As filed with the Securities and Exchange Commission on September 30, 2015
File No. 811-02611
UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION
STATEMENT
UNDER
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THE INVESTMENT COMPANY ACT OF 1940
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Amendment No. 51
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Invesco Exchange Fund
(Exact Name of Registrant as Specified in the Declaration of Trust)
11 Greenway Plaza, Suite 1000
Houston, TX 77046-1173
(Address of Principal Executive Offices) (Zip Code)
(713) 626-1919
(Registrant’s Telephone Number, Including Area Code)
JOHN M. ZERR, ESQ.
11
Greenway Plaza
Suite 1000
Houston, Texas 77046
(Name and Address of Agent for Service)
Copies to:
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Seba Kurian, Esquire
Invesco Advisers, Inc.
11
Greenway Plaza, Suite 1000
Houston, Texas 77046
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E. Carolan Berkley, Esquire
Stradley Ronon Stevens & Young, LLP
2005 Market Street, Suite 2600
Philadelphia, Pennsylvania 19103-7018
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INVESCO EXCHANGE FUND
PART A
INFORMATION
REQUIRED IN A PROSPECTUS
Invesco Exchange Fund (the “Fund”) is an open-end diversified management investment company,
registered under the Investment Company Act of 1940, as amended (the “1940 Act”), and formed on December 4, 1975 under the Uniform Limited Partnership Act of California. The Fund commenced business as an investment company on
December 13, 1976. Effective September 30, 2015, the Fund was reorganized as a Delaware statutory trust.
This
Prospectus, which incorporates by reference the entire Statement of Additional Information, concisely sets forth certain information about the Fund that an investor should know. Shareholders should read this Prospectus carefully and retain it for
future reference. A copy of the Statement of Additional Information may be obtained without charge by calling (800) 847-2424. The Statement of Additional Information has been filed with the Securities and Exchange Commission
(“SEC”) and is available along with other related materials at the SEC’s internet web site (http://www.sec.gov).
This
Prospectus is dated September 30, 2015.
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Item 1.
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Front and Back Cover Pages
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Omitted pursuant to General Instruction B.2. of Form
N-1A.
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Item 2.
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Risk/Return Summary: Investment Objectives/Goals
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Omitted pursuant to General
Instruction B.2. of Form N-1A.
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Item 3.
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Risk/Return Summary: Fee Table
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Omitted pursuant to General Instruction B.2. of Form
N-1A.
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Item 4.
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Risk/Return Summary: Investments, Risks, and Performance
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Omitted pursuant to General
Instruction B.2. of Form N-1A.
Invesco Advisers, Inc. (the “Adviser”) is the Fund’s
investment adviser.
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Information about the current persons jointly and primarily responsible for the day to day
management of the Fund’s portfolio is shown below:
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Name
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Title with Adviser
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Date Began Managing the Fund
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Anthony Munchak
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Portfolio Manager
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2010
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Glen Murphy
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Portfolio Manager
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2010
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Francis Orlando
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Portfolio Manager
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2010
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Item 6.
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Purchase and Sale of Fund Shares.
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The Fund does not currently offer its shares for
purchase. Shareholders may redeem shares at any time without charge by the Fund at the next determined net asset value per share on any business day by submitting a written request in proper form to the Fund’s transfer agent.
The Fund intends to elect to be treated and qualify each year as a
regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (“Code”). Distributions from the Delaware statutory trust to shareholders will be reported on Form 1099 and will be
comprised of investment income and net short-term capital gain (generally taxable as ordinary income) and net long-term capital gains (generally taxable as long-term capital gains). The Fund intends to distribute sufficient amounts of its investment
income quarterly and net capital gain at least annually to satisfy the distribution requirements applicable to RICs under the Code to avoid liability for federal income and excise tax, but no assurances can be given that all or a portion of such
liability will be avoided. All distributions of income and gains will be made in cash and may not be reinvested in additional shares of the Fund.
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Item 8.
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Financial Intermediary Compensation.
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Not applicable, as the Fund does not currently
offer its shares for purchase and does not pay financial intermediaries for the sale of the Fund’s shares.
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Item 9.
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Investment Objectives, Principal Investment Strategies, Related Risks and Disclosure of Portfolio Holdings.
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The Fund’s principal investment objective is long-term growth of capital, while the production of current income is an important secondary
objective. The Fund’s investment objective may be changed by the Board of Trustees (the “Board”) without shareholder approval.
Under normal market conditions, the Fund seeks to achieve these objectives by investing primarily in common stocks or convertible securities
of companies believed to have long-term growth potential. The Fund does not intend to engage to any significant degree in active or frequent trading of portfolio securities. The Fund’s portfolio turnover is reported in its financial statements.
The Fund may, however, for defensive purposes, temporarily invest all or a portion of its assets in other types of securities, including investment grade bonds, preferred stocks and money market obligations such as government securities,
certificates of deposit and commercial paper. In taking a temporary defensive position, the Fund would temporarily not be pursuing and may not achieve its investment objective. The foregoing policies may not be changed without approval of a majority
of the Fund’s outstanding voting securities, as defined in the 1940 Act. The Fund’s temporary investments may consist of U.S. Treasury Bills and U.S. Treasury Bonds, both issued by and supported by the full faith and credit of the United
States Government, and commercial paper rated P-1, if by Moody’s Investors Service, Inc., or A-1 if by Standard & Poor’s and repurchase agreements with domestic banks and broker-dealers.
Capital gains taxes will be considered in determining the sale of portfolio securities. However, sales will be effected whenever believed to
be in the best interests of the shareholders, even though capital gains may be recognized.
The Fund is subject to market risk.
Market risk is the possibility that the market values of securities owned by the Fund will decline. Market risk may affect a single issuer, industry, sector of the economy or the market as a whole. Investments in common stocks and convertible
securities generally are affected by changes in the stock markets, which fluctuate substantially over time, sometimes suddenly and sharply. The financial markets in general are subject to volatility and may at times experience periods of extreme
volatility and uncertainty, which may affect all investment securities, including equity securities, fixed income or debt securities and derivative instruments. During such periods, fixed income or debt securities of all credit qualities may become
illiquid or difficult to sell at a time and a price acceptable to the Fund. The markets for other securities in which the Fund may invest may not function properly, which may affect the value of such securities, and such securities may become
illiquid. New or proposed laws may have an impact on the Fund’s investments and the Fund’s investment adviser is unable to predict what effect, if any, such legislation may have on the Fund.
A description of the Fund’s policies and procedures with respect to the disclosure of the Fund’s portfolio securities is available
under Item 16 in the Fund’s Statement of Additional Information.
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Item 10.
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Management, Organization and Capital Structure.
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The Adviser is an indirect
wholly owned subsidiary of Invesco Ltd. The Adviser is located at 1555 Peachtree Street, N.E., Atlanta, Georgia 30309. The Adviser, a successor in interest to multiple investment advisers, has been an investment adviser since 1976.
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The Fund retains the Adviser to manage the investment of its assets and to place orders for
the purchase and sale of its portfolio securities. Under an investment advisory agreement between the Adviser and the Fund (the “Advisory Agreement”), the Fund pays the Adviser a monthly fee calculated at the annual rate of 0.30% of
average daily net assets of the Fund. For the fiscal year ended December 31, 2014, advisory fees paid by the Fund equaled 0.30% of the Fund’s average daily net assets after fee waivers. The Adviser received approximately $267,695 (0.37 %
of average net assets) in both advisory and administrative service fees from the Fund during the fiscal year ended December 31, 2014.
The Adviser has entered into a Master Intergroup Sub-Advisory Contract (the “Sub-Advisory Agreement”) with certain affiliates to
serve as Sub-Advisers to the Fund, pursuant to which these affiliated Sub-Advisers may be appointed by the Adviser from time to time to provide discretionary investment management services, investment advice, and/or order execution services to the
Fund. Each of these affiliated Sub-Advisers is a registered investment adviser under the Investment Advisers Act of 1940. Each Sub-Adviser is an indirect wholly owned subsidiary of Invesco Ltd. None of the affiliated Sub-Advisers currently provide
sub-advisory services to the Fund.
The only fees payable to the Sub-Advisers under the Sub-Advisory Agreement are for providing
discretionary investment management services. For such services, the Adviser will pay each Sub-Adviser a fee, computed daily and paid monthly, equal to (i) 40% of the monthly compensation that the Adviser receives from the Fund, multiplied by
(ii) the fraction equal to the net assets of the Fund as to which such Sub-Adviser shall have provided discretionary investment management services for that month divided by the net assets of the Fund for that month. Pursuant to the
Sub-Advisory Agreement, this fee is reduced to reflect contractual or voluntary fee waivers or expense limitations by the Adviser, if any, in effect from time to time. In no event shall the aggregate monthly fees paid to the Sub-Advisers under the
Sub-Advisory Agreement exceed 40% of the monthly compensation that the Adviser receives from the Fund pursuant to its advisory agreement with the Fund, as reduced to reflect contractual or voluntary fees waivers or expense limitations by the
Adviser, if any.
Investment decisions for the Fund are made by investment management teams at the Adviser. The following individuals are
jointly and primarily responsible for the day to day management of the Fund’s portfolio:
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Anthony Munchak, Portfolio Manager, who has been responsible for the Fund since 2010 and has been associated with Invesco and/or its affiliates since 2000.
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Glen Murphy, Portfolio Manager, who has been responsible for the Fund since 2010 and has been associated with Invesco and/or its affiliates since 1995.
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Francis Orlando, Portfolio Manager, who has been responsible for the Fund since 2010 and has been associated with Invesco and/or its affiliates since 1987.
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Item 20 in the Fund’s Statement of Additional Information provides additional information about the portfolio managers’
compensation structure, other accounts managed by the portfolio managers and the portfolio managers’ ownership of securities in the Fund.
The Board as a whole and the Independent Trustees, who comprise more than 75% of the Board, voting separately, determined that the terms of
the advisory agreements described above are fair and reasonable and approved the advisory arrangements as being in the best interests of the Fund and its shareholders. A discussion regarding the basis for the Board’s approval of such advisory
arrangements was included in the Fund’s Semiannual Report covering the six-month period ended June 30, 2015 and made available to shareholders in August 2015.
The Adviser and the Fund have entered into a Master Administrative Services Agreement (“Administrative Services Agreement”) pursuant
to which the Adviser may perform or arrange for the provision of certain accounting and other administrative services to the Fund which are not required to be performed by the Adviser under the Advisory Agreement. The Adviser received approximately
$50,000 (0.07% of average net assets) in administrative services fees from the Fund during the fiscal year ended December 31, 2014. The Administrative Services Agreement provides that it will remain in effect and continue from year to year only
if such continuance is specifically approved at least annually by the Board, including the Independent Trustees,
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by votes cast in person at a meeting called for such purpose. Under the Administrative Services Agreement, the Adviser is entitled to receive from the Fund reimbursement of its costs or such
reasonable compensation as may be approved by the Board. Currently, the Adviser is reimbursed for the services of the Fund’s principal financial officer and her staff and any expenses related to fund accounting services.
Other operating expenses paid by the Fund include transfer agency fees, custodial fees, audit, legal and accounting fees, the costs of reports
and proxies to shareholders, trustees fees, and all other business expenses not specifically assumed by the Adviser. For the fiscal year ended December 31, 2014, the Fund’s other operating expenses were 0.23% of average net assets.
The Adviser has contractually agreed, through at least June 30, 2016, to waive the advisory fee payable by the Fund in an amount equal to
100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds. For the fiscal year ended December 31, 2014, the Adviser waived
advisory fees of $1,152.
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Item 11.
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Shareholder Information.
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The Fund will determine its net asset value as of the
close of each business day on the New York Stock Exchange (the “Exchange”). The Fund’s net assets equal the value of its portfolio securities, plus all cash and other assets (including dividends and interest accrued but not
collected) less all liabilities (including accrued expenses). The Fund’s portfolio securities are valued by using prices as of the close of trading on the Exchange and valuing portfolio securities (i) for which market quotations are
readily available at such market quotations (for example, using the last reported sale price for securities listed on a securities exchange or using the mean between the last reported bid and asked prices on unlisted securities) and (ii) for
which market quotations are not readily available and any other assets at their fair value as determined in good faith in accordance with procedures established by the Board. In cases where a security is traded on more than one exchange, the
security is valued on the exchange designated as the primary market. Securities with remaining maturities of 60 days or less are valued at amortized cost, which approximates market value. See the financial statements and notes thereto in the
Fund’s Annual Report.
The Fund does not currently offer its shares for purchase. Shareholders may redeem shares at any time, without
charge by the Fund, at the next determined net asset value per share by submitting a written request in proper form to the Fund’s transfer agent, Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, Missouri 64121-9078. The request
for redemption should indicate the number of shares or dollar amount to be redeemed, and the shareholder’s account number. The redemption request must be signed by all persons in whose names the shares are registered. After receipt of the
redemption request in proper order by the Fund’s transfer agent, Invesco Investment Services, Inc., redemptions are required to be priced at the next determined net asset value per share and payment for shares redeemed will be made within seven
days thereafter. “Proper order” means that all necessary information and documentations related to the redemption request have been provided to the Funds’ transfer agent, if applicable. If your request is not in proper order, the
Funds’ transfer agent may require additional documentation in order to redeem your shares. Redemptions are not made on days during which the Exchange is closed. The right of redemption may be suspended and the payment therefor may be postponed
for more than seven days during any period when (a) the Exchange is closed for other than customary weekends or holidays; (b) the SEC determines trading on the Exchange is restricted; (c) the SEC determines an emergency exists as a
result of which disposal by the Fund of securities owned by it is not reasonably
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practicable or it is not reasonably practicable for the Fund to fairly determine the value of its net assets; or (d) the SEC, by order, so permits.
The shares redeemed may be paid in cash or securities, at the option of the Fund and will ordinarily be paid in whole or in part in
securities. Such securities may be illiquid and difficult or impossible for a shareholder to sell at a time and a price acceptable to a shareholder. The Fund’s valuation will determine the quantity of securities tendered. The Fund will select
securities for tender in redemptions based on tax or investment considerations.
While there is no charge when shares are redeemed or
repurchased through the Fund or through Invesco Distributors, Inc., an affiliate of the Adviser, dealers may make a charge for effecting a repurchase. Payment for shares redeemed may be postponed or the right of redemption suspended as provided by
the rules of the SEC.
Shareholders may exchange shares of the Fund for Class Y shares of another Invesco Fund. Shareholders may not
exchange shares of another Invesco Fund for shares of the Fund. An exchange is the purchase of shares in one fund which is paid for with the proceeds from a redemption of shares of another fund effectuated on the same day. Any gain on the
transaction may be subject to federal income tax. Accordingly, the process for redemptions of Fund shares discussed above will apply. Before requesting an exchange, review the prospectus of the Invesco Fund you wish to acquire. All exchanges are
subject to the limitations set forth in the prospectuses of the applicable Invesco Funds. If you wish to exchange shares of the Fund for those of another Invesco Fund, you must consult the prospectus of the Invesco Fund whose shares you wish to
acquire to determine whether the fund is offering shares to new investors and whether you are eligible to acquire shares of that fund.
The following conditions apply to all exchanges: Shares must have been held for at least one day prior to the exchange and if you have
physical share certificates, you must return them to the Fund’s transfer agent in order to effect the exchange. Under unusual market conditions, the Fund may delay the exchange of shares for up to five business days if it determines that it
would be materially disadvantaged by the immediate transfer of exchange proceeds. The exchange privilege is not an option or right to purchase shares.
Because shares of the Fund are not available for additional investments, the Fund is not susceptible to the “market-timing” or
“short-term trading” practices that affect other continuously offered Invesco Funds. Therefore, the “market timing” and “short term trading” policies applicable to other Invesco Funds are not currently applied to the
Fund. If in the future the Fund offers additional shares for purchase, it is expected that those policies would be applied to the Fund and the Fund’s prospectus would be updated to describe those policies.
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Tax Matters
The following is a summary of certain additional tax considerations generally affecting the Fund and its shareholders. No attempt is made to
present a detailed explanation of the tax treatment of the Fund or its shareholders, and the discussion here is not intended as a substitute for careful tax planning.
This “Tax Matters” section is based on the Code and applicable regulations in effect on the date hereof. Future legislative,
regulatory or administrative changes, including provisions of current law that sunset and thereafter no longer apply, or court decisions may significantly change the tax rules applicable to the Fund and its shareholders. Any of these changes or
court decisions may have a retroactive effect.
This is for general information only and not tax advice. All investors should consult
their own tax advisors as to the federal, state, local and foreign tax provisions applicable to them.
Taxation of the Fund
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The Fund intends to elect and qualify each year as a “regulated investment company” (sometimes referred to as a regulated investment company, RIC or fund) under Subchapter M of the Code. If the Fund qualifies, the Fund will not be subject
to federal income tax on the portion of its investment company taxable income (i.e., generally, taxable interest, dividends, net short-term capital gains and other taxable ordinary income net of expenses without regard to the deduction for dividends
paid) and net capital gain (i.e., the excess of net long-term capital gains over net short-term capital losses) that it distributes to shareholders.
Qualification as a regulated investment company
. In order to qualify for treatment as a regulated investment company, the Fund must
satisfy the following requirements:
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Distribution Requirement – the Fund must distribute an amount equal to the sum of at least 90% of its investment company taxable income and 90% of its net tax-exempt income, if any, for the tax year (certain
distributions made by the Fund after the close of its tax year are considered distributions attributable to the previous tax year for purposes of satisfying this requirement).
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Income Requirement – the Fund must derive at least 90% of its gross income from dividends, interest, certain payments with respect to securities loans, and gains from the sale or other disposition of stock,
securities or foreign currencies, or other income (including, but not limited to, gains from options, futures or forward contracts) derived from its business of investing in such stock, securities or currencies and net income derived from qualified
publicly traded partnerships (QPTPs).
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Asset Diversification Test – The Fund must satisfy the following asset diversification test at the close of each quarter of the Fund’s tax year: (1) at least 50% of the value of the Fund’s assets
must consist of cash and cash items, U.S. Government securities, securities of other regulated investment companies, and securities of other issuers (as to which the Fund has not invested more than 5% of the value of the Fund’s total assets in
securities of an issuer and as to which the Fund does not hold more than 10% of the outstanding voting securities of the issuer); and (2) no more than 25% of the value of the Fund’s total assets may be invested in the securities of any one
issuer (other than U.S. Government securities or securities of other regulated investment companies) or of two or more issuers which the Fund controls and which are engaged in the same or similar trades or businesses, or, collectively, in the
securities of QPTPs.
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In some circumstances, the character and timing of income realized by the Fund for purposes
of the Income Requirement or the identification of the issuer for purposes of the Asset Diversification Test is uncertain under current law with respect to a particular investment, and an adverse determination or future guidance by the Internal
Revenue Service (IRS) with respect to such type of investment may adversely affect the Fund’s ability to satisfy these requirements. In other circumstances, the Fund may be required to sell portfolio holdings in order to meet the Income
Requirement, Distribution Requirement, or Asset Diversification Test, which may have a negative impact on the Fund’s income and performance. In lieu of potential disqualification, the Fund is permitted to pay a tax for certain failures to
satisfy the Asset Diversification Test or Income Requirement, which, in general, are limited to those due to reasonable cause and not willful neglect.
The Fund may use “equalization accounting” (in lieu of making some cash distributions) in determining the portion of its income and
gains that has been distributed. If the Fund uses equalization accounting, it will allocate a portion of its undistributed investment company taxable income and net capital gain to redemptions of Fund shares and will correspondingly reduce the
amount of such income and gains that it distributes in cash. However, the Fund intends to make cash distributions for each taxable year in an aggregate amount that is sufficient to satisfy the Distribution Requirement without taking into account its
use of equalization accounting. If the IRS determines that the Fund’s allocation is improper and that the Fund has under-distributed its income and gain for any taxable year, the Fund may be liable for federal income and/or excise tax.
If for any taxable year the Fund does not qualify as a regulated investment company, all of its taxable income (including its net capital
gain) would be subject to tax at regular corporate rates without any deduction for dividends paid to shareholders, and the dividends would be taxable to the shareholders as ordinary income (or possibly as qualified dividend income) to the extent of
the Fund’s current and accumulated earnings and profits. Failure to qualify as a regulated investment company thus would have a negative impact on the Fund’s income and performance. Subject to savings provisions for certain inadvertent
failures to satisfy the Income Requirement or Asset Diversification Test which, in general, are limited to those due to reasonable cause and not willful neglect, it is possible that the Fund will not qualify as a regulated investment company in any
given tax year. Even if such savings provisions apply, the Fund may be subject to a monetary sanction of $50,000 or more. Moreover, the Board reserves the right not to maintain the qualification of the Fund as a regulated investment company if it
determines such a course of action to be beneficial to shareholders.
Capital loss carryovers
. The capital losses of the Fund, if
any, do not flow through to shareholders. Rather, the Fund may use its capital losses, subject to applicable limitations, to offset its capital gains without being required to pay taxes on or distribute to shareholders such gains that are offset by
the losses. If the Fund has a “net capital loss” (that is, capital losses in excess of capital gains), the excess (if any) of the Fund’s net short-term capital losses over its net long-term capital gains is treated as a short-term
capital loss arising on the first day of the Fund’s next taxable year, and the excess (if any) of the Fund’s net long-term capital losses over its net short-term capital gains is treated as a long-term capital loss arising on the first day
of the Fund’s next taxable year. Any such net capital losses of the Fund that are not used to offset capital gains may be carried forward indefinitely to reduce any future capital gains realized by the Fund in succeeding taxable years. The
amount of capital losses that can be carried forward and used in any single year is subject to an annual limitation if there is a more than 50% “change in ownership” of the Fund. The Fund undertakes no obligation to avoid or prevent an
ownership change, which can occur in the normal course of shareholder redemptions.
Deferral of late year losses.
The Fund may
elect to treat part or all of any “qualified late year loss” as if it had been incurred in the succeeding taxable year in determining the Fund’s taxable income, net capital gain, net short-term capital gain, and earnings and profits.
The effect of this election is to treat any such “qualified late year loss” as if it had been incurred in the succeeding taxable year, which may change the timing, amount, or characterization of Fund distributions (see, “Taxation of
Fund Distributions – Capital gain dividends” below). A “qualified late year loss” includes:
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any net capital loss incurred after October 31 of the current taxable year, or, if there (i) is no such loss, any net long-term capital loss or any net short-term capital loss incurred after October 31 of
the current taxable year (“post-October capital losses”), and
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(ii)
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the sum of (1) the excess, if any, of (a) specified losses incurred after October 31 of the current taxable year, over (b) specified gains incurred after October 31 of the current taxable year
and (2)
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the excess, if any, of (a) ordinary losses incurred after December 31 of the current taxable year, over (b) the ordinary income incurred after December 31 of the current
taxable year.
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The terms “specified losses” and “specified gains” mean ordinary losses and gains from the sale,
exchange, or other disposition of property (including the termination of a position with respect to such property), foreign currency losses and gains, and losses and gains resulting from holding stock in a passive foreign investment company (PFIC)
for which a mark-to-market election is in effect. The terms “ordinary losses” and “ordinary income” mean other ordinary losses and income that are not described in the preceding sentence. Special rules apply to a fund with a
fiscal year ending in November or December that elects to use its taxable year for determining its capital gain net income for excise tax purposes.
Undistributed capital gains
. The Fund may retain or distribute to shareholders its net capital gain for each taxable year. The Fund
currently intends to distribute net capital gains. If the Fund elects to retain its net capital gain, the Fund will be taxed thereon (except to the extent of any available capital loss carryovers) at the highest corporate tax rate (currently 35%).
If the Fund elects to retain its net capital gain, it is expected that the Fund also will elect to have shareholders treated as if each received a distribution of its pro rata share of such gain, with the result that each shareholder will be
required to report its pro rata share of such gain on its tax return as long-term capital gain, will receive a refundable tax credit for its pro rata share of tax paid by the Fund on the gain and will increase the tax basis for its shares by an
amount equal to the deemed distribution less the tax credit.
Federal excise tax
. To avoid a 4% non-deductible excise tax, the Fund
must distribute by December 31 of each year an amount equal to at least: (1) 98% of its ordinary income for the calendar year, (2) 98.2% of capital gain net income (the excess of the gains from sales or exchanges of capital assets over the
losses from such sales or exchanges) for the one-year period ended on October 31 of such calendar year (or, at the election of a regulated investment company having a taxable year ending November 30 or December 31, for its taxable
year), and (3) any prior year undistributed ordinary income and capital gain net income. The Fund may elect to defer to the following year any net ordinary loss incurred for the portion of the calendar year which is after the beginning of the
Fund’s taxable year. Also, the Fund will defer any “specified gain” or “specified loss” which would be properly taken into account for the portion of the calendar after October 31. Any net ordinary loss, specified gain,
or specified loss deferred shall be treated as arising on January 1 of the following calendar year. Generally, the Fund may make sufficient distributions to avoid liability for federal income and excise tax, but can give no assurances that all
or a portion of such liability will be avoided. In addition, under certain circumstances temporary timing or permanent differences in the realization of income and expense for book and tax purposes can result in the Fund having to pay an excise tax.
Foreign income tax
. Investment income received by the Fund from sources within foreign countries may be subject to foreign income
tax withheld at the source, and the amount of tax withheld generally will be treated as an expense of the Fund. The United States has entered into tax treaties with many foreign countries that entitle the Fund to a reduced rate of, or exemption
from, tax on such income. Some countries require the filing of a tax reclaim or other forms to receive the benefit of the reduced tax rate; whether or when the Fund will receive the tax reclaim is within the control of the individual country.
Information required on these forms may not be available such as shareholder information; therefore, the Fund may not receive the reduced treaty rates or potential reclaims. Other countries have conflicting and changing instructions and restrictive
timing requirements which may cause the Fund not to receive the reduced treaty rates or potential reclaims. Other countries may subject capital gains realized by the Fund on sale or disposition of securities of that country to taxation. It is
impossible to determine the effective rate of foreign tax in advance since the amount of the Fund’s assets to be invested in various countries is not known. Under certain circumstances, the Fund may elect to pass-through foreign tax credits to
shareholders, although it reserves the right not to do so.
Taxation of Fund Distributions.
The Fund anticipates distributing
substantially all of its investment company taxable income and net capital gain for each taxable year. Distributions by the Fund will be treated in the manner described regardless of whether such distributions are paid in cash or reinvested in
additional shares of the Fund (or of another Fund). The Fund will send you information annually as to the federal income tax consequences of distributions made (or deemed made) during the year.
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Distributions of ordinary income
. The Fund receives income generally in the form of
dividends and/or interest on its investments. The Fund may also recognize ordinary income from other sources, including, but not limited to, certain gains on foreign currency-related transactions. This income, less expenses incurred in the operation
of the Fund, constitutes the Fund’s net investment income from which dividends may be paid to you. If you are a taxable investor, distributions of net investment income generally are taxable as ordinary income to the extent of the Fund’s
earnings and profits. A portion of the income dividends paid to you by the Fund may be qualified dividends eligible to be taxed at reduced rates.
Capital gain dividends
. Taxes on distributions of capital gains are determined by how long the Fund owned the investments that
generated them, rather than how long a shareholder has owned his or her shares. In general, the Fund will recognize long-term capital gain or loss on the sale or other disposition of assets it has owned for more than one year, and short-term capital
gain or loss on investments it has owned for one year or less. Distributions of net capital gain (the excess of net long-term capital gain over net short-term capital loss) that are properly reported by the Fund to shareholders as capital gain
dividends generally will be taxable to a shareholder receiving such distributions as long-term capital gain. Long-term capital gain rates applicable to individuals are taxed at the maximum rate of 15% (20% for certain high income taxpayers) or 25%
depending on the nature of the capital gain. Distributions of net short-term capital gains for a taxable year in excess of net long-term capital losses for such taxable year generally will be taxable to a shareholder receiving such distributions as
ordinary income.
Qualified dividend income for individuals
. Ordinary income dividends reported by the Fund to shareholders as
derived from qualified dividend income will be taxed in the hands of individuals and other noncorporate shareholders at the rates applicable to long-term capital gain. Qualified dividend income means dividends paid to the Fund (a) by domestic
corporations, (b) by foreign corporations that are either (i) incorporated in a possession of the United States, or (ii) are eligible for benefits under certain income tax treaties with the United States that include an exchange of
information program, or (c) with respect to stock of a foreign corporation that is readily tradable on an established securities market in the United States. Both the Fund and the investor must meet certain holding period requirements to
qualify Fund dividends for this treatment. Income derived from investments in derivatives, fixed-income securities, U.S. REITs, PFICs, and income received “in lieu of” dividends in a securities lending transaction generally is not eligible
for treatment as qualified dividend income. If the qualifying dividend income received by the Fund is equal to 95% (or a greater percentage) of the Fund’s gross income (exclusive of net capital gain) in any taxable year, all of the ordinary
income dividends paid by the Fund will be qualifying dividend income.
Corporate dividends received deduction
. Ordinary income
dividends reported by the Fund to shareholders as derived from qualified dividends from domestic corporations will qualify for the 70% dividends received deduction generally available to corporations. The availability of the dividends received
deduction is subject to certain holding period and debt financing restrictions imposed under the Code on the corporation claiming the deduction. Income derived by the Fund from investments in derivatives, fixed-income and foreign securities
generally is not eligible for this treatment.
Return of capital distributions
. Distributions by the Fund that are not paid from
earnings and profits will be treated as a return of capital to the extent of (and in reduction of) the shareholder’s tax basis in his shares; any excess will be treated as gain from the sale of his shares. Thus, the portion of a distribution
that constitutes a return of capital will decrease the shareholder’s tax basis in his Fund shares (but not below zero), and will result in an increase in the amount of gain (or decrease in the amount of loss) that will be recognized by the
shareholder for tax purposes on the later sale of such Fund shares. Return of capital distributions can occur for a number of reasons including, among others, the Fund overestimates the income to be received from certain investments such as those
classified as partnerships or equity REITs.
U.S. Government interest
. Income earned on certain U.S. Government obligations is
exempt from state and local personal income taxes if earned directly by you. States also grant tax-free status to dividends paid to you from interest earned on direct obligations of the U.S. Government, subject in some states to minimum investment
or reporting requirements that must be met by the Fund. Income on investments by the Fund in certain other obligations, such as repurchase agreements collateralized by U.S. Government obligations, commercial paper and federal agency-backed
obligations (e.g., Government National Mortgage Association
A-10
(GNMA) or Federal National Mortgage Association (FNMA) obligations), generally does not qualify for tax-free treatment. The rules on exclusion of this income are different for corporations.
Dividends declared in December and paid in January
. Ordinarily, shareholders are required to take distributions by the Fund into
account in the year in which the distributions are made. However, dividends declared in October, November or December of any year and payable to shareholders of record on a specified date in such a month will be deemed to have been received by the
shareholders (and made by the Fund) on December 31 of such calendar year if such dividends are actually paid in January of the following year. Shareholders will be advised annually as to the U.S. federal income tax consequences of distributions
made (or deemed made) during the year in accordance with the guidance that has been provided by the IRS.
Medicare tax
. A 3.8%
Medicare tax is imposed on net investment income earned by certain individuals, estates and trusts. “Net investment income,” for these purposes, means investment income, including ordinary dividends and capital gain distributions received
from the Fund and net gains from redemptions or other taxable dispositions of Fund shares, reduced by the deductions properly allocable to such income. In the case of an individual, the tax will be imposed on the lesser of (1) the
shareholder’s net investment income or (2) the amount by which the shareholder’s modified adjusted gross income exceeds $250,000 (if the shareholder is married and filing jointly or a surviving spouse), $125,000 (if the shareholder is
married and filing separately) or $200,000 (in any other case). This Medicare tax, if applicable, is reported by you on, and paid with, your federal income tax return.
Investment expenses.
Because shares of the Fund are not publicly offered, the Fund will report certain of its investment expenses to
shareholders on Form 1099, and the shareholders may be limited in deducting those investment expenses for tax purposes. Shares of the Fund are not treated as publicly offered for this purpose because such shares will not be: (i) continuously
offered pursuant to a public offering (within the meaning of section 4 of the Securities Act of 1933, as amended); (ii) regularly traded on an established securities market; or (iii) held by or for no fewer than 500 persons at all times
during a taxable year).
Sale or Redemption of Fund Shares.
A shareholder will recognize gain or loss on the sale or redemption of
shares of the Fund in an amount equal to the difference between the proceeds of the sale or redemption and the shareholder’s adjusted tax basis in the shares. If you owned your shares as a capital asset, any gain or loss that you realize will
be considered capital gain or loss and will be long-term capital gain or loss if the shares were held for longer than one year. Capital losses in any year are deductible only to the
extent of capital gains plus, in the case of a noncorporate taxpayer, $3,000 of ordinary income.
Tax basis information.
The Fund is required to report to shareholders and the IRS annually on Form 1099-B the cost basis of shares
purchased or acquired on or after January 1, 2012 where the cost basis of the shares is known by the Fund (referred to as “covered shares”) and which are disposed of after that date. Shares of the Fund acquired as a result of the Fund
being reorganized as a Delaware Statutory Trust (referred to as the “reorganization”) are not anticipated to be covered shares since the shares were acquired in a tax-free transaction and a shareholder’s basis of the shares carried
over from the shares held by the shareholder prior to
the reorganization. Accordingly, the cost basis of shares of the Fund will not be reported to the
shareholders or the IRS.
Exchange of shares of the Fund for shares of another fund.
The exchange of shares in one fund for shares
of another fund is taxable for federal income tax purposes and the exchange will be reported as a taxable sale. An exchange occurs when the purchase of shares of a fund is made using the proceeds from a redemption of shares of another fund and is
effectuated on the same day as the redemption. Shareholders should consult their tax advisors regarding the state and local tax consequences of an exchange of shares.
Reportable transactions.
Under Treasury regulations, if a shareholder recognizes a loss with respect to the Fund’s shares of $2
million or more for an individual shareholder or $10 million or more for a corporate shareholder (or certain greater amounts over a combination of years), the shareholder must file with the IRS a disclosure statement on Form 8886. The fact that a
loss is reportable under these regulations does not affect the legal determination of whether the taxpayer’s treatment of the loss is proper. Shareholders should consult their tax advisors to determine the applicability of these regulations in
light of their individual circumstances.
A-11
Tax Treatment of Portfolio Transactions
. In general, gain or loss recognized by the
Fund on the sale or other disposition of portfolio investments will be a capital gain or loss. Such capital gain and loss may be long-term or short-term depending, in general, upon the length of time a particular investment position is maintained
and, in some cases, upon the nature of the transaction. Property held for more than one year generally will be eligible for long-term capital gain or loss treatment. The application of certain rules may serve to alter the manner in which the holding
period for a security is determined or may otherwise affect the characterization as long-term or short-term, and also the timing of the realization and/or character, of certain gains or losses.
Tax Certification and Backup Withholding.
By law, if you do not provide the Fund with your proper taxpayer identification number and
certain required certifications, you may be subject to backup withholding on any distributions of income, capital gains, or proceeds from the sale of your shares. The Fund also must withhold if the IRS instructs it to do so. When withholding is
required, the amount will be 28% of any distributions or proceeds paid.
Foreign Shareholders.
Foreign investors should be aware
that U.S. withholding, special certification requirements to avoid U.S. backup withholding and claim any treaty benefits, and estate taxes may apply to an investment in the Fund.
Foreign Account Tax Compliance Act (FATCA)
. Under FATCA, the Fund will be required to withhold a 30% tax on (a) income dividends
paid by the Fund, and (b) after December 31, 2016, certain capital gain distributions and the proceeds arising from the sale of Fund shares paid by the Fund to certain foreign entities, referred to as foreign financial institutions or
non-financial foreign entities, that fail to comply (or be deemed compliant) with extensive new reporting and withholding requirements designed to inform the U.S. Department of the Treasury of U.S.-owned foreign investment accounts. The Fund may
disclose the information that it receives from its shareholders to the IRS, non-U.S. taxing authorities or other parties as necessary to comply with FATCA. Withholding also may be required if a foreign entity that is a shareholder of the Fund fails
to provide the Fund with appropriate certifications or other documentation concerning its status under FATCA.
Local Tax
Considerations.
Rules of state and local taxation of ordinary income, qualified dividend income and capital gain dividends may differ from the rules for U.S. federal income taxation described above. Distributions may also be subject to
additional state, local and foreign taxes depending on each shareholder’s particular situation.
A-12
|
Item 12.
|
Distribution Arrangements.
|
Not Applicable, as the Fund does not currently offer its
shares for purchase.
|
Item 13.
|
Financial Highlights Information.
|
Omitted pursuant to General Instruction B.2 of
Form N-1A.
A-13
INVESCO EXCHANGE FUND
PART B
INFORMATION
REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
|
Item 14.
|
Cover Page and Table of Contents.
|
This Statement of Additional Information is not
a prospectus. This Statement of Additional Information should be read in conjunction with the prospectus (the “Prospectus”) of Invesco Exchange Fund (the “Fund”) dated as of the same date as this Statement of Additional
Information. This Statement of Additional Information does not include all of the information an investor should consider. Investors should obtain and read the Prospectus prior to purchasing shares of the Fund. Portions of the Fund’s financial
statements are incorporated by reference to the Fund’s most recent Annual Report and Semiannual Report to Shareholders. The Fund’s Prospectus, Statement of Additional Information and Annual and Semiannual Reports may be obtained without
charge by writing or calling Invesco Distributors, Inc., 11 Greenway Plaza, Suite 1000, Houston, Texas 77046, at (800) 959-4246.
This Statement of Additional Information is dated September 30, 2015.
The Fund was formed on December 4,
1975 under the Uniform Limited Partnership Act of California. The Fund commenced business as an investment company on December 13, 1976 under the name American General Exchange Fund. Effective September 30, 2015, the Fund was reorganized
as a Delaware statutory trust.
On September 9, 1983, the name of the Fund was changed from American General Exchange Fund to
American Capital Exchange Fund. On April 26, 1996, the name of the Fund was changed from American Capital Exchange Fund to Van Kampen American Capital Exchange Fund. On December 9, 1998, the name of the Fund was changed from Van Kampen
American Capital Exchange Fund to Van Kampen Exchange Fund. On June 1, 2010, the name of the Fund was changed from Van Kampen Exchange Fund to Invesco Van Kampen Exchange Fund. On August 2, 2013, the name of the Fund was changed to
its current name, Invesco Exchange Fund.
|
Item 16.
|
Description of the Fund and its Investment Risks.
|
The
Fund is a diversified open-end management investment company registered under the Investment Company Act of 1940, as amended (“1940 Act”). The Fund’s principal investment objective is long-term growth of capital, while the
production of current income is an important secondary objective. The Fund’s investment objective may be changed by the Board of Trustees (“the Board”) without shareholder approval. Under normal
B-1
market conditions, the Fund seeks to achieve these objectives by investing primarily in common stocks or convertible securities of companies believed to have long-term growth potential. In
seeking to attain its investment objectives of long-term growth of capital, and, secondarily, production of income, the Fund will acquire securities for long-term appreciation and does not intend to engage to any significant degree in short-term
trading. Capital gains taxes will be considered in determining the sale of portfolio securities. However, sales will be effected whenever believed to be in the best interests of the shareholders even though capital gains may be recognized thereby.
B-2
The Fund has no present intention of investing in corporate bonds, preferred stocks or
certificates of deposit in an amount in excess of 5% of the value of its net assets.
The Fund has adopted certain fundamental investment
restrictions which may not be changed without approval by the vote of a majority of its outstanding voting securities, which is defined by the 1940 Act as the lesser of (i) 67% or more of the voting securities present at a meeting, if the
holders of more than 50% of the outstanding voting securities are present or represented by proxy; or (ii) more than 50% of the outstanding voting securities. The percentage limitations contained in the restrictions and policies set forth
herein apply at the time of purchase of the securities. With respect to the limitations on illiquid securities and borrowings, the percentage limitations apply at the time of purchase and on an ongoing basis. The Fund may not:
|
|
(1)
|
Purchase securities on margin or make short sales.
|
|
|
(2)
|
Purchase or write any options, puts, calls, straddles, spreads or combinations thereof.
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|
(3)
|
Borrow money, except from banks for a purpose other than the purchase of securities, such borrowing not to exceed 5% of the Fund’s total assets at market value at the time of borrowing. Any such borrowing may be
secured provided that not more than 10% of the total assets at market value at the time of pledging may be used as security for such borrowings.
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(4)
|
Engage in the underwriting of securities or invest in securities subject to restrictions on resale.
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(5)
|
Invest more than 25% of its assets at market value at the time of purchase in securities of companies all of which conduct their principal activities in the same industry.
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(6)
|
Invest in real estate (including interests in real estate investment trusts) or invest in oil, gas or mineral exploration or development programs, except in publicly traded securities of issuers which engage in such
business.
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(7)
|
Buy or sell commodities or commodity contracts.
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(8)
|
Make loans of money or securities to other persons provided that this limitation shall not prevent the purchase of a portion of an issue of bonds, notes, debentures or other debt securities which are publicly
distributed or of a type customarily purchased by institutional investors.
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(9)
|
Invest more than 5% of its total assets at market value at the time of purchase in the securities of any one issuer (other than obligations of the United States Government or any instrumentalities thereof).
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(10)
|
Purchase securities if such purchase would result in the Fund owning more than 10% of the outstanding voting securities of any one issuer at the time of purchase.
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(11)
|
Invest in securities of companies which have a record, together with their predecessors, of less than three years of continuous operation.
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(12)
|
Purchase or hold securities of any company if any of its Trustees, or officers or directors of the Fund’s investment adviser, who beneficially own more than 0.50% of the securities of that company together own
beneficially more than 5% of the securities of such company.
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(13)
|
Invest in companies for the purpose of exercising control or management. (The Fund’s officers may be authorized to vote proxies issued with respect to its portfolio securities consistently with its investment
objectives).
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(14)
|
Invest in or hold warrants unless received with respect to securities held by the Fund.
|
B-3
|
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(15)
|
Invest in foreign securities unless listed at the time of purchase on the New York Stock Exchange.
|
|
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(16)
|
Invest more than 5% of its total assets at market value at the time of purchase in equity securities which are not readily marketable.
|
The Fund does not issue senior securities.
B-4
Disclosure of Portfolio Holdings
The Fund provides a complete schedule of portfolio holdings for the second and fourth fiscal quarters in its Semiannual and Annual Reports,
and for the first and third fiscal quarters in its filings with the SEC on Form N-Q.
|
Item 17.
|
Management of the Fund.
|
The business and affairs of the
Fund (also referred to as the “Trust”) are managed under the direction of the Fund’s Board of Trustees (the “Board”) and the Fund’s officers appointed by the Board. The tables below list the Trustees and executive
officers of the Fund and their principal occupations during the last five years, other directorships held by the Trustees and their affiliations, if any, with Invesco Advisers, Inc. (“Invesco” or the “Adviser”) the Fund’s
investment adviser, or its affiliates. The term “Fund Complex” includes each of the investment companies (“Invesco Funds”) advised by the Adviser as of September 30, 2015. The address of each Trustee is 11 Greenway Plaza, Suite
1000 Houston, Texas 77046.
Interested Trustees
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|
Name and Year of
Birth of Trustee
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|
Position(s)
Held with
the Fund
|
|
Term of
Office
and Length
of
Time
Served
|
|
Principal Occupation(s)
During the Past Five
Years
|
|
Number of
Invesco Funds
in
Fund Complex
Overseen by
Trustee
|
|
Other Directorships
Held by
Trustee During the
Past Five Years
|
|
Martin L. Flanagan
1
(1960)
|
|
Trustee
|
|
2014
|
|
Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional
(N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business.
|
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144
|
|
None
|
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|
|
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|
|
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|
Formerly: Chairman and Chief Executive Officer, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service
provider) and Invesco North American Holdings, Inc. (holding company); Director, Chief Executive Officer
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B-5
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|
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|
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|
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and President, Invesco Holding Company Limited (parent of Invesco and a global investment management firm); Director, Invesco Ltd.;
Chairman, Investment Company Institute and President, Co-Chief Executive Officer, Co-President, Chief Operating Officer
and Chief Financial Officer,
Franklin Resources, Inc. (global investment management organization).
|
|
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|
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|
Philip A. Taylor
2
(1954)
|
|
Trustee, President and Principal
Executive
Officer
|
|
2014
|
|
Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered
investment adviser); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group,
Inc. (registered investment adviser and registered transfer agent); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly
known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, Invesco Inc. (holding company) Invesco Canada Holdings Inc. (holding company), Trimark Investments Ltd./Placements Trimark Ltèe and Invesco
Financial Services Ltd/Services Financiers Invesco Ltèe; Chief Executive Officer, Invesco Corporate Class Inc. (corporate mutual fund company); Director, Chairman and Chief Executive Officer, Invesco Canada Ltd. (formerly known as Invesco
Trimark Ltd./Invesco Trimark Ltèe) (registered investment adviser and registered transfer agent); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s
Series Trust) , Short-Term Investments Trust and Invesco Management Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short- Term Investments Trust and Invesco
Management Trust only); Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Director, Chief Executive Officer and President, Van Kampen Exchange Corp.
|
|
144
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Formerly: Chief Executive Officer, Invesco Canada Fund Inc. (corporate mutual fund company); Director and Chairman, Van Kampen Investor Services Inc.; Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding
company) and Van Kampen Investments Inc.; Director and President,
|
|
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|
B-6
|
|
|
|
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|
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|
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|
AIM GP Canada Inc. (general partner for limited partnerships) and Van Kampen Advisors, Inc.; Director and Chief Executive Officer, Invesco Trimark Dealer Inc. (registered broker dealer); Director, Invesco Distributors, Inc.
(formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer
and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior
Managing Director, Invesco Holding Company Limited; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco
Treasurer’s Series Trust), and Short-Term Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.
|
|
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|
1
|
Mr. Flanagan is considered an interested person (within the meaning of Section 2(a)(19) of the 1940 Act) of the Fund because he is an officer of the
Adviser, and an officer and a director of Invesco Ltd., ultimate parent of the Adviser.
|
|
2
|
Mr. Taylor is considered an interested person (within the meaning of Section 2(a)(19) of the 1940 Act) of the Fund because he is an officer and a director of the Adviser.
|
Independent Trustees:
|
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|
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|
|
|
|
|
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|
Name and Year of
Birth of Trustee
|
|
Position(s)
Held with
the Fund
|
|
Term of
Office and
Length of
Time Served
|
|
Principal Occupation(s)
During the Past Five Years
|
|
Number of
Invesco Funds
in Fund
Complex
Overseen by
Trustee
|
|
Other
Directorships
Held
by
Trustee
During
the
Past Five Years
|
|
Bruce L. Crockett (1944)
|
|
Trustee and
Chair
|
|
2014
|
|
Chairman, Crockett Technologies Associates (technology consulting company)
Formerly: Director, Captaris (unified messaging provider); Director, President and Chief
Executive Officer, COMSAT Corporation; Chairman, Board of Governors of INTELSAT (international communications company); ACE Limited (insurance company); Independent Directors Council and Investment Company Institute
|
|
144
|
|
ALPS (Attorneys Liability Protection Society) (insurance company) and Globe Specialty Metals, Inc. (metallurgical company)
|
|
|
|
|
|
|
|
|
David C. Arch
(1945)
|
|
Trustee
|
|
1998
|
|
Chairman of Blistex Inc., a consumer health care products manufacturer
|
|
144
|
|
Board member of the Illinois Manufacturers’ Association;
|
B-7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Member of the Board of Visitors, Institute for the Humanities, University of Michigan; Member of the Audit Committee of the Edward-Elmhurst Hospital
|
|
|
|
|
|
|
|
|
Name and Year of
Birth of
Trustee
|
|
Position(s)
Held with
the Fund
|
|
Term of
Office and
Length of
Time Served
|
|
Principal Occupation(s)
During the Past Five Years
|
|
Number of
Invesco Funds
in Fund
Complex
Overseen by
Trustee
|
|
Other
Directorships
Held
by
Trustee
During
the
Past Five Years
|
|
James T. Bunch
(1942)
|
|
Trustee
|
|
2014
|
|
Managing Member, Grumman Hill Group LLC (family office/private equity investments)
Formerly: Founder, Green Manning & Bunch Ltd. (investment banking firm) (1988-2010);
Executive Committee, United States Golf Association; and Chairman, Board of Governors, Western Golf Association
|
|
144
|
|
Chairman of the Board of Trustees, Evans Scholars Foundation; and Chairman of the Board, Denver Film Society
|
|
|
|
|
|
|
|
|
Rodney F. Dammeyer
1
(1940)
|
|
Trustee
|
|
2014
|
|
Chairman of CAC, LLC, (private company offering capital investment and management advisory services)
Formerly: Prior to 2001, Managing Partner at Equity Group Corporate Investments; Prior to
1995, Chief Executive Officer of Itel Corporation (formerly Anixter International); Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc., Executive Vice President and Chief Financial
Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.; From 1987 to 2010, Director/Trustee of investment companies in the Van Kampen Funds complex
|
|
144
|
|
Director of Quidel Corporation and Stericycle, Inc.
|
|
|
|
|
|
|
|
|
Albert R. Dowden (1941)
|
|
Trustee
|
|
2014
|
|
Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management);
Nature’s Sunshine Products, Inc. and Reich & Tang Funds (5 portfolios) (registered investment company)
Formerly: Director, Homeowners
|
|
144
|
|
Director of: Nature’s Sunshine Products, Inc., Reich & Tang Funds, Homeowners of America Holding Corporation/Homeowners of America Insurance Company, the Boss
Group
|
B-8
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Year of
Birth of
Trustee
|
|
Position(s)
Held with
the
Fund
|
|
Term of
Office and
Length of
Time Served
|
|
Principal Occupation(s)
During the Past Five Years
|
|
Number of
Invesco Funds
in
Fund
Complex
Overseen by
Trustee
|
|
Other
Directorships
Held
by
Trustee
During
the
Past Five Years
|
|
|
|
|
|
|
|
of America Holding Corporation/Homeowners of America Insurance Company (property casualty company); Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and
services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various
public and private corporations; Chairman, DHJ Media, Inc.; Director, Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International
(designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)
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Jack M. Fields
(1952)
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Trustee
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2014
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Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); Owner and Chief Executive Officer, Dos Angeles Ranch,
L.P. (cattle, hunting, corporate entertainment); and Discovery Global Education Fund (non-profit)
Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry
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144
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Insperity, Inc. (formerly known as Administaff)
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B-9
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company); Director of Cross Timbers Quail Research Ranch (non-profit); and member of the U.S. House of Representatives
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Prema Mathai-Davis (1950)
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Trustee
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2014
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Retired. Formerly: Chief Executive Officer, YWCA of the U.S.A.
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144
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None
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Larry Soll
(1942)
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Trustee
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2014
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Retired. Formerly: Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)
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144
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None
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Hugo F. Sonnenschein
2
(1940)
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Trustee
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1998
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President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to 2000, President of the University of
Chicago
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144
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Trustee of the University of Rochester and a member of its investment committee; Member of the National Academy of Sciences and the American Philosophical Society; Fellow of the American Academy of Arts and Sciences
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Raymond Stickel, Jr. (1944)
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Trustee
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2014
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Retired. Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche
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144
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None
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Suzanne H. Woolsey (1941)
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Trustee
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2003
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Chief Executive Officer of Woolsey Partners LLC.
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144
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Emeritus Chair of the Board of Trustees of the Institute for Defense Analyses; Trustee of Colorado College; Trustee of California Institute of Technology. Prior to 2014, Director of Fluor Corp. Prior to 2010, Trustee of the German
Marshall Fund of the United States. Prior to 2010, Trustee of the Rocky Mountain Institute.
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1
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As of the close of business on December 31, 2015, Mr. Dammeyer will retire as a trustee of the Fund.
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2
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As of the close of business on December 31, 2015, Mr. Sonnenschein will retire as a trustee of the Fund.
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Officers
The
following information relates to the executive officers of the Fund. Each officer also serves in the same capacity for all or a number of the other Invesco Funds. The address of each officer is 11 Greenway Plaza, Suite 1000 Houston Texas 77046.
B-10
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Name, Year of Birth and
Position(s) Held with the
Fund
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Officer
Since
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Principal Occupation(s) During the Past Five
Years
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Russell C. Burk – 1958
Senior Vice President and Senior Officer
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2014
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Senior Vice President and Senior Officer, The Invesco Funds
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John M. Zerr – 1962
Senior Vice President, Chief Legal Officer and Secretary
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2010
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Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.) and Van Kampen Exchange Corp.; Senior Vice President, Invesco Advisers, Inc.
(formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary,
Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President,
Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Secretary and
General Counsel, Invesco Capital Markets, Inc. (formerly known as Van Kampen Funds Inc.) and Chief Legal Officer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust,
PowerShares Actively Managed Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Commodity Fund Trust.
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Formerly: Director and Vice President, Van Kampen Advisors Inc.; Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; Director, Invesco Distributors, Inc. (formerly known as Invesco Aim
Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Aim Advisers, Inc. and Van Kampen Investments Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President,
Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company)
and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old
Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment
company)
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Sheri Morris – 1964
Vice President, Treasurer and Principal Financial Officer
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2010
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Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); and Vice President,
PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust and Powershares Actively Managed Exchange-Traded Commodity
Fund
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B-11
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Trust
Formerly: Vice President, Invesco Aim Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice
President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; and Treasurer, PowerShares Exchange-Traded Fund Trust,
PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust.
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Karen Dunn Kelley – 1960
Vice President
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2010
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Senior Managing Director, Investments Invesco Ltd.; Director, Co-President, Co-Chief Executive Officer, and Co-Chairman, Invesco Advisers,
Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Chairman, Invesco Senior Secured Management, Inc.; Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group,
Inc.); Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Invesco Mortgage Capital Inc. and Invesco Management Company Limited; Vice President, The Invesco Funds (other than AIM
Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Invesco Management Trust); and President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco
Treasurer’s Series Trust), Short-Term Investments Trust and Invesco Management Trust only)
Formerly: Director and President, INVESCO Asset Management (Bermuda) Ltd., Director, INVESCO Global Asset Management Limited and INVESCO Management S.A.;
Senior Vice President, Van Kampen Investments Inc. and Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional
(N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management,
Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco
Treasurer’s Series Trust), and Short-Term Investments Trust only)
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Crissie M.Wisdom – 1969
Anti-Money Laundering Compliance Officer
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2013
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Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser), Invesco Capital Markets, Inc. (formerly known as Van Kampen Funds Inc.),
Invesco Distributors, Inc., Invesco Investment Services, Inc., Invesco Management Group, Inc., Van Kampen Exchange Corp., The Invesco Funds, and PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India
Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Commodity Fund Trust; Anti-Money Laundering Compliance Officer and Bank Secrecy Act Officer, INVESCO National Trust
Company and Invesco Trust
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B-12
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Company; and Fraud Prevention Manager and Controls and Risk Analysis Manager for Invesco Investment Services, Inc.
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Lisa O. Brinkley 1959
Chief Compliance Officer
|
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2015
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Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco
Institutional (N.A., Inc.); and Chief Compliance Officer, The Invesco Funds.
Formerly;
Global Assurance Officer, Invesco Ltd. and Vice President, The Invesco Funds Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim
Investment Services, Inc.) and Van Kampen Investor Services, Inc. ; Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief
Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company.
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Trustee Qualification
The business and affairs of the Fund are managed under direction of the Board. The Board seeks to provide shareholders with a highly qualified,
highly capable and diverse group of Board members reflecting the diversity of investor interests underlying the Fund and with a diversity of backgrounds, experience and skills that the Board considers desirable and necessary to its primary goal
— protecting and promoting shareholders’ interests.
After considering all factors together, including each Trustee’s background,
experience and skills summarized below, the Board believes that each Trustee is qualified to serve as a Trustee of the Fund.
Additional Information
about the Trustees
Independent Trustees
B-13
David C. Arch.
Mr. Arch has been a member of the Board of the Fund since 1998 and a member of the
board of other Invesco Funds since 1988. Mr. Arch is the Chairman of Blistex Inc., a consumer health care products manufacturer. Mr. Arch is a member of the Board of the Illinois Manufacturers’ Association, the Board of Visitors,
Institute for the Humanities, University of Michigan and the Audit Committee of Edward-Elmhurst Hospital. From 1984 to 2010, Mr. Arch served as Director or Trustee of investment companies in the Van Kampen Funds Complex. The Board believes that
Mr. Arch’s experience as the CEO of a public company and as a member of the board of several organizations, his service as a Trustee of the Fund and his experience with investment companies benefits the Fund.
James T. Bunch.
Mr. Bunch has been a member of the Board of the Fund since 2014 and a member of the board of other Invesco Funds since 2000. From
1988 to 2010, Mr. Bunch was Founding Partner of Green Manning & Bunch, Ltd., a leading investment banking firm located in Denver, Colorado. Green Manning & Bunch is an investment bank registered with the Financial Industry
Regulatory Authority Inc. (FINRA) specializing in mergers and acquisitions, private financing of middle-market companies and corporate finance advisory services. Immediately prior to forming Green Manning & Bunch, Mr. Bunch was
Executive Vice President, General Counsel, and a Director of Boettcher & Company, then the leading investment banking firm in the Rocky Mountain region. Mr. Bunch began his professional career as a practicing attorney. He joined the
prominent Denver-based law firm of Davis Graham & Stubbs in 1970 and later rose to the position of Chairman and Managing Partner of the firm. At various other times during his career, Mr. Bunch has served as Chair of the National
Association of Securities Dealers, Inc. (NASD) Business District Conduct Committee, and Chair of the Colorado Bar Association Ethics Committee. In June 2010, Mr. Bunch became the Managing Member of Grumman Hill Group LLC, a family office
private equity investment manager. The Board believes that Mr. Bunch’s experience as an investment banker and investment management lawyer benefits the Fund.
Bruce L. Crockett.
Mr. Crockett has been a member of the Board of the Fund since 2014 and a member of the board of other funds since 1978, and has
served as Independent Chair of the Board since 2004. Mr. Crockett has more than 30 years of experience in finance banking, aerospace and telecommunications industries. From 1992 to 1996, he served as president, chief executive officer and a
director of COMSAT Corporation, an international satellite and wireless telecommunications company. Mr. Crockett has also served, since 1996, as chairman of Crockett Technologies Associates, a strategic consulting firm that provides services to
the information technology and communications industries. Mr. Crockett also serves on the Board of Directors of ALPS (Attorneys Liability Protection Society) and Globe Specialty Metals, Inc. (metallurgical company) and he is a life trustee of
the University of Rochester Board of Directors. The Board of Trustees elected Mr. Crockett to serve as its Independent Chair because of his extensive experience in managing public companies and familiarity with investment companies.
Rodney F. Dammeyer.
Mr. Dammeyer has been a member of the Board of the Fund since 2014 and a member of the board of other Invesco Funds since
2010. Mr. Dammeyer is chairman of CAC, LLC, a private company offering capital investment and management advisory services. Prior to this, Mr. Dammeyer was responsible for managing all of Sam Zell’s non-real estate investment activity
as managing partner of Equity Group Corporate Investments. From 1985 to 1995, Mr. Dammeyer was chief executive officer of Itel Corporation, which later changed its name to Anixter International. From 1983 to 1985, Mr. Dammeyer was senior
vice president and chief financial officer of Household International, Inc. He was executive vice president and chief financial officer of Northwest Industries, Inc. from 1979 to 1983. After graduating from Kent State University in 1962,
Mr. Dammeyer began his business career with Arthur Andersen & Co. and was admitted to partnership in 1970. He served as chairman of the firm’s advisory council and a member of the board of directors’ nominating committee.
Mr. Dammeyer is a member of the boards of directors of Stericycle, Inc. and Quidel Corporation, in addition to several private companies. He also serves on the School of Leadership and Education Sciences (SOLES) Advisory Board of the University
of San Diego, the board of directors of High Tech charter schools, and the California Charter Schools Association. From 1987 to 2010, Mr. Dammeyer served as Director or Trustee of investment companies in the Van Kampen Funds complex. The Board
believes that Mr. Dammeyer’s experience in executive
B-14
positions at a number of public companies, his accounting experience and his experience serving as a director of other investment companies benefits the Fund.
Albert R. Dowden
. Mr. Dowden has been a member of the Board of the Fund since 2014 and a member of the board of other Invesco Funds since 2000.
Mr. Dowden retired at the end of 1998 after a 24-year career with Volvo Group North America, Inc. and Volvo Cars of North America, Inc. Mr. Dowden joined Volvo as general counsel in 1974 and was promoted to increasingly senior positions
until 1991 when he was appointed president, chief executive officer and director of Volvo Group North America and senior vice president of Swedish parent company AB Volvo. Since retiring, Mr. Dowden continues to serve on the boards of the
Reich & Tang Funds, Nature’s Sunshine Products, Inc. and The Boss Group. Mr. Dowden’s charitable endeavors currently focus on Boys & Girls Clubs where he has been active for many years, as well as several other
not-for-profit organizations. Mr. Dowden began his career as an attorney with a major international law firm, Rogers & Wells (1967-1976), which is now Clifford Chance. The Board believes that Mr. Dowden’s extensive experience
as a corporate executive benefits the Fund.
Jack M. Fields.
Mr. Fields has been a member of the Board of the Fund since 2014 and a member of
the board of other Invesco Funds since 1997. Mr. Fields served as a member of Congress, representing the 8th Congressional District of Texas from 1980 to 1997. As a member of Congress, Mr. Fields served as Chairman of the House
Telecommunications and Finance Subcommittee, which has jurisdiction and oversight of the Federal Communications Commission and the Securities and Exchange Commission. Mr. Fields co-sponsored the National Securities Markets Improvements Act of
1996, and played a leadership role in enactment of the Securities Litigation Reform Act. Mr. Fields currently serves as Chief Executive Officer of the Twenty-First Century Group, Inc. in Washington, D.C., a bipartisan Washington consulting firm
specializing in Federal government affairs. Mr. Fields also serves as a Director of Insperity, Inc. (formerly known as Administaff), a premier professional employer organization with clients nationwide. In addition, Mr. Fields sits on the
Board of the Discovery Channel Global Education Fund, a non-profit organization dedicated to providing educational resources to people in need around the world through the use of technology. The Board believes that Mr. Fields’ experience
in the House of Representatives, especially concerning regulation of the securities markets benefits the Fund.
Dr. Prema Mathai-Davis.
Dr. Mathai-Davis has been a member of the Board of the Fund since 2014 and a member of the board of other Invesco Funds since 1998. Prior to her retirement in 2000, Dr. Mathai-Davis served as Chief Executive Officer of the YWCA of the USA.
Prior to joining the YWCA, Dr. Mathai-Davis served as the Commissioner of the New York City Department for the Aging. She was a Commissioner of the Metropolitan Transportation Authority of New York, the largest regional transportation network
in the U.S. Dr. Mathai-Davis also serves as a Trustee of the YWCA Retirement Fund, the first and oldest pension fund for women, and on the advisory board of the Johns Hopkins Bioethics Institute. Dr. Mathai-Davis was the president and
chief executive officer of the Community Agency for Senior Citizens, a non-profit social service agency that she established in 1981. She also directed the Mt. Sinai School of Medicine-Hunter College Long-Term Care Gerontology Center, one of
the first of its kind. The Board believes that Dr. Mathai-Davis’ extensive experience in running public and charitable institutions benefits the Fund.
Dr. Larry Soll.
Dr. Soll has been a member of the Board of the Fund since 2014 and a member of the board of other Invesco Funds since 1997.
Formerly, Dr. Soll was chairman of the board (1987 to 1994), chief executive officer (1982 to 1989; 1993 to 1994), and president (1982 to 1989) of Synergen Corp., a public company, and in such capacities supervised the activities of the Chief
Financial Officer. Dr. Soll also has served as a director of three other public companies and as a treasurer of a non-profit corporation. Dr. Soll currently serves as a trustee and a member of the Audit Committee of each of the funds
within the Invesco Funds. The Board believes that Dr. Soll’s experience as a chairman of a public company and in academia benefits the Fund.
Hugo F. Sonnenschein.
Mr. Sonnenschein has been a member of the Board of the Fund since 1998 and a member of the board of other Invesco Funds
since 2010. Mr. Sonnenschein is the President Emeritus and an Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000,
Mr. Sonnenschein served as President of the University of Chicago. Mr. Sonnenschein is a Trustee of the University of Rochester and a member of its investment committee.
B-15
He is also a member of the National Academy of Sciences and the American Philosophical Society, and a Fellow of the American Academy of Arts and Sciences. From 1994 to 2010, Mr. Sonnenschein
served as Director or Trustee of investment companies in the Van Kampen Funds complex. The Board believes that Mr. Sonnenschein’s experiences in academia and in running a university, and his experience as a director of other investment
companies benefits the Fund.
Raymond Stickel, Jr.
Mr. Stickel, Jr. has been a member of the Board of the Fund since 2014 and a member of the
Board of other Invesco Funds since 2005. Mr. Stickel retired after a 35-year career with Deloitte & Touche (the Firm). For the last five years of his career, he was the managing partner of the investment management practice for the New
York, New Jersey and Connecticut region. In addition to his management role, he directed audit and tax services for several mutual fund clients. Mr. Stickel began his career with Touche Ross & Co. in Dayton, Ohio, became a partner in
1976 and managing partner of the office in 1985. He also started and developed an investment management practice in the Dayton office that grew to become a significant source of investment management talent for the Firm. In Ohio, he served as the
audit partner on numerous mutual funds and on public and privately held companies in other industries. Mr. Stickel has also served on the firm’s Accounting and Auditing Executive Committee. The Board believes that Mr. Stickel’s
experience as a partner in a large accounting firm working with investment managers and investment companies and his status as an Audit Committee Financial Expert, benefits the Fund.
Suzanne H. Woolsey.
Ms. Woolsey has been a member of the Board of the Fund since 2003 and a member of the board of other Invesco Funds since 2014.
Ms. Woolsey is the Chief Executive Officer of Woolsey Partners LLC. She was formerly the chief operating officer and chief communications officer at the National Academy of Sciences and Engineering and Institute of Medicine/National Research
Council from 1993 to 2003. Ms. Woolsey served as trustee to the former Van Kampen investment companies from 2003 to 2010. She continued to serve as trustee or managing general partner to certain Invesco closed-end funds, Invesco Senior Loan
Fund, and Invesco Exchange Fund following the acquisition of the Van Kampen family of funds in 2010. Ms. Woolsey also served as an independent director to the Fluor Corporation, a multi-billion dollar global engineering, construction, and
management company from 2004 to 2014. Additionally, she served as independent director to the Neurogen Corporation, which is a publicly traded small molecule drug design company, from 1998 to 2006. The Board believes that Ms. Woolsey’s
experience as an independent director of numerous organizations, her service as a Trustee of certain Invesco closed-end funds, Invesco Exchange Fund and Invesco Senior Loan Fund benefits the Fund.
Interested Trustees
Martin L. Flanagan.
Mr. Flanagan has been a member of the Board of the Fund since 2014 and a member of the board of other Invesco Funds since 2007. Mr. Flanagan is president and chief executive officer of Invesco Ltd., a position he has held since August
2005. He is also a member of the Board of Directors of Invesco Ltd. Mr. Flanagan joined Invesco Ltd. from Franklin Resources, Inc., where he was president and co-chief executive officer from January 2004 to July 2005. Previously he had been
Franklin’s co-president from May 2003 to January 2004, chief operating officer and chief financial officer from November 1999 to May 2003, and senior vice president and chief financial officer from 1993 until November 1999. Mr. Flanagan
served as director, executive vice president and chief operating officer of Templeton, Galbraith & Hansberger, Ltd. before its acquisition by Franklin in 1992. Before joining Templeton in 1983, he worked with Arthur Andersen & Co.
Mr. Flanagan is a chartered financial analyst and a certified public accountant. He serves as vice chairman of the Investment Company Institute and is a member of the executive board at the SMU Cox School of Business. The Board believes that
Mr. Flanagan’s long experience as an executive in the investment management area benefits the Fund.
B-16
Philip A. Taylor.
Mr. Taylor has been a member of the Board of the Fund since 2014 and a member
of the board of other Invesco Funds since 2006. Mr. Taylor has headed Invesco’s North American retail business as Senior Managing Director since April 2006. He previously served as chief executive officer of Invesco Trimark Investments
since January 2002. Mr. Taylor joined Invesco in 1999 as senior vice president of operations and client services and later became executive vice president and chief operating officer. Mr. Taylor was president of Canadian retail broker
Investors Group Securities from 1994 to 1997 and managing partner of Meridian Securities, an execution and clearing broker, from 1989 to 1994. He held various management positions with Royal Trust, now part of Royal Bank of Canada, from 1982 to
1989. He began his career in consumer brand management in the U.S. and Canada with Richardson-Vicks, now part of Procter & Gamble. The Board believes that Mr. Taylor’s long experience in the investment management business benefits
the Fund.
Management Information
The Trustees have the authority to take all actions necessary in connection with the business affairs of the Fund, including, among other
things, approving the investment objectives, policies and procedures for the Fund. The Fund enters into agreements with various entities to manage the day-to-day operations of the Fund, including the Fund’s investment advisers, administrator,
transfer agent, distributor and custodians. The Trustees are responsible for selecting these service providers and approving the terms of their contracts with the Fund, and exercising general oversight of these service providers on an ongoing basis.
Certain Trustees and officers of the Fund are affiliated with Invesco and Invesco Ltd., the parent corporation of Invesco. All of the
Fund’s executive officers hold similar offices with some or all of the other Invesco Funds in the Fund Complex.
Leadership
Structure and the Board.
The Board is currently composed of thirteen Trustees, including eleven Trustees who are not “interested persons” of the Fund, as that term is defined in the 1940 Act (collectively, the Independent Trustees and
each an Independent Trustee). In addition to eight regularly scheduled meetings per year, the Board holds special meetings or informal conference calls to discuss specific matters that may require action prior to the next regular meeting. As
discussed below, the Board has established five committees to assist the Board in performing its oversight responsibilities.
The Board
has appointed an Independent Trustee to serve in the role of Chairman. The Chairman’s primary role is to participate in the preparation of the agenda for meetings of the Board and the identification of information to be presented to the Board
and matters to be acted upon by the Board. The Chairman also presides at all meetings of the Board and acts as a liaison with service providers, officers, attorneys, and other Trustees generally between meetings. The Chairman may perform such other
functions as may be requested by the Board from time to time. Except for any duties specified herein or pursuant to the Fund’s Declaration of Trust or By-laws, the designation of Chairman does not impose on such Independent Trustee any duties,
obligations or liability that is greater than the duties, obligations or liability imposed on such person as a member of the Board, generally.
The Board believes that its leadership structure, which includes an Independent Trustee as Chairman, allows for effective communication
between the Trustees and Fund management, among the Board’s Trustees and among its Independent Trustees. The existing Board structure, including its committee structure, provides the Independent Trustees with effective control over Board
governance while also providing insight from the two interested Trustees who are active officers of the Fund’s investment adviser. The Board’s leadership structure promotes dialogue and debate, which the Board believes will allow for the
proper consideration of matters deemed important to the Fund and its shareholders and result in effective decision-making.
Risk
Oversight.
The Board considers risk management issues as part of its general oversight responsibilities throughout the year at regular meetings of the Investments, Audit, Compliance and Valuation, Distribution and Proxy Oversight Committees (as
defined and further described below). These Committees in turn report to the full Board and recommend actions and approvals for the full Board to take.
B-17
Invesco prepares regular reports that address certain investment, valuation and compliance
matters, and the Board as a whole or the Committees may also receive special written reports or presentations on a variety of risk issues at the request of the Board, a Committee or the Senior Officer. In addition, the Audit Committee of the Board
meets regularly with Invesco Ltd.‘s internal audit group to review reports on their examinations of functions and processes within Invesco that affect the Fund.
The Investments Committee and its sub-committees receive regular written reports describing and analyzing the investment performance of the
Fund. In addition, the portfolio managers of the Fund meets regularly with the sub-committees of the Investment Committee to discuss portfolio performance, including investment risk, such as the impact on the Fund of the investment in particular
securities or instruments, such as derivatives. To the extent that a Fund changes a particular investment strategy that could have a material impact on the Fund’s risk profile, the Board generally is consulted in advance with respect to such
change.
Invesco provides regular written reports to the Valuation, Distribution and Proxy Oversight Committee that enable the Committee
to monitor the number of fair valued securities in a particular portfolio, the reasons for the fair valuation and the methodology used to arrive at the fair value. Such reports also include information concerning illiquid securities within the
Fund’s portfolio. In addition, the Audit Committee reviews valuation procedures and pricing results with the Fund’s independent auditors in connection with such Committee’s review of the results of the audit of the Fund’s
year-end financial statement.
The Compliance Committee receives regular compliance reports prepared by Invesco’s compliance group
and meets regularly with the Fund’s Chief Compliance Officer (CCO) to discuss compliance issues, including compliance risks. The Compliance Committee recommends and the Board adopts compliance policies and procedures for the Fund and
approves such procedures for the Fund’s service providers. The compliance policies and procedures are specifically designed to detect, prevent and correct violations of the federal securities laws.
Committee Structure.
The standing committees of the Board are the Audit Committee, the Compliance Committee, the Governance Committee,
the Investments Committee and the Valuation, Distribution and Proxy Oversight Committee (the Committees).
The members of the Audit
Committee are Messrs. David C. Arch, James T. Bunch, Bruce L. Crockett, Rodney F. Dammeyer (Vice-Chair), Raymond Stickel, Jr. (Chair), Dr. Larry Soll, and Ms. Suzanne H. Woolsey. The Audit Committee’s primary purposes are to:
(i) oversee qualifications, independence and performance of the independent registered public accountants; (ii) appoint independent registered public accountants for the Fund; (iii) pre-approve all permissible audit and non-audit
services that are provided to the Fund by its independent registered public accountants to the extent required by Section 10A(h) and (i) of the Exchange Act; (iv) pre-approve, in accordance with Rule 2-01(c)(7)(ii) of Regulation S-X,
certain non-audit services provided by the Fund’s independent registered public accountants to Invesco and certain other affiliated entities; (v) review the audit and tax plans prepared by the independent registered public accountants;
(vi) review the Fund’s audited financial statements; (vii) review the process that management uses to evaluate and certify disclosure controls and procedures in Form N-CSR; (viii) review the process for preparation and review of
the Fund’s shareholder reports; (ix) review certain tax procedures maintained by the Fund; (x) review modified or omitted officer certifications and disclosures; (xi) review any internal audits of the Fund; (xii) establish
procedures regarding questionable accounting or auditing matters and other alleged violations; (xiii) set hiring policies for employees and proposed employees of the Fund who are employees or former employees of the independent registered
public accountants; and (xiv) remain informed of (a) the Fund’s accounting systems and controls, (b) regulatory changes and new accounting pronouncements that affect the Fund’s net asset value calculations and financial
statement reporting requirements, and (c) communications with regulators regarding accounting and financial reporting matters that pertain to the Fund. During the fiscal year ended December 31, 2014, the Audit Committee held six meetings.
The members of the Compliance Committee are Messrs. Bunch, Dammeyer (Vice-Chair), Dr. Soll (Chair) and Stickel. The Compliance
Committee is responsible for: (i) recommending to the Board and the Independent Trustees the appointment, compensation and removal of the Fund’s Chief Compliance Officer; (ii) recommending to the Independent Trustees the appointment,
compensation and removal of the Fund’s Senior Officer appointed pursuant to the terms of the Assurances of Discontinuance entered into by the New York Attorney General, Invesco and INVESCO Funds Group, Inc. (IFG);
B-18
(iii) reviewing any report prepared by a third party who is not an interested person of Invesco, upon
the conclusion by such third party of a compliance review of Invesco; (iv) reviewing all reports on compliance matters from the Fund’s Chief Compliance Officer, (v) reviewing all recommendations made by the Senior Officer regarding
Invesco’s compliance procedures, (vi) reviewing all reports from the Senior Officer of any violations of state and federal securities laws, the Colorado Consumer Protection Act, or breaches of Invesco’s fiduciary duties to Fund
shareholders and of Invesco’s Code of Ethics; (vii) overseeing all of the compliance policies and procedures of the Fund and its service providers adopted pursuant to Rule 38a-1 of the 1940 Act; (viii) reviewing all reports made by
Invesco’s Chief Compliance Officer; (ix) reviewing and recommending to the Independent Trustees whether to approve procedures to investigate matters brought to the attention of Invesco’s ombudsman; (x) risk management oversight
with respect to the Fund and, in connection therewith, receiving and overseeing risk management reports from Invesco Ltd. that are applicable to the Fund or its service providers; and (xi) overseeing potential conflicts of interest that are
reported to the Compliance Committee by Invesco, the Chief Compliance Officer, the Senior Officer and/or the Compliance Consultant. During the fiscal year ended December 31, 2014, the Compliance Committee held five meetings.
The members of the Governance Committee are Messrs. Arch, Crockett, Albert R. Dowden (Chair), Jack M. Fields
(Vice-Chair),
Hugo F. Sonnenschein, Dr. Prema Mathai-Davis and Ms. Woolsey. The Governance Committee is responsible for: (i) nominating persons who will qualify as Independent Trustees for
(a) election as Trustees in connection with meetings of shareholders of the Fund that are called to vote on the election of Trustees, (b) appointment by the Board as Trustees in connection with filling vacancies that arise in between
meetings of shareholders; (ii) reviewing the size of the Board, and recommending to the Board whether the size of the Board shall be increased or decreased; (iii) nominating the Chair of the Board; (iv) monitoring the composition of
the Board and each committee of the Board, and monitoring the qualifications of all Board Members; (v) recommending persons to serve as members of each committee of the Board (other than the Compliance Committee), as well as persons who shall
serve as the chair and vice chair of each such committee; (vi) reviewing and recommending the amount of compensation payable to the Independent Trustees; (vii) overseeing the selection of independent legal counsel to the Independent
Trustees; (viii) reviewing and approving the compensation paid to independent legal counsel to the Independent Trustees; (ix) reviewing and approving the compensation paid to counsel and other advisers, if any, to the Committees of the
Board; and (x) reviewing as they deem appropriate administrative and/or logistical matters pertaining to the operations of the Board. During the fiscal year ended December 31, 2014, the Governance Committee held six meetings.
The Governance Committee will consider nominees recommended by a shareholder to serve as Trustees, provided: (i) that such person is a shareholder of
record at the time he or she submits such names and is entitled to vote at the meeting of shareholders at which Trustees will be elected; and (ii) that the Governance Committee or the Board, as applicable, shall make the final determination of
persons to be nominated. Notice procedures set forth in the Trust’s bylaws require that any shareholder of a Fund desiring to nominate a trustee for election at a shareholder meeting must submit to the Trust’s Secretary the nomination in
writing not later than the close of business on the later of the 90th day prior to such shareholder meeting or the tenth day following the day on which public announcement is made of the shareholder meeting and not earlier than the close of business
on the 120th day prior to the shareholder meeting. The Governance Committee has not adopted any specific policy on the issue of diversity, but will take this into account, among other factors, in its consideration of new candidates to the Board. The
Governance Committee’s charter is available at www.invesco.com/us.
The members of the Investments Committee are Messrs. Arch, ,
Bunch (Chair), Crockett, Dammeyer (Vice-Chair), Dowden, Fields (Vice-Chair), Martin L. Flanagan, Sonnenschein (Vice- Chair), Stickel, Philip A. Taylor, Ms. Woolsey, and Drs. Mathai-Davis and Soll. The Investments Committee’s primary
purposes are to: (i) assist the Board in its oversight of the investment management services provided by Invesco and the Sub-Advisers; and (ii) review all proposed and existing advisory and sub-advisory arrangements for the Fund, and to
recommend what action the full Board and the Independent Trustees take regarding the approval of all such proposed arrangements. During the fiscal year ended December 31, 2014, the Investments Committee held six meetings.
B-19
The Investments Committee has established three Sub-Committees. The Sub-Committees are
responsible for: (i) reviewing the performance, fees and expenses of the Fund and other Invesco Funds that have been assigned to a particular Sub-Committee (for each Sub-Committee, the Designated Funds), unless the Investments Committee takes
such action directly; (ii) reviewing with the applicable portfolio managers from time to time the investment objective(s), policies, strategies and limitations of the Designated Funds; (iii) evaluating the investment advisory, sub-advisory
and distribution arrangements in effect or proposed for the Designated Funds, unless the Investments Committee takes such action directly; (iv) being familiar with the registration statements and periodic shareholder reports applicable to their
Designated Funds; and (v) such other investment-related matters as the Investments Committee may delegate to the Sub-Committee from time to time.
The members of the Valuation, Distribution and Proxy Oversight Committee are Messrs. Dowden, Fields, Dr. Mathai-Davis (Chair), and
Sonnenschein (Vice-Chair). The Board adopted written pricing procedures that conform to the fair value policies and procedures requirements of the 1940 Act and the rules and interpretations thereunder (“Pricing Procedures”). The primary
purposes of the Valuation, Distribution and Proxy Oversight Committee are: (a) to address issues requiring action or oversight by the Board (i) in the valuation of the Fund’s portfolio securities consistent with the Pricing
Procedures, (ii) in oversight of the creation and maintenance by the principal underwriters of the Invesco Funds of an effective distribution and marketing system to build and maintain an adequate asset base and to create and maintain economies
of scale for the Invesco Funds, (iii) in the review of existing distribution arrangements for the Invesco Funds under Rule 12b-1 and Section 15 of the 1940 Act, and (iv) in the oversight of proxy voting on portfolio securities of the
Fund; and (b) to make regular reports to the full Board of the Invesco Funds.
The Valuation, Distribution and Proxy Oversight
Committee is responsible for: (a) with regard to valuation, (i) developing an understanding of the valuation process and the Pricing Procedures, (ii) reviewing the Pricing Procedures and making recommendations to the full Board with
respect thereto, (iii) reviewing the reports described in the Pricing Procedures and other information from Invesco regarding fair value determinations made pursuant to the Pricing Procedures by Invesco’s internal valuation committee and
making reports and recommendations to the full Board with respect thereto, (iv) receiving the reports of Invesco’s internal valuation committee requesting approval of any changes to pricing vendors or pricing methodologies as required by
the Pricing Procedures and the annual report of Invesco evaluating the pricing vendors, approving changes to pricing vendors and pricing methodologies as provided in the Pricing Procedures, and recommending annually the pricing vendors for approval
by the full Board; (v) upon request of Invesco, assisting Invesco’s internal valuation committee or the full Board in resolving particular fair valuation issues; (vi) reviewing the reports described in the Procedures for Determining
the Liquidity of Securities (the Liquidity Procedures) and other information from Invesco regarding liquidity determinations made pursuant to the Liquidity Procedures by Invesco and making reports and recommendations to the full Board with respect
thereto, and (vii) overseeing actual or potential conflicts of interest by investment personnel or others that could affect their input or recommendations regarding pricing or liquidity issues.
(b) with regard to distribution and marketing, the Valuation, Distribution and Proxy Oversight Committee is responsible for
(i) developing an understanding of mutual fund distribution and marketing channels and legal, regulatory and market developments regarding distribution, (ii) reviewing periodic distribution and marketing determinations and annual approval
of distribution arrangements and making reports and recommendations to the full Board with respect thereto, and (iii) reviewing other information from the principal underwriters to the Invesco Funds regarding distribution and marketing of the
Invesco Funds and making recommendations to the full Board with respect thereto.
(c) with regard to proxy voting, the Valuation, and
Proxy Oversight Committee is responsible for (i) overseeing the implementation of the Proxy Voting Guidelines (the Guidelines) and the Proxy Policies and Procedures (the Proxy Procedures) by Invesco and the Sub-Advisers, reviewing the Quarterly
Proxy Voting Report and making recommendations to the full Board with respect thereto, (ii) reviewing the Guidelines and the Proxy Procedures and information provided by Invesco and the Sub-Advisers regarding industry developments and best
practices in connection with proxy voting and making recommendations to the full Board with respect thereto, and (iii) in implementing its responsibilities in this area, assisting Invesco in resolving particular proxy voting issues. The
Valuation, Distribution and Proxy Oversight Committee were formed effective January 1, 2008. It succeeded the Valuation Committee which existed prior to 2008. During the fiscal year ended December 31, 2014, the Valuation, Distribution and
Proxy Oversight Committee held six meetings.
B-20
Compensation of Trustees
The compensation of Trustees and executive officers who are affiliated persons (as defined in the 1940 Act) of the Adviser is paid by the
respective affiliated entity. The Fund pays the non-affiliated Trustees an annual retainer and meeting fees for services to the Fund.
Additional information regarding compensation and benefits for Trustees is set forth below. As indicated in the notes accompanying the table,
the amounts relate to either the Fund’s most recently completed fiscal year or the most recently completed calendar year ended December 31, 2014.
COMPENSATION TABLE
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|
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|
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Name
|
|
Compensation
from the
Fund
(1)
|
|
|
Total
Compensation
from Fund
Complex
(2)
|
|
|
Number of Portfolios
in Fund Complex
Overseen by
Trustees
|
|
|
Independent Trustees
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David C. Arch
|
|
$
|
1420
|
|
|
$
|
384,500
|
|
|
|
144
|
|
|
James T. Bunch
|
|
|
368
|
|
|
|
356,800
|
|
|
|
144
|
|
|
Bruce L. Crockett
|
|
|
627
|
|
|
|
661,000
|
|
|
|
144
|
|
|
Rodney F. Dammeyer
|
|
|
344
|
|
|
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332,100
|
|
|
|
144
|
|
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Albert R. Dowden
|
|
|
368
|
|
|
|
372,900
|
|
|
|
144
|
|
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Jack M. Fields
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|
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320
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|
|
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345,700
|
|
|
|
144
|
|
|
Prema Mathai-Davis
|
|
|
368
|
|
|
|
372,900
|
|
|
|
144
|
|
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Larry Soll
|
|
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368
|
|
|
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372,900
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|
|
|
144
|
|
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Hugo F. Sonnenschein
|
|
|
1445
|
|
|
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411,700
|
|
|
|
144
|
|
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Raymond Stickel, Jr
|
|
|
394
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|
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400,100
|
|
|
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144
|
|
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Suzanne H. Woolsey
|
|
|
3,133
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|
|
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253,500
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|
|
|
144
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|
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(1)
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The Fund does not accrue or pay retirement or pension benefits to the Trustees. Pursuant to the retirement plan of other funds in the Fund Complex overseen by the Board, which was amended as of December 31, 2013 to
convert to a defined contribution plan, estimated annual benefits upon retirement payable by such funds to Trustees is as follows: David C. Arch: $205,000; James T. Bunch: $205,000; Bruce L. Crockett: $205,000; Rodney F. Dammeyer: $205,000; Albert
R. Dowden: $205,000; Jack M. Fields: $205,000; Prema Mathai-Davis: $205,000; Larry Soll: $226,779; Hugo F. Sonnenschein: $205,000; and Raymond Stickel, Jr.: $205,000. Such amounts represent the estimated annual benefits payable by such funds upon
the Trustees’ retirement and assumes each Trustees will serve until his or her normal retirement date. These amounts are payable by other funds in the Fund Complex and not by the Fund.
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(2)
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The amounts shown in this column represent the aggregate compensation paid by all of the funds in the Fund Complex as of December 31, 2014. Because the funds in the Fund Complex have different fiscal year ends, the
amounts shown in this column are presented on a calendar year basis.
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(3)
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The Fund and other funds overseen by the Board have agreed to compensate Ms. Woolsey for additional efforts undertaken in her capacity as chair of the Fund’s governance committee intended to facilitate the
Board Consolidation, including attending meetings with representatives of the Board and of the Board of other Invesco Funds and fund management, in an aggregate amount equal to $100,000.
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B-21
Shareholder Communications
Shareholders may send communications to the Board. Shareholders should send communications intended for the Board by addressing the communication directly to
the Board (or individual Trustee) and/or otherwise clearly indicating in the salutation that the communication is for the Board (or individual Trustees) and by sending the communication to either the Fund’s office or directly to such Trustee at
the address specified for such Trustee above. Other shareholder communications received by the Fund not directly addressed and sent to the Board will be reviewed and generally responded to by management, and will be forwarded to the Board only at
management’s discretion based on the matters contained therein.
Share Ownership
As of December 31, 2014, the most recently completed calendar year of the Fund, each Trustee beneficially owned equity securities of the Fund and all of
the funds in the Fund Complex overseen by the Trustee in the dollar range amounts specified in the following table:
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Name
|
|
Fund
|
|
Aggregate Dollar Range of Equity
Securities in all Registered
Investment Companies Overseen
by Trustee
in the
Fund Complex
|
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Independent Trustees
|
|
|
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Arch
|
|
$10,001–$50,000
|
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Over $100,000
|
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Bunch
|
|
$1-$10,000
|
|
Over $100,000
(1)
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Crockett
|
|
$1-$10,000
|
|
Over $100,000
(1)
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Dammeyer
|
|
$10,001–$50,000
|
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Over $100,000
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Dowden
|
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$1-$10,000
|
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Over $100,000
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Fields
|
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$1-$10,000
|
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Over $100,000
(1)
|
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Mathai-Davis
|
|
$1-$10,000
|
|
Over $100,000
(1)
|
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Soll
|
|
$1-$10,000
|
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Over $100,000
(1)
|
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Sonnenschein
|
|
$10,001–$50,000
|
|
Over $100,000
|
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Stickel
|
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$1-$10,000
|
|
Over $100,000
|
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Woolsey
|
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$10,001–$50,000
|
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Over $100,000
|
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Interested Trustees
|
|
|
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Flanagan
|
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$1-$10,000
|
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Over $100,000
|
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Taylor
|
|
$1-$10,000
|
|
$1-$10,000
|
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(1)
|
Includes total amount of compensation deferred by the Trustee at his or her election pursuant to a deferred compensation plan. Such deferred compensation is placed in a deferral account and deemed to be invested in one
or more of the Invesco Funds.
|
Code of Ethics
The Fund, the Adviser, the Sub-Advisers and Invesco Distributors, Inc. have each adopted a Code of Ethics (the “Code of Ethics”) that
sets forth general and specific standards relating to the securities trading activities of their employees. The Code of Ethics does not prohibit employees from acquiring securities that may be purchased or held by the Fund, but is intended to ensure
that all employees conduct their personal transactions in a manner that does not interfere with the portfolio transactions of the Fund or other funds in the Fund Complex, and that such employees do not take unfair advantage of their relationship
with the Fund. Among other things, the Code of Ethics prohibits certain types of transactions absent prior approval, imposes various trading restrictions (such as time periods during which personal transactions may or may not be made) and requires
quarterly reporting of securities transactions and other reporting matters. Additional restrictions apply to portfolio managers, traders, research
B-22
analysts and others who may have access to nonpublic information about the trading activities of the Fund or other funds in the Fund Complex or who otherwise are involved in the investment
advisory process. Exceptions to these and other provisions of the Code of Ethics may be granted in particular circumstances after review by appropriate personnel.
Proxy Voting Policy and Proxy Voting Record
The Board believes that the voting of proxies on securities held by the Fund is an important element of the overall investment process. The
Board has delegated day-to-day responsibility to the Adviser to vote such proxies, pursuant to the Board approved Proxy Voting Policy, a copy of which is currently in effect as of the date of this Statement of Additional Information and is attached
hereto as Appendix A.
The Proxy Voting Policy is subject to change over time and investors seeking the most current copy of the Proxy
Voting Policy should go to the Adviser’s web site at www.invesco.com/us. The Fund’s proxy voting record is also available without charge on the SEC’s web site at www.sec.gov.
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Item 18.
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Control Persons and Principal Holders of Securities.
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As
of September 23, 2015, no person was known by the Fund to own beneficially or to holder of record 5% or more of the outstanding shares of the Fund, except as follows:
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|
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Name and Address of Holder
|
|
Approximate Percentage of
Ownership on
September 23, 2015
|
|
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Comerica Bank Cust
|
|
|
20.06
|
%
|
|
P.O. Box 75000
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Detroit, MI 48275-3446
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Comerica Bank Agent for Edward and Helen Mardigian, TR
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16.67
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%
|
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DTD 8/2/77
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P.O. Box 75000
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Mail Code 3446
|
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Detroit, MI 48275-3446
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Gordon E. Moore & Betty I. Moore
|
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9.40
|
%
|
|
TR FBO Gordon E. Moore & Betty I. Moore Trust
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UA DTD 10-9-73
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Woodside, CA 94062-4104
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Michael Lloyd DOW TR
|
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6.47
|
%
|
|
Estate Planning Trust # 1
|
|
|
|
|
|
DTD 01/31/2001
|
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Charlevoix, MI 49720-9492
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On September 23, 2015, all Trustees and officers as a group owned less than 1% of the Fund’s outstanding voting
securities.
|
Item 19.
|
Investment Advisory and Other Services.
|
Investment Adviser.
Invesco Advisers, Inc. (the “Adviser”) is the Fund’s investment adviser. The Adviser is an indirect wholly owned subsidiary of Invesco Ltd. The Adviser is located at 1555 Peachtree Street, N.E., Atlanta, GA 30309. The Adviser, a
successor in interest to multiple investment advisers, has been an investment adviser since 1976.
The Fund and the Adviser are parties to an investment
advisory agreement (the “Advisory Agreement”). Under the Advisory Agreement, the Fund pays to the Adviser as compensation for the services rendered, facilities furnished,
B-23
and expenses paid by it a fee payable monthly computed on average daily net assets of the Fund at an annual rate
of 0.30%.
The Adviser received approximately $217,695, $195,638 and $177,190 in advisory fees from the Fund during the fiscal years ended
December 31, 2014, 2013 and 2012, respectively.
The Advisory Agreement may be continued from year to year if specifically approved at least
annually (a)(i) by the Fund’s Trustees or (ii) by vote of a majority of the Fund’s outstanding voting securities and (b) by the affirmative vote of a majority of the Trustees who are not parties to the agreement or interested
persons of any such party by votes cast in person at a meeting called for such purpose. The Advisory Agreement provides that it shall terminate automatically if assigned and that it may be terminated without penalty by either party on 30 days
written notice.
Under the Advisory Agreement, the Fund retains the Adviser to manage the investment of its assets and to place orders for the purchase
and sale of its portfolio securities. The Adviser is responsible for obtaining and evaluating economic, statistical, and financial data and for formulating and implementing investment programs in furtherance of the Fund’s investment objectives.
The Adviser also furnishes at no cost to the Fund (except as noted herein) the services of sufficient executive and clerical personnel for the Fund as are necessary to prepare registration statements, shareholder reports, and notices and proxy
solicitation materials. In addition, the Adviser furnishes at no cost to the Fund the services of a Chief Executive Officer and other executive and clerical personnel, as needed.
Investment Sub-Advisers.
The Adviser has entered into a Master Intergroup Sub-Advisory Contract (the “Sub-Advisory Agreement”) with
certain affiliates to serve as sub-advisers to the Fund, pursuant to which these affiliated sub-advisers may be appointed by the Adviser from time to time to provide discretionary investment management services, investment advice, and/or order
execution services to the Fund. These affiliated sub-advisers, each of which is a registered investment adviser under the Investment Advisers Act of 1940 are:
Invesco Asset Management Deutschland GmbH;
Invesco Asset
Management Limited;
Invesco Asset Management (Japan) Limited;
Invesco Hong Kong Limited;
Invesco Senior Secured Management,
Inc.; and
Invesco Canada Ltd. (each a “Sub-Adviser” and collectively, the “Sub-Advisers”).
Each Sub-Adviser is an indirect wholly owned subsidiary of Invesco Ltd. The only fees payable to the Sub-Advisers under the Sub-Advisory Agreement are for
providing discretionary investment management services. For such services, the Adviser will pay each Sub-Adviser a fee, computed daily and paid monthly, equal to (i) 40% of the monthly compensation that the Adviser receives from the Fund,
multiplied by (ii) the fraction equal to the net assets of such Fund as to which such Sub-Adviser shall have provided discretionary investment management services for that month divided by the net assets of such Fund for that month. Pursuant to
the Sub-Advisory Agreement, this fee is reduced to reflect contractual or voluntary fee waivers or expense limitations by the Adviser, if any, in effect from time to time. In no event shall the aggregate monthly fees paid to the Sub-Advisers under
the Sub-Advisory Agreement exceed 40% of the monthly compensation that the Adviser receives from the Fund pursuant to its advisory agreement with the Fund, as reduced to reflect contractual or voluntary fees waivers or expense limitations by the
Adviser, if any.
Administrative Services Agreement.
The Adviser and the Fund have entered into a Master Administrative Services
Agreement (“Administrative Services Agreement”) pursuant to which the Adviser may perform or arrange for the provision of certain accounting and other administrative services to the Fund which are not required to be performed by the
Adviser under the Advisory Agreement. The Administrative Services Agreement provides that it will remain in effect and continue from year to year only if such continuance is specifically approved at least annually by the Board, including the
independent Trustees, by votes cast in person at a meeting called for such purpose. Under the Administrative Services Agreement, the Adviser is entitled to receive from the Fund reimbursement of its costs or such reasonable compensation as may be
approved by the Board. Currently, the Adviser is reimbursed for the services of the Fund’s principal financial officer and her staff and any expenses related
B-24
to fund accounting services. The Adviser received approximately $50,000, $50,000 and $50,000 in administrative services fees from the Fund during the fiscal years ended December 31, 2014,
2013 and 2012, respectively.
Other Service Providers.
The Fund also pays transfer agency fees, custodian fees, legal and auditing fees,
the costs of reports to shareholders and all other ordinary expenses not specifically assumed by the Adviser. Invesco Investment Services, Inc. is the Fund’s transfer agent. The contact information for Invesco Investment Services, Inc. is P.O.
Box 219078, Kansas City, Missouri 64121-9078, or by telephone at (800) 959-4246. The custodian of all the assets of the Fund is State Street Bank and Trust Company located at One Lincoln Street, Boston, Massachusetts 02110.
An independent registered public accounting firm for the Fund performs an annual audit of the Fund’s financial statements.
|
Item 20.
|
Portfolio Managers.
|
Other Accounts Managed by Portfolio Managers as of
December 31, 2014:
The Adviser’s portfolio managers develop investment models which are used in connection with the
management of certain funds in the Fund Complex as well as other mutual funds for which the Adviser or an affiliate acts as sub-adviser, other pooled investment vehicles that are not registered mutual funds, and other accounts managed for
organizations and individuals.
The following chart reflects information regarding accounts other than the Fund for which each portfolio
manager has day to-day management responsibilities. The accounts are grouped into three categories: (i) registered investment companies, (ii) pooled investment vehicles and (iii) other accounts. To the extent that any of these
accounts pay advisory fees that are based on account performance (performance-based fees), information on those accounts is specifically broken out. In addition, any assets denominated in foreign currencies have been converted into U.S. Dollars
using the exchange rates as of the applicable date.
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Registered Investment
Companies
(assets in millions)
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Pooled Investment
Vehicles other than
Registered Investment
Companies
(assets in millions)
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|
|
Other Accounts Managed
(assets in millions)
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|
|
Portfolio Manager
|
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Number of
Accounts
|
|
|
Assets
|
|
|
Number of
Accounts
|
|
|
Assets
|
|
|
Number of
Accounts
|
|
|
Assets
|
|
|
Anthony Munchak
|
|
|
8
|
|
|
$
|
5,363
|
|
|
|
38
|
1
|
|
$
|
9,863
|
1
|
|
|
100
|
2
|
|
$
|
14,979
|
2
|
|
Glen Murphy
|
|
|
9
|
|
|
$
|
5,371
|
|
|
|
38
|
1
|
|
$
|
9,863
|
1
|
|
|
100
|
2
|
|
$
|
14,979
|
2
|
|
Francis Orlando
|
|
|
8
|
|
|
$
|
5,363
|
|
|
|
38
|
1
|
|
$
|
9,863
|
1
|
|
|
100
|
2
|
|
$
|
14,979
|
2
|
|
1
|
This amount includes 3 funds that pay performance-based fees with $755M in total assets under management.
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|
2
|
This amount includes 22 funds that pay performance-based fees with $4,363M in total assets under management
|
Portfolio Manager Beneficial Ownership as of December 31, 2014:
The following chart reflects the portfolio managers’ investments in the funds that they manage. The accounts are grouped into three
categories: (i) investments made directly in the Fund, (ii) investments made in a pooled investment vehicle managed by the Adviser with the same or similar objectives and strategies as the Fund and (iii) any investments made in any
fund or pooled investment vehicle managed by the Adviser.
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|
|
|
|
|
|
|
|
|
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Portfolio Manager
|
|
Dollar Range of
Investments
In the Fund
1
|
|
Dollar Range of
Investments
In Invesco
Pooled
Investment
Vehicles
2
|
|
Dollar Range of Investments in
Invesco Fund and Invesco Pooled
Investment Vehicles
3
|
|
|
Anthony Munchak
|
|
None
|
|
N/A
|
|
$
|
500,001-$1,000,000
|
|
|
Glen Murphy
|
|
None
|
|
N/A
|
|
$
|
500,001-$1,000,000
|
|
|
Francis Orlando
|
|
None
|
|
N/A
|
|
$
|
100,001-$500,000
|
|
B-25
|
1
|
This column reflects investments in the Fund’s shares owned directly by a portfolio manager or beneficially owned by a portfolio manager (as determined in accordance with Rule 16a-1(a) (2) under the
Securities Exchange Act of 1934, as amended). A portfolio manager is presumed to be a beneficial owner of securities that are held by his or her immediate family members sharing the same household.
|
|
2
|
This column reflects portfolio managers’ investments made either directly or through a deferred compensation or a similar plan in Invesco pooled investment vehicles with the same or similar objectives and
strategies as the Fund as of the most recent fiscal year end of the Fund.
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|
3
|
This column reflects the combined holdings from both the “Dollar Range of investments in Invesco pooled investment vehicles” and the “Dollar Range of Investments in the Fund” columns.
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Potential Conflicts of Interest
Actual or apparent conflicts of interest may arise when a portfolio manager has day-to-day management responsibilities with respect to more
than one fund or other account. More specifically, portfolio managers who manage multiple funds and/or other accounts may be presented with one or more of the following potential conflicts:
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•
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The management of multiple funds and/or other accounts may result in a portfolio manager devoting unequal time and attention to the management of each fund and/or other account. The Adviser and each Sub-Adviser seek to
manage such competing interests for the time and attention of portfolio managers by having portfolio managers focus on a particular investment discipline. Most other accounts managed by a portfolio manager are managed using the same investment
models that are used in connection with the management of the Fund.
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|
|
•
|
|
If a portfolio manager identifies a limited investment opportunity which may be suitable for more than one fund or other account, the Fund may not be able to take full advantage of that opportunity due to an allocation
of filled purchase or sale orders across all eligible funds and other accounts. To deal with these situations, the Adviser, each Sub-Adviser and the Fund have adopted procedures for allocating portfolio transactions across multiple accounts.
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|
|
•
|
|
The Adviser and each Sub-Adviser determine which broker to use to execute each order for securities transactions for the Fund, consistent with its duty to seek best execution of the transaction. However, for certain
other accounts (such as mutual funds for which the Adviser or an affiliate acts as sub-adviser, other pooled investment vehicles that are not registered mutual funds, and other accounts managed for organizations and individuals), the Adviser and
each Sub-Adviser may be limited by the client with respect to the selection of brokers or may be instructed to direct trades through a particular broker. In these cases, trades for the Fund in a particular security may be placed separately from,
rather than aggregated with, such other accounts. Having separate transactions with respect to a security may temporarily affect the market price of the security or the execution of the transaction, or both, to the possible detriment of the Fund or
other account(s) involved.
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|
|
•
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|
Finally, the appearance of a conflict of interest may arise where the Adviser or Sub-Adviser has an incentive, such as a performance-based management fee, which relates to the management of one fund or account but not
all funds and accounts for which a portfolio manager has day-to-day management responsibilities. As shown above, the Fund’s portfolio managers currently manage assets for one other account that charges a performance fee.
|
The Adviser, each Sub-Adviser, and the Fund have adopted certain compliance procedures which are designed to address these types of
conflicts. However, there is no guarantee that such procedures will detect each and every situation in which a conflict arises.
Portfolio Manager
Compensation Structure
Description of Compensation Structure for the Adviser and each affiliated Sub-Adviser.
The
Adviser and each Sub-Adviser seek to maintain a compensation program that is competitively positioned to attract and retain high-caliber investment professionals. Portfolio managers receive a base salary, an incentive bonus opportunity and
B-26
an equity compensation opportunity. Portfolio manager compensation is reviewed and may be modified each year as appropriate to reflect changes in the market, as well as to adjust the factors used
to determine bonuses to promote competitive Fund performance. The Adviser and each Sub-Adviser evaluate competitive market compensation by reviewing compensation survey results conducted by an independent third party of investment industry
compensation. Each portfolio manager’s compensation consists of the following three elements:
Base Salary.
Each
portfolio manager is paid a base salary. In setting the base salary, the Adviser and each Sub-Adviser’s intention is to be competitive in light of the particular portfolio manager’s experience and responsibilities.
Annual Bonus.
The portfolio managers are eligible, along with other employees of the Adviser and each Sub-Adviser, to participate
in a discretionary year-end bonus pool. The Compensation Committee of Invesco Ltd. reviews and approves the amount of the bonus pool available for the Adviser and each of the Sub-Adviser’s investment centers. The Compensation Committee
considers investment performance and financial results in its review. In addition, while having no direct impact on individual bonuses, assets under management are considered when determining the starting bonus funding levels. Each portfolio manager
is eligible to receive an annual cash bonus which is based on quantitative (i.e. investment performance) and non-quantitative factors (which may include, but are not limited to, individual performance, risk management and teamwork).
Each portfolio manager’s compensation is linked to the pre-tax investment performance of the funds/accounts managed by the portfolio
manager as described in the table below.
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Sub-Adviser
|
|
Performance time period
1
|
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Invesco
2
|
|
One-, Three- and Five-year performance against Fund peer group
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Invesco Deutschland
|
|
One-, Three- and Five-year performance against Fund peer group
|
|
Invesco Hong Kong
|
|
One-, Three- and Five-year performance against Fund peer group
|
|
Invesco Asset Management
|
|
One-, Three- and Five-year performance against Fund peer group
|
|
|
|
|
Invesco – Invesco Real Estate
2,3
|
|
Not applicable
|
|
Invesco Senior Secured
2,4
|
|
Not applicable
|
|
|
|
|
Invesco Canada
2
|
|
One-year performance against Fund peer group
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|
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Three-and Five-year performance against entire universe of Canadian funds
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|
Invesco Japan
5
|
|
One-, Three-and Five-year performance
|
|
1
|
Rolling time periods based on calendar year-end.
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|
2
|
Portfolio managers may be granted an annual deferral award that vests on a pro-rata basis over a four year period and final payments are based on the performance of eligible funds selected by the portfolio manager at
the time the award is granted.
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3
|
Portfolio managers for Invesco Global Real Estate Fund, Invesco Real Estate Fund, Invesco Global Real Estate Income Fund and Invesco V.I. Global Real Estate Fund base their bonus on new operating profits of the U.S.
Real Estate Division of Invesco.
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|
4
|
Invesco Senior Secured’s bonus is based on annual measures of equity return and standard tests of collateralization performance.
|
|
5
|
Portfolio managers for Invesco Pacific Growth Fund’s compensation is based on the one-, three- and five-year performance against the appropriate Micropol benchmark.
|
High investment performance (against applicable peer group and/or benchmarks) would deliver compensation generally associated with top pay in
the industry (determined by reference to the third-party provided compensation survey information) and poor investment performance (versus applicable peer group) would result in low bonus compared to the applicable peer group or no bonus at all.
These decisions are reviewed and approved collectively by senior leadership which has responsibility for executing the compensation approach across the organization.
B-27
Equity-Based Compensation.
Portfolio managers may be granted an award that allows
them to select receipt of shares of certain Invesco Funds with a vesting period as well as common shares and/or restricted shares of Invesco Ltd. stock from pools determined from time to time by the Compensation Committee of Invesco Ltd.’s
Board of Directors. Awards of equity-based compensation typically vest over time, so as to create incentives to retain key talent.
Portfolio managers also participate in benefit plans and programs available generally to all employees.
|
Item 21.
|
Brokerage Allocation and Other Practices.
|
The Adviser and
the Sub-Advisers have adopted compliance procedures that cover, among other items, brokerage allocation and other trading practices. If all or a portion of the Fund’s assets are managed by one or more Sub-Advisers, the decision to buy and sell
securities and broker selection will be made by the Sub-Adviser for the assets it manages. Unless specifically noted, the Sub-Advisers’ brokerage allocation procedures do not materially differ from the Adviser’s procedures.
Brokerage Transactions
Placing trades
generally involves acting on portfolio manager instructions to buy or sell a specified amount of portfolio securities, including selecting one or more broker-dealers, including affiliated and third-party broker-dealers to execute the trades, and
negotiating commissions and spreads. Various Invesco Ltd. subsidiaries have created a global equity trading desk. The global equity trading desk has assigned local traders in six primary trading centers to place equity securities trades in their
regions. Invesco’s Americas desk, located in Atlanta, Houston and Toronto, generally places trades of equity securities trading in North America, Canada, and Latin America; the Hong Kong desk of Invesco Hong Kong (the “Hong Kong
Desk”) generally places trades of equity securities in the Asia-Pacific markets, except Japan and Australia; the Japan trading desk generally places trades of equity securities in the Japanese markets; the London trading desk of Invesco Limited
(the “London Desk”) generally places trades of equity securities in European Middle Eastern and African countries; the Australia desk, located in Sydney and Melbourne, for the execution of orders of equity securities trading in the
Australian and New Zealand Market; and the Taipei desk, located in Taipei, for the execution of orders of securities trading in the Chinese Market. The Adviser, Invesco Canada, Invesco Australia, Invesco Japan, Invesco Deutschland, Invesco Hong Kong
and Invesco Asset Management use the global equity trading desk to place equity trades. Other Sub-Advisers may use the global equity trading desk in the future. The trading procedures for the global trading desks are similar in all material
respects.
References in the language below to actions by the Adviser or a Sub-Adviser (other than Invesco Canada or Invesco Japan)
making determinations or taking actions related to equity trading include these entities’ delegation of these determinations/actions to the Americas Desk, the Hong Kong Desk, and the London Desk. Even when trading is delegated by the Adviser or
the Sub-Advisers to the various arms of the global equity trading desk, the Adviser or the Sub-Advisers that delegate trading is responsible for oversight of this trading activity.
The Adviser or the Sub-Advisers make decisions to buy and sell securities for the Fund, select broker-dealers (each, a “Broker”),
effect the Fund’s investment portfolio transactions, allocate brokerage fees in such transactions and, where applicable, negotiate commissions and spreads on transactions. The Adviser’s and the Sub-Advisers’ primary consideration in
effecting a security transaction is to obtain best execution, which is defined as prompt and efficient execution of the transaction at the best obtainable price with payment of commissions, mark-ups or mark-downs which are reasonable in relation to
the value of the brokerage services provided by the Broker. While the Adviser or the Sub-Advisers seek reasonably competitive commission rates, the Fund may not pay the lowest commission or spread available. See “Broker Selection” below.
Some of the securities in which the Fund invests may be traded in over-the-counter markets. Portfolio transactions in such markets may
be effected on a principal basis at net prices without commissions, but which include compensation to the Broker in the form of a mark-up or mark-down, or on an agency basis, which involves the payment of negotiated brokerage commissions to the
Broker, including electronic communication networks. Purchases of underwritten issues, which include initial public offerings and secondary offerings, include a
B-28
commission or concession paid by the issuer (not the Fund) to the underwriter. Purchases of money market instruments may be made directly from issuers without the payment of commissions.
Historically, the Adviser and the Sub-Advisers did not negotiate commission rates on stock markets outside the United States. In recent years
many overseas stock markets have adopted a system of negotiated rates; however, a number of markets maintain an established schedule of minimum commission rates.
In some cases, the Adviser may decide to place trades on a “blind principal bid” basis, which involves combining all trades for one
or more portfolios into a single basket, and generating a description of the characteristics of the basket for provision to potential executing brokers. Based on the trade characteristics information provided by the Adviser, these brokers submit
bids for executing all of the required trades at the market close price for a specific commission. The Adviser generally selects the broker with the lowest bid to execute these trades.
The Fund did not pay brokerage commissions during the fiscal years ended December 31, 2014, 2013 and 2012, respectively.
Commissions
The Fund may engage in
certain principal and agency transactions with banks and their affiliates that own 5% or more of the outstanding voting securities of a fund in the Fund Complex, provided the conditions of an exemptive order received by such fund from the SEC
are met. In addition, the Fund may purchase or sell a security from or to certain other funds in the Fund Complex or other accounts (and may invest in affiliated money market funds) provided the Fund follows procedures adopted by the boards of
the various funds in the Fund Complex, including the Fund. These inter-fund transactions do not generate brokerage commissions but may result in custodial fees or taxes or other related expenses.
Broker Selection
The Adviser’s or
the Sub-Advisers’ primary consideration in selecting Brokers to execute portfolio transactions for the Fund is to obtain best execution. In selecting a Broker to execute a portfolio transaction in equity securities for a Fund, the Adviser or
the Sub-Advisers consider the full range and quality of a Broker’s services, including the value of research and/or brokerage services provided, execution capability, commission rate, and willingness to commit capital, anonymity and
responsiveness. The Adviser’s and the Sub-Advisers’ primary consideration when selecting a Broker to execute a portfolio transaction in fixed income securities for the Fund is the Broker’s ability to deliver or sell the relevant fixed
income securities; however, the Adviser and the Sub-Advisers will also consider the various factors listed above. In each case, the determinative factor is not the lowest commission or spread available but whether the transaction represents the best
qualitative execution for the Fund. The Adviser and the Sub-Advisers will not select Brokers based upon their promotion or sale of Fund shares.
In choosing Brokers to execute portfolio transactions for the Fund, the Adviser or the Sub-Advisers may select Brokers that are not
affiliated with the Adviser that provide brokerage and/or research services (“Soft Dollar Products”) to the Fund and/or the other accounts over which the Adviser and its affiliates have investment discretion. Section 28(e) of the
Securities Exchange Act of 1934, as amended, provides that the Adviser or the Sub-Advisers, under certain circumstances, lawfully may cause an account to pay a higher commission than the lowest available. Under Section 28(e)(1), the Adviser or
the Sub-Advisers must make a good faith determination that the commissions paid are “reasonable in relation to the value of the brokerage and research services provided viewed in terms of either that particular transaction or the
[Adviser’s or the Sub-Advisers’] overall responsibilities with respect to the accounts as to which [it] exercises investment discretion.” The services provided by the Broker also must lawfully and appropriately assist the Adviser or
the Sub-Adviser in the performance of its investment decision-making responsibilities. Accordingly, the Fund may pay a Broker commissions higher than those available from another Broker in recognition of the Broker’s provision of Soft Dollar
Products to the Adviser or the Sub-Advisers.
The Adviser and the Sub-Advisers face a potential conflict of interest when they use client
trades to obtain Soft Dollar Products. This conflict exists because the Adviser and the Sub-Advisers are able to use the Soft Dollar Products to manage client accounts without paying cash for the Soft Dollar Products, which reduces the
B-29
Adviser’s or the Sub-Advisers’ expenses to the extent that the Adviser or the Sub-Advisers would have purchased such products had they not been provided by Brokers. Section 28(e)
permits the Adviser or the Sub-Advisers to use Soft Dollar Products for the benefit of any account it manages. Certain Adviser-managed accounts (or accounts managed by the Sub-Advisers) may generate soft dollars used to purchase Soft Dollar Products
that ultimately benefit other Adviser-managed accounts (or Sub-Adviser-managed accounts), effectively cross subsidizing the other Adviser-managed accounts (or the other Sub-Adviser-managed accounts) that benefit directly from the product. The
Adviser or the Sub-Advisers may not use all of the Soft Dollar Products provided by Brokers through which a fund in the Fund Complex effects securities transactions in connection with managing the fund whose trades generated the soft dollars
used to purchase such products.
The Adviser presently engages in the following instances of cross-subsidization:
Fixed income funds in the Fund Complex normally do not generate soft dollar commissions to pay for Soft Dollar Products. Therefore, soft
dollar commissions used to pay for Soft Dollar Products which are used to manage certain fixed income Invesco Funds are generated entirely by equity Invesco Funds and other equity client accounts managed by the Adviser. In other words, certain fixed
income Invesco Funds are cross-subsidized by the equity Invesco Funds in that the fixed income Invesco Funds receive the benefit of Soft Dollar Products services for which they do not pay. Similarly, other accounts managed by the Adviser or certain
of its affiliates may benefit from Soft Dollar Products services for which they do not pay.
The Adviser and the Sub-Advisers attempt to
reduce or eliminate the potential conflicts of interest concerning the use of Soft Dollar Products by directing client trades for Soft Dollar Products only if the Adviser or the Sub-Advisers conclude that the Broker supplying the product is capable
of providing best execution.
Certain Soft Dollar Products may be available directly from a vendor on a hard dollar basis; other Soft
Dollar Products are available only through Brokers in exchange for soft dollars. The Adviser and the Sub-Advisers use soft dollars to purchase two types of Soft Dollar Products:
|
|
•
|
|
proprietary research created by the Broker executing the trade, and
|
|
|
•
|
|
other products created by third parties that are supplied to the Adviser or the Sub-Advisers through the Broker executing the trade.
|
Proprietary research consists primarily of traditional research reports, recommendations and similar materials produced by the in-house
research staffs of broker-dealer firms. This research includes evaluations and recommendations of specific companies or industry groups, as well as analyses of general economic and market conditions and trends, market data, contacts and other
related information and assistance. The Adviser periodically rates the quality of proprietary research produced by various Brokers. Based on the evaluation of the quality of information that the Adviser receives from each Broker, the Adviser
develops an estimate of each Broker’s share of Adviser clients’ commission dollars and attempts to direct trades to these firms to meet these estimates.
The Adviser and the Sub-Advisers also use soft dollars to acquire products from third parties that are supplied to the Adviser or the
Sub-Advisers through Brokers executing the trades or other Brokers who “step in” to a transaction and receive a portion of the brokerage commission for the trade. The Adviser or the Sub-Advisers may from time to time instruct the executing
Broker to allocate or “step out” a portion of a transaction to another Broker. The Broker to which the Adviser or the Sub-Advisers have “stepped out” would then settle and complete the designated portion of the transaction, and
the executing Broker would settle and complete the remaining portion of the transaction that has not been “stepped out.” Each Broker may receive a commission or brokerage fee with respect to that portion of the transaction that it settles
and completes.
Soft Dollar Products received from Brokers supplement the Adviser’s and/or the Sub-Advisers’ own research (and
the research of certain of its affiliates), and may include the following types of products and services:
|
|
•
|
|
Database Services — comprehensive databases containing current and/or historical information on companies and industries and indices. Examples include historical securities prices, earnings estimates and
financial data. These services may include software tools that allow the user to search the database or to
|
B-30
|
|
prepare value-added analyses related to the investment process (such as forecasts and models used in the portfolio management process).
|
|
|
•
|
|
Quotation/Trading/News Systems — products that provide real time market data information, such as pricing of individual securities and information on current trading, as well as a variety of news services.
|
|
|
•
|
|
Economic Data/Forecasting Tools — various macro economic forecasting tools, such as economic data or currency and political forecasts for various countries or regions.
|
|
|
•
|
|
Quantitative/Technical Analysis — software tools that assist in quantitative and technical analysis of investment data.
|
|
|
•
|
|
Fundamental/Industry Analysis — industry specific fundamental investment research.
|
Fixed Income Security Analysis- data and analytical tools that pertain specifically to fixed income securities. These tools assist in creating
financial models, such as cash flow projections and interest rate sensitivity analyses, which are relevant to fixed income securities.
|
|
•
|
|
Other Specialized Tools — other specialized products, such as consulting analyses, access to industry experts, and distinct investment expertise such as forensic accounting or custom built investment-analysis
software.
|
If the Adviser or the Sub-Advisers determine that any service or product has a mixed use (i.e., it also serves
functions that do not assist the investment decision-making or trading process), the Adviser or the Sub-Advisers will allocate the costs of such service or product accordingly in its reasonable discretion. The Adviser or the Sub-Advisers will
allocate brokerage commissions to Brokers only for the portion of the service or product that the Adviser or the Sub-Advisers determine assists it in the investment decision-making or trading process and will pay for the remaining value of the
product or service in cash.
Outside research assistance is useful to the Adviser or the Sub-Advisers because the Brokers used by the
Adviser or the Sub-Advisers tend to provide more in-depth analysis of a broader universe of securities and other matters than the Adviser’s or the Sub-Advisers’ staff follow. In addition, such services provide the Adviser or the
Sub-Advisers with a diverse perspective on financial markets. Some Brokers may indicate that the provision of research services is dependent upon the generation of certain specified levels of commissions and underwriting concessions by the
Adviser’s or the Sub-Advisers’ clients, including the Fund. However, the Fund is not under any obligation to deal with any Broker in the execution of transactions in portfolio securities. In some cases, Soft Dollar Products are
available only from the Broker providing them. In other cases, Soft Dollar Products may be obtainable from alternative sources in return for cash payments. The Adviser and the Sub-Advisers believe that because Broker research supplements rather than
replaces the Adviser’s or the Sub-Advisers’ research, the receipt of such research tends to improve the quality of the Adviser’s or the Sub-Advisers’ investment advice. The advisory fee paid by the Fund is not reduced because the
Adviser or the Sub-Advisers receive such services. To the extent the Fund’s portfolio transactions are used to obtain Soft Dollar Products, the brokerage commissions obtained by the Fund might exceed those that might otherwise have been paid.
The Adviser or the Sub-Advisers may determine target levels of brokerage business with various Brokers on behalf of its clients
(including the Fund) over a certain time period. The Adviser determines target levels based upon the following factors, among others: (1) the execution services provided by the Broker; and (2) the research services provided by the Broker.
Portfolio transactions may be effected through Brokers that recommend the Fund to their clients, or that act as agent in the purchase of the Fund’s shares for their clients, provided that the Adviser or the Sub-Advisers believe such Brokers
provide best execution and such transactions are executed in compliance with the Adviser’s policy against using directed brokerage to compensate Brokers for promoting or selling shares of funds in the Fund Complex. The Adviser and the
Sub-Advisers will not enter into a binding commitment with Brokers to place trades with such Brokers involving brokerage commissions in precise amounts.
Allocation of Portfolio Transactions
The Adviser and the Sub-Advisers manage numerous funds in the Fund Complex and other accounts. Some of these accounts may have investment
objectives similar to the Fund. Occasionally, identical securities will
B-31
be appropriate for investment by the Fund and by another fund in the Fund Complex or one or more other accounts. However, the position of each account in the same security and the length of
time that each account may hold its investment in the same security may vary. The Adviser and the Sub-Advisers will also determine the timing and amount of purchases for an account based on its cash position. If the purchase or sale of securities is
consistent with the investment policies of the Fund and one or more other accounts, and is considered at or about the same time, the Adviser or the Sub-Advisers will allocate transactions in such securities among the Fund and these accounts on a pro
rata basis based on order size or in such other manner believed by Invesco to be fair and equitable. The Adviser or the Sub-Advisers may combine transactions in accordance with applicable laws and regulations to obtain the most favorable execution.
Simultaneous transactions could, however, adversely affect the Fund’s ability to obtain or dispose of the full amount of a security which it seeks to purchase or sell.
Allocation of Initial Public Offering (“IPO”) Transactions
Certain of the funds in the Fund Complex or other accounts managed by the Adviser may become interested in participating in IPOs.
Purchases of IPOs by a fund in the Fund Complex or other accounts may also be considered for purchase by one or more other funds in the Fund Complex or accounts. The Adviser combines indications of interest for IPOs for all funds in the
Fund Complex and accounts participating in purchase transactions for that IPO. When the full amount of all IPO orders for such funds in the Fund Complex and accounts cannot be filled completely, the Adviser shall allocate such transactions
in accordance with the following procedures:
The Adviser or the Sub-Advisers may determine the eligibility of each fund in the
Fund Complex and account that seeks to participate in a particular IPO by reviewing a number of factors, including market capitalization/liquidity suitability and sector/style suitability of the investment with the fund’s or account’s
investment objective, policies, strategies and current holdings. The Adviser will allocate securities issued in IPOs to eligible funds and accounts on a pro rata basis based on order size.
Invesco Canada, Invesco Hong Kong and Invesco Japan allocate IPOs on a pro rata basis based on size of order or in such other manner which
they believe is fair and equitable.
Invesco Asset Management allocates IPOs on a pro rata basis based on account size or in such other
manner believed by Invesco Asset Management to be fair and equitable.
Invesco Deutschland and Invesco Senior Secured do not subscribe to
IPOs.
|
Item 22.
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Capital Stock and Other Securities.
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See Items 6, 7
and 11.
The Fund has outstanding shares of beneficial interest (“shares”) with equal rights to participate in
distributions made by the Fund and equal rights to the Fund’s assets. Each share is entitled to one vote and there is no cumulative voting.
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Item 23.
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Purchase, Redemption and Pricing of Shares.
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No shares are
being offered to the public. As more fully described in Item 6, the redemption price per share is equivalent to the net asset value per share, calculated as described in Item 11.
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Item 24.
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Taxation of the Fund.
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See Items 7 and 11.
Not Applicable, as the Fund does not
currently offer its shares for purchase.
B-32
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Item 26.
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Calculation of Performance Data.
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Not Applicable.
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Item 27.
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Financial Statements.
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The audited financial statements
of the Fund, including the Financial Highlights pertaining thereto, and the report of the independent registered public accounting firm thereon, are incorporated herein by reference to the Annual Report to shareholders of the Fund dated
December 31, 2014. The unaudited financial statements for the Fund, including the Financial Highlights pertaining thereto, are incorporated herein by reference to the Semiannual report to shareholders of the Fund dated June 30, 2015. The
Annual and Semiannual Reports may be obtained by following the instructions on the cover of this Statement of Additional Information. The Annual and Semiannual Reports are included as part of the Fund’s filings on Form N-CSR as filed with
the SEC on March 6, 2015 and Form N-CSRS as filed with the SEC on September 8, 2015. The Annual and Semiannual Reports may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC or on the EDGAR database on the
SEC’s internet site (http://www.sec.gov). Information on the operation of the SEC’s Public Reference Room may be obtained by calling the SEC at (202) 551-8090. You can also request copies of these materials, upon payment of a
duplicating fee, by electronic request at the SEC’s e-mail address (publicinfo@sec.gov) or by writing the Public Reference Section of the SEC, 100 F Street NE, Washington, DC 20549-0102.
The portions of such Annual and Semiannual Reports that are not specifically listed above are not incorporated by reference into this
Statement of Additional Information and are not a part of this Registration Statement.
B-33
APPENDIX A
PROXY POLICIES AND PROCEDURES
Proxy Policies and Procedures
for
Invesco Advisers, Inc.
I.1. PROXY POLICIES AND PROCEDURES – INVESCO ADVISERS
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Applicable to
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All Advisory Clients, including the Invesco Funds
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Risk Addressed by Policy
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Breach of fiduciary duty to client under Investment Advisers Act of
1940 by placing Invesco personal interests ahead of client’s best interests in voting proxies
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Relevant Law and Other Sources
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Investment Advisers Act of 1940
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Last
¨
Reviewed
þ
Revised
by Compliance for Accuracy
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October 21, 2014
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Policy/Procedure Owner
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Advisory Compliance
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Policy Approver
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Invesco Advisers, Inc., Invesco Funds Board
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Approved/Adopted Date
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October 21, 2014
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The following policies and procedures apply to all institutional and retail funds and accounts that have explicitly
authorized Invesco Advisers, Inc. to vote proxies associated with securities held on their behalf (collectively, “Clients”).
A. GUIDING
PRINCIPLES
Public companies hold meetings for shareholders, during which important issues, such as appointments to the
company’s board of directors, executive compensation, and the selection of auditors, are addressed and, where applicable, voted on by shareholders. Proxy voting gives shareholders the opportunity to vote on issues that impact a company’s
operations and policies without attending the meetings.
Invesco views proxy voting as an integral part of its
investment management responsibilities and believes that the right to vote proxies should be managed with the same high standards of care and fiduciary duty to its Clients as all other elements of the investment process. Invesco’s proxy voting
philosophy, governance structure and process are designed to ensure that proxy votes are cast in accordance with Clients’ best interests, which Invesco interprets to mean Clients’ best economic interests, and Invesco’s established
proxy voting policies and procedures.
The primary aim of Invesco’s proxy policies is to encourage a
culture of performance among the companies in which Invesco invests on behalf of Clients, rather than one of mere conformance with a prescriptive set of rules and constraints. Rigid adherence to a checklist approach to corporate governance issues
is, in itself, unlikely to maximize shareholder value.
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I.1 - 1
The proxy voting process at Invesco, which is driven by investment professionals, focuses on the following
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maximizing long-term value for Clients and protecting Clients’ rights and promoting governance structures and practices that reinforce the
accountability of corporate management and boards of directors to shareholders;
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reflecting Invesco’s belief that environmental, social and corporate governance proposals can influence long-term shareholder value and should
be voted in a manner where such long-term shareholder value is maximized; and
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addressing potential conflicts of interest that may arise from time to time in the proxy voting process.
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B. OPERATING PROCEDURES AND RESPONSIBLE PARTIES
Proxy Administration – In General
Guided by its philosophy that proxy voting is an asset that is to be managed by each investment team, consistent with
that team’s view as to the best economic interest of Clients, Invesco has created the Invesco US Proxy Advisory Committee (“IUPAC”). The IUPAC is an investments -driven committee comprised of representatives from each investment
management team and Invesco’s Head of Proxy Administration. IUPAC provides a forum for investment teams to monitor, understand and discuss key proxy issues and voting trends within the Invesco complex, and to vote proxies where Invesco as a
firm has a conflict of interest with an issuer or an investment professional has a personal conflict of interest with an issuer whose proxy he or she is charged with voting. Absent a conflict of interest, the IUPAC representative for each
investment team, in consultation with his or her team, is responsible for voting proxies for the securities the team manages. In addition to IUPAC, the Invesco mutual fund board of trustees provides oversight of the proxy process through
quarterly reporting and an annual in-person presentation by the Head of Proxy Administration. IUPAC and Invesco’s proxy administration, compliance and legal teams regularly communicate and review Invesco’s proxy policies and procedures to
ensure that they remain consistent with Clients’ best interests, regulatory requirements and industry best practices.
Use of Third Party Proxy
Advisory Services
Representatives of the IUPAC have direct access to third party proxy advisory analyses
and recommendations (currently provided by Glass Lewis (“GL”) and Institutional Shareholder Services, Inc. (“ISS”)), among other research tools, and use the information gleaned from those sources to make independent voting
decisions.
Invesco’s proxy administration group performs extensive initial and ongoing due diligence on
the proxy advisory firms that it engages. When deemed appropriate, representatives from the firms are asked to deliver updates directly to the mutual fund board of trustees. IUPAC conducts semi-annual, in-person policy roundtables with key heads of
research from ISS and GL to ensure transparency, dialogue and engagement with the firms. These meetings provide Invesco with an opportunity to assess the firms’ capabilities, conflicts of interest and service levels, as well as provide
investment professionals with direct insight into the advisory firms’ stances on key governance and proxy topics and their policy framework/methodologies. Invesco’s proxy administration team also reviews the annual SSAE 16 reports for, and
the periodic proxy guideline updates published by, each proxy advisory firm to ensure that their guidelines remain consistent with Invesco’s policies and procedures.
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I.1 - 2
If Invesco becomes aware of any material inaccuracies in the information
provided by ISS or GL, Invesco’s proxy administration team will investigate the matter to determine the cause, evaluate the adequacy of the proxy advisory firm’s control structure and assess the efficacy of the measures instituted to
prevent further errors.
ISS and GL provide updates to previously issued proxy reports when necessary to
incorporate newly available information or to correct factual errors. ISS also has a Feedback Review Board, which provides a mechanism for stakeholders to communicate with ISS about issues related to proxy voting and policy formulation, research,
and the accuracy of data contained in ISS reports.
Proxy Voting Platform and Administration
Invesco maintains a proprietary global proxy administration platform, supported by the Head of Proxy Administration and a
dedicated team of internal proxy specialists. The platform streamlines the proxy voting and ballot reconciliation processes, as well as related functions such as share blocking and issuer/shareholder engagement. Invesco believes that managing these
processes internally, as opposed to relying on third parties, gives Invesco greater quality control, oversight and independence in the proxy administration process.
The platform also includes advanced global reporting and record-keeping capabilities regarding proxy matters (including
reporting by business unit, issuer or issue) that enable Invesco to satisfy client, regulatory and management requirements. Historical proxy voting information, including commentary by investment professionals regarding the votes they cast, is
stored in order to build institutional knowledge over time across the Invesco complex with respect to individual companies and proxy issues. Investment professionals also use the platform to access third-party proxy research.
C. Proxy Voting Guidelines (the “Guidelines”)
The following
guidelines describe Invesco’s general positions with regard to various common proxy issues. The guidelines are not intended to be exhaustive or prescriptive. As noted above, Invesco’s proxy process is investor-driven, and each investment
team retains ultimate discretion to vote proxies in the manner they deem to be the most appropriate, consistent with the proxy voting principles and philosophy discussed above. Individual proxy votes therefore will differ from these guidelines from
time to time.
Management teams of companies are accountable to the boards of directors and directors of publicly held companies are accountable to shareholders.
Invesco endeavors to vote the proxies of companies in a manner that will reinforce the notion of a board’s accountability. Consequently, Invesco generally votes against any actions that would impair the rights of shareholders or would reduce
shareholders’ influence over the board.
The following are specific voting issues that illustrate how Invesco applies this
principle of accountability.
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Elections of directors
In uncontested director elections for companies that do not have a controlling shareholder, Invesco generally votes in
favor of slates if they are comprised of at least a majority of independent directors and if the boards’ key committees are fully independent. Key committees include the audit, compensation and governance or
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October 2014
I.1 - 3
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nominating Committees. Invesco’s standard of independence excludes directors who, in addition to the directorship, have any material business or family relationships with the companies they
serve. Contested director elections are evaluated on a
case-by-case
basis.
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Director performance
Invesco generally withholds votes from directors who exhibit a lack of accountability to shareholders, either through
their level of attendance at meetings or by adopting or approving egregious corporate-governance or other policies. In cases of material financial restatements, accounting fraud, habitually late filings, adopting shareholder rights plan
(“poison pills”) without shareholder approval, or other areas of poor performance, Invesco may withhold votes from some or all of a company’s directors. In situations where directors’ performance is a concern, Invesco may also
support shareholder proposals to take corrective actions, such as so-called “clawback” provisions.
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Auditors and Audit Committee members
Invesco believes a company’s audit committee has a high degree of responsibility to shareholders in
matters of financial disclosure, integrity of the financial statements and effectiveness of a company’s internal controls. Independence, experience and financial expertise are critical elements of a well-functioning audit committee. When
electing directors who are members of a company’s audit committee, or when ratifying a company’s auditors, Invesco considers the past performance of the committee and holds its members accountable for the quality of the company’s
financial statements and reports.
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Majority standard in director elections
The right to elect directors is the single most important mechanism shareholders have to promote
accountability. Invesco supports the nascent effort to reform the U.S. convention of electing directors, and generally votes in favor of proposals to elect directors by a majority vote.
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Staggered Boards/Annual Election of Directors
Invesco generally supports proposals to elect each director annually rather than electing
directors to staggered multi-year terms because annual elections increase a board’s level of accountability to its shareholders.
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Supermajority voting requirements
Unless required by law in the state of incorporation, Invesco generally votes against actions that would
impose any supermajority voting requirement, and generally supports actions to dismantle existing supermajority requirements.
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Responsiveness of Directors
Invesco generally withholds votes for directors who do not adequately respond to shareholder proposals that were
approved by a majority of votes cast the prior year.
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Cumulative voting
The practice of cumulative voting can enable minority shareholders to have representation on a company’s board.
Invesco generally supports proposals to institute the practice of cumulative voting at companies whose overall corporate-governance standards indicate a particular need to protect the interests of minority shareholders.
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October 2014
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Shareholder access
On business matters with potential financial consequences, Invesco generally votes in favor of proposals that would
increase shareholders’ opportunities to express their views to boards of directors, proposals that would lower barriers to shareholder action and proposals to promote the adoption of generally accepted best practices in corporate governance.
Furthermore, Invesco generally votes for shareholder proposals that are designed to protect shareholder rights if a company’s corporate governance standards indicate that such additional protections are warranted.
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II.
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Compensation and Incentives
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Invesco
believes properly constructed compensation plans that include equity ownership are effective in creating incentives that induce management and employees of companies to create greater shareholder wealth. Invesco generally supports equity
compensation plans that promote the proper alignment of incentives with shareholders’ long-term interests, and generally votes against plans that are overly dilutive to existing shareholders, plans that contain objectionable structural
features, and plans that appear likely to reduce the value of the Client’s investment.
Following are specific voting issues that
illustrate how Invesco evaluates incentive plans.
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Executive compensation
Invesco evaluates executive compensation plans within the context of the company’s performance under the executives’
tenure. Invesco believes independent compensation committees are best positioned to craft executive-compensation plans that are suitable for their company-specific circumstances. Invesco views the election of independent compensation committee
members as the appropriate mechanism for shareholders to express their approval or disapproval of a company’s compensation practices. Therefore, Invesco generally does not support shareholder proposals to limit or eliminate certain forms of
executive compensation. In the interest of reinforcing the notion of a compensation committee’s accountability to shareholders, Invesco generally supports proposals requesting that companies subject each year’s compensation record to an
advisory shareholder vote, or so-called “say on pay” proposals.
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Equity-based compensation plans
Invesco generally votes against plans that contain structural features that would impair the alignment of incentives
between shareholders and management. Such features include the ability to reprice or reload options without shareholder approval, the ability to issue options below the stock’s current market price, or the ability automatically to replenish
shares without shareholder approval.
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Employee stock-purchase plans
Invesco generally supports employee stock-purchase plans that are reasonably designed to provide proper incentives to a
broad base of employees, provided that the price at which employees may acquire stock is at most a 15 percent discount from the market price.
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Severance agreements
Invesco generally votes in favor of proposals requiring advisory shareholder ratification of executives’ severance
agreements. However, Invesco generally opposes proposals requiring such agreements to be ratified by shareholders in advance of their adoption. Given the vast differences that may occur in these agreements, some severance agreements are evaluated on
an individual basis.
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October 2014
I.1 - 5
Examples of management
proposals related to a company’s capital structure include authorizing or issuing additional equity capital, repurchasing outstanding stock, or enacting a stock split or reverse stock split. On requests for additional capital stock, Invesco
analyzes the company’s stated reasons for the request. Except where the request could adversely affect the Client’s ownership stake or voting rights, Invesco generally supports a board’s decisions on its needs for additional capital
stock. Some capitalization proposals require a case-by-case analysis. Examples of such proposals include authorizing common or preferred stock with special voting rights, or issuing additional stock in connection with an acquisition.
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IV.
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Mergers, Acquisitions and Other Corporate Actions
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Issuers occasionally require shareholder approval to engage in certain corporate actions such as mergers, acquisitions, name changes, dissolutions, reorganizations, divestitures and reincorporations and the votes
for these types of corporate actions are generally determined on a case-by-case basis.
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V.
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Anti-Takeover Measures
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Practices designed
to protect a company from unsolicited bids can adversely affect shareholder value and voting rights, and they potentially create conflicts of interests among directors, management and shareholders. Except under special issuer-specific circumstances,
Invesco generally votes to reduce or eliminate such measures. These measures include adopting or renewing “poison pills”, requiring supermajority voting on certain corporate actions, classifying the election of directors instead of
electing each director to an annual term, or creating separate classes of common or preferred stock with special voting rights. Invesco generally votes against management proposals to impose these types of measures, and generally votes for
shareholder proposals designed to reduce such measures. Invesco generally supports shareholder proposals directing companies to subject their anti-takeover provisions to a shareholder vote.
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VI.
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Environmental, Social and Corporate Responsibility Issues
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Invesco believes that a company’s response to environmental, social and corporate responsibility issues and the risks attendant to them can have a significant effect on its long-term shareholder value. Invesco
recognizes that to manage a corporation effectively, directors and management must consider not only the interest of shareholders, but also the interests of employees, customers, suppliers and creditors, among others. While Invesco generally affords
management discretion with respect to the operation of a company’s business, Invesco will evaluate such proposals on a case-by-case basis and will vote proposals relating to these issues in a manner intended to maximize long-term shareholder
value.
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VII.
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Routine Business Matters
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Routine business
matters rarely have the potential to have a material effect on the economic prospects of Clients’ holdings, so Invesco generally supports a board’s discretion on these items. However, Invesco generally votes against proposals where there
is insufficient information to make a decision about the nature of the proposal. Similarly, Invesco generally votes against proposals to conduct other unidentified business at shareholder meetings.
October 2014
I.1 - 6
Client Maintains Right to Vote Proxies
In the case of institutional or sub-advised Clients, Invesco will vote the proxies in accordance with these Guidelines unless the
Client retains, in writing, the right to vote or the named fiduciary of a Client (e.g., the plan sponsor of an ERISA Client) retains in writing the right to direct the plan trustee or a third party to vote proxies.
Voting for Certain Investment Strategies
For proxies held by certain Client accounts managed in accordance with fixed income, money market and index strategies, Invesco will typically vote in line with the majority of the rest of the shares voted by
Invesco outside of those strategies (“Majority Voting”). In this manner Invesco seeks to leverage the expertise and comprehensive proxy voting reviews conducted by teams employing active equity strategies, which typically incorporate
analysis of proxy issues as a core component of the investment process. Portfolio managers for accounts employing Majority Voting still retain full discretion to override Majority Voting and to vote the shares as they determine to be in the best
interest of Clients, absent certain types of conflicts of interest, which are discussed elsewhere in these policies and procedures.
Proxy
Constraints
In certain circumstances, Invesco may refrain from voting where the economic or other opportunity cost of voting a
company’s proxy exceeds any anticipated benefits of that proxy proposal. In addition, there may be instances in which Invesco is unable to vote all of its Clients’ proxies despite using commercially reasonable efforts to do so. Particular
examples of such instances include, but are not limited to, the following:
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When securities are participating in an Invesco securities lending program, Invesco determines whether to terminate the loan by weighing the benefit to the
Client of voting a particular proxy versus the revenue lost by terminating the loan and recalling the securities.
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In some countries the exercise of voting rights requires the Client to submit to “share-blocking.” Invesco generally refrains from voting proxies in
share-blocking countries unless the portfolio manager determines that the benefit to the Client(s) of voting a specific proxy outweighs the Client’s temporary inability to sell the security.
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An inability to receive proxy materials from our Clients’ custodians with sufficient time and information to make an informed voting decision.
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Some non-U.S. companies require a representative to attend meetings in person in order to vote a proxy. In such cases, Invesco may determine that the costs of
sending a representative or signing a power-of-attorney outweigh the benefit of voting a particular proxy.
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In the
great majority of instances Invesco is able to vote U.S. and non-U.S. proxies successfully. It is important to note that Invesco makes voting decisions for non-U.S. issuers using these Guidelines as its framework, but also takes into account the
corporate
October 2014
I.1 - 7
governance standards, regulatory environment and generally reasonable and governance-minded practices of the local market.
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E.
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Resolving potential conflicts of interest
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Firm Level Conflicts of Interest
A potential conflict of interest arises when Invesco votes a proxy for an issuer with which it also maintains a material business
relationship. Examples could include issuers that are distributors of Invesco’s products, or issuers that employ Invesco to manage portions of their retirement plans or treasury accounts.
Invesco generally resolves such potential conflicts in one of the following ways: (1) if the proposal that gives rise to the potential
conflict is specifically addressed by the Guidelines, Invesco may vote the proxy in accordance with the predetermined Guidelines; (2) Invesco may engage an independent third party to determine how the proxy should be voted; or (3) Invesco
may establish an ethical wall or other informational barrier between the persons involved in the potential conflict and the persons making the proxy-voting decision in order to insulate the potential conflict from the decision makers.
Because the Guidelines are pre-determined and crafted to be in the best economic interest of Clients, applying the Guidelines to vote Client
proxies should, in most instances, adequately resolve any potential conflict of interest. As an additional safeguard against potential conflicts, persons from Invesco’s marketing, distribution and other customer-facing functions are not members
of IUPAC.
Voting of Proxies Related to Invesco Ltd
. In order to avoid any appearance of a conflict of interest, Invesco will not
vote proxies issued by, or related to matters involving, Invesco Ltd. that may be held by Clients from time to time.
Personal
Conflicts of Interest
If any member of IUPAC has a personal conflict of interest with respect to a company or an issue presented for voting, that IUPAC member will inform IUPAC of such conflict and will abstain from voting on that company or
issue. All IUPAC members shall sign an annual conflicts of interest memorandum.
Funds of Funds
Some Invesco Funds offering diversified asset
allocation within one investment vehicle own shares in other Invesco Funds. A potential conflict of interest could arise if an underlying Invesco Fund has a shareholder meeting with any proxy issues to be voted on, because Invesco’s
asset-allocation funds or target-maturity funds may be large shareholders of the underlying fund. In order to avoid any potential for a conflict, the asset-allocation funds and target maturity funds vote their shares in the same proportion as the
votes of the external shareholders of the underlying fund.
F. RECORDKEEPING
The Investments Administration team will be responsible for all Proxy Voting record keeping.
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G.
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Policies and Vote Disclosure
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October 2014
I.1 - 8
A copy of these Guidelines and the voting record of each Invesco Retail Fund are available on
Invesco’s web site,
www.invesco.com
. In accordance with Securities and Exchange Commission regulations, all Invesco Funds file a record of all proxy-voting activity for the prior 12 months ending June 30th. That filing is made on or
before August 31st of each year. In the case of institutional and sub-advised Clients, Clients may obtain information about how Invesco voted proxies on their behalf by contacting their client services representative.
October 2014
I.1 - 9
Proxy Policies and Procedures
for
Invesco Asset Management Limited (UK)
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Invesco Perpetual
Policy on Corporate
Governance and Stewardship
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Invesco Perpetual
Policy on Corporate Governance and Stewardship
Contents
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Invesco Perpetual
Policy on Corporate
Governance and Stewardship
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01
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1. Introduction
Invesco Perpetual (IP), a business name of
Invesco Asset Management Limited, has adopted a clear and considered policy towards its responsibility as a shareholder on behalf of all investors in portfolios managed by them. As part of this policy, IP will take steps to satisfy itself about the
extent to which the companies in which it invests look after shareholder value in their companies and comply with local recommendations and practices, such as the UK Corporate Governance Code issued by the Financial Reporting Council and the U.S.
Department of Labor Interpretive Bulletins.
IP has a responsibility to optimise returns to its clients. As a core part of the
investment process, IP’s fund managers will endeavour to establish a dialogue with company management to promote company decision making that is in the best interests of shareholders, and is in accordance with good Corporate Governance
principles.
Being a major shareholder in a company is more than simply expecting to benefit in its future earnings streams. In
IP’s view, it is about helping to provide the capital a company needs to grow, about being actively involved in its strategy, when necessary, and helping to ensure that shareholder interests are always at the forefront of management’s
thoughts.
IP primarily defines stewardship as representing the best interests of clients in its fiduciary role as a discretionary asset
manager (not asset owner) and as an institutional shareholder, i.e. an organization which pools large sums of money and invest those sums in securities, real property and other investment assets. This is considered more appropriate than undertaking
the stewardship of investee companies, which we believe should always remain the responsibility of the directors and executives of those companies. IP may at times seek to influence strategies of investee companies, where appropriate, on behalf of
its clients, but IP will never seek to be involved in the day to day running of any investee companies.
IP considers that shareholder
activism is fundamental to good Corporate Governance. Although this does not entail intervening in daily management decisions, it does involve supporting general standards for corporate activity and, where necessary, taking the initiative to ensure
those standards are met, with a view to protecting and enhancing value for our investors in our portfolios.
Engagement will also be
proportionate and will reflect the size of holdings, length of holding period and liquidity of the underlying company shares. This is because in most of IP’s investment jurisdictions, the only effective remedy of last resort available to
shareholders, other than liquidating their share ownership, is the removal of directors.
2. Scope
The scope of this policy covers all portfolios that are managed by the IP investment teams located in Henley on Thames, United Kingdom and
specifically excludes portfolios that are managed by other investment teams within the wider Invesco group that have their own voting, corporate governance and stewardship policies. As an example, within IP’s ICVC range the following funds are
excluded: IP UK Enhanced Index, IP Hong Kong & China, IP Japanese Smaller Companies, IP Global Balanced Index, IP Global ex-UK Core Equity Index, IP Global ex-UK Enhanced Index and the IP Balanced Risk 6, 8 and 10 funds.
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Invesco Perpetual
Policy on Corporate
Governance and Stewardship
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02
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3. Responsible voting
One important means of putting shareholder
responsibility into practice is via the exercising of voting rights. In deciding whether to vote, IP will take into account such factors as the likely impact of voting on management activity, and where expressed, the preference of clients in
portfolios managed by them. As a result of these two factors, IP will tend to vote on all UK, European and US shares but to vote on a more selective basis on other shares. (See Appendix I – Voting on shares listed outside of the UK, Europe and
the US).
IP considers that the voting rights attached to its clients’ investments should be actively managed with the same duty of
care as that applied to all other aspects of asset administration. As such, voting rights will be exercised on an informed and independent basis, and will not simply be passed back to the company concerned for discretionary voting by the Chairman.
In voting for or against a proposal, IP will have in mind three objectives, as follows:
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To protect the rights of its clients
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To minimise the risk of financial or business impropriety within the companies in which its clients are invested, and
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To protect the long-term value of its clients’ investments.
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It is important to note that, when exercising voting rights, the third option of abstention can also be used as a means of expressing dissatisfaction, or lack of support, to a board on any particular issue.
Additionally, in the event of a conflict of interest arising between IP and its clients over a specific issue, IP will either abstain or seek instruction from each client.
IP will actively exercise the voting rights represented by the shares it manages on behalf of its clients where it is granted the discretion to do so. In certain circumstances the discretion is retained by the
client, where they wish to be responsible for applying their own right to vote.
Note: Share blocking
Generally, IP will not vote where this results in shares being blocked from trading for a period of more than a few hours. IP considers that it is
not in the interest of clients that their shares are blocked at a potentially sensitive time, such as the time around a shareholder meeting.
4. Voting procedures
IP will endeavour to keep under regular review with trustees, depositaries, custodians and third party
proxy voting services the practical arrangements for circulating company resolutions and notices of meetings and for exercising votes in accordance with standing or special instructions. Although IP’s proxy voting service will provide research
and recommendations for each resolution, each fund manager will cast their vote independently considering their own research and dialogue with company management.
Proxy voting research and services are currently provided by Institutional Shareholder Services (ISS), part of the RiskMetrics Group.
IP will endeavour to review regularly any standing or special instructions on voting and where possible, discuss with company representatives any significant issues.
IP will take into account the implications of stock lending arrangements where this is relevant (that is, when stock is lent to the extent
permitted by local regulations, the voting rights attaching to that stock pass to the borrower). However, IP does not currently enter into any stock lending arrangements as it believes the facility does not support active shareholder engagement.
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Invesco Perpetual
Policy on Corporate
Governance and Stewardship
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03
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5. Dialogue with companies
IP will endeavour, where practicable
and in accordance with its investment approach, to enter into a dialogue with companies’ management based on the mutual understanding of objectives. This dialogue is likely to include regular meetings with company representatives to explore any
concerns about corporate governance where these may impact on the best interests of clients. In discussion with company boards and senior non-Executive Directors, IP will endeavour to cover any matters of particular relevance to investee company
shareholder value.
Those people on the inside of a company, most obviously its executives, know their businesses much more intimately.
Therefore, it is usually appropriate to leave strategic matters in their hands. However, if that strategy is not working, or alternatives need exploring, IP will seek to influence the direction of that company where practicable. In IP’s view,
this is part of its responsibility to investors, where possible, in shaping strategy. Ultimately the business’ performance will have an impact on the returns generated by IP’s portfolios, whether it is in terms of share price performance
or dividends, and IP wants to seek to ensure that the capital IP has invested on behalf of its clients is being used as effectively as possible. In the majority of cases IP is broadly in agreement with the direction of a company that it has invested
in, as its initial decision to invest will have taken these factors into account. But these issues demand regular review, which can only be achieved through company meetings.
The building of this relationship facilitates frank and open discussion, and on-going interaction is an integral part of the fund manager’s role. The fact that IP has been a major shareholder in a number of
companies for a long time, in particular within its domestic UK portfolios, reflects both the fact that IP’s original investments were based on a joint understanding of where the businesses were going and the ability of the companies’
management to execute that plan. Inevitably there are times when IP’s views diverge from those of the companies’ executives but, where possible, it attempts to work with companies towards a practical solution. However, IP believes that its
status as part-owner of companies means that it has both the right and the responsibility to make its views known. The option of selling out of those businesses is always open, but normally IP prefers to push for change, even if this can be a slow
process.
Specifically when considering resolutions put to shareholders, IP will pay attention to the companies’ compliance with
the relevant local requirements. In addition, when analysing companies’ prospects for future profitability and hence returns to shareholders, IP will take many variables into account, including but not limited to, the following:
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Nomination and audit committees
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Remuneration committee and directors’ remuneration
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Board balance and structure
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Financial reporting principles
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Internal control system and annual review of its effectiveness
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Dividend and Capital Management policies
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Socially Responsible Investing policies
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6. Non-routine resolutions and other topics
These will be considered on a case-by-case basis and where proposals are put to the
vote will require proper explanation and justification by (in most instances) the Board. Examples of such proposals would be all political donations and any proposal made by a shareholder or body of shareholders (typically a pressure group).
Apart from the three fundamental voting objectives set out under ‘Responsible Voting’ above, considerations that IP might
apply to non-routine proposals will include:
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The degree to which the company’s stated position on the issue could affect its reputation and/ or sales, or leave it vulnerable to boycott or selective purchasing
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Peer group response to the issue in question
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Whether implementation would achieve the objectives sought in the proposal
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Whether the matter is best left to the Board’s discretion.
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Invesco Perpetual
Policy on Corporate
Governance and Stewardship
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04
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7. Evaluation of companies’ environmental, social and governance arrangements
At IP, each fund manager is individually responsible for environmental, social and governance (ESG) matters, rather than utilising ESG professionals or an internal / external discrete team independent from the fund
management process. ESG issues are deemed as an essential component of the fund manager’s overall investment responsibilities. Additionally, fund managers may call on the support of the IP Investment Management Operations team on any ESG
matter.
As mentioned in Section 5, company meetings are an integral part of IP’s investment research approach and discussions
at these meetings include all matters that might affect the share price, including ESG issues.
IP’s research is structured to give
it a detailed understanding of a company’s key historical and future, long-term business drivers, such as demand for its products, pricing power, market share trends, cash flow and management strategy. This enables IP’s investment teams to
form a holistic opinion of management strategy, the quality of the management, an opinion on a company’s competitive position, its strategic advantages/ disadvantages, and corporate governance arrangements, thus incorporating any inherent ESG
issues.
IP will, when evaluating companies’ governance arrangements, particularly those relating to board structure and
composition, give due weight to all relevant factors brought to its attention.
8. Disclosure and reporting
Although IP acknowledges initiatives of transparency, it is also very aware of its fiduciary duty and the interests of all
investors in portfolios managed by them. As such, IP is very cognisant that disclosure of any meeting specific information may have a detrimental effect in its ability to manage its portfolios and ultimately would not be in the best interests of all
clients. Primarily, this is for investor protection and to allow IP’s fund managers to manage their portfolios in the interests of all its clients.
Although IP does not report specific findings of company meetings for external use, it will seek to provide regular illustrations to demonstrate that active engagement is at the heart of its investment process.
For clients with individual mandates, (i.e. not invested in a fund), IP may discuss specific issues where it can share details of a
client’s portfolio with that specific client. Occasionally, where IP has expressed strong views to management over matters of governance, those views have gained media attention, but IP will never seek to encourage such debates in the media.
On request from investors, IP will in good faith provide records of voting instructions given to third parties such as trustees,
depositaries and custodians provided that:
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In IP’s view, it does not conflict with the best interests of other investors; and
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It is understood that IP will not be held accountable for the expression of views within such voting instructions and
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IP is not giving any assurance nor undertaking nor has any obligation to ensure that such instructions resulted in any votes actually being cast. Records of voting instructions
within the immediate preceding three months will not normally be provided for activities within the funds managed by IP
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Note:
The record of votes
will reflect the voting instruction of the relevant fund manager. This may not be the same as votes actually cast as IP is entirely reliant on third parties complying promptly with such instructions to ensure that such votes are cast correctly.
Accordingly, the provision of information relating to an instruction does not mean that a vote was actually cast, just that an instruction was given in accordance with a particular view taken.
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Invesco Perpetual
Policy on Corporate
Governance and Stewardship
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05
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9. The UK Stewardship Code
The UK Stewardship Code (the Code)
issued by the Financial Reporting Council (FRC) aims to enhance the quality of engagement between institutional investors and companies to help improve long-term returns to shareholders and the efficient exercise of governance responsibilities. The
Code sets out seven principles, which support good practice on engagement with UK investee companies and to which the FRC believes institutional investors should aspire. The Code is applied on a ‘comply or explain’ approach. IP sets out
below how it complies with each principle or details why it chooses not to.
Principle 1
Institutional investors should publicly disclose their policy on how they will discharge their stewardship responsibilities.
IP complies with Principle 1 and publishes the Invesco Perpetual Policy on Corporate Governance and Stewardship, which sets out how it will
discharge its stewardship responsibilities, on the ‘About us’ page on its website:
The following is a summary:
IP primarily defines stewardship as representing the best interests of clients in its fiduciary role as a discretionary asset manager (not asset
owner) and as an institutional shareholder, i.e. an organization which pools large sums of money and invest those sums in securities, and other investment assets. This is considered more appropriate than undertaking the stewardship of investee
companies, which we believe should always remain the responsibility of the directors and executives of those companies. IP may at times seek to influence strategies of investee companies, where appropriate, on behalf of its clients, but IP will
never seek to be involved in the day to day running of any investee companies. As a result, in the interests of the beneficiaries of the assets under its management, IP will engage with investee companies on strategy, share value performance, risk,
capital structure, governance, culture, remuneration and other significant matters that may be subject to voting in a general meeting and of proportional interest in terms of value discovery in a business.
Principle 2
Institutional investors should have a robust policy on managing conflicts of interest in relation to stewardship and this policy should be
publicly disclosed.
IP complies with Principle 2 by meeting its regulatory requirement of having an effective Conflicts of Interest
Policy. Any conflicts of interest arising through its stewardship of investee companies will be handled in accordance with that policy.
In respect of stewardship, IP anticipates the opportunity for conflicts arising would be limited, e.g. where it invests in a company that is also a
broker (i.e. dealing) of, or client of IP.
This Invesco UK Conflicts of Interest Policy is available on request and covers potential
conflicts of interest in relation to stewardship. The Conflicts of Interest Policy defines a conflict of interest as ‘a situation where there is a material risk of damage to the interests of a client arising because of the interests of Invesco
and our clients differ and any client and those of another client differ.’ As UK Stewardship is carried out in our clients’ interests, there are limited opportunities for conflicts of interest arising and, where they do, these are managed
appropriately.
Principle 3
Institutional investors should monitor their investee companies.
As an active shareholder, IP
complies with Principle 3. Through its investment process, fund managers endeavour to establish on a proportionate basis, on-going dialogue with company management and this is likely to include regular meetings. In discussions with company boards
and senior non-Executive Directors, IP will explore any concerns about corporate governance where these may impact on the best interests of clients, together with any other matters of particular value to shareholders.
Meeting company boards of investee companies is a core part of IP’s investment process and IP is committed to keeping records of all future
key engagement activities. As part of the engagement process IP fund managers may choose to be made insiders (i.e. to be made privy to material, non-public information) to protect and/or enhance investor value. In such circumstances they will follow
IP’s regulatory required policy and processes to mitigate against market abuse, principally by systematically blocking any trading in insider securities.
When casting votes on behalf of investors, IP keeps detailed records of all instructions given in good faith to third parties such as trustees, depositories and custodians. Although the rationale for voting in a
particular manner is not automatically captured through the voting process, the individually responsible fund manager would be expected to be able to clearly articulate their decision whenever required.
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Invesco Perpetual
Policy on Corporate
Governance and Stewardship
9. The UK Stewardship Code
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Principle 4
Institutional
investors should establish clear guidelines on when and how they will escalate their activities as a method of protecting and enhancing shareholder value.
IP complies with Principle 4 with its fund managers managing corporate governance matters independently being a key part of their investment process to protect and add value on behalf investors. Initially any
issues/concerns would be raised by its fund managers through IP’s process of on-going dialogue and company meetings. On occasions that a fund manager believes an issue is significant enough to be escalated, this will be done through IP’s
Chief Investment Officer (CIO) and the IP Investment Management Operations team who will ensure the relevant internal resources are made available to support the fund manager in securing the most appropriate outcome for IP’s clients.
Principle 5
Institutional investors should be willing to act collectively with other investors where appropriate.
IP is supportive of collective engagement in cases where objectives between parties are mutually agreeable, there are no conflicts of interest and,
as they pertain to the UK market, are not in breach of ‘concert party’ rules. Other shareholders can engage directly with the relevant fund manager or through an investment adviser. Alternatively, enquiries can be directed to any of the
below:
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Stuart Howard — Head of IP Investment Management Operations
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Dan Baker — IP Investment Management Operations Manager
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Charles Henderson — UK Equities Business Manager
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Principle 6
Institutional investors should have a clear policy on voting and disclosure of
voting activity.
As detailed in Section 3, IP is committed to voting on all the UK (together with European and US) stocks it
holds for its underlying investors and where it has the full discretion to do so. Whilst comprehensive records of IP’s voting instructions are maintained, IP does not report specifically on its voting activity. Whilst being mindful of its
fiduciary duty and the interest of all investors, IP believes that automatic public disclosure of its voting records may have a detrimental effect on its ability to manage its portfolios and ultimately would not be in the best interest of all
clients.
On specific requests from clients, IP will in good faith provide records of voting instructions given to third parties such as
trustees, depositaries and custodians subject to limitations detailed in Section 8.
IP uses ISS to process its voting decisions
and the ABI’s IVIS service for research for UK securities. Its instructions to ISS include a default instruction to vote with management, which is used only on the rare occasion when instructions are not successfully transmitted to ISS. IP will
also consider the need to attend and vote at general meetings if issues prevent the casting of proxy votes within required time limits.
IP does not enter into stock lending arrangements which might impact the voting process.
Principle 7
Institutional investors should report periodically on their stewardship and voting activities.
IP complies with Principle 7 through a commitment to provide regular illustrations of its engagement activities and to respond to voting record
requests from investors in its portfolios on an individual basis.
Although IP does not report specific findings of company meetings for
external use, we will seek to provide illustrations to demonstrate that active engagement is at the heart of its investment process. On request from investors, IP will in good faith provide records of voting instructions given to third parties such
as trustees, depositaries and custodians subject to certain limitations outlined in Section 8. Although the rationale for its voting decision is not captured through the voting process, individual fund managers would be expected to articulate
their decision whenever required.
IP currently does not obtain an independent opinion on its engagement and voting processes as it
believes any value for its clients from such an opinion is outweighed by the costs of obtaining such an opinion. There is also no material demand from clients to provide such an independent assurance.
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Invesco Perpetual
Policy on Corporate
Governance and Stewardship
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07
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Appendix 1
Voting on shares listed outside of the UK, Europe and the US
When deciding whether to exercise the voting rights attached to its clients’ shares listed outside of the UK, Europe and the US, IP will take
into consideration a number of factors. These will include the:
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Likely impact of voting on management activity, versus the cost to the client
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Portfolio management restrictions (e.g. share blocking) that may result from voting
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Preferences, where expressed, of clients
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Generally, IP will vote
on shares listed outside of the UK, Europe and the US by exception only, except where the client or local regulator expressly requires voting on all shares.
Note: Share blocking
Generally, IP will not vote where this results in shares being blocked from trading for
a period of more than a few hours. IP considers that it is not in the interest of clients that their shares are blocked at a potentially sensitive time, such as that around a shareholder meeting.
Important information
As at 8 July 2014.
For more information on our funds, please refer to the most up to date relevant fund and
share class-specific Key Investor Information Documents, the Supplementary Information Document, the ICVC ISA Key Features and Terms & Conditions, the latest Annual or Interim Short Reports and the latest Prospectus. This information is
available using the contact details shown.
Telephone calls may be recorded.
The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.
Where Invesco Perpetual has expressed views and opinions, these may change.
Invesco Perpetual is a business name of Invesco Asset Management Limited. Authorised and regulated by the Financial Conduct Authority.
Invesco Asset Management Limited
Registered in England 949417
Registered office Perpetual Park, Perpetual Park Drive, Henley-on-Thames,
Oxfordshire, RG9 1HH, UK.
56413/PDF/080714
Proxy Policies and Procedures
for
Invesco Canada Ltd.
INVESCO CANADA
PROXY VOTING GUIDELINES
Purpose
The purpose of this document is to describe Invesco Canada Ltd.’s
(“Invesco Canada”) general guidelines for voting proxies received from companies held in the accounts (“Accounts”) for which it acts as investment fund manager and/or adviser including:
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Investment fund manager, including investment funds offered in Canada (the “Canadian Funds”),
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Adviser, including separately managed portfolios (“SMPs”),
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Sub-adviser, including investment funds registered under and governed by the US Investment Company Act of 1940, as amended (the “US Funds”).
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The Accounts referred to above, exclude Accounts that are sub-advised (“Sub-Advised Accounts”) by affiliated or
third party advisers (“Sub-Advisers”). Proxies for Sub-Advised Accounts will be voted in accordance with the Sub-Adviser’s proxy voting policy (which may contain different voting recommendations), provided the policy as a whole is
designed with the intention of voting securities in the best interest of the Account; unless the sub-advisory agreement provides otherwise.
Voting rights will not be exercised in accordance with this policy or the Sub-Adviser’s proxy policy if the investment management agreement between
the client and Invesco Canada governing the SMP provides otherwise.
Compliance will review the proxy voting policies & procedures of
any new sub-advisors as part of its due diligence.
Introduction
Invesco Canada has a fiduciary obligation to act in the best long-term economic interest of the Accounts when voting proxies of portfolio companies.
The default is to vote with the recommendation of the publicly traded company’s management.
As a general rule, Invesco Canada shall vote against any actions that would:
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reduce the rights or options of shareholders,
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reduce shareholder influence over the board of directors and management,
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reduce the alignment of interests between management and shareholders, or
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reduce the value of shareholders’ investments.
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Since Invesco Canada’s portfolio managers follow an investment discipline that includes investing in companies that are believed to have strong management teams, the portfolio managers will generally
support the management of companies in which they invest, and will accord proper weight to the recommendations of company management. Therefore, in most circumstances, votes will be cast in accordance with the recommendations of company management.
While Invesco Canada’s proxy voting guidelines are stated below, the portfolio managers will take into consideration all relevant facts
and circumstances (including country specific considerations), and retain the right to vote proxies as deemed appropriate.
These guidelines
may be amended from time to time.
Situations in which Voting Rights Proxies Will Not Be Exercised
Voting rights will not be exercised in situations where:
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the securities have been sold subsequent to record date;
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administrative issues prevent voting, or;
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Invesco Canada sub-advises an Account for an unaffiliated third-party and the securities to be voted have been lent out by the fund manager.
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Conflicts of Interest
When voting proxies, Invesco Canada’s portfolio managers assess whether there are material conflicts of interest between Invesco Canada’s interests and those of the Account. A potential conflict
of interest situation may include where Invesco Canada or an affiliate manages assets for, provides other financial services to, or otherwise has a material business relationship with, a company whose management is soliciting proxies, and failure to
vote in favour of management of the company may harm Invesco Canada’s relationship with the company. In all situations, the portfolio managers will not take Invesco Canada’s relationship with the company into account, and will vote the
proxies in the best interest of the Account. To the extent that a portfolio manager has any personal conflict of interest with respect to a company or an issue presented, that portfolio manager should abstain from voting on that company or issue.
Portfolio managers are required to report in writing to the relevant Investment Head any such conflicts of interest and/or attempts by outside parties to improperly influence the voting process. If the portfolio manager in question is an Investment
Head, such conflicts of
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interest and/or attempts by outside
parties to improperly influence the voting process shall be presented in writing to the Investment Leadership Team (“ILT”). The Global Investments Director (or designate) will report any conflicts of interest to the Independent Review
Committee on an annual basis.
We believe that a board that has at least a majority of independent directors is integral to good corporate governance. Unless there are restrictions
specific to a company’s home jurisdiction, key board committees, including audit and compensation committees, should be completely independent.
Voting on Director Nominees in Uncontested Elections
Votes in an uncontested election of
directors are evaluated on a
case-by-case
basis, considering factors that may include:
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Long-term financial company performance relative to a market index,
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Composition of the board and key board committees,
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Nominee’s attendance at board meetings,
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Nominee’s time commitments as a result of serving on other company boards,
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Nominee’s stock ownership position in the company,
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Whether the chairman is also serving as CEO, and
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Whether a retired CEO sits on the board.
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Voting on Director Nominees in Contested Elections
Votes in a contested election of
directors are evaluated on a
case-by-case
basis, considering factors that may include:
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Long-term financial performance of the company relative to its industry,
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Management’s track record,
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Background to the proxy contest,
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Qualifications of director nominees (both slates),
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Evaluation of what each side is offering shareholders as well as the likelihood that the proposed objectives and goals can be met, and
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Stock ownership positions in the company.
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Majority Threshold Voting for Director Elections
We will generally vote
for
proposals that require directors to be elected with an affirmative majority of votes cast unless the relevant portfolio manager believes that the company has adopted formal corporate governance principles that present a meaningful alternative to the
majority voting standard.
Separating Chairman and CEO
Shareholder proposals to separate the chairman and CEO positions should be evaluated on a
case-by-case
basis.
While we generally support these proposals, some companies have governance structures in place that can satisfactorily counterbalance a combined position. Voting decisions will take into account factors
such as:
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Designated lead director, appointed from the ranks of the independent board members with clearly delineated duties;
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Majority of independent directors;
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All-independent key committees;
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Committee chairpersons nominated by the independent directors;
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CEO performance is reviewed annually by a committee of independent directors; and
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Established governance guidelines.
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Majority of Independent Directors
While we generally support proposals asking that a
majority of directors be independent, each proposal should be evaluated on a case-by-case basis.
We generally vote for proposals that the
board’s audit, compensation, and/or nominating committees be composed exclusively of independent directors.
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Stock Ownership Requirements
We believe that individual directors should be appropriately compensated and motivated to act in the best interests of shareholders. Share
ownership by directors better aligns their interests with those of other shareholders. Therefore, we believe that meaningful share ownership by directors is in the best interest of the company.
We generally vote
for
proposals that require a certain percentage of a director’s compensation to be in the form of common stock.
Size of Boards of Directors
We believe
that the number of directors is important to ensuring the board’s effectiveness in maximizing long-term shareholder value. The board must be large enough to allow it to adequately discharge its responsibilities, without being so large that it
becomes cumbersome.
While we will prefer a board of no fewer than 5 and no more than16 members, each situation will be considered on a
case-by-case
basis taking into consideration the specific company circumstances.
Classified or Staggered Boards
In a classified or staggered board, directors are typically elected in two or more “classes”, serving terms greater than one year.
We prefer the annual election of all directors and will generally
not support
proposals that provide for staggered terms for board members. We
recognize that there may be jurisdictions where staggered terms for board members is common practice and, in such situations, we will review the proposals on a
case-by-case
basis.
Director Indemnification and Liability Protection
We recognize that many individuals may
be reluctant to serve as corporate directors if they are personally liable for
all
lawsuits and legal costs. As a result, limitations on directors’ liability can benefit the corporation and its shareholders by helping to attract and
retain qualified directors while providing recourse to shareholders on areas of misconduct by directors.
We generally vote
for
proposals that limit directors’ liability and provide indemnification as long as the arrangements are limited to the director acting honestly and in good faith with a view to the best interests of the company and, in criminal matters, are
limited to the director having reasonable grounds for believing the conduct was lawful.
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A strong audit process is a requirement for good corporate governance. A significant aspect of the audit process is a strong relationship with a
knowledgeable and independent set of auditors.
Ratification of Auditors
We believe a company should limit its relationship with its auditors to the audit engagement, and certain closely related activities that do not, in the aggregate, raise an appearance of impaired
independence.
We generally vote
for
the reappointment of the company’s auditors unless:
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It is not clear that the auditors will be able to fulfill their function;
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There is reason to believe the auditors have rendered an opinion that is neither accurate nor indicative of the company’s financial position; or
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The auditors have a significant professional or personal relationship with the issuer that compromises their independence.
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Disclosure of Audit vs. Non-Audit Fees
Understanding the fees earned by the auditors is important for assessing auditor independence. Our support for the re-appointment of the auditors will take into consideration whether the management
information circular contains adequate disclosure about the amount and nature of audit vs. non-audit fees.
There may be certain jurisdictions
that do not currently require disclosure of audit vs. non-audit fees. In these circumstances, we will generally
support
proposals that call for this disclosure.
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III.
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COMPENSATION PROGRAMS
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Appropriately designed equity-based compensation plans, approved by shareholders, can be an effective way to align the interests of long-term
shareholders and the interests of management, employees and directors. Plans should not substantially dilute shareholders’ ownership interests in the company, provide participants with excessive awards or have objectionable structural features.
We will consider each compensation plan in its entirety (including all incentives, awards and other compensation) to determine if the plan provides the right incentives to managers, employees and directors and is reasonable on the whole.
While we generally encourage companies to provide more transparent disclosure related to their compensation programs, the following are specific
guidelines dealing with some
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of the more common features of these
programs (features not specifically itemized below will be considered on a
case-by-case
basis taking into consideration the general principles described above):
Cash Compensation and Severance Packages
We will generally
support
the board’s
discretion to determine and grant appropriate cash compensation and severance packages.
Executive Compensation (“say on pay”)
Proposals requesting that companies subject each year’s compensation record to a non binding advisory shareholder vote, or so-called
“say on pay” proposals will be evaluated on a
case-by-case
basis.
Equity Based Plans – Dilution
Equity compensation plans can increase the number of shares of a company and therefore dilute the value of existing shares. While such plans can be an
effective compensation tool in moderation, they can be a concern to shareholders and their cost needs to be closely watched. We assess proposed equity compensation plans on a
case-by-case
basis.
Employee Stock Purchase Plans
We will
generally vote
for
the use of employee stock purchase plans to increase company stock ownership by employees, provided that shares purchased under the plan are acquired for no less than 85% of their market value. It is recognized that country
specific circumstances may exist (e.g. tax issues) that require proposals to be reviewed on a
case-by-case
basis.
Loans to
Employees
We will vote
against
the corporation making loans to employees to allow employees to pay for stock or stock options. It
is recognized that country specific circumstances may exist that require proposals to be reviewed on a
case-by-case
basis.
Stock
Option Plans – Board Discretion
We will vote
against
stock option plans that give the board broad discretion in setting the
terms and conditions of the programs. Such programs should be submitted with detail and be reasonable in the circumstances regarding their cost, scope, frequency and schedule for exercising the options.
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Stock Option Plans – Inappropriate Features
We will generally vote
against
plans that have any of the following structural features:
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•
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|
ability to re-price “underwater” options without shareholder approval,
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•
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ability to issue options with an exercise price below the stock’s current market price,
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•
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|
ability to issue “reload” options, or
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•
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automatic share replenishment (“evergreen”) features.
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Stock Option Plans – Director Eligibility
While we prefer stock ownership by
directors, we will
support
stock option plans for directors as long as the terms and conditions of director options are clearly defined
Stock Option Plans – Repricing
We
will vote
for
proposals to re-price options if there is a value-for-value (rather than a share-for-share) exchange.
Stock Option
Plans – Vesting
We will vote
against
stock option plans that are 100% vested when granted.
Stock Option Plans – Authorized Allocations
We will generally vote
against
stock option plans that authorize allocation of 25% or more of the available options to any one individual.
Stock Option Plans – Change in Control Provisions
We will vote
against
stock
option plans with change in control provisions that allow option holders to receive more for their options than shareholders would receive for their shares.
We will review proposals relating to changes to capital structure and restructuring on a case-by-case basis, taking into consideration the impact of the
changes on corporate governance and shareholder rights, anticipated financial and operating benefits, portfolio manager views, level of dilution, and a company’s industry and performance in terms of shareholder returns.
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As of May 2013
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Page 8 of 11
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Common Stock Authorization
We will review proposals to increase the number of shares of
common stock authorized for issue on a
case-by-case
basis.
Dual Class Share Structures
Dual class share structures involve a second class of common stock with either superior or inferior voting rights to those of another class of stock.
We will generally vote
against
proposals to create or extend dual class share structures where classes have different voting rights.
Stock Splits
We will vote
for
proposals to increase common share authorization for a stock split, provided that the increase in authorized shares would not result in excessive dilution given a company’s industry and performance in terms of shareholder returns.
Reverse Stock Splits
We
will vote
for
proposals to implement a reverse stock split.
Share Repurchase Programs
We will vote
against
proposals to institute open-market share repurchase plans if all shareholders do not participate on an equal basis.
Reincorporation
Reincorporation involves re-establishing the company in a different legal jurisdiction.
We will generally vote
for
proposals to reincorporate the company provided that the board and management have demonstrated sound financial or business reasons for the move. Proposals to
reincorporate will generally
not be supported
if solely as part of an anti-takeover defense or as a way to limit directors’ liability.
Mergers & Acquisitions
We will vote
for
merger & acquisition
proposals that the relevant portfolio managers believe, based on their review of the materials:
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•
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|
will result in financial and operating benefits,
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•
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have a fair offer price,
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As of May 2013
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Page 9 of 11
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•
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have favourable prospects for the combined companies, and
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•
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will not have a negative impact on corporate governance or shareholder rights.
|
We recognize that to effectively manage a corporation, directors and management must consider not only the interests of shareholders, but the interests
of employees, customers, suppliers, and creditors, among others.
We believe that companies and their boards must give careful consideration
to social responsibility issues in order to enhance long-term shareholder value.
We
support
efforts by companies to develop policies
and practices that consider social responsibility issues related to their businesses.
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VI.
|
SHAREHOLDER PROPOSALS
|
Shareholder proposals can be extremely complex, and the impact on the interests of all stakeholders can rarely be anticipated with a high degree of
confidence. As a result, shareholder proposals will be reviewed on a
case-by-case
basis with consideration of factors such as:
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|
•
|
|
the proposal’s impact on the company’s short-term and long-term share value,
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|
•
|
|
its effect on the company’s reputation,
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•
|
|
the economic effect of the proposal,
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|
•
|
|
industry and regional norms in which the company operates,
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•
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|
the company’s overall corporate governance provisions, and
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•
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|
the reasonableness of the request.
|
We will generally
support
shareholder proposals that require additional disclosure regarding corporate responsibility issues where the relevant portfolio manager believes:
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|
•
|
|
the company has failed to adequately address these issues with shareholders,
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•
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|
there is information to suggest that a company follows procedures that are not in compliance with applicable regulations, or
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|
As of May 2013
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Page 10 of 11
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•
|
|
the company fails to provide a level of disclosure that is comparable to industry peers or generally accepted standards.
|
We will generally
not support
shareholder proposals that place arbitrary or artificial constraints on the board, management or the company.
Ordinary Business Practices
We will generally
support
the board’s discretion regarding shareholder proposals that involve ordinary business practices.
Protection of Shareholder Rights
We
will generally vote
for
shareholder proposals that are designed to protect shareholder rights if the company’s corporate governance standards indicate that such additional protections are warranted.
Barriers to Shareholder Action
We will
generally vote
for
proposals to lower barriers to shareholder action.
Shareholder Rights Plans
We will generally vote
for
proposals to subject shareholder rights plans to a shareholder vote.
We will vote
against
any proposal where the proxy materials lack sufficient information upon which to base an informed decision.
We will vote
against
any proposals to authorize the company to conduct any other business that is not described in the proxy statement (including
the authority to approve any further amendments to an otherwise approved resolution).
Reimbursement of Proxy Solicitation Expenses
Decisions to provide reimbursement for dissidents waging a proxy contest are made on a
case-by-case
basis.
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As of May 2013
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Page 11 of 11
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Proxy Policy and Procedures
for
Invesco Hong Kong Limited
Invesco Hong Kong Limited
PROXY VOTING POLICY
30 June 2014
TABLE OF CONTENTS
INTRODUCTION
This policy sets out
Invesco’s approach to proxy voting in the context of our broader portfolio management and client service responsibilities. It applies to Asia related equity portfolios managed by Invesco on behalf of individually-managed clients and pooled fund
clients
Invesco’s proxy voting policy is expected to evolve over time to cater for changing circumstances or unforeseen
events.
2
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|
1.1
|
Invesco recognises its fiduciary obligation to act in the best interests of all clients, be they retirement scheme trustees, institutional clients, unitholders in
pooled investment vehicles or personal investors. The application of due care and skill in exercising shareholder responsibilities is a key aspect of this fiduciary obligation.
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1.2
|
The sole objective of Invesco’s proxy voting policy is to promote the economic interests of its clients. At no time will Invesco use the shareholding powers
exercised in respect of its clients’ investments to advance its own commercial interests, to pursue a social or political cause that is unrelated to clients’ economic interests, or to favour a particular client or other relationship to the
detriment of others.
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1.3
|
Invesco also recognises the broader chain of accountability that exists in the proper governance of corporations, and the extent and limitations of the
shareholder’s role in that process. In particular, it is recognised that company management should ordinarily be presumed to be best placed to conduct the commercial affairs of the enterprise concerned, with prime accountability to the
enterprise’s Board of Directors which is in turn accountable to shareholders and to external regulators and exchanges. The involvement of Invesco as an institutional shareholder will not extend to interference in the proper exercise of Board or
management responsibilities, or impede the ability of companies to take the calculated commercial risks which are essential means of adding value for shareholders.
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1.4
|
The primary aim of the policy is to encourage a culture of performance among investee companies, rather than one of mere conformance with a prescriptive set of rules
and constraints. Rigid adherence to a checklist approach to corporate governance issues is of itself unlikely to promote the maximum economic performance of companies, or to cater for circumstances in which non-compliance with a checklist is
appropriate or unavoidable.
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1.5
|
Invesco considers that proxy voting rights are an asset which should be managed with the same care as any other asset managed on behalf of its clients.
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3
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2.
|
PROXY VOTING AUTHORITY
|
|
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2.1
|
An important dimension of Invesco’s approach to corporate governance is the exercise of proxy voting authority at the Annual General Meetings or other
decision-making forums of companies in which we manage investments on behalf of clients.
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2.2
|
An initial issue to consider in framing a proxy voting policy is the question of where discretion to exercise voting power should rest - with Invesco as the investment
manager, or with each individual client? Under the first alternative, Invesco’s role would be both to make voting decisions on clients’ behalf and to implement those decisions. Under the second alternative, Invesco would either have no
role to play, or its role would be limited solely to implementing voting decisions under instructions from our clients.
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2.3
|
In addressing this issue, it is necessary to distinguish the different legal structures and fiduciary relationships which exist as between individually-managed clients,
who hold investments directly on their own accounts, and pooled fund clients, whose investments are held indirectly under a trust structure.
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2.4
|
Individually-Managed Clients
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|
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2.4.1
|
As a matter of general policy, Invesco believes that unless a client’s mandate gives specific instructions to the contrary, discretion to exercise votes should
normally rest with the investment manager, provided that the discretion is always exercised in the client’s interests alone.
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2.4.2
|
The reason for this position is that Invesco believes that, with its dedicated research resources and ongoing monitoring of companies, an investment manager is usually
better placed to identify issues upon which a vote is necessary or desirable. We believe it is also more practical that voting discretion rests with the party that has the authority to buy and sell shares, which is essentially what investment
managers have been engaged to do on behalf of their clients.
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2.4.3
|
In cases where voting authority is delegated by an individually-managed client, Invesco recognises its responsibility to be accountable for the decisions it makes. If a
client requires, an appropriate reporting mechanism will be put in place.
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2.4.4
|
While it is envisaged that the above arrangements will be acceptable in the majority of cases, it is recognised that some individually-managed clients
will wish to retain voting authority for themselves, or to place conditions on the circumstances in which it can be exercised by investment managers. In practice, it is believed that this option is generally only likely to arise with relatively
large clients such as trustees of major superannuation funds or statutory corporations which have the resources to develop their own policies and to supervise their implementation by investment managers and custodians. In particular, clients who
have multiple equity managers and utilise a master custody arrangement
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4
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|
may be more likely to consider retaining voting authority in order to ensure consistency of approach across their total portfolio.
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2.4.5
|
In any event, whatever decision is taken as to where voting authority should lie, Invesco believes that the matter should be explicitly covered by the terms of the
investment management agreement and clearly understood by the respective parties.
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|
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2.4.6
|
Accordingly, Invesco will pursue the following policies with respect to the exercise of proxy voting authority for individually-managed clients:
|
PROXY VOTING AUTHORITY
Individually-Managed Clients
Unless an individually-managed client wishes to retain proxy voting authority, Invesco will assume proxy voting authority
by way of delegation from the client, provided that the allocation of proxy voting responsibility is clearly set out in the investment management agreement.
In the case of clients who wish to place special conditions on the delegation of proxy voting powers,
Invesco will endeavour to accommodate those clients’ requirements as far as practicable, subject to any administrative obstacles or additional costs that might arise in implementing the conditions.
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2.5.1
|
The legal relationship between an investment manager and its pooled fund clients is different in a number of important respects from that applying to
individually-managed clients. These differences have a bearing on how proxy voting authority is exercised on behalf of pooled fund clients.
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2.5.2
|
These legal relationships essentially mean that the manager is required to act solely in the collective interests of unitholders at large rather than as a direct agent
or delegate of each unitholder. On the issue of proxy voting, as with all other aspects of our client relationships, Invesco will naturally continue to be receptive to any views and concerns raised by its pooled fund clients. However, the legal
relationship that exists means it is not possible for the manager to accept instructions from a particular pooled fund client as to how to exercise proxy voting authority in a particular instance.
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2.5.3
|
As in the case of individually-managed clients who delegate their proxy voting authority, Invesco’s accountability to pooled fund clients in exercising its
fiduciary responsibilities is best addressed as part of the manager’s broader client relationship and reporting responsibilities.
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2.5.4
|
Accordingly, Invesco will pursue the following policies with respect to the exercise of proxy voting authority for pooled fund clients:
|
5
PROXY VOTING AUTHORITY
Pooled Fund Clients
In considering proxy voting issues arising in respect of pooled fund shareholdings, Invesco will act
solely in accordance with its fiduciary responsibility to take account of the collective interests of unitholders in the pooled fund as a whole.
Invesco cannot accept instructions from individual unitholders as to the exercise of proxy voting
authority in a particular instance.
6
|
3.
|
KEY PROXY VOTING ISSUES
|
|
|
3.1
|
This section outlines Invesco’s intended approach in cases where proxy voting authority is being exercised on clients’ behalf.
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3.2
|
Invesco will vote on all material issues at all company meetings where it has the voting authority and responsibility to do so. We will not announce our voting
intentions and the reasons behind them.
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3.3
|
Invesco applies two underlying principles. First, our interpretation of ‘material voting issues’ is confined to those issues which affect the value of shares
we hold on behalf of clients and the rights of shareholders to an equal voice in influencing the affairs of companies in proportion to their shareholdings. We do not consider it appropriate to use shareholder powers for reasons other than the
pursuit of these economic interests. Second, we believe that a critical factor in the development of an optimal corporate governance policy is the need to avoid unduly diverting resources from our primary responsibilities to add value to our
clients’ portfolios through investment performance and client service.
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3.4
|
In order to expand upon these principles, Invesco believes it is necessary to consider the role of proxy voting policy in the context of broader portfolio management
and administrative issues which apply to our investment management business as a whole. These are discussed as follows.
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|
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3.5
|
Portfolio Management Issues - Active Equity Portfolios
|
|
|
3.5.1
|
While recognising in general terms that issues concerning corporate governance practices can have a significant bearing on the financial performance of companies, the
primary criterion for the selection and retention of a particular stock in active equity portfolios remains our judgment that the stock will deliver superior investment performance for our clients, based on our investment themes and market analysis.
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3.5.2
|
In view of these dynamics, Invesco does not consider it feasible or desirable to prescribe in advance comprehensive guidelines as to how it will exercise proxy voting
authority in all circumstances. The primary aim of Invesco’s approach to corporate governance is to encourage a culture of performance among the companies in which we manage investments in order to add value to our clients’ portfolios,
rather than one of mere conformance with a prescriptive set of rules and constraints.
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3.5.3
|
Nevertheless, Invesco has identified a limited range of issues upon which it will always exercise proxy voting authority - either to register disapproval of management
proposals or to demonstrate support for company initiatives through positive use of voting powers. These issues are outlined as follows:
|
7
KEY VOTING ISSUES
Major Corporate Proposals
Invesco will always vote on the following issues arising in company General Meetings where it has the
authority to do so on behalf of clients.
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|
•
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contentious issues (eg. issues of perceived national interest, or where there has been extensive press coverage or public comment);
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|
•
|
approval of changes of substantial shareholdings;
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|
|
•
|
mergers or schemes of arrangement; and
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•
|
approval of major asset sales or purchases.
|
As a general rule, Invesco will vote against any actions that will reduce the rights or options of shareholders, reduce shareholder influence over the board of directors and management, reduce the
alignment of interests between management and shareholders, or reduce the value of shareholders’ investments, unless balanced by reasonable increase in net worth of the shareholding.
Where appropriate, Invesco will also use voting powers to influence companies to adopt generally accepted best corporate
governance practices in areas such as board composition, disclosure policies and the other areas of recommended corporate governance practice.
Invesco’s approach to significant proxy voting issues which fall outside these areas will be
addressed on their merits.
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3.6
|
Administrative Issues
|
|
|
3.6.1
|
In addition to the portfolio management issues outlined above, Invesco’s proxy voting policy also takes account of administrative and cost implications, together
with the size of our holdings as compared to the issue size, involved in the exercise of proxy voting authority on our clients’ behalf.
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3.6.2
|
There are practical constraints to the implementation of proxy voting decisions. Proxy voting is a highly seasonal activity, with most company Annual General Meetings
being collapsed into a few months, with short deadlines for the distribution and return of notice papers, multiple resolutions from multiple companies being considered simultaneously, and under a legal system which is essentially dependent upon
paper-based communication and record-keeping.
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3.6.3
|
In addition, for investment managers such as Invesco who do not invest as principals and who consequently do not appear directly on the share registers of companies,
all of these communications are channelled through external custodians, among whom there is in turn a considerable variation in the nature and quality of systems to deal with the flow of information.
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3.6.4
|
While Invesco has the systems in place to efficiently implement proxy voting decisions when required, it can be seen that administrative and cost
|
8
|
|
considerations by necessity play an important role in the application of a responsible proxy voting policy. This is particularly so bearing in mind the extremely limited time period within which
voting decisions must often be made and implemented (which can in practice be as little as a few days). This factor also explains why Invesco resists any suggestion that there should be compulsory proxy voting on all issues, as in our view this
would only increase the costs to be borne by our clients with very little practical improvement in corporate performance in most cases.
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3.6.5
|
These administrative constraints are further highlighted by the fact that many issues on which shareholders are in practice asked to vote are routine matters relating
to the ongoing administration of the company - eg. approval of financial accounts or housekeeping amendments to Articles of Association. Generally in such cases, we will be in favour of the motion as most companies take seriously their duties and
are acting in the best interests of shareholders. However, the actual casting of a “yes” vote on all such resolutions in our view would entail an unreasonable administrative workload and cost.
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|
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3.6.6
|
Accordingly, Invesco believes that an important consideration in the framing of a proxy voting policy is the need to avoid unduly diverting resources from our primary
responsibilities to add value to our clients’ investments through portfolio management and client service. The policies outlined below have been prepared on this basis.
|
KEY PROXY VOTING ISSUES
Administrative Constraints
In view of the administrative constraints and costs involved in the exercise of proxy voting powers, Invesco may (depending on circumstances) not exercise its voting right unless its clients’
portfolios in aggregate represent a significant proportion of the shareholdings of the company in question.
A significant proportion in this context means 5% or more of the market capitalisation of the company.
9
4. INTERNAL ADMINISTRATION & DECISION-MAKING PROCESS
|
|
4.1
|
The following diagram illustrates the procedures adopted by Invesco for the administration of proxy voting:
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|
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4.2
|
As shown by the diagram, a central administrative role is performed by our Global Proxy Team, located within the Client Administration section. The initial role of the
Global Proxy Team is to receive company notice papers via the range of custodians who hold shares on behalf of our clients, to ascertain which client portfolios hold the stock, and to initiate the decision-making process by distributing the company
notice papers to the Primary Investment Manager responsible for the company in question.
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4.3
|
A voting decision on each company resolution (whether a yes or no vote, or a recommended abstention) is made by the Primary Investment Manager responsible for the
company in question. Invesco believes that this approach is preferable to the appointment of a committee with responsibility for handling voting issues across all companies, as it takes advantage of the expertise of individuals whose professional
lives are occupied by analysing particular companies and sectors, and who are familiar with the issues facing particular companies through their regular company visits.
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4.4
|
Moreover, the Primary Equity Manager has overall responsibility for the relevant market and this ensures that similar issues which arise in different companies are
handled in a consistent way across the relevant market.
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10
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4.5
|
The voting decision is then documented and passed back to the Global Proxy Team, who issue the voting instructions to each custodian in advance of the closing date for
receipt of proxies by the company. At the same time, the Global Proxy Team logs all proxy voting activities for record keeping or client reporting purposes.
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4.6
|
A key task in administering the overall process is the capture and dissemination of data from companies and custodians within a time frame that makes exercising votes
feasible in practice. This applies particularly during the company Annual General Meeting “season”, when there are typically a large number of proxy voting issues under consideration simultaneously. Invesco has no control over the former
dependency and Invesco’s ability to influence a custodian’s service levels are limited in the case of individually-managed clients, where the custodian is answerable to the client.
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4.7
|
The following policy commitments are implicit in these administrative and decision-making processes:
|
INTERNAL ADMINISTRATION AND DECISION-MAKING PROCESS
Invesco will consider all resolutions put forward in the Annual General Meetings or other decision-making forums of all
companies in which investments are held on behalf of clients, where it has the authority to exercise voting powers. This consideration will occur in the context of our policy on Key Voting Issues outlined in Section 3.
The voting decision will be made by the Primary Investment Manager responsible for the market in question.
A written record will be kept of the voting decision in each case, and in case of an opposing vote, the reason/comment for
the decision.
Voting instructions will be issued to custodians as far as practicable in advance of the
deadline for receipt of proxies by the company. Invesco will monitor the efficiency with which custodians implement voting instructions on clients’ behalf.
Invesco’s ability to exercise proxy voting authority is dependent on timely receipt of
notification from the relevant custodians.
11
5. CLIENT REPORTING
|
|
5.1
|
Invesco will keep records of its proxy voting activities.
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5.2
|
Upon client request, Invesco will regularly report back to the client on proxy voting activities for investments owned by the client.
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5.2
|
The following points summarise Invesco’s policy commitments on the reporting of proxy voting activities to clients (other than in cases where specific forms of
client reporting are specified in the client’s mandate):
|
CLIENT REPORTING
Where proxy voting authority is being exercised on a client’s behalf, a statistical summary of voting activity will be provided on request as part of the client’s regular quarterly report.
Invesco will provide more detailed information on particular proxy voting issues in
response to requests from clients wherever possible.
12
Proxy Policies and Procedures
for
Invesco Asset Management (Japan) Limited
Guidelines on Exercising Shareholder Voting Rights and
Policies for Deciding on the Exercise of Shareholder Voting Rights
Invesco Asset Management (Japan) Limited
Enforcement Date: July 5, 2010
Revision Date: May 1, 2014
Authority to Amend or Abolish: Shareholders’ Voting Committee
Record of Amendments
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Date
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Content
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April 20, 2011
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Revision associated with review of proxy voting guideline
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Mar 6, 2012
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Revision associated with review of investment to emerging markets
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April 20, 2012
|
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Revision associated with review of proxy voting guideline
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May 1, 2014
|
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Revision associated with review of proxy voting guideline
|
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|
B19-2 Giudeline on Exercising Shareholder Voting Rights and Policies for Deciding on the
Exercise of Shareholder Voting Rights. April 20, 2011
Guidelines on Exercising of Shareholder Voting Rights and
Policy Decision Making Criteria
(Japanese Equities)
Policy and Objectives of Exercising Shareholder Voting Rights
Our company is cognizant of the importance of corporate governance, and exercises votes with the sole objective of maximizing the long
term interests of trustors (investors) and beneficiaries, pursuant to our fiduciary duty as a trustee to the trustors (investors) and the beneficiaries. We will not conduct any voting with an objective of own interest or that of any third party
other than the trustors (investors) or beneficiaries. The interests of trustors (investors) and beneficiaries means the increasing of corporate value or the increasing of the economic interests of shareholders or the preventing of damage thereto.
Significance of Guidelines on Exercising Shareholder Voting Rights
Our company has determined the Guidelines on Exercising of Shareholder Voting Rights in accordance with our policy on exercising the voting rights of shareholders, for the purpose of exercising votes in
an appropriate manner, and will closely examine each proposal and determine the response pursuant to these Guidelines.
Guidelines on Exercising Shareholder Voting Rights
1.
Procedural Proposal
(1) Financial Statements, Business Reports and Auditors
Reports
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•
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In principle we will vote in favor of a proposal requesting approval of the financial statements, business reports and auditor reports, except in the
following circumstances:
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•
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Concerns exist about the settlement or auditing procedures; or
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•
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The relevant company has not answered shareholders’ questions concerning matters that should be disclosed.
|
(2) Allocation of Earned Surplus and Dividends
|
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•
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|
A decision regarding a proposal requesting approval of the allocation of earned surplus and dividends will be made in consideration of, inter alia, the
financial condition and the business performance of the relevant company as well as the economic interests of shareholders.
|
2.
Election of Directors
A
decision regarding a proposal in connection with electing a director will be made in consideration of, inter alia, the independence, suitability and existence or absence of any antisocial activities in
- 1 -
B19-2 Giudeline on Exercising Shareholder Voting Rights and Policies for Deciding on the
Exercise of Shareholder Voting Rights. April 20, 2011
the past on the part of a candidate for director. In the event that a
candidate for director is a reelection candidate, we will decide in consideration, inter alia, of the director candidate’s engagement in corporate governance, accountability, the business performance of the company, and the existence or absence
of any antisocial act by the company during his or her term in the office.
Definition of the independence:
A person considered to be independent shall mean a person for whom there is no relationship between the relevant company and the candidate for director
other than that of being selected as a director.
(1) Independence
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•
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In principle we will vote in favor of a proposal to elect an external director, however, we will oppose a candidate for an external director who is
perceived to have an interest in the relevant company.
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•
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In principle we will oppose a candidate for an external director who does not have independence in the case of a committees organized company, except
where the majority of the board are independent.
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•
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In principle we will oppose a top executive candidate if the board after the shareholder meeting does not include at least one external director,
regardless of independence.
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•
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Listed parent and subsidiary
|
If the relevant company has a listed parent and does not have at least one external director who is independent from the relevant company, we shall in principle oppose the top executive candidates for
directors of that company.
(2) Suitability
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•
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In principle we shall oppose a director candidate whose attendance is less than 75 percent at meetings of the board of directors.
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(3) Accountability
|
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•
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We will consider opposing a candidate for reelection as a director, if a takeover defense strategy is introduced, and that has not been approved by a
resolution of a general meeting of shareholders.
|
(4) Business Performance of the Company
|
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•
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We will consider opposing a candidate for reelection as a director in the event that business performance of the relevant company during the term in
office of the candidate experienced a deficit in three consecutive periods and no dividends were paid.
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|
|
•
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We will consider opposing a candidate for reelection as a director in the event that business performance of the relevant company during the term in
office of the candidate was inferior when compared to others in the same industry.
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B19-2 Giudeline on Exercising Shareholder Voting Rights and Policies for Deciding on the
Exercise of Shareholder Voting Rights. April 20, 2011
(5) Antisocial Activities on the Part of the Company
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•
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|
In principle we will oppose a candidate for reelection as a director in the event that during the term in office of the candidate a corporate scandal
occurred that had a significant impact on society and caused or could cause damage to of shareholder value.
|
|
|
•
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|
In principle we will consider opposing a candidate for reelection as a director in the event that during the term in office of the candidate window
dressing or inappropriate accounting practices occurred on the part of the relevant company.
|
(6) Shareholder-unfriendly
Behavior
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|
•
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|
We will consider opposing the reelection of directors particularly top executives at companies which have carried out third-party placements without an
approval at a general meeting of shareholders where the placements are likely to lead to excessive diminution of shareholder benefits.
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|
|
•
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|
We will consider opposing the reelection of directors particularly top executives at companies which have carried out a large –scale public
offerings without any rational explanation.
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|
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•
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|
We will consider opposing the reelection of directors particularly top executives at companies which has not taken appropriate action regarding
shareholder’s proposal even if there was a shareholder’s proposal which was regarded favorable to minority shareholders and approved by majority of valid vote in the previous period at a general meeting of shareholders, or which has not
proposed similar proposal in the next period at general meeting of shareholders.
|
(7) Other
|
|
•
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|
In principle we will oppose a candidate for director in the event that information concerning the relevant candidate has not been sufficiently
disclosed.
|
3.
Amendment of the Composition of the Board of Directors and the Required Qualification of
Directors
(1) Amendment of the Number of Directors or Composition of the Board of Directors
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|
•
|
|
A decision regarding a proposal concerning amendment of the number of directors or the composition of the board of directors will be made by making a
comparison with the existing situation and considering, inter alia, the impact on the relevant company and the economic interests of shareholders.
|
|
|
•
|
|
We will consider voting in favor of a proposal to decrease the number of directors except external directors, however as for a proposal to increase the
number of directors, if there is not any explicit and rational reason, we will consider opposing the reelection of representative directors.
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B19-2 Giudeline on Exercising Shareholder Voting Rights and Policies for Deciding on the
Exercise of Shareholder Voting Rights. April 20, 2011
|
|
•
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|
We will consider voting in favor of a proposal to increase the number of external directors, however as for a proposal to decrease the number of
external directors, if there is not any explicit and rational reason, we will consider opposing the reelection of representative directors.
|
(2) Amendment of Required Qualifications of Directors, Their Terms of Office and Scope of Responsibilities
|
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•
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|
A decision regarding a proposal concerning amendment of the required qualifications of directors, their terms of office or scope of liabilities will be
made by making a comparison with the existing situation and considering, inter alia, the impact on the relevant company and the economic interests of shareholders.
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|
|
•
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|
In principle we will oppose a proposal requesting retention of a certain number of a company’s own shares as a condition of installation or
continuation in office of a director.
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|
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•
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|
In principle we will oppose a proposal to restrict a term in office of a director.
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|
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•
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|
In principle we will oppose a proposal to institute a normal retirement age of directors.
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•
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|
In principle we will oppose a proposal to reduce the liabilities of a director from liability in connection with financial damage as a result of a
violation of the fiduciary duties.
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(3) Amendment of the Procedural Method for Election of Directors
|
|
•
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|
A decision regarding a proposal concerning amendment of the procedural method of electing directors will be made by making a comparison with the
existing situation and considering, inter alia, the reasonability of the amendment.
|
4.
Election of Statutory
Auditors
A decision regarding a proposal concerning the election of statutory auditors will be made by considering, inter alia, the
independence and the suitability of the candidate for statutory auditor.
Definition of the independence:
A person considered to be independent shall mean a person for whom there is no relationship between the relevant company and the candidate for statutory
auditor other than that of being selected as a statutory auditor.
(1) Independence
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•
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In principle we will oppose a candidate for an external statutory auditor if the candidate does not have independence.
|
(2) Suitability
|
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•
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|
In principle we shall oppose a statutory auditor candidate whose attendance rate is less than 75 percent at meetings of the board of directors or
meetings of the board of auditors
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B19-2 Giudeline on Exercising Shareholder Voting Rights and Policies for Deciding on the
Exercise of Shareholder Voting Rights. April 20, 2011
(3) Accountability
|
|
•
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|
In principle we will consider opposing a candidate for reelection as a statutory auditor in the event that significant concerns exist in an audit
report that has been submitted or audit proceedings.
|
(4) Antisocial Activities on the Part of the Company
|
|
•
|
|
In principle we will consider opposing a candidate for reelection as a statutory auditor in the event that during the term in office of the candidate a
corporate scandal occurred that had a significant impact on society and caused or could cause damage to shareholder value.
|
|
|
•
|
|
In principle we will consider opposing a candidate for reelection as a statutory auditor in the event that during the term in office of the candidate
window dressing or inappropriate accounting practices occurred on the part of the relevant company.
|
5.
Composition of
the Board of Auditors
A decision regarding a proposal concerning amendment of the number of statutory auditors or the composition of
the board of auditors will be made by making a comparison with the existing situation and considering, inter alia, the impact on the relevant company and the economic interests of shareholders
|
|
•
|
|
We will consider voting in favor of a proposal to increase the number of statutory auditors except external statutory auditors, however as for a
proposal to decrease the number of statutory auditors, if there is not any explicit and rational reason, we will consider opposing the reelection of representative directors.
|
|
|
•
|
|
We will consider voting in favor of a proposal to increase the number of external statutory auditors, however as for a proposal to decrease the number
of external statutory auditors, if there is not any explicit and rational reason, we will consider opposing the reelection of representative directors.
|
6.
Election of Accounting Auditors
We will decide on proposals concerning the
election of an accounting auditor by considering, inter alia, the suitability of the candidate for accounting auditor, and the level of audit fees.
|
|
•
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|
In principle we will oppose a candidate for accounting auditor in the event that the accounting auditor can be determined to have expressed an opinion
that is not accurate concerning the financial condition of the relevant company.
|
|
|
•
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|
In principle we will oppose in the event that a contract for non-auditing work exists between the accounting auditor and the relevant company, and it
is determined that the non-auditing work can be found to present a conflict of interest with the auditing work.
|
|
|
•
|
|
In principle we will oppose a candidate for accounting auditor in the event that an
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B19-2 Giudeline on Exercising Shareholder Voting Rights and Policies for Deciding on the
Exercise of Shareholder Voting Rights. April 20, 2011
|
|
excessive auditing fee is paid.
|
|
|
•
|
|
In principle we will oppose a proposal requesting a change of accounting auditor in the event that the reason for the change can be determined to be a
result of a difference in interpretation between the accounting auditor and the relevant company regarding accounting policy.
|
7.
Compensation of Directors, Statutory Auditors, Officers and Employees
(1) Compensation of Directors/Statutory Auditors
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|
•
|
|
In principle we will vote in favor of a proposal to obtain approval of compensation, except in the following cases:
|
|
|
•
|
|
A negative correlation appears to exist between the business performance of the company and compensation
|
|
|
•
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|
A compensation framework or practice exists which presents an issue
|
|
|
•
|
|
In principle we will oppose a proposal to pay compensation only by granting shares.
|
(2) Annual Bonus for Directors/Statutory Auditors
In principle we will vote in favor of a proposal to pay annual bonuses, except in the following case:
|
|
•
|
|
Recipients include those who are judged to be responsible for clear mismanagement resulted in a significant decline in the stock price or severe
deterioration in business performance, or shareholder-unfriendly behavior.
|
(3) Stock Option Plan
|
|
•
|
|
A proposal to introduce or amend a stock option plan will be decided in consideration of, inter alia, the impact that introducing or amending the plan
will have on shareholder value and the rights of shareholders, as well as the level of compensation, the scope of implementation, and the reasonability of the plan.
|
|
|
•
|
|
In principle we will oppose a proposal to reduce the exercise price of a stock option plan.
|
|
|
•
|
|
In principle we will vote in favor of a proposal to request that an amendment of the exercise price of a stock option plan be made a matter for
approval by the shareholders.
|
(4) Stock Purchase Plan
|
|
•
|
|
A decision regarding a proposal requesting the introduction or amendment of a stock purchase plan will be made in consideration of, inter alia, the
impact that introducing or amending the plan will have on shareholder value and the rights of shareholders, the scope of implementation, and the reasonability of the plan.
|
(5) Retirement Bonus of Directors or Statutory Auditors
A decision regarding a proposal in
connection with awarding a retirement bonus to a director or a
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B19-2 Giudeline on Exercising Shareholder Voting Rights and Policies for Deciding on the
Exercise of Shareholder Voting Rights. April 20, 2011
statutory auditor will be made in consideration of, inter alia, the extent of
the persons who are to be recipients, the existence or absence of antisocial activities in the past on the part of the prospective recipients, the business performance of the company, and the existence or absence of antisocial activities on the part
of the company.
|
|
•
|
|
In principle we will vote in favor of a proposal to pay a retirement bonus of a director or a statutory auditor if all of the following conditions are
satisfied.
|
|
|
•
|
|
Retirement bonus amount is disclosed.
|
|
|
•
|
|
The prospective recipients do not include an external director or an external statutory auditor.
|
|
|
•
|
|
None of the prospective recipients have committed a significant criminal conduct.
|
|
|
•
|
|
The business performance of the relevant company has not experienced a deficit for three consecutive periods and had no dividend or dividends or they
were inferior when compared to others in the same industry.
|
|
|
•
|
|
During the terms of office of the prospective recipients there has been no corporate scandal that had a significant impact on society and caused or
could cause damage to shareholder value.
|
|
|
•
|
|
During their terms in office there has been no window dressing or inappropriate accounting practices in the relevant company.
|
8.
Equity Financing Policy
(1) Amendment of the Number of Authorized Shares
|
|
•
|
|
A decision regarding a proposal requesting an increase in the number of authorized shares will be made by considering, inter alia, the impact that
amending the number of authorized shares will have on shareholder value and the rights of shareholders, as well as the reasonability of the amendment of the number of authorized shares, and the impact on the listing of shares as well as on the
continuity of the company.
|
|
|
•
|
|
In principle we will vote in favor of a proposal requesting an increase in the number of authorized shares if it can be determined that unless an
increase is made to the number of authorized shares the company will be delisted or that there is a risk of a significant impact on the continuity of the company.
|
|
|
•
|
|
In principle we will oppose a proposal to increase the number of authorized shares after the appearance of an acquirer.
|
(2) Issuing of New Shares
A decision
regarding a proposal in connection with issuing of new shares will be made in consideration of , inter alia, reasons of issuing new shares, issuing conditions and terms, the impact of the dilution on the shareholders value and rights of shareholders
as well as the impact on the
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B19-2 Giudeline on Exercising Shareholder Voting Rights and Policies for Deciding on the
Exercise of Shareholder Voting Rights. April 20, 2011
listing of shares and the continuity of the company.
(3) Acquisition or Reissue by a Company of Its Own Shares
|
|
•
|
|
A decision regarding a proposal for a company to acquire or reissue its own shares shall be made by considering, inter alia, its reasonability.
|
(4) Stock Split
|
|
•
|
|
In principle we will vote in favor of a proposal involving a stock split.
|
(5) Consolidation of Shares (Reverse Split)
|
|
•
|
|
A decision regarding a proposal involving a consolidation of shares (reverse split) shall be made by considering, inter alia, its reasonability.
|
(6) Preferred Shares
|
|
•
|
|
In principle we will oppose a proposal requesting the creation of new preferred shares or increasing the authorized number of preferred shares, by way
of a blank power of attorney that does not specify the voting rights, dividends, conversion or other rights.
|
|
|
•
|
|
In principle we will vote in favor of a proposal to create new preferred shares or to increase the number of authorized preferred shares if the voting
rights, dividends, conversion and other rights are stipulated and these rights can be determined to be reasonable.
|
|
|
•
|
|
In principle we will vote in favor of a proposal to the effect that approval of issuing preferred shares is so be obtained from shareholders.
|
(7) Issuing of Convertible Bonds
|
|
•
|
|
A decision regarding a proposal to issue convertible bonds shall be made by considering, inter alia, the number of shares into which the bonds are to
be converted, and the period to maturity of the bonds.
|
(8) Issuing of Non-Convertible Bonds, and Increasing a Borrowing
Limit
|
|
•
|
|
A decision regarding a proposal in connection with the issuing of non-convertible bonds or increasing a borrowing limit shall be made by considering,
inter alia the financial condition of the relevant company.
|
(9) Equitization of Debt
|
|
•
|
|
A decision regarding a proposal requesting an amendment of the number of authorized shares or issuing of shares of the company in relation to a debt
restructuring shall be made in consideration of, inter alia, the conditions of amending the number of authorized shares or issuing shares of the company, the impact on shareholder value and on the rights of shareholders, the reasonability thereof,
and the impact on listing of the shares as well as on the continuity of the company.
|
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B19-2 Giudeline on Exercising Shareholder Voting Rights and Policies for Deciding on the
Exercise of Shareholder Voting Rights. April 20, 2011
(10) Capital Reduction
|
|
•
|
|
A decision regarding a proposal in connection with a capital reduction will be made in consideration of, inter alia, the impact on shareholder value
and on the rights of shareholders, the reasonability of the capital reduction, as well as the impact on listing of the shares and on the continuity of the company.
|
|
|
•
|
|
In principle we will approve a proposal requesting a capital reduction in the form of a standard accounting processing.
|
(11) Financing Plan
|
|
•
|
|
A decision regarding a proposal in connection with a financing plan will be made in consideration of, inter alia, the impact on shareholder value and
the rights of shareholders, as well as the reasonability thereof, and the impact on the listing of shares as well as on the continuity of the company.
|
|
|
•
|
|
In principle we will vote in favor of a proposal requesting approval of a financing plan.
|
(12) Capitalization of Reserves
|
|
•
|
|
In principle we will vote in favor of a proposal requesting a capitalization of reserves.
|
9.
Corporate Governance
(1)
Amendment of Settlement Period
|
|
•
|
|
In principle we will vote in favor of a proposal requesting an amendment of the settlement period, except when it can be determined that the objective
is to delay a general meeting of shareholders.
|
(2) Amendment of Articles of Incorporation
A decision regarding a proposal in connection with an amendment of the articles of incorporation will be made in consideration of, inter alia, the impact
on shareholder value and the rights of shareholders as well as the necessity and the reasonability of amending the articles of incorporation.
|
|
•
|
|
In principle we will vote in favor of a proposal to amend the articles of incorporation if amendment of the articles of incorporation is necessary by
law.
|
|
|
•
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|
In principle we will oppose a proposal to amend the articles of incorporation if it can be determined that there is a risk that the rights of
shareholders will be infringed or a risk that a reduction in shareholder value will occur as a result of the relevant amendment.
|
|
|
•
|
|
In principal we will vote in favor of a proposal submitted by the board in connection with transition to a committees organized company.
|
|
|
•
|
|
In principal we will vote in favor of a proposal requesting mitigation or abolishment of the requirements for special resolution.
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B19-2 Giudeline on Exercising Shareholder Voting Rights and Policies for Deciding on the
Exercise of Shareholder Voting Rights. April 20, 2011
(3) Amendment of the Quorum of a General Meeting of Shareholders
|
|
•
|
|
A decision regarding a proposal in connection with an amendment of the quorum of a general meeting of shareholders will be made in consideration of,
inter alia, the impact on shareholder value and the rights of shareholders as well as the customs of the region or country.
|
|
|
•
|
|
A proposal in connection with amending the quorum of a special resolution of a general meeting of shareholders will be made in consideration of, inter
alia, the impact on shareholder value and the rights of shareholders as well as the customs of the region or country.
|
(4) Omnibus Proposal of a General Meeting of Shareholders
|
|
•
|
|
In principle we will oppose an omnibus proposal at a general meeting of shareholders if the entire proposal will not be in the best interests of
shareholders.
|
10.
Corporate Behavior
(1) Amendment of Tradename or Location of Corporate Registration
|
|
•
|
|
In principle we will vote in favor of a proposal requesting amendment of a tradename.
|
|
|
•
|
|
In principle we will vote in favor of a proposal requesting amendment of a location of corporate registration.
|
(2) Corporate Restructuring
|
|
•
|
|
A decision regarding a proposal in connection with a corporate reorganization as set forth below will be made in consideration of, inter alia, the
impact on shareholder value and the rights of shareholders, the respective impact on the financial condition and business performance of the relevant company, as well as the reasonability thereof, and the impact on the listing of shares as well as
on the continuity of the company:
|
Merger or acquisition;
Assignment or acquisition of business;
Company split (spin-off);
Sale of assets;
Being acquired; or
Liquidation.
(3)
Proxy Contest
|
|
•
|
|
A decision regarding a proposal in connection with election of a director from among opposing candidates will be made in consideration of the
independence, suitability, existence or absence of any antisocial activities in the past, actions in corporate governance and accountability on the part of the candidates for director, the business performance of
|
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B19-2 Giudeline on Exercising Shareholder Voting Rights and Policies for Deciding on the
Exercise of Shareholder Voting Rights. April 20, 2011
|
|
the company, the existence or absence of antisocial activities of the company, and the background to the proxy contest.
|
|
|
•
|
|
A person who is considered to be independent shall mean a person for whom there is no relationship between the relevant company and the candidate for
director other than that of being selected as a candidate director of the relevant company.
|
(4) Defense Strategy in
Proxy Contest
|
|
•
|
|
In principle we will oppose a proposal requesting the introduction of a staggered board of directors.
|
|
|
•
|
|
In principle we will vote in favor of a proposal requesting that the terms in office of directors be one year.
|
|
|
•
|
|
Authority to Dismiss Directors
|
In principle we will oppose a proposal requesting more stringent requirements for the shareholders to be able to dismiss a director.
|
|
•
|
|
In principle we will vote in favor of a proposal to introduce cumulative voting in connection with the election of directors.
|
|
|
•
|
|
In principle we will oppose a proposal requesting the abolition of cumulative voting in connection with the election of directors.
|
(5) Takeover Defense Strategies
|
|
•
|
|
Introduction or Amendment of Takeover Defense Strategy
|
In principle we will oppose a proposal requesting to introduce or amend a takeover defense strategy that will reduce shareholder value or
infringe the rights of shareholders.
|
|
•
|
|
Rights Plan (Poison Pill)
|
A decision regarding a proposal to introduce a rights plan (poison pill) will be made in consideration of, inter alia, the triggering conditions, the effective period, the conditions of disclosure of
content, the composition of directors of the relevant company, and the status of introducing other takeover defense strategies.
|
|
•
|
|
In principal we will oppose a proposal in which, a triggering condition of the number of outstanding shares is less than 20%.
|
|
|
•
|
|
In principal we will oppose a proposal that the effective period is beyond 3 years.
|
|
|
•
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|
In principal we will oppose a proposal that directors are not selected annually.
|
|
|
•
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|
In principal we will oppose a proposal in the event that there are less than 2 directors or 20% of the board who are independent with no issue of the
attendance records of
|
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B19-2 Giudeline on Exercising Shareholder Voting Rights and Policies for Deciding on the
Exercise of Shareholder Voting Rights. April 20, 2011
|
|
•
|
|
We will vote in favor for a proposal that a rights plan is considered by an independent committee before introducing such plan. We will vote in favor a
proposal only if all special committee members are independent with no issue of the attendance records of the board meeting.
|
|
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•
|
|
In principal we will oppose a proposal in the event that other takeover defense strategies exist.
|
|
|
•
|
|
In principal we will oppose a proposal in the event that the issuing date of invitation notice to shareholders is less than 3 weeks before the general
shareholders meeting.
|
|
|
•
|
|
In principal we will oppose a proposal unless the introduction of takeover defense strategies is considered reasonably beneficial to interests of
minority shareholders.
|
|
|
•
|
|
Relaxation of Requirements to Amend the Articles of Incorporation or Company Regulations
|
A decision regarding a proposal to relax the requirements to amend the articles of incorporation or company regulations will be made in
consideration of, inter alia, the impact on shareholder value and the rights of shareholders.
|
|
•
|
|
Relaxation of Requirements for Approval of a Merger
|
A decision regarding a proposal to relax the requirements to approve a merger will be made in consideration of, inter alia, the impact on shareholder value and the rights of shareholders.
11.
Social, Environmental and Political Problems
A decision regarding a proposal in connection with social, environmental or political problems will be made in consideration of, inter alia, the impact that the actions on the part of the company will
have on shareholder value and the rights of shareholders, or on the financial condition and business performance of the company, the reasonability of these actions, and the impact on the listing of shares as well as on the continuity of the company.
12.
Information Disclosure
|
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•
|
|
In principle we will oppose a proposal for which sufficient information is not disclosed for the purpose of making a voting decision.
|
|
|
•
|
|
In principle we will vote in favor of a proposal to increase information disclosure, if all of the following standards are satisfied.
|
|
|
•
|
|
The information will be beneficial to shareholders.
|
|
|
•
|
|
The time and expense required for the information disclosure will be minimal.
|
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B19-2 Giudeline on Exercising Shareholder Voting Rights and Policies for Deciding on the
Exercise of Shareholder Voting Rights. April 20, 2011
13.
Conflicts of Interest
We will abstain from exercising shareholder voting rights in a company that would constitute a conflict of interest.
The following company is determined to be a company that would constitute a conflict of interest:
14.
Shareholder proposals
A decision regarding shareholders’ proposals will be made in accordance with the Guidelines along with
company’s proposal, however, will be considered on the basis of proposed individual items.
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B19-2 Giudeline on Exercising Shareholder Voting Rights and Policies for Deciding on the
Exercise of Shareholder Voting Rights. April 20, 2011
Guidelines on Exercising of Shareholder Voting Rights and
Policy Decision Making Criteria
(Foreign Equities)
Policy and Objectives of Exercising Shareholder Voting Rights
Our company is cognizant of the importance of corporate governance, and exercises votes with the sole objective of maximizing the long
term interests of trustors (investors) and beneficiaries, pursuant to our fiduciary duty as a trustee to the trustors (investors) and the beneficiaries. We will not conduct any voting with an objective of own interest or that of any third party
other than the trustors (investors) or beneficiaries. The interests of trustors (investors) and beneficiaries means the increasing of corporate value or the increasing of the economic interests of shareholders or the preventing of damage thereto.
Significance of Guidelines on Exercising Shareholder Voting Rights
Our company has determined the Guidelines on Exercising of Shareholder Voting Rights in accordance with our policy on exercising the voting rights of shareholders, for the purpose of exercising votes in
an appropriate manner, and will closely examine each proposal and determine the response pursuant to these Guidelines.
Guidelines on Exercising Shareholder Voting Rights
1.
Procedural Proposal
(1) Procedures
|
|
•
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|
In principle we will vote in favor of a selection of the chairman of a general meeting of shareholders, approval of the minutes, approval of the
shareholders registry and other proposals in connection with procedures to hold a general meeting of shareholders.
|
|
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•
|
|
In principle we will vote in favor of a procedural proposal such as the following:
|
|
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•
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|
Opening of a general meeting of shareholders
|
|
|
•
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|
Closing of a general meeting of shareholders
|
|
|
•
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|
Confirming the proper convening of a general meeting of shareholders
|
|
|
•
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|
Satisfaction of the quorum for a general meeting of shareholders
|
|
|
•
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|
Confirming the agenda items of a general meeting of shareholders
|
|
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•
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|
Election of a chairman of a general meeting of shareholders
|
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•
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|
Designation of shareholders who will sign the minutes of a general meeting of shareholders
|
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•
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|
Preparing and approving a registry of shareholders
|
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B19-2 Giudeline on Exercising Shareholder Voting Rights and Policies for Deciding on the
Exercise of Shareholder Voting Rights. April 20, 2011
|
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•
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Filing of legally prescribed documents in connection with a general meeting of shareholders
|
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•
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|
Designation of an inspector or shareholder to inspect the minutes of a general meeting of shareholders
|
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•
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|
Permission to ask questions
|
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•
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|
Approval of the issuing of minutes of a general meeting of shareholders
|
|
|
•
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|
Approval of matters of resolution and granting to the board of directors the authority to execute matters that have been approved
|
(2) Financial Statements, Business Reports and Auditors Reports
|
|
•
|
|
In principle we will vote in favor of a proposal requesting approval of the financial statements, business reports and auditor reports, except in the
following circumstances:
|
|
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•
|
|
Concerns exist about the settlement or auditing procedures; or
|
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•
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|
The relevant company has not answered shareholders’ questions concerning matters that should be disclosed.
|
(3) Allocation of Earned Surplus and Dividends
|
|
•
|
|
A decision regarding a proposal requesting approval of the allocation of earned surplus and dividends will be made in consideration of, inter alia, the
financial condition and the business performance of the relevant company as well as the economic interests of shareholders.
|
2.
Election of Directors
A
decision regarding a proposal in connection with electing a director will be made in consideration of, inter alia, the independence, suitability and existence or absence of any antisocial activities in the past on the part of a candidate for
director. In the event that a candidate for director is a reelection candidate, we will decide in consideration, inter alia, of the director candidate’s engagement in corporate governance, accountability, the business performance of the
company, and the existence or absence of any antisocial act by the company during his or her term in the office.
Definition of
independence:
A person considered to be independent shall mean a person for whom there is no relationship between the relevant company and
the candidate for director other than that of being selected as a director.
(1) Independence
(United States)
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|
•
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|
In the following circumstances we will in principle oppose or withhold approval of a
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B19-2 Giudeline on Exercising Shareholder Voting Rights and Policies for Deciding on the
Exercise of Shareholder Voting Rights. April 20, 2011
|
|
candidate for an internal director, or a candidate for an external director who cannot be found to have a relationship of independence from the relevant company:
|
|
|
•
|
|
If the internal director or the external director who cannot be found to have a relationship of independence from the relevant company is a member of
the compensation committee or the nominating committee;
|
|
|
•
|
|
If the audit committee, compensation committee, or nominating committee has not been established and the director functions as a committee member;
|
|
|
•
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|
If the nominating committee has not been established;
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|
|
•
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|
If external directors who are independent from the relevant company do not constitute a majority of the board of directors;
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|
|
•
|
|
A person who is independent shall mean a person for whom there is no relationship between the relevant company and the candidate for director other
than that of being selected as a director.
|
(Other than United States)
A decision concerning the independence of the candidate for director will be made in consideration of the conditions of each country.
(2) Suitability
|
|
•
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|
In principle we shall oppose or withhold approval of a director candidate in the following circumstances:
|
|
|
•
|
|
An attendance rate of less than 75 percent at meetings of any of the board of directors, the audit committee, the compensation committee, or the
nominating committee;
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|
|
•
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|
Serving as a director of six or more companies; or
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•
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|
Serving as a CEO of another company and also serving as an external director of at least two other companies.
|
(3) Corporate Governance Strategies
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•
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|
In principle we will oppose or withhold approval of all candidates for reelection in the event that the board of directors employs a system of
staggered terms of office and a problem of governance has occurred in the board of directors or committee but the responsible director is not made a subject of the current proposal to reelect directors.
|
|
|
•
|
|
In the following circumstances we will in principle oppose or withhold approval of a candidate for reelection of a director who is a member of the
audit committee:
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•
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|
If an excessive auditing fee is being paid to the accounting auditor;
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|
|
•
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|
If the accounting auditor has expressed an opinion of non-compliance concerning the
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B19-2 Giudeline on Exercising Shareholder Voting Rights and Policies for Deciding on the
Exercise of Shareholder Voting Rights. April 20, 2011
|
|
financial statements of the relevant company; or
|
|
|
•
|
|
If the audit committee has agreed with the accounting auditor to reduce or waive the liability of accounting auditor, such as by limiting the right of
the company or the shareholders to take legal action against the accounting auditor.
|
|
|
•
|
|
In the following circumstances we will in principle oppose or withhold approval of a candidate for reelection as a director who is a member of the
compensation committee:
|
|
|
•
|
|
If there appears to be a negative correlation between the business performance of the company and the compensation of the CEO;
|
|
|
•
|
|
If in the case of an option for which the stock price of the relevant company is less than the exercise price, an amendment of the exercise price or an
exchange for cash or the like has been made without the approval of a general meeting of shareholders;
|
|
|
•
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|
If an exchange (sale) of stock options which is limited to a single exercise has been made without obtaining the approval of a general meeting of
shareholders;
|
|
|
•
|
|
If the burn rate has exceeded the level promised in advance to shareholders (the burn rate is the annual rate of dilution measured by the stock options
or rights to shares with restriction on assignment that have been actually granted (otherwise known as the “run rate”)); or
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|
|
•
|
|
If a compensation system or practice exists that presents a problem.
|
|
|
•
|
|
In the following circumstances we will in principle oppose or withhold approval of all candidates for reelection as directors:
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|
|
•
|
|
If the board of directors has not taken appropriate action regarding a shareholders’ proposal even if there was a shareholders’ proposal
which has been approved by a majority of the valid votes in the previous period at a general meeting of shareholders;
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|
|
•
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|
If the board of directors has not taken appropriate action such as withdrawing a takeover defense strategy, despite a majority of shareholders having
accepted a public tender offer; or
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|
|
•
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|
If the board of directors has not taken appropriate action regarding the cause of opposition or withholding of approval even though at the general
meeting of shareholders for the previous period there was a candidate for director who was opposed or for whom approval was withheld by a majority of the valid votes.
|
(4) Accountability
|
|
•
|
|
In the following cases we will consider opposing or withholding approval from a candidate for reelection as a director:
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B19-2 Giudeline on Exercising Shareholder Voting Rights and Policies for Deciding on the
Exercise of Shareholder Voting Rights. April 20, 2011
|
|
•
|
|
If a notice of convening states that there is a director with an attendance rate of less than 75% at meetings of the board of directors or committee
meetings, but the name of the individual is not specifically stated.
|
|
|
•
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|
If the relevant company has a problematic system as set forth below, and business performance of the relevant company during the term in office of
candidate has been in a deficit and with no dividend or is inferior when compared to those in the same industry in three consecutive periods :
|
|
|
•
|
|
A system of staggered terms of office;
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|
|
•
|
|
A system of special resolution that is not by simple majority;
|
|
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•
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|
Shares of stock with multiple votes;
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|
|
•
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|
A takeover defense strategy that has not been approved by a resolution of a general meeting of shares;
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|
|
•
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|
No clause for exceptions exists in the event that there are competing candidates, even though a system of majority resolution has been introduced for
the election of directors;
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|
•
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|
An unreasonable restriction is imposed on the authority of shareholders to convene an extraordinary general meeting of shareholders; or
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|
•
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|
An unreasonable restriction is imposed on the shareholders’ right to seek approval or disapproval on the part of shareholders by means of a letter
of consent by shareholders;
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|
|
•
|
|
In principle we will oppose or withhold approval of all candidates for reelection as directors in the event that a dead hand or similar provision is
included in a poison pill, until this provision is abolished.
|
|
|
•
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|
In principle we will oppose or withhold approval of all candidates for reelection as directors in the event of introducing a new poison pill with an
effective duration of 12 months or more (a long-term pill), or any renewal of a poison pill including a short-term pill with an effective period of less than 12 months, by the board of directors without the approval of a general meeting of
shareholders.
|
Nevertheless we will in principle vote in favor of all candidates for reelection as directors
in the event of a new introduction if a commitment is made by binding resolution to seek approval of the new introduction at a general meeting of shareholders.
|
|
•
|
|
In principle we will oppose or withhold approval of all candidates for reelection as directors in the event that a significant amendment to the
disadvantage of shareholders is added to a poison pill, by the board of directors without the approval of a general meeting of shareholders.
|
(5) Business Performance of a Company
|
|
•
|
|
We will consider opposing or withholding a candidate for reelection as a director in the event that business performance of the relevant company during
the term in office of the candidate experienced a deficit in three consecutive periods and no dividends were paid.
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B19-2 Giudeline on Exercising Shareholder Voting Rights and Policies for Deciding on the
Exercise of Shareholder Voting Rights. April 20, 2011
|
|
•
|
|
We will consider opposing or withholding candidate for reelection as a director in the event that business performance of the relevant company during
the term in office of the candidate was inferior when compared to others in the same industry.
|
(6) Antisocial Activities
on the Part of the Company
|
|
•
|
|
In principle we will oppose or withhold a candidate for reelection as a director in the event that during the term in office of the candidate a
corporate scandal occurred that had a significant impact on society and caused or could cause damage to of shareholder value.
|
|
|
•
|
|
In principle we will oppose or withhold approval of a candidate for reelection as a director who was a member of the audit committee, if inappropriate
accounting practices occurred at the relevant company such as window dressing, accounting treatment that deviates from GAAP (generally accepted accounting principles), or a significant omission in disclosure pursuant to Article 404 of the Sox Law.
|
(7) Other
|
|
•
|
|
In principle we will oppose or withhold a candidate for director in the event that information concerning the relevant candidate has not been
sufficiently disclosed.
|
(8) Amendment of the Number and Composition of Directors
|
|
•
|
|
A decision regarding a proposal concerning amendment of the number of directors or the composition of the board of directors will be made by making a
comparison with the existing situation and considering, inter alia, the impact on the relevant company and the economic interests of shareholders.
|
|
|
•
|
|
In principle we will vote in favor of a proposal to diversify the composition of a board of directors.
|
|
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•
|
|
In principle we will vote in favor of a proposal to fix the number of members of a board of directors, except when it is determined that this is a
takeover defense strategy.
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|
|
•
|
|
In principle we will oppose a proposal to make shareholder approval unnecessary in connection with an amendment of the number of members or composition
of the board of directors.
|
(9) Amendment of Qualification Requirements, Period of Service, or Extent of Liability of
Directors
|
|
•
|
|
A decision regarding a proposal concerning amendment of the required qualifications of directors, their terms of office or scope of liabilities will be
made by making a comparison with the existing situation and considering, inter alia, the impact on the relevant company and the economic interests of shareholders
|
|
|
•
|
|
In principle we will oppose a proposal requesting retention of a certain number of a
|
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B19-2 Giudeline on Exercising Shareholder Voting Rights and Policies for Deciding on the
Exercise of Shareholder Voting Rights. April 20, 2011
|
|
company’s own shares as a condition of installation or continuation in office of a director.
|
|
|
•
|
|
In principle we will oppose a proposal to restrict a term in office of a director.
|
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•
|
|
In principle we will oppose a proposal to institute normal retirement age of directors.
|
|
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•
|
|
In principle we will oppose a proposal to reduce the liabilities of a director from liability in connection with financial damage as a result of a
violation of the fiduciary duties.
|
(10) Amendment of the Procedural Method for Election of Directors
|
|
•
|
|
We will decide on proposal concerning amendment of the procedural method of electing directors will be made by making a comparison with the existing
situation and considering, inter alia, the reasonability of the amendment.
|
|
|
•
|
|
In principle we will vote in favor of a proposal to require the approval of the majority of the valid votes for an election of a director.
|
|
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•
|
|
In principle we will vote in favor of a proposal to prohibit the US style voting system.
|
3.
Election of Statutory Auditors
|
|
•
|
|
A decision regarding a proposal in connection with electing a statutory auditor shall be made by considering, inter alia, the independence and
suitability of the statutory auditor candidate.
|
|
|
•
|
|
In principle we will oppose a candidate for reelection as a statutory auditor in the event that significant concerns exist in an audit report that has
been submitted or audit proceedings.
|
|
|
•
|
|
A person who is independent shall mean a person for whom there is no relationship between the relevant company and the candidate for statutory auditor
other than that of being selected as a statutory auditor.
|
4.
Election of Accounting Auditor
We will decide on proposals concerning the election of an accounting auditor by considering, inter alia, the suitability of the candidate for accounting
auditor, and the level of audit fees.
|
|
•
|
|
In principle we will oppose a candidate for accounting auditor in the event that the accounting auditor can be determined to have expressed an opinion
that is not accurate concerning the financial condition of the relevant company.
|
|
|
•
|
|
In principle we will oppose in the event that a contract for non-auditing work exists between the accounting auditor and the relevant company, and it
is determined that the non-auditing work can be found to present a conflict of interest with the auditing work.
|
|
|
•
|
|
In principle we will oppose a candidate for accounting auditor in the event that an excessive auditing fee is paid.
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B19-2 Giudeline on Exercising Shareholder Voting Rights and Policies for Deciding on the
Exercise of Shareholder Voting Rights. April 20, 2011
|
|
•
|
|
In principle we will oppose a proposal requesting a change of accounting auditor in the event that the reason for the change can be determined to be a
result of a difference in interpretation between the accounting auditor and the relevant company regarding accounting policy.
|
5.
Compensation of Directors, Statutory Auditors, Officers and Employees
(1) Compensation (Including Bonus)
|
|
•
|
|
Proposals concerning compensation will be decided in consideration of, inter alia, levels of compensation, business performance of the company, and the
reasonability of the framework.
|
|
|
•
|
|
In principle we will vote in favor of a proposal to obtain approval of compensation reports, except in the following cases:
|
|
|
•
|
|
A negative correlation appears to exist between the business performance of the company and compensation.
|
|
|
•
|
|
A compensation framework or practice exists which presents an issue.
|
|
|
•
|
|
In principle we will oppose a proposal to set an absolute level or maximum compensation.
|
|
|
•
|
|
In principle we will oppose a proposal to pay compensation only by granting shares.
|
(2) Stock Option Plan
|
|
•
|
|
A proposal to introduce or amend a stock option plan will be decided in consideration of, inter alia, the impact that introducing or amending the plan
will have on shareholder value and the rights of shareholders, as well as the level of compensation, the scope of implementation and the reasonability of the plan.
|
|
|
•
|
|
In principle we will oppose a proposal to reduce the exercise price of a stock option plan.
|
|
|
•
|
|
In principle we will vote in favor of a proposal to request that an amendment of the exercise price of a stock option plan be made a matter for
approval by the shareholders.
|
(3) Stock Purchase Plan
|
|
•
|
|
A decision regarding a proposal requesting the introduction or amendment of a stock purchase plan will be made in consideration of, inter alia, the
impact that introducing or amending the plan will have on shareholder value and the rights of shareholders, the scope of implementation and the reasonability of the plan.
|
(4) Retirement Bonus of Directors or Statutory Auditors
|
|
•
|
|
A decision regarding a proposal in connection with awarding a retirement bonus to a director or a statutory auditor will be made in consideration of,
inter alia, the extent of the persons who are to be recipients, the existence or absence of antisocial activities in the past on the part of the prospective recipients, the business performance of the company, and the existence or absence of
antisocial activities on the part of the company. In principle we will
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B19-2 Giudeline on Exercising Shareholder Voting Rights and Policies for Deciding on the
Exercise of Shareholder Voting Rights. April 20, 2011
|
|
oppose awarding a retirement bonus in the event that a significant criminal act has been committed by the recipient during his or her term in office. Moreover we will also consider
opposing the awarding of a retirement bonus in the event that the business performance of the relevant company during the term in office of the candidate experienced a deficit in three consecutive periods and no dividends were paid or they were
inferior when compared to others in the same industry. In principle we will oppose awarding a retirement bonus in the event that during the term in office of the recipient inappropriate accounting practices occurred such as window dressing or
accounting treatment that deviates from generally accepted accounting principles or a significant omission in disclosure, or a corporate scandal occurred, which had a significant impact on society and caused or could cause damage to shareholder
value.
|
6.
Equity Financing Policy
(1) Amendment of the Number of Authorized Shares
|
|
•
|
|
A decision regarding a proposal requesting an increase in the number of authorized shares of stock shall be made by considering, inter alia, the impact
that amending the number of authorized shares will have on shareholder value and the rights of shareholders, as well as the reasonability of the amendment of the number of authorized shares, and the impact on the listing of shares as well as on the
continuity of the company.
|
|
|
•
|
|
In principle we will vote in favor of a proposal requesting an increase in the number of authorized shares if it can be determined that unless an
increase is made to the number of authorized shares the company will be delisted or that there is a risk of a significant impact on the continuity of the company.
|
|
|
•
|
|
In principle we will oppose a proposal to increase the number of authorized shares after the appearance of an acquirer.
|
(2) Issuing of New Shares
|
|
•
|
|
In principle if the existing shareholders will be granted new share subscription rights (pre-emptive purchase rights) we will vote in favor of a
proposal to issue new shares up to 100 percent of the number of shares issued and outstanding.
|
|
|
•
|
|
If the existing shareholders will not be granted new share subscription rights (pre-emptive purchase rights) we will in principle vote in favor of a
proposal to issue new shares up to 20 percent of the number of shares issued and outstanding.
|
|
|
•
|
|
In principle we will oppose a proposal to issue new shares after an acquirer has appeared.
|
(3) Acquisition or Reissue by a Company of Its Own Shares
|
|
•
|
|
A decision regarding a proposal for a company to acquire or reissue its own shares shall be made by considering, inter alia, its reasonability.
|
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B19-2 Giudeline on Exercising Shareholder Voting Rights and Policies for Deciding on the
Exercise of Shareholder Voting Rights. April 20, 2011
(4) Stock Split
|
|
•
|
|
In principle we will vote in favor of a proposal involving a stock split.
|
(5) Consolidation of Shares (Reverse Split)
|
|
•
|
|
A decision regarding a proposal involving a consolidation of shares (reverse split) shall be made by considering, inter alia, its reasonability.
|
(6) Reduction in Par Value of Shares
|
|
•
|
|
In principle we will vote in favor of a proposal reducing the par value of shares.
|
(7) Preferred Shares
|
|
•
|
|
A decision regarding a proposal in connection with creating new preferred shares or amending the number of authorized preferred shares shall be made by
considering, inter alia, the existence or absence of voting rights, dividends, conversion or other rights to be granted to the preferred shares as well as the reasonability of those rights.
|
|
|
•
|
|
In principle we will oppose a proposal requesting the creation of new preferred shares or increasing the authorized number of preferred shares, by way
of a blank power of attorney that does not specify the voting rights, dividends, conversion or other rights.
|
|
|
•
|
|
In principle we will vote in favor of a proposal to create new preferred shares or to increase the number of authorized preferred shares if the voting
rights, dividends, conversion and other rights are stipulated and these rights can be determined to be reasonable.
|
|
|
•
|
|
In principle we will vote in favor of a proposal to make the issuing of preferred shares a matter for approval by the shareholders.
|
(8) Classified Shares
|
|
•
|
|
In principle we will oppose a proposal requesting the creation of new shares with differing voting rights or increasing the authorized number of shares
with differing voting rights.
|
|
|
•
|
|
In principle we will vote in favor of a proposal to convert to a capital structure in which there is one vote per share.
|
(9) Issuing of Convertible Bonds
|
|
•
|
|
A decision regarding a proposal to issue convertible bonds shall be made by considering, inter alia, the number of shares into which the bonds are to
be converted, and the period to maturity of the bonds.
|
(10) Issuing of Non-Convertible Bonds, and Increasing a Borrowing
Limit
|
|
•
|
|
A decision regarding a proposal to issue non-convertible bonds will be made by considering, inter alia, the financial condition of the relevant
company.
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- 23 -
B19-2 Giudeline on Exercising Shareholder Voting Rights and Policies for Deciding on the
Exercise of Shareholder Voting Rights. April 20, 2011
|
|
•
|
|
A decision regarding a proposal to increase a borrowing limit shall be made by considering, inter alia, the financial condition of the relevant
company.
|
(11) Equitization of Debt
|
|
•
|
|
A decision regarding a proposal requesting an amendment of the number of authorized shares or issuing of shares of the company in relation to a debt
restructuring shall be made in consideration of, inter alia, the conditions of amending the number of authorized shares or issuing shares of the company, the impact on shareholder value and on the rights of shareholders, the reasonability thereof,
as well as the impact on listing of the shares and on the continuity of the company.
|
(12) Capital Reduction
|
|
•
|
|
A decision regarding a proposal in connection with a capital reduction will be made in consideration of, inter alia, the impact on shareholder value
and on the rights of shareholders, the reasonability of the capital reduction, as well as the impact on listing of the shares and on the continuity of the company.
|
|
|
•
|
|
In principle we will approve a proposal requesting a capital reduction in the form of a standard accounting processing.
|
(13) Financing Plan
|
|
•
|
|
A decision regarding a proposal in connection with a financing plan will be made in consideration of, inter alia, the impact on shareholder value and
on the rights of shareholders, as well as the reasonability thereof, and the impact on the listing of shares as well as on the continuity of the company.
|
|
|
•
|
|
In principle we will vote in favor of a proposal requesting approval of a financing plan.
|
(14) Capitalization of Reserves
|
|
•
|
|
In principle we will vote in favor of a proposal requesting a capitalization of reserves.
|
7.
Corporate Governance
(1)
Amendment of Settlement Period
|
|
•
|
|
In principle we will vote in favor of a proposal requesting an amendment of the settlement period, except when it can be determined that the objective
is to delay a general meeting of shareholders.
|
(2) Amendment of Articles of Incorporation
|
|
•
|
|
A decision regarding a proposal in connection with an amendment of the articles of incorporation will be made in consideration of, inter alia, the
impact on shareholder value and the rights of shareholders as well as the necessity and the reasonability of amending
|
- 24 -
B19-2 Giudeline on Exercising Shareholder Voting Rights and Policies for Deciding on the
Exercise of Shareholder Voting Rights. April 20, 2011
|
|
the articles of incorporation.
|
|
|
•
|
|
In principle we will vote in favor of a proposal to amend the articles of incorporation if amendment of the articles of incorporation is necessary by
law.
|
|
|
•
|
|
In principle we will oppose a proposal to amend the articles of incorporation if it can be determined that there is a risk that the rights of
shareholders will be infringed or a risk that a reduction in shareholder value will occur as a result of the relevant amendment.
|
(3) Amendment of the Quorum of a General Meeting of Shareholders
|
|
•
|
|
A decision regarding a proposal in connection with amending the quorum of a general meeting of shareholders and a special resolution of a general
shareholders meeting will be made in consideration of, inter alia, the impact on shareholder value and on the rights of shareholders as well as the customs of the region or country.
|
|
|
•
|
|
In principle we will oppose a proposal to reduce the quorum of a general meeting of shareholders.
|
|
|
•
|
|
In principle we will oppose a proposal to reduce the quorum of a special resolution.
|
(4) Omnibus Proposal of a General Meeting of Shareholders
|
|
•
|
|
In principle we will oppose an omnibus proposal at a general meeting of shareholders if the entire proposal will not be in the best interests of
shareholders.
|
(5) Other
(Anonymous Voting)
|
|
•
|
|
In principle we will vote in favor of a proposal requesting anonymous voting, an independent vote counter, an independent inspector, and separate
disclosure of the results of voting on a resolution of a general meeting of shareholders.
|
(Authority to Postpone General
Meetings of Shareholders)
|
|
•
|
|
In principle we will oppose a proposal requesting to grant to a company the authority to postpone a general meeting of shareholders.
|
(Requirement of Super Majority Approval)
|
|
•
|
|
In principle we will vote in favor of a proposal requesting a relaxation or abolishment of the requirement for a super majority.
|
8.
Corporate Behavior
(1) Amendment of Tradename or Location of Corporate Registration
|
|
•
|
|
In principle we will vote in favor of a proposal requesting amendment of a tradename.
|
|
|
•
|
|
In principle we will vote in favor of a proposal requesting amendment of a location of
|
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B19-2 Giudeline on Exercising Shareholder Voting Rights and Policies for Deciding on the
Exercise of Shareholder Voting Rights. April 20, 2011
(2) Corporate Restructuring
A decision regarding a proposal in connection with a merger, acquisition, assignment or acquisition of business, company split (spin-off),
sale of assets, being acquired, corporate liquidation or other corporate restructuring will be made in consideration of, inter alia, the respective impact on shareholder value and on the rights of shareholders, the impact on the financial condition
and on the business performance of the relevant company, as well as the reasonability thereof, and the impact on the listing of shares and on the continuity of the company.
|
|
•
|
|
A decision regarding a proposal in connection with a corporate reorganization as set forth below will be made in consideration of, inter alia, the
respective impact on shareholder value and on the rights of shareholders, the impact on the financial condition and on the business performance of the relevant company, as well as the reasonability thereof, and the impact on the listing of shares as
well as on the continuity of the company:
|
Merger or acquisition;
Assignment or acquisition of business;
Company split (spin-off);
Sale of assets;
Being acquired; or
Liquidation.
(3) Proxy Contest
|
|
•
|
|
A decision regarding a proposal in connection with election of a director from among opposing candidates will be made in consideration of the
independence, suitability, existence or absence of any antisocial activities in the past on the part of a candidate for director, the actions in corporate governance, accountability the business performance of the company, the existence or absence
of antisocial activities of the company, and the background to the proxy contest.
|
|
|
•
|
|
A person who is considered to be independent shall mean a person for whom there is no relationship between the relevant company and the candidate for
director other than that of being selected as a candidate director of the relevant company.
|
(4) Defense Strategy in
Proxy Contest
In principle we will oppose a proposal requesting the introduction of staggered board of directors:
- 26 -
B19-2 Giudeline on Exercising Shareholder Voting Rights and Policies for Deciding on the
Exercise of Shareholder Voting Rights. April 20, 2011
|
|
•
|
|
In principle we will oppose a proposal requesting the introduction of a staggered board of directors.
|
|
|
•
|
|
In principle we will vote in favor of a proposal requesting that the terms in office of directors be one year.
|
|
|
•
|
|
Authority to Dismiss Directors
|
In principle we will oppose a proposal requesting more stringent requirements for the shareholders to be able to dismiss a director.
|
|
•
|
|
In principle we will vote in favor of a proposal to introduce cumulative voting in connection with the election of directors. However, in principle we
will oppose a proposal which a majority of valid votes is required to elect a director except in the event that shareholders are able to write-in their own candidate in the convening notice or ballot of the company and the number of candidates
exceeds a prescribed number.
|
|
|
•
|
|
In principle we will oppose a proposal requesting the abolition of cumulative voting in connection with the election of directors.
|
|
|
•
|
|
Authority to Call an Extraordinary General Meeting of Shareholders
|
|
|
•
|
|
In principle we will vote in favor of a proposal requesting a right of shareholders to call an extraordinary general meeting of shareholders.
|
|
|
•
|
|
In principle we will vote in favor of a proposal to abolish restrictions on the right of shareholders to call an extraordinary general meeting of
shareholders.
|
|
|
•
|
|
In principle we will oppose a proposal to restrict or prohibit the right of shareholders to call an extraordinary general meeting of shareholders.
|
|
|
•
|
|
Letter of Consent Seeking Approval or Disapproval from Shareholders
|
|
|
•
|
|
In principle we will vote in favor of a proposal requesting that shareholders have the right to seek approval or disapproval on the part of
shareholders by means of a letter of consent.
|
|
|
•
|
|
In principle we will vote in favor of a proposal to abolish restrictions on the right of shareholders to seek approval or disapproval on the part of
shareholders by means of a letter of consent.
|
|
|
•
|
|
In principle we will oppose a proposal to restrict or prohibit the right of shareholders to seek approval or disapproval on the part of shareholders by
means of a letter of consent.
|
(5) Takeover Defense Strategies
|
|
•
|
|
Rights Plan (Poison Pill)
|
A decision regarding a proposal in connection with introducing a rights plan (poison pill) will be made in consideration of, inter alia, the triggering conditions, the effective period,
- 27 -
B19-2 Giudeline on Exercising Shareholder Voting Rights and Policies for Deciding on the
Exercise of Shareholder Voting Rights. April 20, 2011
the conditions of disclosure of content, the composition of
directors of the relevant company, and the status of introducing other takeover defense strategies.
A decision regarding a proposal in connection with introducing fair price conditions will be made in consideration of, inter alia, the triggering conditions, the decision-making process for triggering,
and the reasonability of the plan.
|
|
•
|
|
In principle we will vote in favor of a proposal requesting the introduction of fair price conditions, provided that the following is satisfied.
|
|
|
•
|
|
At the time of triggering the fair price provision, the approval of a majority or not more than a majority of shareholders without a direct interest in
the acquisition is to be sought
|
|
|
•
|
|
In principle we will vote in favor of a proposal to reduce the number of approvals by shareholders that is necessary to trigger fair price provision.
|
|
|
•
|
|
Anti-Greenmail Provision
|
A decision regarding a proposal in connection with introducing an anti-greenmail provision will be made in consideration of, inter alia, the triggering conditions, the decision-making process for
triggering, and the reasonability of the plan.
|
|
•
|
|
In principle we will vote in favor of a proposal requesting the introduction of anti-greenmail provisions, provided that all of the following standards
are satisfied:
|
|
|
•
|
|
The definition of greenmail is clear
|
|
|
•
|
|
If a buyback offer is to be made to a person who holds a large number of shares, that the buy-back offer will be made to all shareholders, or
confirmation will be made that shareholders who do not have a direct interest in the takeover do not oppose the buyback offer to the person who holds a large number of shares.
|
|
|
•
|
|
No clause is included which would restrict the rights of shareholders, such as measures to deter being bought out.
|
|
|
•
|
|
Golden Parachute and Tin Parachute Conditions
|
A decision regarding a proposal in connection with introducing a golden parachute or a tin parachute will be made in consideration of, inter alia, the triggering conditions, the decision-making process
for triggering, the level of compensation to be provided and the reasonability of the plan.
|
|
•
|
|
In principle we will vote in favor of a proposal to introduce or amend a golden parachute or a tin parachute if all of the following criteria are
satisfied:
|
- 28 -
B19-2 Giudeline on Exercising Shareholder Voting Rights and Policies for Deciding on the
Exercise of Shareholder Voting Rights. April 20, 2011
|
|
•
|
|
The triggering of the golden parachute or the tin parachute will be determined by an independent committee.
|
|
|
•
|
|
The payable compensation shall be no more than three times the employment compensation payable for a year.
|
|
|
•
|
|
Payment of compensation shall be made after the transfer of control.
|
In principle we will oppose a proposal in connection with creating new classified shares with multiple voting rights.
A decision regarding a proposal in connection with creating new classified shares with no voting rights or less voting rights will be made in consideration of, inter alia, the terms of the classified
shares.
|
|
•
|
|
In principle we will oppose a proposal to create classified shares with multiple voting rights.
|
|
|
•
|
|
In principle we will vote in favor of a proposal to create new classified shares with no voting rights or less voting rights if all of the following
conditions are satisfied.
|
|
|
•
|
|
The objective of creating the new classified shares is to obtain financing while minimizing the dilution of the existing shareholders.
|
|
|
•
|
|
The creation of the new classified shares does not have an objective of protecting the voting rights of shareholders that have a direct interest in a
takeover or of major shareholders.
|
|
|
•
|
|
Issuing New Shares to a White Squire or a White Knight
|
A decision regarding a proposal in connection with issuing shares to a white squire or a white knight will be made in consideration of,
inter alia, the conditions of issuing the shares.
|
|
•
|
|
Relaxation of Requirements to Amend the Articles of Incorporation or Company Regulations
|
A decision regarding a proposal to relax the requirements to amend the articles of incorporation or company regulations will be made in
consideration of, inter alia, the impact on shareholder value and the rights of shareholders.
|
|
•
|
|
Relaxation of Requirements for Approval of a Merger
|
A decision regarding a proposal to relax the requirements to approve a merger will be made in consideration of, inter alia, the impact on
shareholder value and on the rights of shareholders.
- 29 -
B19-2 Giudeline on Exercising Shareholder Voting Rights and Policies for Deciding on the
Exercise of Shareholder Voting Rights. April 20, 2011
|
|
•
|
|
Introduction or Amendment of Takeover Defense Strategy
|
In principle we will oppose a proposal in connection with introducing or amending a takeover defense strategy that will reduce shareholder
value or infringe the rights of shareholders.
9.
Social, Environmental and Political Problems
A decision regarding a proposal in connection with a social, environmental or political problems will be made in consideration of, inter alia, the impact
that the actions on the part of the company will have on shareholder value and the rights of shareholders, the impact on the financial condition and the business performance of the company, the reasonability of these actions, and the impact on the
listing of shares as well as on the continuity of the company.
10.
Information Disclosure
|
|
•
|
|
In principle we will oppose a proposal for which sufficient information is not disclosed for the purpose of making a voting decision.
|
|
|
•
|
|
In principle we will vote in favor of a proposal to increase information disclosure, if all of the following criteria are satisfied.
|
|
|
•
|
|
The information will be beneficial to shareholders.
|
|
|
•
|
|
The time and expense required for the information disclosure will be minimal.
|
11.
Other
(1) Directors
|
|
•
|
|
Ex Post Facto Approval of Actions by Directors and Executive Officers
|
In principle we will vote in favor of a proposal requesting ex post facto approval of an action taken by the directors or executive
officers as long as there are no material concerns such as having committed an act in violation of fiduciary duties.
|
|
•
|
|
Separation of Chairman of the Board of Directors and CEO
|
|
|
•
|
|
In principle we will vote in favor of a proposal to have a director who is independent from the relevant company serve as the chairman of the board of
directors as long as there are not sufficient reasons to oppose the proposal, such as the existence of a corporate governance organization that will counter a CEO who is also serving as chairman.
|
|
|
•
|
|
A person considered to be independent shall mean a person for whom there is no relationship between the relevant company and the director other than
that of being selected as a director.
|
- 30 -
B19-2 Giudeline on Exercising Shareholder Voting Rights and Policies for Deciding on the
Exercise of Shareholder Voting Rights. April 20, 2011
|
|
•
|
|
Independence of Board of Directors
|
|
|
•
|
|
In principle we will vote in favor of a proposal to have directors who are independent from the relevant company account for at least a majority or
more than two-thirds of the members of the board of directors.
|
|
|
•
|
|
In principle we will vote in favor of a proposal that the audit committee, compensation committee and nominating committee of the board of directors
shall be composed solely of independent directors.
|
|
|
•
|
|
A person considered to be independent shall mean a person for whom there is no relationship between the relevant company and the director other than
that of being selected as a director.
|
(2) Statutory Auditors
|
|
•
|
|
Ex Post Facto Approval of Actions by Statutory Auditors
|
In principle we will vote in favor of a proposal requesting ex post facto approval of an action taken by a statutory auditor as long as
there are no material concerns such as having committed an act in violation of fiduciary duties.
|
|
•
|
|
Attendance by a Statutory Auditor at a General Meeting of Shareholders
|
In principle we will vote in favor of a proposal requesting that a statutory auditor attend a general meeting of shareholders.
(3) Accounting Auditor
|
|
•
|
|
Fees of an accounting auditor
|
|
|
•
|
|
In principle we will vote in favor of a proposal requesting that the decision on the fees of an accounting auditor is left up to the discretion of the
board of directors.
|
|
|
•
|
|
In principle we will oppose a proposal to reduce or waive the liability of an accounting auditor.
|
|
|
•
|
|
Selection of the Accounting Auditor by a General Meeting of Shareholders
|
|
|
•
|
|
In principle we will vote in favor of a proposal to make the selection of an accounting auditor a matter for resolution by a general meeting of
shareholders.
|
12.
Conflicts of Interest
We will abstain from exercising shareholder voting rights in a company that would constitute a conflict of interest.
- 31 -
B19-2 Giudeline on Exercising Shareholder Voting Rights and Policies for Deciding on the
Exercise of Shareholder Voting Rights. April 20, 2011
The following company is determined to be a company that would constitute a
conflict of interest:
13.
Shareholder Proposals
A decision regarding shareholders’ proposals will be made in accordance with the Guideline along with
company’s proposal, however, will be considered on the basis of proposed individual items.
- 32 -
Proxy Policies and Procedures
for
Invesco Asset Management Deutschland GmbH
April 2013
INVESCO CONTINENTAL EUROPE
VOTING RIGHTS POLICY
INVESCO ASSET MANAGEMENT SA (& BRANCHES IN AMSTERDAM, BRUSSELS, MADRID, MILAN, STOCKHOLM)
INVESCO ASSET MANAGEMENT DEUTSCHLAND GMBH
INVESCO ASSET MANAGEMENT ÖSTERREICH GMBH
Approach
This document sets out the high level Proxy Voting Policy of the companies
outlined above and referred to as Invesco Continental Europe (“Invesco CE”). The principles within this policy are followed by these companies or to any of its delegates as applicable.
Invesco CE is committed to the fair and equitable treatment of all its clients. As such Invesco CE has put in place procedures to ensure that voting
rights attached to securities within a UCITS or portfolio for which it is the Management Company are exercised where appropriate and in the best interests of the individual UCITS/ portfolio itself. Where Invesco CE delegates the activity of
Investment Management it will ensure that the delegate has in place policies and procedures consistent with the principles of this policy.
Voting Opportunities
Voting
opportunities which exist in relation to securities within each individual UCITS/ portfolio are monitored on an ongoing basis in order to ensure that advantage can be taken of any opportunity that arises to benefit the individual UCITS/ portfolio.
When is has been identified that a voting opportunity exists, an investment decisions is taken whether or not the opportunity to vote should
be exercised and, if relevant, the voting decision to be taken. Considerations which are taken into account include:
|
|
•
|
|
The cost of participating in the vote relative to the potential benefit to the UCITS/portfolio.
|
|
|
•
|
|
The impact of participation in a vote on the liquidity of the securities creating the voting opportunity due to the fact that some jurisdictions will
require that the securities are not sold for a period if they are the subject of a vote.
|
|
|
•
|
|
Other factors as deemed appropriate by the Investment Manager in relation to the investment objectives and policy of the individual UCITS/ portfolio.
|
It may be the case that an investment decision is taken not to participate in a vote. Such decisions can be equally
appropriate due to the considerations applied by the investment team to determine the relative benefit to the individual UCITS/ portfolio, based on criteria such as fund size, investment objective, policy and investment strategy applicable.
Conflicts of Interest:
Invesco CE has a Conflicts of Interest Policy which outlines the principles for avoiding, and where not possible, managing conflicts of interest. At no time will Invesco CE use shareholding powers in
respect of individual UCITS/portfolio to advance its own commercial interests, to pursue a social or political cause that is unrelated to a UCITS’/portfolio’s economic interests, or to favour another UCITS/ portfolio or client or other
relationship to the detriment of others. This policy is available, free of cost, from any of the Invesco CE companies.
Information on
Voting Activity:
Further information on votes which were available to individual UCITS and actions taken are available to unitholders free
of charge and by request to the UCITS Management Company.
PART C
OTHER INFORMATION
|
|
|
|
|
a(1)
|
|
Agreement and Declaration of Trust-Short Form*
|
|
|
|
|
(2)
|
|
Amended and Restated Agreement and Declaration of Trust*
|
|
|
|
|
b(1)
|
|
By-Laws(*)
|
|
|
|
|
c
|
|
Articles II, VI, VII, VIII and IX of the Amended and Restated Agreement and Declaration of Trust and Articles IV, V and VI of the Bylaws,
as amended, both as previously filed define rights of holders of shares.
|
|
|
|
|
d(1)
|
|
Master Investment Advisory Agreement dated September 30, 2015(*)
|
|
|
|
|
d(2)
|
|
Form of Master Intergroup Sub-Advisory Agreement dated September 30, 2015(*)
|
|
|
|
|
(a)
|
|
Termination Agreement for Invesco Australia*
|
|
|
|
|
e
|
|
Omitted pursuant to General Instruction B.2 of Form N-1A
|
|
|
|
|
f
|
|
Not Applicable
|
|
|
|
|
g(1)
|
|
Custodian Contract(42)
|
|
|
|
|
(2)(a)
|
|
Transfer Agency and Service Agreement dated September 30, 2015(*)
|
C-1
|
|
|
|
|
(3)(a)
|
|
Master Fund Administrative Services Agreement(*)
|
|
|
|
|
h
|
|
Not Applicable
|
|
|
|
|
i
|
|
Omitted pursuant to General Instruction B.2 of Form N-1A.
|
|
|
|
|
j
|
|
Omitted pursuant to General Instruction B.2 of Form N-1A.
|
|
|
|
|
k
|
|
Omitted pursuant to General Instruction B.2 of Form N-1A.
|
|
|
|
|
l
|
|
Not Applicable
|
|
|
|
|
m
|
|
Not Applicable
|
|
|
|
|
n
|
|
Not Applicable
|
|
|
|
|
o
|
|
Not Applicable
|
|
|
|
|
p(1)
|
|
Invesco Advisers, Inc. and Code of Ethics, amended January 1, 2015*
|
|
|
|
|
(2)
|
|
Invesco Asset Management Limited (IAML)(UK) Code of Ethics dated 2014*
|
|
|
|
|
(3)
|
|
Invesco Ltd. Code of Conduct dated October 2014, for Invesco Asset Management (Japan) Limited Code of Ethics*
|
|
|
|
|
(4)
|
|
Invesco Staff Ethics and Personal Share Dealing, dated January 2014, and Invesco Hong Kong Limited Policy on Gifts and Entertainment dated February 2014, and Invesco Hong Kong Limited Code of Ethics dated January 1, 2015 for
Invesco Hong Kong Limited.*
|
|
|
|
|
(5)
|
|
Invesco Ltd. Code of Conduct, revised October 2014, relating to, Invesco Canada Ltd.; Invesco Canada Ltd., Policy No. D-6 Gifts and Entertainment, revised May 2014, and Policy No. D-7 Invesco Canada Personal Trading Policy,
revised July 2014, together the Code of Ethics relating to Invesco Canada Ltd*
|
|
|
|
|
(6)
|
|
Invesco EMEA UK Employees Code of Ethics dated 2014, for Invesco Asset Management Deutschland GmbH. *
|
|
|
|
|
(7)
|
|
Invesco Senior Secured Management Code of Ethics revised March 4, 2015 and Invesco Advisers Inc. Code of Ethics amended January 2015.*
|
C-2
|
Item 29.
|
Persons Controlled by or Under Common Control with Fund
|
None.
C-3
Indemnification provisions for officers, trustees, and employees of the Registrant are set forth in Article
VIII of the Registrant’s Amended and Restated Agreement and Declaration of Trust and Article VIII of its Bylaws, and are hereby incorporated by reference. See Item 28(a) and (b) above. Under the Amended and Restated Agreement and
Declaration of Trust, amended and restated effective as of May 19, 2015, (i) Trustees or officers, when acting in such capacity, shall not be personally liable for any act, omission or obligation of the Registrant or any Trustee or officer
except by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office with the Trust; (ii) every Trustee, officer, employee or agent of the Registrant shall be indemnified
to the fullest extent permitted under the Delaware Statutory Trust act, the Registrant’s Bylaws and other applicable law; (iii) in case any shareholder or former shareholder of the Registrant shall be held to be personally liable solely by
reason of his being or having been a shareholder of the Registrant or any portfolio or class and not because of his acts or omissions or for some other reason, the shareholder or former shareholder (or his heirs, executors, administrators or other
legal representatives, or, in the case of a corporation or other entity, its corporate or general successor) shall be entitled, out of the assets belonging to the applicable portfolio (or allocable to the applicable class), to be held harmless from
and indemnified against all loss and expense arising from such liability in accordance with the Bylaws and applicable law. The Registrant, on behalf of the affected portfolio (or class), shall upon request by the shareholder, assume the defense of
any such claim made against the shareholder for any act or obligation of that portfolio (or class).
The Registrant and other investment companies and
their respective officers and trustees are insured under a joint Mutual Fund Directors and Officers Liability Policy, issued by ICI Mutual Insurance Company and certain other domestic insurers, with limits up to $80,000,000 (plus an additional
$20,000,000 limit that applies to independent directors/trustees only).
Section 16 of the Master Investment Advisory Agreement between the
Registrant and Invesco Advisers, Inc. (Invesco) provides that in the absence of willful misfeasance, bad faith, gross negligence or reckless disregard of obligations or duties hereunder on the part of Invesco or any of its officers, directors or
employees, that Invesco shall not be subject to liability to the Registrant or to any shareholder of the Registrant for any act or omission in the course of, or connected with, rendering services hereunder or for any losses that may be sustained in
the purchase, holding or sale of any security.
Section 10 of the Master Intergroup Sub-Advisory Contract for Mutual Funds (the Sub-Advisory
Contract) between Invesco, on behalf of Registrant, and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc.
and Invesco Canada Ltd. (each a Sub-Adviser, collectively the Sub-Advisers) provides that the Sub-Adviser shall not be liable for any costs or liabilities arising from any error of judgment or mistake of law or any loss suffered by the Registrant in
connection with the matters to which the Sub-Advisory Contract relates except a loss resulting from willful misfeasance, bad faith or gross negligence on the part of the Sub-Adviser in the performance by the Sub-Adviser of its duties or from
reckless disregard by the Sub-Adviser of its obligations and duties under the Sub-Advisory Contract.
|
Item 31.
|
Business and Other Connections of Investment Adviser
|
See “Management, Organization
and Capital Structure” in Part A and “Management of the Fund” in the Statement of Additional Information for information regarding the business of the Adviser. For information as to the business, profession, vocation and
employment of a substantial nature of directors and officers of the Adviser, reference is made to the Adviser’s current Form ADV (File No. 801-33949) filed under the Investment Advisers Act of 1940, as amended, incorporated herein by
reference.
|
Item 32.
|
Principal Underwriters
|
Not applicable.
C-4
|
Item 33.
|
Location of Accounts and Records
|
All accounts, books and other documents of the
Fund required by Section 31(a) of the Investment Company Act of 1940, as amended, and the Rules thereunder to be maintained (i) by the Fund will be maintained at its offices, located at at 11 Greenway Plaza, Suite 1000, Houston,
Texas 77046 or at State Street Bank and Trust Company, 1776 Heritage Drive, North Quincy, Massachusetts 02171; and (ii) by the Adviser will be maintained at its offices, located at 1555 Peachtree Street, N.E., Atlanta,
Georgia 30309.
|
Item 34.
|
Management Services
|
Not applicable.
Not applicable.
C-5
SIGNATURE
Pursuant to the requirements of the Investment Company Act of 1940, the Fund, Invesco Exchange Fund, has duly caused this Amendment to the
Registration Statement to be signed on its behalf by the undersigned, thereto duly authorized, in the City of Atlanta, and the State of Georgia, on the 30th day of September, 2015.
|
|
|
|
|
INVESCO EXCHANGE FUND
|
|
|
|
|
By:
|
|
/s/ Philip A. Taylor
|
|
|
|
Philip A. Taylor
|
|
|
|
President
|
INVESCO EXCHANGE FUND
INDEX TO EXHIBITS
TO
AMENDMENT NO. 51
|
|
|
|
|
|
|
Description of Exhibits
|
|
|
|
|
a (1)
|
|
Agreement and Declaration of Trust – Short Form dated May 6, 2015
|
|
(2)
|
|
Amended and Restated Agreement and Declaration of Trust- dated May 19, 2015
|
|
|
|
|
b (1)
|
|
By-Laws
|
|
|
|
|
d (1)
|
|
Master Investment Advisory Agreement
|
|
(2)
|
|
Form of Master Intergroup Sub-Advisory Agreement dated September 30, 2015
|
|
(2) (a)
|
|
Termination Agreement for Invesco Australia
|
|
|
|
|
g (2)(a)
|
|
Transfer Agency and Service Agreement dated September 30, 2015
|
|
(3)(a)
|
|
Master Administrative Services Agreement*
|
|
|
|
|
P(1)
|
|
Invesco Advisers, Inc. and Code of Ethics, adopted January 1, 2015, relating to Invesco Advisers, Inc. and any of its subsidiaries.
|
|
|
|
|
p (2)
|
|
Invesco Asset Management Limited (IAML) (UK) Code of Ethics dated 2014
|
|
|
|
|
p (3)
|
|
Invesco Ltd. Code of Conduct dated October 2014, for Invesco Asset Management (Japan) Limited Code of Ethics
|
|
|
|
|
p (4)
|
|
Invesco Staff Ethics and Personal Share Dealing dated February 2014 and Invesco Hong Kong Limited Policy on Gifts and Entertainment dated February 2014, and Invesco Hong Kong Limited Code of Ethics dated January 1, 2015 for
Invesco Hong Kong Limited.
|
|
|
|
|
p (5)
|
|
Invesco Ltd. Code of Conduct, revised October 2014, Policy No. D-6 Gifts and Entertainment, revised May 2014, and Policy No. D-7 Personal Trading Policy revised July 2014, together the Code of Ethics relating to Invesco Canada
Ltd
|
|
|
|
|
p (6)
|
|
Invesco EMEA-UK Employees Code of Ethics dated 2014, for Invesco Asset Management Deutschland GmbH
|
|
|
|
|
p (7)
|
|
Invesco Senior Secured Management Code of Ethics Policy, revised March 4, 2014 and Invesco Advisers, Inc. Code of Ethics amended January 1, 2015
|
DECLARATION OF TRUST, dated as of May 6, 2015, by the individual trustee identified on the
signature page hereto (the “Trustee”). The Trustee hereby agrees as follows:
1. The trust created hereby (the
“Trust”) shall be known as “Invesco Exchange Fund” in which name the Trustee may conduct the business of the Trust, make and execute contracts, and sue and be sued.
2. The Trustee hereby declares that he will hold the trust estate in trust for such persons as are or may become entitled to a beneficial
interest in the trust estate. It is the intention of the parties hereto that the Trust created hereby constitute a statutory trust under Chapter 38 of Title 12 of the Delaware Code, 12 Del. Code § 3801
et seq
., and that this
document constitutes the governing instrument of the Trust. The Trustee is hereby authorized and directed to execute and file a certificate of trust in the office of the Secretary of State of the State of Delaware. The Trust is hereby
established by the Trustee for the purpose of becoming a registered investment company under the Investment Company Act of 1940, as amended (the “1940 Act”), and engaging in such other activities as are necessary, convenient or incidental
thereto.
3. The Trustee intends to enter into an amended and restated Agreement and Declaration of Trust and to appoint additional
trustees thereunder to provide for the contemplated operation of the Trust created hereby. Prior to the execution and delivery of such amended and restated Agreement and Declaration of Trust, the Trustee shall not have any duty or obligation
hereunder or with respect to the trust estate, except as set forth herein or as required by law.
4. The following persons be, and they
hereby are, elected to the offices listed opposite their names, each to serve (a) until the first meeting of the Board of Trustees and until his or her successor shall have been elected and shall have qualified, (b) until his or her death
or (c) until he or she shall have resigned or have been removed by the Trustee:
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Philip A. Taylor
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President and Principal Executive Officer
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Sheri Morris
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Treasurer and Principal Financial Officer
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John M. Zerr
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Secretary and Chief Legal Officer
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5. The Trustee and the officers of the Trust are hereby authorized: (i) to prepare and file with the
Securities and Exchange Commission (the “Commission”) and execute, in each case on behalf of the Trust, (a) a Registration Statement on Form N-1A, including any pre-effective or post-effective amendments to such Registration
Statement, relating to the registration of the securities of the Trust under the Securities Act of 1933, as amended (the “1933 Act”) and the 1940 Act, (b) the Notification of Registration on Form N-8A relating to the registration
of the Trust under the 1940 Act, and (c) any additional filing, request, report or application or amendment thereto with the Commission that may be required from time to time under the 1940 Act or the 1933 Act, and the rules and regulations
promulgated thereunder; (ii) to prepare, execute and file, in each case on behalf of the Trust, such applications, reports, surety bonds, irrevocable consents, appointments of attorney for service of process and other papers and documents as
shall be necessary or desirable to register the securities of the Trust under the securities or “blue sky” laws of such jurisdictions as the Trustee and officers may deem
necessary or desirable; (iii) to negotiate the terms of, and execute on behalf of the Trust, such investment advisory agreements and other contracts among the Trust and any other persons
relating to the operation of the Trust or the issuance of the securities of the Trust, satisfactory to each such party and (iv) to make any and all necessary filings and to take any and all actions, including, without limitation, the execution
and delivery of any and all documents, amendments, certificates or other instruments, that they, together with and upon the advice of counsel, shall deem necessary or advisable to conduct the business of the Trust, such determination to be
conclusively evidenced by the taking of such actions and steps and the execution and delivery of such documents, amendments, certificates or other instruments.
6. The number of Trustees initially shall be one (1) and thereafter the number of Trustees shall be such number as shall be fixed in an
amended and restated Agreement and Declaration of Trust. The sole Trustee may resign upon acceptance of the trusts by the additional trustees appointed by the sole Trustee.
7. (a) The Trustees and the officers of the Trust (the “Fiduciary Indemnified Persons”) shall not be liable, responsible or
accountable in damages or otherwise to the Trust, the Trustees or any holder of the Trust’s securities (the Trust and any holder of the Trust’s securities being a “Covered Person”) for any loss, damage or claim incurred by reason
of any act or omission performed or omitted by the Fiduciary Indemnified Persons in good faith on behalf of the Trust and in a manner the Fiduciary Indemnified Persons reasonably believed to be within the scope of authority conferred on the
Fiduciary Indemnified Persons by this Declaration of Trust or by law, except that the Fiduciary Indemnified Persons shall be liable for any such loss, damage or claim incurred by reason of the Fiduciary Indemnified Person’s gross negligence or
willful misconduct with respect to such acts or omissions.
(b) The Fiduciary Indemnified Persons shall be fully protected in relying in
good faith upon the records of the Trust and upon such information, opinions, reports or statements presented to the Trust by any person as to matters the Fiduciary Indemnified Persons reasonably believes are within such other person’s
professional or expert competence and who has been selected with reasonable care by or on behalf of the Trust, including information, opinions, reports or statements as to the value and amount of the assets, liabilities, profits, losses, or any
other facts pertinent to the trust estate.
8. The Trust shall, to the fullest extent permitted by applicable law,
(a) indemnify and hold harmless each Fiduciary Indemnified Person from and against any loss, damage, liability, tax, penalty, expense or
claim of any kind or nature whatsoever incurred by the Fiduciary Indemnified Persons by reason of the creation, operation or termination of the Trust in a manner the Fiduciary Indemnified Persons reasonably believed to be within the scope of
authority conferred on the Fiduciary Indemnified Persons by this Declaration of Trust, except that no Fiduciary Indemnified Persons shall be entitled to be indemnified in respect of any loss, damage or claim incurred by the Fiduciary Indemnified
Persons by reason of gross negligence or willful misconduct with respect to such acts or omissions; and
(b) advance expenses
(including legal fees) incurred by a Fiduciary Indemnified Person in defending any claim, demand, action, suit or proceeding, from time to
time, prior to the final disposition of such claim, demand, action, suit or proceeding, upon receipt by the Trust of an undertaking by or on behalf of such Fiduciary Indemnified Persons to repay
such amount if it shall be determined that such Fiduciary Indemnified Person is not entitled to be indemnified as authorized in the preceding subsection.
9. The provisions of Section 8 shall survive the resignation or removal of the Fiduciary Indemnified Persons.
10. The Trust may terminate without issuing any securities at the election of the sole Trustee.
11. This Declaration of Trust and the rights of the parties hereunder shall be governed by and interpreted in accordance with the laws of
the State of Delaware and all rights and remedies shall be governed by such laws without regard to the principles of conflict of laws.
IN
WITNESS WHEREOF, the parties hereto have caused this Declaration of Trust to be duly executed as of the day and year first above written.
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/s/ John M. Zerr
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John M. Zerr
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AMENDED AND RESTATED
AGREEMENT AND DECLARATION OF TRUST
OF
INVESCO EXCHANGE FUND
AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST of Invesco Exchange Fund is made the 19th day of May, 2015 by the parties
signatory hereto, as Trustees and by each person who becomes a Shareholder in accordance with the terms hereinafter set forth.
WHEREAS
the Trust was formed by its sole Trustee by the filing of a Certificate of Trust with the office of the Secretary of State of the State of Delaware pursuant to a Declaration of Trust, dated as of May 6, 2015 (the “Original
Declaration”);
WHEREAS, the initial sole Trustee has appointed the Trustees and resigned and the initial Shareholder has elected the
Trustees;
WHEREAS the Trust has been formed to carry on the business of an open-end management investment company as defined in the 1940
Act;
WHEREAS the Trustees have agreed to manage all property coming into their hands as trustees of a Delaware statutory trust in
accordance with the provisions of the Delaware Statutory Trust Act, as amended from time to time, and the provisions hereinafter set forth; and
WHEREAS the Board of Trustees desires to amend and restate the Original Declaration in the manner hereinafter set forth.
NOW, THEREFORE, the Trustees hereby declare that:
(i) the Original Declaration is amended and restated in its entirety in the manner hereinafter set forth;
(ii) they will hold all cash, securities and other assets that they may from time to time acquire in any manner as Trustees hereunder IN TRUST
to manage and dispose of the same upon the following terms and conditions for the benefit of the holders from time to time of Shares as hereinafter set forth; and
(iii) this Amended and Restated Agreement and Declaration of Trust and the Bylaws shall be binding in accordance with their terms on every
Trustee, by virtue of having become a Trustee of the Trust, and on every Shareholder, by virtue of having become a Shareholder of the Trust, pursuant to the terms of this Agreement and the Bylaws.
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ARTICLE I
NAME, DEFINITIONS, PURPOSE AND CERTIFICATE OF TRUST
Section 1.1
Name
. The name of the statutory trust is Invesco Exchange Fund, and the Trustees may transact the Trust’s affairs
in that name or any other name as the Board of Trustees may from time to time designate. The Trust shall constitute a Delaware statutory trust in accordance with the Delaware Act.
Section 1.2
Offices of the Trust
. The Board may at any time establish offices of the Trust at any place or places where the Trust
intends to do business.
Section 1.3
Registered Agent and Registered Office
. The name of the registered agent of the Trust and
the address of the registered office of the Trust are as set forth in the Certificate of Trust.
Section 1.4
Definitions
.
Whenever used herein, unless otherwise required by the context or specifically provided in the Governing Instrument:
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(a)
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“Affiliated Person,” “Commission,” “Company,” “Person,” and “Principal Underwriter” shall have the meanings given them in the 1940 Act, as modified by or interpreted by
any applicable order or orders of the Commission or any rules or regulations adopted or interpretive releases of the Commission thereunder;
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(b)
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“Agreement” means this Amended and Restated Agreement and Declaration of Trust, as it may be amended or amended and restated from time to time;
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(c)
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“Board of Trustees” or “Board” shall mean the governing body of the Trust that is comprised of the number of Trustees of the Trust fixed from time to time pursuant to Article III hereof, having the
powers and duties set forth herein;
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(d)
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“Bylaws” means the Bylaws of the Trust as amended from time to time by the Trustees;
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(e)
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“Certificate of Trust” shall mean the certificate of trust of the Trust filed on May , 2015 with the office of the Secretary of State of the State of Delaware as required under the Delaware Act, as such
certificate may be amended or restated from time to time;
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(f)
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“Code” means the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated thereunder;
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(g)
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“Covered Person” means a person who is or was a Trustee, general partner, officer, employee or agent of the Trust or of the predecessor California limited partnership, or is or was serving at the request of
the Trustees as a director, trustee, partner, officer, employee or agent of another foreign or domestic corporation, trust, partnership, joint venture or other enterprise;
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(h)
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“Delaware Act” refers to the Delaware Statutory Trust Act, 12 Del. C. § 3801 et seq., as such Act may be amended from time to time;
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(i)
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“Governing Instrument” means collectively this Agreement, the Bylaws, all amendments to this Agreement and the Bylaws, all written committee and sub-committee charters adopted by the Trustees, and every
resolution of the Trustees or any committee or sub-committee of the Trustees that by its terms is incorporated by reference into this Agreement or stated to constitute part of the Trust’s Governing Instrument, in each case as of the date of
adoption of each such resolution or amendment or modification thereto;
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(j)
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“Majority Shareholder Vote” means the vote of “a majority of the outstanding voting securities” (as defined in the 1940 Act) of the Trust;
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(k)
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“Majority Trustee Vote” means the vote of a majority of the Trustees then in office;
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(l)
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“1940 Act” means the Investment Company Act of 1940, as amended from time to time, and the rules promulgated thereunder;
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(m)
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“Outstanding Shares” means Shares shown on the books of the Trust or the Trust’s transfer agent as then issued and outstanding;
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(n)
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“Record Owner” means, as of any particular time, a record owner of Outstanding Shares of the Trust shown on the books of the Trust or the Trust’s transfer agent as then issued and outstanding at such
time;
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(o)
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“Shareholder” means, as of any particular time, an owner of Outstanding Shares, whether beneficially or of record, of the Trust;
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(p)
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“Shares” means the equal proportionate transferable units of beneficial interest into which the beneficial interest of the Trust shall be divided and may include fractions of Shares in 1/1000
th
of a Share or integral multiples thereof as well as whole Shares;
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(q)
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“Trust” means Invesco Exchange Fund, the Delaware statutory trust formed under the Original Declaration, as amended and restated by this Agreement, and by filing of the Certificate of Trust with the office of
the Secretary of State of the State of Delaware and governed by this Agreement, as such instruments may be further amended, restated or supplemented from time to time;
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(r)
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“Trust Property” means any and all property, real or personal, tangible or intangible, which is owned or held by or for the account of the Trust or by the Trustees on behalf of the Trust; and
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(s)
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“Trustees” means the natural persons who have signed this Agreement as trustees so long as they shall continue to serve as trustees of the
Trust in accordance with the terms hereof, and all other natural persons who may from time to time be duly appointed as Trustee in accordance with the provisions of Section 3.4, or elected as Trustee by the Shareholders, and reference herein to
a Trustee or to the Trustees shall refer to such natural persons in their capacity as Trustees hereunder.
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In this Agreement or in any amended, restated or supplemented Agreement, references to this
Agreement, and all expressions like “herein,” “hereof,” and “hereunder,” shall be deemed to refer to this Agreement as amended, restated or supplemented. All expressions like “his,” “he,” and
“him,” shall be deemed to include the feminine and neuter, as well as masculine, genders.
Section 1.5
Purpose
. The
purpose of the Trust is to conduct, operate and carry on the business of an open-end management investment company registered under the 1940 Act through investing primarily in securities and to carry on such other business as the Trustees may from
time to time determine pursuant to their authority under this Agreement.
ARTICLE II
BENEFICIAL INTEREST
Section 2.1
Shares of Beneficial Interest
. The beneficial interests of the Trust shall be divided into an unlimited number of
Shares, with par value of $0.01 per Share. All Shares issued hereunder, including without limitation, Shares issued in connection with a dividend or other distribution in Shares or a split or reverse split of Shares, shall be fully paid and
nonassessable.
Section 2.2
Issuance of Shares
. The Trustees in their discretion may, from time to time, without vote of the
Shareholders, issue Shares, in addition to the then issued and Outstanding Shares, to such party or parties and for such amount and type of consideration, subject to applicable law, including cash or securities, at such time or times and on such
terms as the Trustees may deem appropriate, and may in such manner acquire other assets (including the acquisition of assets subject to, and in connection with, the assumption of liabilities) and businesses. In connection with any issuance of
Shares, the Trustees may issue fractional Shares. The Trustees may from time to time divide or combine the Shares into a greater or lesser number without thereby changing the proportionate beneficial interests in the Trust. Contributions to the
Trust may be accepted for, and Shares shall be redeemed as, whole Shares and/or 1/1,000
th
of a Share or integral multiples thereof.
Section 2.3
Relative Rights and Preferences
. Shares of the Trust shall have the following relative rights and preferences:
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(a)
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Each Share shall represent an equal pro rata interest in the assets belonging to the Trust and shall have identical voting, dividend, liquidation and other rights, preferences, powers, restrictions, limitations,
qualifications and designations and terms and conditions with each other Share.
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(b)
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Shareholders shall have no preemptive or other right to subscribe to any additional Shares or other securities issued by the Trust.
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(c)
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Shares redeemed or repurchased by the Trust shall be deemed to be cancelled.
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(d)
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Any Trustee, officer or other agent of the Trust, and any organization in which any such Person has an economic or other interest, may acquire, own,
hold and dispose of Shares in the Trust, whether such Shares are authorized but unissued, or already outstanding, to the same extent as if such Person were not a Trustee, officer or other agent of the Trust; and the Trust may issue and sell and may
purchase such Shares from any such Person or any such organization,
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subject to the limitations, restrictions or other provisions applicable to the sale or purchase of such shares herein, the 1940 Act and other applicable law.
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(e)
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The Trust may issue Shares in fractional denominations of 1/1000
th
of a Share or integral multiples thereof to the same extent as its whole Shares, and Shares in
fractional denominations shall be Shares having proportionately to the respective fractions represented thereby all the rights of whole Shares, including without limitation, the right to vote, the right to receive dividends and distributions and the
right to participate upon termination of the Trust.
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Section 2.4
Investment in the Trust
. Investments may be
accepted by the Trust from such Persons, at such times, on such terms, and for such consideration, which may consist of cash or tangible or intangible property or a combination thereof, as the Trustees from time to time may authorize. At the
Trustees’ sole discretion, such investments, subject to applicable law, may be in the form of cash or securities in which Trust is authorized to invest, valued as provided in applicable law. Each such investment shall be recorded in the
individual Shareholder’s account in the form of full and fractional Shares of the Trust.
Section 2.5
Personal Liability of
Shareholders
. No Shareholder of the Trust shall be personally liable for the debts, liabilities, obligations and expenses incurred by, contracted for, or otherwise existing with respect to the Trust. Neither the Trust nor the Trustees, nor any
officer, employee, or agent of the Trust shall have any power to bind personally any Shareholder or to call upon any Shareholder for the payment of any sum of money or assessment whatsoever other than such as the Shareholder may at any time
personally agree to pay by way of subscription for any Shares or otherwise. The Shareholders shall be entitled, to the fullest extent permitted by applicable law, to the same limitation of personal liability as is extended under the Delaware General
Corporation Law to stockholders of private corporations for profit. Every note, bond, contract or other undertaking issued by or on behalf of the Trust or the Trustees relating to the Trust shall include a recitation limiting the obligation
represented thereby to the Trust and its assets (but the omission of such a recitation shall not operate to bind any Shareholder or Trustee of the Trust or otherwise limit any benefits set forth in the Delaware Act that may be applicable to such
Persons).
Section 2.6
Assent to Agreement
. Every Shareholder, by virtue of having purchased a Share, shall be held to have
expressly assented to, and agreed to be bound by, the terms of the Governing Instrument. The death, incapacity, dissolution, termination or bankruptcy of a Shareholder during the continuance of the Trust shall not operate to terminate the Trust nor
entitle the representative of any deceased Shareholder to an accounting or to take any action in court or elsewhere against the Trust or the Trustees, but only to rights of said decedent under the Governing Instrument. Ownership of Shares shall not
entitle the Shareholder to any title in or to the whole or any part of the Trust Property or right to call for a partition or division of the same or for an accounting, nor shall the ownership of Shares constitute the Shareholders as partners.
Section 2.7
Disclosure of Holding
. The Shareholders shall upon demand disclose to the Trustees in writing such information with
respect to direct or indirect ownership of Shares as the Trustees deem to be (i) in the best interests of the Trust or (ii) necessary to comply with the provisions of the Code, the 1940 Act or other applicable laws or regulations, or to
comply with the requirements of any other taxing or regulatory authority.
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ARTICLE III
THE TRUSTEES
Section 3.1
Management of the Trust
. The Trustees shall have exclusive and absolute control over the Trust Property and over the
business of the Trust to the same extent as if the Trustees were the sole owners of the Trust Property and business in their own right, but with such powers of delegation as may be permitted by this Agreement. The Trustees shall have power to
conduct the business of the Trust and carry on its operations in any and all of its branches and maintain offices both within and without the State of Delaware, in any and all states of the United States of America, in the District of Columbia, in
any and all commonwealths, territories, dependencies, colonies, or possessions of the United States of America, and in any and all foreign jurisdictions and to do all such other things and execute all such instruments as they deem necessary, proper
or desirable in order to promote the interests of the Trust although such things are not herein specifically mentioned. Any determination as to what is in the interests of the Trust made by the Trustees in good faith shall be conclusive. In
construing the provisions of this Agreement, the presumption shall be in favor of a grant of power to the Trustees.
The enumeration of
any specific power in this Agreement shall not be construed as limiting the aforesaid power. The powers of the Trustees may be exercised without order of or resort to any court or other authority.
Section 3.2
Trustees
. The number of Trustees shall be such number as shall be fixed from time to time by a majority of the
Trustees; provided, however, that the number of Trustees shall in no event be less than two (2) nor more than fifteen (15). The natural persons who have executed this Agreement shall be the Trustees as of the date hereof.
Section 3.3
Terms of Office of Trustees
. The Trustees shall hold office during the lifetime of this Trust, and until its
termination as herein provided; except that (A) any Trustee may resign his trusteeship or may retire by written instrument signed by him and delivered to the other Trustees, which shall take effect upon such delivery or upon such later date as
is specified therein; (B) any Trustee may be removed at any time by written instrument signed by at least two-thirds of the number of Trustees prior to such removal, specifying the date when such removal shall become effective; (C) any
Trustee who has died, become physically or mentally incapacitated by reason of disease or otherwise, or is otherwise unable to serve, may be retired by written instrument signed by a majority of the other Trustees, specifying the date of his
retirement; (D) a Trustee may be removed at any meeting of the Shareholders by a vote of the Shareholders owning at least two-thirds (66 2/3%) of the Outstanding Shares; and (E) a Trustee shall be retired in accordance with the terms of
any retirement policy adopted by the Trustees and in effect from time to time.
Section 3.4
Vacancies and Appointment of
Trustees
. In case of the declination to serve, death, resignation, retirement or removal of a Trustee, or a Trustee is otherwise unable to serve, or an increase in the number of Trustees, a vacancy shall occur. Whenever a vacancy in the Board of
Trustees shall occur, until such vacancy is filled, the other Trustees shall have all the powers hereunder and the determination of the other Trustees of such vacancy shall be conclusive. In the case of any vacancy, the remaining Trustees may fill
such vacancy by appointing such other person as they in their discretion shall see fit, or may leave such vacancy unfilled or may reduce the number of Trustees to not less than two (2) Trustees. Such appointment shall be evidenced by a written
instrument signed by a majority of the Trustees in
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office or by resolution of the Board of Trustees, duly adopted, which shall be recorded in the minutes of a meeting of the Trustees, whereupon the appointment shall take effect.
An appointment of a Trustee may be made by the Trustees then in office in anticipation of a vacancy to occur by reason of retirement,
resignation, or removal of a Trustee, or an increase in number of Trustees effective at a later date, provided that said appointment shall become effective only at the time or after the expected vacancy occurs. As soon as any Trustee appointed
pursuant to this Section 3.4 or elected by the Shareholders shall have accepted the Trust and agreed in writing to be bound by the terms of the Agreement, the Trust estate shall vest in the new Trustee or Trustees, together with the continuing
Trustees, without any further act or conveyance, and he shall be deemed a Trustee hereunder.
Section 3.5
Temporary Absence of
Trustee
. Any Trustee may, by power of attorney, delegate his power for a period not exceeding six months at any one time to any other Trustee or Trustees, provided that in no case shall fewer than two Trustees personally exercise the other
powers hereunder except as herein otherwise expressly provided.
Section 3.6
Effect of Death, Resignation, etc. of a Trustee
.
The declination to serve, death, resignation, retirement, removal, incapacity, or inability of the Trustees, or any one of them, shall not operate to terminate the Trust or to revoke any existing agency created pursuant to the terms of this
Agreement.
Section 3.7
Ownership of Assets of the Trust
. The assets of the Trust shall be held separate and apart from any
assets now or hereafter held in any capacity other than as Trustee hereunder by the Trustees or any successor Trustees. Legal title in all of the assets of the Trust and the right to conduct any business shall at all times be considered as vested in
the Trustees on behalf of the Trust, except that the Trustees may cause legal title to any Trust Property to be held by or in the name of the Trust, or in the name of any Person as nominee. No Shareholder shall be deemed to have a severable
ownership in any individual asset of the Trust or any right of partition or possession thereof, but each Shareholder shall have, except as otherwise provided for herein, a proportionate undivided beneficial interest in the Trust. The Shares shall be
personal property giving only the rights specifically set forth in this Agreement or the Delaware Act.
Section 3.8
Legal
Standard
. The Trustees shall be subject to the same fiduciary duties to which the directors of a Delaware corporation would be subject if the Trust were a Delaware corporation, the Shareholders were shareholders of such Delaware corporation and
the Trustees were directors of such Delaware corporation, and such modified duties shall replace any fiduciary duties to which the Trustees would otherwise be subject. Without limiting the generality of the foregoing, all actions and omissions of
the Trustees shall be evaluated under the doctrine commonly referred to as the “business judgment rule,” as defined and developed under Delaware law, to the same extent that the same actions or omissions of directors of a Delaware
corporation in a substantially similar circumstance would be evaluated under such doctrine. Notwithstanding the foregoing, the provisions of the Governing Instrument, to the extent that they modify, restrict or eliminate the duties (including
fiduciary duties), and liabilities relating thereto, of a Trustee otherwise applicable under the foregoing standard or otherwise existing at law (statutory or common) or in equity, are agreed by each Shareholder and the Trust to replace such duties
and liabilities of such Trustee under the foregoing standard or otherwise existing at law (statutory or common) or in equity.
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Section 3.9
Other Business Interests
. The Trustees shall devote to the affairs of the
Trust such time as may be necessary for the proper performance of their duties hereunder, but neither the Trustees nor the officers, directors, shareholders, partners or employees of the Trustees, if any, shall be expected to devote their full time
to the performance of such duties. The Trustees, or any Affiliated Person, shareholder, officer, director, partner or employee thereof, or any Person owning a legal or beneficial interest therein, may engage in, or possess an interest in, any
business or venture other than the Trust, of any nature and description, independently or with or for the account of others. None of the Trust or any Shareholder shall have the right to participate or share in such other business or venture or any
profit or compensation derived therefrom.
ARTICLE IV
POWERS OF THE TRUSTEES
Section 4.1
Powers
. The Trustees in all instances shall act as principals, and are and shall be free from the control of the
Shareholders. The Trustees shall have full power and authority to do any and all acts and to make and execute any and all contracts and instruments that they may consider necessary or appropriate in connection with the management of the Trust.
Without limiting the foregoing and subject to any applicable limitation in the Governing Instrument or applicable law, the Trustees shall have power and authority:
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(a)
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To invest and reinvest cash and other property, and to hold cash or other property uninvested, without in any event being bound or limited by any present or future law or custom in regard to investments by Trustees, and
to sell, exchange, lend, pledge, mortgage, hypothecate, write options on, distribute and otherwise deal with and lease any or all of the assets of the Trust;
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(b)
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To operate as, and to carry on the business of, an investment company, and to exercise all the powers necessary and appropriate to the conduct of such operations;
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(c)
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To borrow money and in this connection issue notes or other evidence of indebtedness; to secure borrowings by mortgaging, pledging or otherwise subjecting as security the Trust Property; to endorse, guarantee, or
undertake the performance of an obligation or engagement of any other Person and to lend Trust Property;
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(d)
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To provide for the distribution of Shares either through a principal underwriter in the manner hereafter provided for or by the Trust itself, or both, or otherwise pursuant to a plan of distribution of any kind;
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(e)
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To adopt Bylaws not inconsistent with this Agreement providing for the conduct of the business of the Trust and to amend and repeal them to the extent that they do not reserve such right to the Shareholders; such Bylaws
shall be deemed incorporated and included in the Governing Instrument;
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(f)
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To elect and remove such officers and appoint and terminate such agents as they consider appropriate;
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(g)
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To employ one or more banks, trust companies or companies that are members of a national securities exchange or such other domestic or foreign entities as custodians of any assets of the Trust subject to any conditions
set forth in the Governing Instrument;
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(h)
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To retain one or more transfer agents and shareholder servicing agents;
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(i)
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To set record dates in the manner provided herein or in the Bylaws;
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(j)
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To delegate such authority as they consider desirable to any officers of the Trust and to any investment adviser, manager, administrator, custodian, underwriter or other agent or independent contractor;
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(k)
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To sell or exchange any or all of the assets of the Trust, subject to the right of Shareholders, if any, to vote on such transaction pursuant to Section 6.1;
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(l)
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To vote or give assent, or exercise any rights of ownership, with respect to stock or other securities or property; and to execute and deliver proxies and powers of attorney to such person or persons as the Trustees
shall deem proper, granting to such person or persons such power and discretion with relation to securities or property as the Trustee shall deem proper;
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(m)
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To exercise powers and rights of subscription or otherwise that in any manner arise out of ownership of securities;
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(n)
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To hold any security or property in a form not indicating any trust, whether in bearer, book entry, unregistered or other negotiable form; or either in the name of the Trust or a custodian or a nominee or nominees,
subject in either case to proper safeguards according to the usual practice of Delaware statutory trusts or investment companies;
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(o)
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To consent to or participate in any plan for the reorganization, consolidation or merger of any corporation or concern, with respect to any security held in the Trust; to consent to any contract, lease, mortgage,
purchase, or sale of property by such corporation or concern, and to pay calls or subscriptions with respect to any security held in the Trust;
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(p)
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To compromise, arbitrate, or otherwise adjust claims in favor of or against the Trust or any matter in controversy including, but not limited to, claims for taxes;
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(q)
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To declare and pay dividends and make distributions of income and of capital gains and capital to Shareholders in the manner hereinafter provided;
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(r)
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To establish, from time to time, a minimum investment for Shareholders in the Trust, and to require the redemption of the Shares of any Shareholder whose investment is less than such minimum upon giving notice to such
Shareholder;
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(s)
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To redeem or repurchase Shares as provided for in this Agreement, upon such terms and conditions as the Trustees shall establish;
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(t)
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To establish one or more committees or sub-committees, to delegate any of the powers of the Trustees to said committees or sub-committees and to adopt a written charter for one or more of such committees or
sub-committees governing its membership, duties and operations and any other characteristics as the Trustees may deem proper, each of which committees and sub-committees may consist of less than the whole number of Trustees then in office, and may
be empowered to act for and bind the Trustees and the Trust, as if the acts of such committee or sub-committee were the acts of all the Trustees then in office;
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(u)
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To interpret the investment policies, practices or limitations of the Trust;
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(v)
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To establish a registered office and have a registered agent in the State of Delaware;
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(w)
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To enter into joint ventures, general or limited partnerships, limited liability companies, and any other combinations and associations; and
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(x)
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In general, to carry on any other business in connection with or incidental to any of the foregoing powers, to do everything necessary, suitable or proper for the accomplishment of any purpose or the attainment of any
object or the furtherance of any power hereinbefore set forth, either alone or in association with others, and to do every other act or thing incidental or appurtenant to or growing out of or connected with the aforesaid business or purposes,
objects or powers.
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The foregoing clauses shall be construed both as objects and powers, and the foregoing enumeration of
specific powers shall not be held to limit or restrict in any manner the general powers of the Trustees. Any action by one or more of the Trustees in their capacity as such hereunder shall be deemed an action on behalf of the Trust and not an action
in an individual capacity.
The Trustees shall not be limited to investing in obligations maturing before the possible termination of the
Trust.
No one dealing with the Trustees shall be under any obligation to make any inquiry concerning the authority of the Trustees, or to
see to the application of any payments made or property transferred to the Trustees or upon their order.
Section 4.2
Issuance,
Redemption and Repurchase of Shares
. The Trustees shall have the power to issue, sell, repurchase, redeem, retire, cancel, acquire, hold, resell, reissue, dispose of, and otherwise deal in Shares and, subject to the provisions set forth in
Articles II and VII hereof, to apply to any such repurchase, redemption, retirement, cancellation or acquisition of Shares any funds or property of the Trust.
Section 4.3
Action by the Trustees
. The Board of Trustees or any committee or sub-committee thereof shall act by majority vote of
those present at a meeting duly called as set forth in the Bylaws at which a quorum required by the Bylaws is present. Any action that may be taken by the Board of Trustees or any committee or sub-committee thereof by majority vote at a meeting duly
called and at which a quorum required by the Bylaws is present, may also be taken by written consent of at least seventy-five percent (75%) of the Trustees or members of the committee or sub-committee, as the case may be, without a meeting,
provided that the
10
writing or writings are filed with the minutes of proceedings of the Board or committee or sub-committee. Written consents or waivers of the Trustees may be executed in one or more counterparts.
Any written consent or waiver may be provided and delivered to the Trust by any means by which notice may be given to a Trustee. Subject to the requirements of the Governing Instrument and the 1940 Act, the Trustees by Majority Trustee Vote may
delegate to any Trustee or Trustees or committee or sub-committee of Trustees, officer or officers of the Trust or any agent of the Trust authority to approve particular matters or take particular actions on behalf of the Trust.
Section 4.4
Principal Transactions
. The Trustees may, on behalf of the Trust, buy any securities from or sell any securities to,
or lend any assets of the Trust to, any Trustee or officer of the Trust or any firm of which any such Trustee or officer is a member acting as principal, or have any such dealings with any investment adviser, distributor, or transfer agent for the
Trust or with any Affiliated Person of such Person; and the Trust may employ any such Person, or firm or Company in which such Person is an Affiliated Person, as broker, legal counsel, registrar, investment adviser, distributor, administrator,
transfer agent, dividend disbursing agent, custodian, or in any capacity upon customary terms, subject in all cases to applicable laws, rules, and regulations and orders of regulatory authorities.
Section 4.5
Payment of Expenses by the Trust
. The Trustees are authorized to pay or cause to be paid out of the principal or
income of the Trust, or partly out of the principal and partly out of income, all expenses, fees, charges, taxes and liabilities incurred or arising in connection with the Trust, or in connection with the management thereof, including, but not
limited to, the Trustees’ compensation and such expenses and charges for the services of the Trust’s officers, employees, investment adviser and manager, administrator, principal underwriter, auditors, counsel, custodian, transfer agent,
shareholder servicing agent, and such other agents or independent contractors and such other expenses and charges as the Trustees may deem necessary or proper to incur.
Section 4.6
Trustee Compensation
. The Trustees as such shall be entitled to reasonable compensation from the Trust. They may fix
the amount of their compensation. Nothing herein shall in any way prevent the employment of any Trustee for advisory, management, administrative, legal, accounting, investment banking, underwriting, brokerage, or investment dealer or other services
and the payment for the same by the Trust.
Section 4.7
Independent Trustee
. A Trustee who is an “Independent
Trustee,” as that term is defined in the Delaware Act, shall be deemed to be independent and disinterested for all purposes when making any determinations or taking any action as a Trustee.
ARTICLE V
INVESTMENT
ADVISER, PRINCIPAL UNDERWRITER AND
TRANSFER AGENT
Section 5.1
Investment Adviser
. The Trustees may in their discretion, from time to time, enter into an investment advisory or
management contract or contracts with respect to the Trust whereby the other party or parties to such contract or contracts shall undertake to furnish the Trustees with such management, investment advisory, statistical and research facilities and
services and such other facilities and services, if any, and all upon such terms and conditions, as the Trustees may in their discretion determine.
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The Trustees may authorize the investment adviser to employ, from time to time, one or more
sub-advisers to perform such of the acts and services of the investment adviser, and upon such terms and conditions, as may be agreed upon among the Trustees, the investment adviser and sub-adviser. Any references in this Agreement to the investment
adviser shall be deemed to include such sub-advisers, unless the context otherwise requires.
Section 5.2
Other Service
Contracts
. The Trustees may authorize the engagement of a principal underwriter, transfer agent, administrator, custodian, and any other service providers they deem to be in the best interest of the Trust.
Section 5.3
Parties to Contract
. Any contract of the character described in Sections 5.1 and 5.2 may be entered into with any
corporation, firm, partnership, trust, association or other legal entity, although one or more of the Trustees or officers of the Trust may be an officer, director, trustee, shareholder, member, employee or agent or hold any similar office with
respect to such other party to the contract.
Section 5.4
Miscellaneous
. The fact that (i) any of the Shareholders,
Trustees or officers of the Trust is a shareholder, director, officer, partner, trustee, employee, manager, adviser, principal underwriter or distributor or agent of or for any Company or of or for any parent or affiliate of any Company, with which
an advisory or administration contract, or principal underwriter’s or distributor’s contract, or transfer, shareholder servicing, custodian or other agency contract may have been or may hereafter be made, or that any such Company, or any
parent or affiliate thereof, is a Shareholder or has an interest in the Trust, or that (ii) any Company with which an advisory or administration contract or principal underwriter’s or distributor’s contract, or transfer, shareholder
servicing, custodian, or other agency contract may have been or may hereafter be made also has an advisory or administration contract, or principal underwriter’s or distributor’s contract, or transfer, shareholder servicing, custodian or
other agency contract with one or more other companies, or has other business or interests shall not affect the validity of any such contract or disqualify any Shareholder, Trustee or officer of the Trust from voting upon or executing the same or
create any liability or accountability to the Trust or its Shareholders.
ARTICLE VI
SHAREHOLDERS’ VOTING POWERS AND MEETING
Section 6.1
Voting Powers
. The Shareholders shall have power to vote only to: (i) elect Trustees, provided that a meeting of
Shareholders has been called for that purpose; (ii) remove Trustees, provided that a meeting of Shareholders has been called for that purpose; (iii) approve the sale of all or substantially all the assets of the Trust, unless the primary
purpose of such sale is to change the Trust’s domicile or form of organization or form of statutory trust; (iv) approve the merger or consolidation of the Trust with and into another Company, unless (A) the primary purpose of such
merger or consolidation is to change the Trust’s domicile or form of organization or form of statutory trust, or (B) after giving effect to such merger or consolidation, based on the number of Outstanding Shares as of a date selected by
the Trustees, the Shareholders of the Trust will have a majority of the outstanding shares of the surviving Company thereof, as the case may be; (v) approve any amendment to this Article VI, Section 6.1; and (vi) approve such
additional matters as may be required by law or as the Trustees, in their sole discretion, shall determine.
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Until Shares are issued, the Trustees may exercise all rights of Shareholders and may take any
action required or permitted by law or the Governing Instrument that may be taken by Shareholders.
On any matter submitted to a vote of
the Shareholders, all Shares shall be voted together. Each whole Share shall be entitled to one vote as to any matter on which it is entitled to vote, and each fractional Share shall be entitled to a proportionate fractional vote. The vote necessary
to approve any such matter shall be set forth in the Bylaws.
Shareholders shall not be entitled to cumulative voting in the election of
Trustees or on any other matter.
Only Record Owners shall have the power to cast a vote at a meeting of Shareholders subject to the
voting provisions set forth in the Governing Instrument. Beneficial owners of Shares who are not Record Owners shall not be entitled to cast a vote at a meeting of Shareholders but shall be entitled to provide voting instructions to corresponding
Record Owners, subject to any limitations imposed by applicable law.
Section 6.2
Additional Voting Powers and Voting Requirements
for Certain Actions
. Notwithstanding any other provision of this Agreement, the Shareholders shall have power to vote to approve any amendment to Section 8.4 of this Agreement that would have the effect of reducing the indemnification
provided thereby to Shareholders or former Shareholders, and any repeal or amendment of this sentence, and any such action shall require the affirmative vote or consent of Shareholders owning at least two-thirds (66 2/3%) of the Outstanding Shares
entitled to vote thereon. In addition, the removal of one or more Trustees by the Shareholders shall require the affirmative vote or consent of Shareholders owning at least two-thirds (66 2/3%) of the Outstanding Shares entitled to vote thereon.
The voting requirements set forth in this Section 6.2 shall be in addition to, and not in lieu of, any vote or consent of the
Shareholders otherwise required by applicable law or by this Agreement.
ARTICLE VII
DISTRIBUTIONS AND REDEMPTIONS
Section 7.1
Distributions
. The Trustees may from time to time declare and pay dividends and make other distributions which may be
from income, capital gains or capital. The amount of such dividends or distributions and the payment of them and whether they are in cash or any other Trust Property shall be wholly in the discretion of the Trustees, although the Trustees pursuant
to Section 4.1(j) may delegate the authority to set record, declaration, payment and ex-dividend dates, determine the amount of dividends and distributions and pay such dividends and distributions. Dividends and other distributions may be paid
pursuant to a standing resolution adopted once or more often as the Trustees determine. The Trustees shall have the power and authority to amend, correct or change the amount of any declared dividend or distribution from time to time until such
dividend or distribution has been paid to Shareholders. The Trustees may adopt and offer to Shareholders such dividend reinvestment plans, cash distribution payment plans, or similar plans as the Trustees deem appropriate.
Section 7.2
Redemptions
. Any Record Owner of Shares shall have the right to require the Trust to redeem his Shares, or any portion
thereof, subject to such terms and conditions as are set forth in the registration statement of the Trust in effect from time to time.
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The redemption price may in any case or cases be paid wholly or partly in kind if the Trustees determine that
such payment is advisable in the interest of the remaining Shareholders. Subject to the foregoing, the fair value, selection and quantity of securities or other property so paid or delivered as all or part of the redemption price may be determined
by or under authority of the Trustees. In no case shall the Trust be liable for any delay of any Person in transferring securities selected for delivery as all or part of any payment in kind.
Section 7.3
Redemptions at the Option of the Trust
. The Trust shall have the right, at its option, upon no less than 30 days
notice to the affected Shareholder at any time to redeem Shares of any Shareholder at the net asset value of such Shares: (A) if at such time such Shareholder owns Shares having an aggregate net asset value of less than an amount determined
from time to time by the Trustees; or (B) to the extent that such Shareholder owns Shares equal to or in excess of a percentage of the outstanding Shares of the Trust, as such percentage may be determined from time to time, in each case subject
to such terms and conditions as are set forth in the registration statement of the Trust in effect from time to time.
ARTICLE VIII
LIMITATION OF LIABILITY AND INDEMNIFICATION
Section 8.1
Limitation of Liability
. A Trustee or officer of the Trust, when acting in such capacity, shall not be personally
liable to any person for any act, omission or obligation of the Trust or any Trustee or officer of the Trust; provided, however, that nothing contained herein shall protect any Trustee or officer against any liability to the Trust or to Shareholders
to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office with the Trust.
Section 8.2
Indemnification of Covered Persons
. Every Covered Person shall be indemnified by the Trust to the fullest extent
permitted by the Delaware Act, the Bylaws and other applicable law.
Section 8.3
Insurance
. To the fullest extent permitted by
applicable law, the Board of Trustees shall have the authority to purchase with Trust Property insurance for liability and for all expenses reasonably incurred or paid or expected to be paid by a Covered Person in connection with any proceeding in
which such Covered Person becomes involved by virtue of such Covered Person’s actions, or omissions to act, in its capacity or former capacity with the Trust, whether or not the Trust would have the power to indemnify such Covered Person
against such liability.
Section 8.4
Indemnification of Shareholders
. In case any Shareholder or former Shareholder of the
Trust shall be held to be personally liable solely by reason of his being or having been a Shareholder of the Trust and not because of his acts or omissions or for some other reason, the Shareholder or former Shareholder (or his heirs, executors,
administrators or other legal representatives, or, in the case of a corporation or other entity, its corporate or general successor) shall be entitled to be held harmless from and indemnified against all loss and expense arising from such liability
in accordance with the Bylaws and applicable law. The Trust, shall upon request by the Shareholder, assume the defense of any such claim made against the Shareholder.
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ARTICLE IX
MISCELLANEOUS
Section 9.1
Trust Not a Partnership; Taxation
. It is hereby expressly declared that a trust and not a partnership is created
hereby. No Trustee hereunder shall have any power to bind personally either the Trust’s officers or any Shareholder. All persons extending credit to, contracting with or having any claim against the Trust or the Trustees in their capacity as
such shall look only to the assets of the Trust for payment under such credit, contract or claim; and neither the Shareholders, the Trustees, nor the Trust’s officers nor any of the agents of the Trustees whether past, present or future, shall
be personally liable therefor.
The Board of Trustees shall have the power, in its discretion, to make an initial entity classification
election, and to change any such entity classification election, of the Trust for U.S. federal income tax purposes as may be permitted or required under the Code, without the vote or consent of any Shareholder. In furtherance thereof, the Board of
Trustees, or an appropriate officer as determined by the Board of Trustees, is authorized (but not required) to make and sign any such entity classification election on Form 8832, Entity Classification Election (or successor form thereto), on behalf
of the Trust, sign the consent statement contained therein on behalf of all of the Shareholders thereof, and file the same with the U.S. Internal Revenue Service.
Section 9.2
Trustee’s Good Faith Action, Expert Advice, No Bond or Surety
. The exercise by the Trustees of their powers and
discretion hereunder in good faith and with reasonable care under the circumstances then prevailing shall be binding upon everyone interested. Subject to the provisions of Article VIII and to Section 9.1, the Trustees shall not be liable for
errors of judgment or mistakes of fact or law. The Trustees may take advice of counsel or other experts with respect to the meaning and operation of this Agreement, and subject to the provisions of Article VIII and Section 9.1, shall be under
no liability for any act or omission in accordance with such advice or for failing to follow such advice. The Trustees shall not be required to give any bond as such, nor any surety if a bond is obtained.
Section 9.3
Termination of Trust
.
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(a)
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Unless terminated as provided herein, the Trust shall continue without limitation of time. The Trust may be terminated at any time by the Trustees by written notice to the Shareholders.
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(b)
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On termination of the Trust pursuant to paragraph (a) above,
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(1)
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the Trust thereafter shall carry on no business except for the purpose of winding up its affairs,
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(2)
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the Trustees shall (i) proceed to wind up the affairs of the Trust, and all powers of the Trustees under this Agreement with respect thereto
shall continue until such affairs have been wound up, including the powers to fulfill or discharge the contracts of the Trust, (ii) collect its assets or the assets belonging thereto, (iii) sell, convey, assign, exchange, or otherwise
dispose of all or any part of those assets to one or more persons at public or private sale for consideration that may consist in whole or in part of cash, securities, or other property of any kind, ((iv) pay or make reasonable provision (including
through the use of a liquidating trust) to
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pay all claims and obligations of the Trust, including all contingent, conditional or unmatured claims and obligations known to the Trust, and all claims and obligations which are known to the
Trust, but for which the identity of the claimant is unknown, and claims and obligations that have not been made known to the Trust or that have not arisen but that, based on the facts known to the Trust, are likely to arise or to become known to
the Trust within 10 years after the date of dissolution, and (v) do all other acts appropriate to liquidate its business, and
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(3)
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after paying or adequately providing for the payment of all liabilities, and upon receipt of such releases, indemnities, and refunding agreements as they deem necessary for their protection, the Trustees shall
distribute the remaining assets ratably among the Shareholders of the Trust.
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(c)
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On completion of distribution of the remaining assets pursuant to paragraph (b)(3) above, the Trust shall terminate and the Trustees and the Trust shall be discharged from all further liabilities and duties
hereunder with respect thereto and the rights and interests of all parties therein shall be cancelled and discharged. On termination of the Trust, following completion of winding up of its business, any one (1) Trustee shall execute, and cause
to be filed, a certificate of cancellation, with the office of the Secretary of State of the State of Delaware in accordance with the provisions of Section 3810 of the Delaware Act, whereupon the Trust shall terminate and the Trustees and the
Trust shall be discharged from all further liabilities and duties hereunder with respect thereto. The Trustees shall not be personally liable to the claimants of the dissolved Trust by reason of the Trustees’ actions in winding up the
Trust’s affairs if the Trustees complied with Section 3808(e) of the Delaware Act.
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Section 9.4
Sale of
Assets; Merger and Consolidation
. Subject to right of Shareholders, if any, to vote pursuant to Section 6.1, the Trustees may cause (i) the Trust to the extent consistent with applicable law to sell all or substantially all of its
assets to, or be merged into or consolidated with, another statutory trust (or series thereof) or Company (or series thereof), (ii) the Shares of the Trust to be converted into beneficial interests in another statutory trust (or series thereof)
created pursuant to this Section 9.4, or (iii) the Shares to be exchanged under or pursuant to any state or federal statute to the extent permitted by law. In all respects not governed by statute or applicable law, the Trustees shall have
power to prescribe the procedure necessary or appropriate to accomplish a sale of assets, merger or consolidation including the power to create one or more separate statutory trusts to which all or any part of the assets, liabilities, profits or
losses of the Trust may be transferred and to provide for the conversion of Shares of the Trust into beneficial interests in such separate statutory trust or trusts (or series or class thereof).
Section 9.5
Filing of Copies, References, Headings
. The original or a copy of this Agreement or any amendment hereto or any
supplemental agreement shall be kept at the office of the Trust where it may be inspected by any Shareholder. Headings are placed herein for convenience of reference only and in case of any conflict, the text of this Agreement, rather than the
headings, shall control. This Agreement may be executed in any number of counterparts each of which shall be deemed an original.
Section 9.6
Governing Law
. The Trust and the Governing Instrument (including this Agreement) and the rights, obligations and
remedies of the Trustees and Shareholders
16
hereunder, are to be governed by and construed and administered according to the Delaware Act, including the provision that gives maximum freedom to contract, and the other laws of the State of
Delaware and the applicable provisions of the 1940 Act. Notwithstanding the foregoing, the following provisions shall not be applicable to the Trust, the Trustees, the Shareholders or the Governing Instrument: (A) the provisions of Sections
3533, 3540, 3561 and 3583(a) of Title 12 of the Delaware Code or (B) any provisions of the laws (statutory or common) of the State of Delaware (other than the Delaware Act) pertaining to trusts which relate to or regulate (i) the filing
with any court or governmental body or agency of trustee accounts or schedules of trustee fees and charges, (ii) affirmative requirements to post bonds for trustees, officers, agents or employees of a trust, (iii) the necessity for
obtaining court or other governmental approval concerning the acquisition, holding or disposition of real or personal property, (iv) fees or other sums payable to trustees, officers, agents or employees of a trust, (v) the allocation of
receipts and expenditures to income or principal, (vi) restrictions or limitations on the permissible nature, amount or concentration of trust investments or requirements relating to the titling, storage or other manner of holding of trust
assets, or (vii) the establishment of fiduciary or other standards or responsibilities or limitations on the indemnification, acts or powers of trustees or other Persons, which are inconsistent with the limitations of liabilities or authorities
and powers of the Trustees or officers of the Trust set forth or referenced in the Governing Instrument.
The Trust shall be of the type
commonly called a “statutory trust,” and without limiting the provisions hereof, the Trust may exercise all powers which are ordinarily exercised by such a trust under Delaware law. The Trust specifically reserves the right to exercise any
of the powers or privileges afforded to trusts or actions that may be engaged in by trusts under the Delaware Act, and the absence of a specific reference herein to any such power, privilege or action shall not imply that the Trust may not exercise
such power or privilege or take such actions; provided, however, that the exercise of any such power, privilege or action shall not otherwise violate applicable law.
Section 9.7
Amendments
. Except as specifically provided in Article VI hereof, the Trustees may, without any Shareholder vote,
amend this Agreement by making an amendment to this Agreement, an agreement supplemental hereto, or an amended and restated trust instrument. Any such amendment, having been approved by a Majority Trustee Vote, shall become effective, unless
otherwise provided by such Trustees, upon being executed by a duly authorized officer of the Trust. A certification signed by a duly authorized officer of the Trust setting forth an amendment to this Agreement and reciting that it was duly adopted
by the Shareholders or by the Trustees as aforesaid, or a copy of this Agreement, as amended, executed by a majority of the Trustees, or a duly authorized officer of the Trust, shall be conclusive evidence of such amendment when lodged among the
records of the Trust.
Section 9.8
Provisions in Conflict with Law
. The provisions of this Agreement are severable, and if the
Trustees shall determine, with the advice of counsel, that any of such provisions is in conflict with applicable law, the conflicting provision shall be deemed never to have constituted a part of this Agreement; provided, however, that such
determination shall not affect any of the remaining provisions of this Agreement or render invalid or improper any action taken or omitted prior to such determination. If any provision of this Agreement shall be held invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall attach only to such provision in such jurisdiction and shall not in any manner affect such provisions in any other jurisdiction or any other provision of this Agreement in any jurisdiction.
Section 9.9
Record Owners’ Right to Inspect Shareholder List and other Records
. Except as may be permitted by
Regulation 14A promulgated under the Securities Exchange Act
17
of 1934, as amended from time to time, no Shareholder shall have the right to obtain from the Trust a list of the Trust’s Shareholders. Except as required by the 1940 Act or as expressly
provided in the Governing Instrument, Shareholders shall have no right to inspect the records, documents, accounts and books of the Trust. Any request to inspect the records of the Trust shall be submitted by the Shareholder to the Trust in writing.
Upon receipt of any such request, the Trustees shall determine whether delivery of records pertaining to such request is required by the 1940 Act or is otherwise necessary or appropriate, as determined by the Trustees in their sole discretion, and
whether such request complies with the requirements of the 1940 Act and, if so, establish procedures for such inspection. To preserve the integrity of the records, the Trust may provide certified copies of Trust records rather than originals. The
Trust shall not be required to create records or obtain records from third parties to satisfy a Shareholder request. The Trust may require a requesting Shareholder to pay in advance or otherwise indemnify the Trust for the costs and expenses of such
Shareholder’s inspection of records. The rights provided for in this Section 9.9 shall not extend to any Person who is a Shareholder but not also a Record Owner.
Section 9.10
Reports
. The Trustees shall cause to be prepared at least annually and more frequently to the extent and in the form
required by law or regulation, a report of operations containing a balance sheet and statement of income and undistributed income of the Trust prepared in conformity with generally accepted accounting principles and an opinion of an independent
public accountant on such financial statements. Copies of such reports shall be mailed to all Shareholders within the time required by the 1940 Act, and in any event within a reasonable period preceding the meeting of Shareholders. The Trustees
shall, in addition, furnish to the Shareholders at least semi-annually to the extent required by law, interim reports containing an unaudited balance sheet of the Trust as of the end of such period and an unaudited statement of income and surplus
for the period from the beginning of the current fiscal year to the end of such period.
Section 9.11
Use of the Name
“Invesco”
. The Board of Trustees expressly agrees and acknowledges that the name “Invesco” is the sole property of Invesco Ltd. (“Invesco”). Invesco has granted to the Trust a non-exclusive license to use such name
as part of the name of the Trust now and in the future. The Board of Trustees further expressly agrees and acknowledges that the non-exclusive license granted herein may be terminated by Invesco if the Trust ceases to use Invesco or one of its
Affiliated Persons as investment adviser or to use other Affiliated Persons or successors of Invesco for such purposes. In such event, the non-exclusive license may be revoked by Invesco and the Trust shall cease using the name “Invesco”
or any name misleadingly implying a continuing relationship between the Trust and Invesco or any of its Affiliated Persons, as part of its name unless otherwise consented to by Invesco or any successor to its interests in such name.
The Board of Trustees further understands and agrees that so long as Invesco and/or any future advisory Affiliated Person of Invesco shall
continue to serve as the Trust’s investment adviser, other registered open- or closed-end investment companies (“funds”) and other types of investment vehicles as may be sponsored or advised by Invesco or its Affiliated Persons shall
have the right permanently to adopt and to use the name “Invesco” in their names and in the names of any series or class of shares of such funds.
18
IN WITNESS WHEREOF, the undersigned, being all of the Trustees of the Trust, have executed this
instrument this 19th day of May, 2015.
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/s/ David C. Arch
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David C. Arch
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/s/ James T. Bunch
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James T. Bunch
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/s/ Bruce L. Crockett
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Bruce L. Crockett
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/s/ Rodney F. Dammeyer
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Rodney F. Dammeyer
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/s/ Albert R. Dowden
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Albert R. Dowden
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/s/ Jack M. Fields
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Jack M. Fields
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/s/ Martin L. Flanagan
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Martin L. Flanagan
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/s/ Prema Mathai-Davis
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Prema Mathai-Davis
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/s/ Larry Soll
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Larry Soll
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/s/ Hugo F. Sonnenschein
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Hugo F. Sonnenschein
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/s/ Raymond Stickel, Jr.
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Raymond Stickel, Jr.
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/s/ Philip A. Taylor
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Philip A. Taylor
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/s/ Suzanne H. Woolsey
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Suzanne H. Woolsey
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19
INVESCO EXCHANGE FUND
BYLAWS
A Delaware
Statutory Trust
Adopted effective May 19, 2015
Capitalized terms not specifically defined herein
shall have the meanings ascribed to them in the Trust’s
Amended and Restated Agreement and Declaration of Trust (the “Agreement”).
ARTICLE I
OFFICES
Section 1.
Registered Office
. The registered office of Invesco Exchange Fund (the “Trust”) shall be at the
offices of The Corporation Trust Company in the County of New Castle, State of Delaware.
Section 2.
Other Offices
. The Trust
may also have offices at such other places both within and without the State of Delaware as the Trustees may from time to time determine or the business of the Trust may require.
ARTICLE II
TRUSTEES
Section 1.
Meetings of the Trustees
. The Trustees of the Trust may hold meetings, both regular and special, either within
or without the State of Delaware. Meetings of the Trustees may be called orally or in writing by or at the direction of the Chair or his or her designee or by a majority of the Trustees. Meetings of the Board of Trustees and any committee or
sub-committee thereof may be held in person or by telephonic or other electronic means.
Section 2.
Regular Meetings
. Regular
meetings of the Board of Trustees shall be held each year, at such time and place as the Board of Trustees may determine.
Section 3.
Notice of Meetings
. Notice of the time, date, and place of all meetings of the Board of Trustees and any committee or sub-committee thereof shall be given to each Trustee, committee member or sub-committee member, as applicable, (i) by
telephone, telex, telegram, facsimile, electronic-mail, or other electronic mechanism sent to his or her home or business address at least twenty-four hours in advance of the meeting or (ii) in person at another meeting of the Board of Trustees
or such committee or sub-committee, as applicable, or (iii) by written notice mailed or sent via overnight courier to his or her home or business address at least seventy-two hours in advance of the meeting. Notice need not be given to any
Trustee, committee member or sub-committee member who attends a meeting of the Board of Trustees or any committee or sub-committee thereof without objecting to the lack of notice or who signs a waiver of notice either before or after such meeting.
Section 4.
Quorum
. At all meetings of the Board of Trustees and any committee or sub-committee thereof, one-third of the
Trustees then in office or one-third of the committee members or sub-committee members (but in no event less than two Trustees, committee members or sub-committee members), as applicable, shall constitute a quorum for the transaction of business.
The act of a majority of the Trustees, committee members or
sub-committee members present at any meeting at which there is a quorum shall be the act of the Board of Trustees or such committee or sub-committee, as applicable, except as may be otherwise
specifically provided by applicable law or by the Agreement or these Bylaws. If a quorum shall not be present at any meeting of the Board of Trustees or any committee or sub-committee thereof, the Trustees, committee members or sub-committee
members, as applicable, present thereat may adjourn such meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.
Section 5.
Designation, Powers, and Names of Committees; Sub-Committees; Committee Charters
.
(a) The Board of Trustees shall have at a minimum the following five committees: (1) an Audit Committee; (2) a Governance Committee;
(3) an Investments Committee; (4) a Valuation, Distribution and Proxy Oversight Committee; and (5) a Compliance Committee. Each such Committee shall have a written Charter governing its membership, duties and operations, and the Board
shall designate the powers of each such Committee in its Charter. The Board of Trustees may terminate any such Committee by an amendment to these Bylaws. The Board of Trustees may, by resolution passed by a majority of the whole Board, establish one
or more sub-committees of each such Committee, and the membership, duties and operations of each such sub-committee shall be set forth in the written Charter of the applicable Committee.
(b) The Board of Trustees may, by resolution passed by a majority of the whole Board, designate one or more additional committees, including
ad hoc committees to address specified issues, each of which may, if deemed advisable by the Board of Trustees, have a written Charter. Each such additional committee shall consist of two or more of the Trustees of the Trust. The Board may designate
one or more Trustees as alternate members of any such additional committee, who may replace any absent or disqualified member at any meeting of such committee. Each such additional committee, to the extent provided in the resolution and/or in such
committee’s Charter, if applicable, shall have and may exercise the powers of the Board of Trustees in the management of the business and affairs of the Trust; provided, however, that in the absence or disqualification of any member of such
committee or committees, the member or members thereof present at any meeting and not disqualified from voting, whether or not such members constitute a quorum, may unanimously appoint another member of the Board of Trustees to act at the meeting in
the place of any such absent or disqualified member. Such additional committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Trustees and/or as set forth in the written
Charter of such committee or committees, if applicable.
Section 6.
Chair; Vice Chair
. The Board of Trustees shall have a
Chair, who shall be a Trustee who is not an “interested person,” as such term is defined in the 1940 Act. The Chair shall be elected by a majority of the Trustees, including a majority of the Trustees who are not “interested
persons,” as such term is defined in the 1940 Act. The Board of Trustees may also have a Vice Chair, who shall be a Trustee. The Vice Chair shall be elected by a majority of the Trustees, including a majority of the Trustees who are not
“interested persons,” as such term is defined in the 1940 Act. The Chair shall preside at all meetings of the Shareholders and the Board of Trustees, if the Chair is present, and shall approve the agendas of all meetings of the
Shareholders and the Board of Trustees. The Chair shall have such other powers and duties as shall be determined by the Board of Trustees, and shall undertake such other assignments as may be requested by the Board of Trustees. If the Chair shall
not be present,
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the Vice Chair, if any, shall preside at all meetings of the Shareholders and the Board of Trustees, if the Vice Chair is present. The Vice Chair shall have such other powers and duties as shall
be determined by the Chair or the Board of Trustees, and shall undertake such other assignments as may be requested by the Chair or the Board of Trustees.
ARTICLE III
OFFICERS
Section 1.
Executive Officers
. The executive officers shall include a Principal Executive Officer, a President, one or
more Vice Presidents, which may include one or more Executive Vice Presidents and/or Senior Vice Presidents (the number thereof to be determined by the Board of Trustees), a Principal Financial Officer, a Chief Legal Officer, a Chief Compliance
Officer, a Senior Officer, a Treasurer, a Secretary and an Anti-Money Laundering Compliance Officer. The Board of Trustees may also in its discretion appoint Assistant Vice Presidents, Assistant Secretaries, Assistant Treasurers, and other officers,
agents and employees, who shall have such authority and perform such duties as the Board may determine. The Board of Trustees may fill any vacancy that may occur in any office. Any two offices, except for those of President and Vice President, may
be held by the same person, but no officer shall execute, acknowledge or verify any instrument on behalf of the Trust in more than one capacity, if such instrument is required by law or by these Bylaws to be executed, acknowledged or verified by two
or more officers.
Section 2.
Term of Office
. Unless otherwise specifically determined by the Board of Trustees, the officers
shall serve at the pleasure of the Board of Trustees. If the Board of Trustees in its judgment finds that the best interests of the Trust will be served, the Board of Trustees may remove any officer of the Trust at any time with or without cause.
The Trustees may delegate this power to the President (without supervision by the Trustees) with respect to any other officer, except the Senior Officer. Such removal shall be without prejudice to the contract rights, if any, of the person so
removed. Any officer may resign from office at any time by delivering a written resignation to the Trustees or the President. Unless otherwise specified therein, such resignation shall take effect upon delivery.
Section 3.
Principal Executive Officer
. The Principal Executive Officer shall be the chief executive officer of the Trust and
shall generally manage the business and affairs of the Trust. The Principal Executive Officer shall be responsible for making the certifications required of the Trust’s principal executive officer by Sections 302 and 906 of the Sarbanes-Oxley
Act of 2002 and the rules promulgated thereunder by the Securities and Exchange Commission (the “Commission”).
Section 4.
President; Vice Presidents
. The President and one or more Vice Presidents, which may include one or more Executive Vice Presidents and/or Senior Vice Presidents, shall have and exercise such powers and duties of the Principal Executive
Officer in the absence or inability to act of the Principal Executive Officer, as may be assigned to them, respectively, by the Board of Trustees or, to the extent not so assigned, by the Principal Executive Officer. In the absence or inability to
act of the Principal Executive Officer, the powers and duties of the Principal Executive Officer not otherwise assigned by the Board of Trustees or the Principal Executive Officer shall devolve first upon the President, then upon the Executive Vice
Presidents, then upon the Senior Vice Presidents, and finally upon the Vice Presidents, all in the order of their election. If both the Chair and the Vice Chair are absent, or if
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the Chair is absent and there is no Vice Chair, the President shall, if present, preside at all meetings of the Shareholders and the Board of Trustees.
Section 5.
Principal Financial Officer
. The Principal Financial Officer, who shall also have a title of at least Vice President,
shall be the chief financial officer of the Trust and shall generally manage the financial affairs of the Trust. The Principal Financial Officer shall be responsible for making the certifications required of the Trust’s principal financial
officer by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder.
Section 6.
Chief Legal
Officer
. The Chief Legal Officer, who shall also have a title of at least Senior Vice President, shall generally manage the legal affairs of the Trust. The Chief Legal Officer shall be responsible for receiving up-the-ladder reports within the
Trust of any evidence of material violations of securities laws or breaches of fiduciary duty or similar violations by the Trust, as required by Section 307 of the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder.
Section 7.
Chief Compliance Officer
. The Chief Compliance Officer, who shall also have a title of at least Senior Vice President,
shall be responsible for administering the Trust’s policies and procedures adopted pursuant to Rule 38a-1(a)(1) under the 1940 Act.
Section 8.
Senior Officer
. The Senior Officer, who shall also have a title of at least Senior Vice President, shall be employed by
or on behalf of the Trust and shall have such powers and duties as are set forth in such Senior Officer’s Executive Employment Agreement.
Section 9.
Treasurer
. The Treasurer shall have the care and custody of the funds and securities of the Trust and shall deposit the
same in the name of the Trust in such bank or banks or other depositories, subject to withdrawal in such manner as these Bylaws or the Board of Trustees may determine. The Treasurer shall, if required by the Board of Trustees, give such bond for the
faithful discharge of duties in such form as the Board of Trustees may require.
Section 10.
Secretary
. The Secretary shall
(a) have custody of the seal of the Trust, if any; (b) if requested, attend meetings of the Shareholders, the Board of Trustees, and any committees or sub-committees of Trustees; (c) keep or cause to be kept the minutes of all
meetings of Shareholders, the Board of Trustees and any committees or sub-committees thereof, and (d) issue all notices of the Trust. The Secretary shall have charge of the Shareholder records and such other books and papers as the Board may
direct, and shall perform such other duties as may be incidental to the office or which are assigned by the Board of Trustees.
Section 11.
Anti-Money Laundering Compliance Officer
. The Anti-Money Laundering Compliance Officer shall have such powers and
duties as are set forth in the Anti-Money Laundering Program adopted by the Trust pursuant to the USA PATRIOT Act of 2001 and the rules promulgated thereunder, as such Program may be amended from time to time.
Section 12.
Assistant Officers
. Assistant officers, which may include one or more Assistant Vice Presidents, Assistant Secretaries
and Assistant Treasurers, shall perform such functions and have such responsibilities as the Board of Trustees may assign to them or, to the extent not so assigned, by the President, Vice President(s), Secretary or Treasurer, as applicable.
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Section 13.
Surety Bond
. The Trustees may require any officer or agent of the Trust
to execute a bond (including, without limitation, any bond required by the 1940 Act and the rules and regulations of the Commission to the Trust in such sum and with such surety or sureties as the Trustees may determine, conditioned upon the
faithful performance of his or her duties to the Trust, including responsibility for negligence and for the accounting of any of the Trust’s property, funds, or securities that may come into his or her hands.
Section 14.
Authorized Signatories
. Unless a specific officer is otherwise designated in these Bylaws or in a resolution adopted
by the Board of Trustees, the proper officers of the Trust for executing agreements, documents and instruments other than Internal Revenue Service forms shall be the Principal Executive Officer, the President, any Vice President, the Principal
Financial Officer, the Chief Legal Officer, the Chief Compliance Officer, the Senior Officer, the Treasurer, the Secretary, the Anti-Money Laundering Compliance Officer, any Assistant Vice President, any Assistant Treasurer or any Assistant
Secretary. Unless a specific officer is otherwise designated in these Bylaws or in a resolution adopted by the Board of Trustees, the proper officers of the Trust for executing any and all Internal Revenue Service forms shall be the Principal
Executive Officer, the President, any Vice President, the Principal Financial Officer, the Treasurer, the Secretary, any Assistant Treasurer or any Assistant Secretary.
ARTICLE IV
MEETINGS OF
SHAREHOLDERS
Section 1.
Purpose
. All meetings of the Shareholders for the election of Trustees shall be held at such
place as may be fixed from time to time by the Trustees, or at such other place either within or without the State of Delaware as shall be designated from time to time by the Trustees and stated in the notice indicating that a meeting has been
called for such purpose. Meetings of Shareholders may be held for any purpose determined by the Trustees and may be held at such time and place, within or without the State of Delaware as shall be stated in the notice of the meeting or in a duly
executed waiver of notice thereof. At all meetings of the Shareholders, every Record Owner entitled to vote on a matter to be voted on by such Shares shall be entitled to vote on such matter at such meeting either in person or by written proxy
signed by the Record Owner or by his duly authorized attorney in fact. A Record Owner may duly authorize such attorney in fact through written, electronic, telephonic, computerized, facsimile, telecommunication, telex or oral communication or by any
other form of communication. Unless a proxy provides otherwise, such proxy is not valid more than eleven months after its date. A proxy with respect to shares held in the name of two or more persons shall be valid if executed by any one of them
unless at or prior to exercise of the proxy the Trust receives a specific written notice to the contrary from any one of them. A proxy purporting to be executed by or on behalf of a Record Owner shall be deemed valid unless challenged at or prior to
its exercise and the burden of proving invalidity shall rest on the challenger.
Section 2.
Nomination of Trustees
.
(a) Any Shareholder may submit names of individuals to be considered by the Governance Committee or the Board of Trustees for election as
trustees of the Trust, as applicable, provided, however, (i) that such person submits such names in a timely manner as set out in Section 2 of Article V hereof, (ii) that such person was a shareholder of record at the time of
submission of such names and is entitled to vote at the meeting, and (iii) that the
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Governance Committee or the Board of Trustees, as applicable, shall make the final determination of persons to be nominated.
(b) The process and procedures for the nomination of persons for election or appointment as trustees of the Trust by the Trustees shall be set
forth in the written Charter for the Governance Committee of the Board of Trustees.
Section 3.
Election of Trustees
. All
meetings of Shareholders for the purpose of electing Trustees shall be held on such date and at such time as shall be designated from time to time by the Trustees and stated in the notice of the meeting, at which the Shareholders shall elect by a
plurality vote any number of Trustees as the notice for such meeting shall state are to be elected, and transact such other business as may properly be brought before the meeting in accordance with Section 1 of this Article IV.
Section 4.
Notice of Meetings
. Written notice of any meeting stating the place, date, and hour of the meeting shall be given to
each Shareholder entitled to vote at such meeting not less than ten days before the date of the meeting in accordance with Article V hereof.
Section 5.
Special Meetings
. Special meetings of the Shareholders, for any purpose or purposes, unless otherwise prescribed by
applicable law or by the Agreement, may be called by the Chair or by a majority of the Trustees; provided, however, that the Trustees shall promptly call a meeting of the Shareholders solely for the purpose of removing one or more Trustees, when
requested in writing to do so by the Record Owners of not less than ten percent of the Outstanding Shares of the Trust.
Section 6.
Notice of Special Meeting
. Written notice of a special meeting stating the place, date, and hour of the meeting and the purpose or purposes for which the meeting is called, shall be given not less than ten days before the date of the meeting,
to each Shareholder entitled to vote at such meeting.
Section 7.
Conduct of Special Meeting
. Business transacted at any
special meeting of Shareholders shall be limited to (i) the purpose stated in the notice and (ii) the adjournment of such special meeting with regard to such stated purpose.
Section 8.
Quorum
. The holders of one-third of the Outstanding Shares entitled to vote thereat, present in person or represented
by proxy, shall constitute a quorum at all meetings of the Shareholders for the transaction of business except as otherwise provided by applicable law or by the Agreement. If, however, such quorum shall not be present or represented at any meeting
of the Shareholders, the vote of the holders of a majority of Shares cast shall have power to adjourn the meeting from time to time in accordance with Article IV, Section 16 hereof, without notice other than announcement at the meeting, until a
quorum shall be present or represented. At such adjourned meeting, at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified.
Section 9.
Organization of Meetings
.
(a) The meetings of the Shareholders shall be presided over by the Chair, or if the Chair shall not be present, by the Vice Chair, if any, or
if the Vice Chair shall not be present or if there is no Vice Chair, by the President, or if the President shall not be present, by
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a Vice President, or if no Vice President is present, by a chair appointed for such purpose by the Board of Trustees or, if not so appointed, by a chair appointed for such purpose by the officers
and Trustees present at the meeting. The Secretary of the Trust, if present, shall act as Secretary of such meetings, or if the Secretary is not present, an Assistant Secretary of the Trust shall so act, and if no Assistant Secretary is present,
then a person designated by the Secretary of the Trust shall so act, and if the Secretary has not designated a person, then the meeting shall elect a secretary for the meeting.
(b) The Board of Trustees of the Trust shall be entitled to make such rules and regulations for the conduct of meetings of Shareholders as it
shall deem necessary, appropriate or convenient. Subject to such rules and regulations of the Board of Trustees, if any, the chair of the meeting shall have the right and authority to prescribe such rules, regulations and procedures and to do all
such acts as, in the judgment of such chair, are necessary, appropriate or convenient for the proper conduct of the meeting, including, without limitation, establishing: an agenda or order of business for the meeting; rules and procedures for
maintaining order at the meeting and the safety of those present; limitations on participation in such meeting to shareholders of record of the Trust and their duly authorized and constituted proxies, and such other persons as the chair shall
permit; restrictions on entry to the meeting after the time fixed for the commencement thereof; limitations on the time allotted to questions or comments by participants; and regulation of the opening and closing of the polls for balloting on
matters which are to be voted on by ballot, unless and to the extent the Board of Trustees or the chair of the meeting determines that meetings of Shareholders shall not be required to be held in accordance with the rules of parliamentary procedure.
Section 10.
Voting Standard
. When a quorum is present at any meeting, the vote of the holders of a majority of the Shares
cast shall decide any question brought before such meeting, unless the question is one on which, by express provision of applicable law, the Agreement, these Bylaws, or applicable contract, a different vote is required, in which case such express
provision shall govern and control the decision of such question.
Section 11.
Voting Procedure
. Each whole Share shall be
entitled to one vote, and each fractional Share shall be entitled to a proportionate fractional vote. On any matter submitted to a vote of the Shareholders, all Shares shall be voted together.
Section 12.
Action Without Meeting
. Unless otherwise provided in the Agreement or applicable law, any action required to be taken
at any meeting of the Shareholders, or any action which may be taken at any meeting of the Shareholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be
signed by the holders of Outstanding Shares having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all Shares entitled to vote thereon were present and voted. Prompt notice of
the taking of any such action without a meeting by less than unanimous written consent shall be given to those Shareholders who have not consented in writing.
Section 13.
Broker Non-Votes
. At any meeting of Shareholders the Trust will consider broker non-votes as present for purposes of
determining whether a quorum is present at the meeting. Broker non-votes will not count as votes cast for or against any proposals.
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Section 14.
Abstentions
. At any meeting of Shareholders the Trust will consider
abstentions as present for purposes of determining whether a quorum is present at the meeting. Abstentions will not count as votes cast for or against any proposals.
Section 15.
Record Date for Shareholder Meetings and Consents
. In order that the Trustees may determine the Shareholders entitled
to notice of or to vote at any meeting of Shareholders or any adjournment thereof, or to express consent to action in writing without a meeting, the Board of Trustees may fix a record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board of Trustees, and which record date shall not be more than ninety nor less than ten days before the original date upon which the meeting of Shareholders is scheduled, nor more than ten days
after the date upon which the resolution fixing the record date is adopted by the Board of Trustees for action by Shareholder consent in writing without a meeting. A determination of shareholders of record entitled to notice of or to vote at a
meeting of Shareholders shall apply to any adjournment of the meeting; provided, however, that the Board of Trustees may fix a new record date for the adjourned meeting so long as notice of the adjournment and the new record and meeting dates are
given to the Shareholders.
Section 16.
Adjournments
. A meeting of Shareholders convened on the date for which it was called
may be adjourned from time to time without further notice to Shareholders to a date not more than 120 days after the original record date. A meeting of Shareholders may not be adjourned for more than 120 days after the original record date for such
meeting without giving the Shareholders notice of the adjournment and the new meeting date. Except as otherwise set forth in Article IV, Section 8 hereof, the vote of the holders of one-third of the Shares cast shall be required in order to
adjourn a meeting of Shareholders with regard to a particular proposal scheduled to be voted on at such meeting or to adjourn such meeting entirely.
ARTICLE V
NOTICES
Section 1.
Methods of Giving Notice
. Whenever, under the provisions of applicable law or of the Agreement or of these
Bylaws, notice is required to be given to any Trustee or Shareholder, it shall not, unless otherwise provided herein, be construed to mean personal notice, but such notice may be given orally in person, or by telephone (promptly confirmed in
writing) or in writing, by mail addressed to such Trustee at his or her last given address or to such Shareholder at his address as it appears on the records of the Trust, with postage thereon prepaid, and such notice shall be deemed to be given at
the time when the same shall be deposited in the United States mail. Notice to Trustees or members of a committee or sub-committee may also be given by telex, telegram, facsimile, electronic-mail or via overnight courier. If sent by telex or
facsimile, notice to a Trustee or member of a committee or sub-committee shall be deemed to be given upon transmittal; if sent by telegram, notice to a Trustee or member of a committee or sub-committee shall be deemed to be given when the telegram,
so addressed, is delivered to the telegraph company; if sent by electronic-mail, notice to a Trustee or member of a committee or sub-committee shall be deemed to be given and shall be presumed valid when the Trust’s electronic-mail server
reflects the electronic-mail message as having been sent; and if sent via overnight courier, notice to a Trustee or member of a committee or sub-committee shall be deemed to be given when delivered against a receipt therefor.
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Section 2.
Annual Meeting Notice Requirements for Nominations and Proposals by
Shareholders
.
(a) For nominations or other business to be properly brought before an annual meeting by a Shareholder, the Shareholder
must have given timely notice thereof in writing to the Secretary of the Trust and such other business must otherwise be a proper matter for action by Shareholders. To be timely, a Shareholder’s notice shall be delivered to the Secretary at the
principal executive offices of the Trust not later than the close of business on the 90
th
day, nor earlier than the close of business on the
120
th
day, prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is advanced by more than 30 days or
delayed by more than 60 days from such anniversary date or if the Trust has not previously held an annual meeting, notice by the Shareholder to be timely must be so delivered not earlier than the close of business on the 120
th
day prior to such annual meeting and not later than the close of business on the later of the 90
th
day prior to such annual meeting or the tenth
day following the day on which public announcement of the date of such meeting is first made by the Trust. In no event shall the public announcement of a postponement or adjournment of an annual meeting to a later date or time commence a new time
period for the giving of a Shareholder’s notice as described above. Such Shareholder’s notice shall set forth (A) as to each person whom the Shareholder proposes to nominate for election or reelection as a Trustee all information
relating to such person that is required to be disclosed in solicitations of proxies for election of Trustees in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a Trustee if elected); (B) as to any other business that the Shareholder proposes to bring
before the meeting, a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest in such business of such Shareholder and of the beneficial owner, if
any, on whose behalf the proposal is made; and (C) as to the Shareholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made, (i) the name and address of such Shareholder, as they appear
on the Trust’s books, and of such beneficial owner and (ii) the number of Shares of the Trust which are owned beneficially and of record by such Shareholder and such beneficial owner.
(b) Notwithstanding anything in the second sentence of paragraph (a) of this Section 2 to the contrary, in the event that the number
of Trustees to be elected to the Board of Trustees is increased and there is no public announcement by the Trust naming all of the nominees for Trustee or specifying the size of the increased Board of Trustees at least 100 days prior to the first
anniversary of the preceding year’s annual meeting, a Shareholder’s notice required by this Section 2 shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be
delivered to the Secretary at the principal executive offices of the Trust not later than the close of business on the tenth day following the day on which such public announcement is first made by the Trust.
Section 3.
Special Meeting Notice Requirement for Nominations and Proposals by Shareholders
. Only such business shall be conducted
at a special meeting of Shareholders as shall have been brought before the meeting pursuant to the Trust’s notice of meeting. Nominations of persons for election to the Board of Trustees may be made at a special meeting of Shareholders at which
Trustees are to be elected (A) pursuant to the Trust’s notice of meeting, (B) by or at the direction of the Board of Trustees or (C) provided that the Board of
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Trustees has determined that Trustees shall be elected at such special meeting, by any Shareholder of the Trust who is a Shareholder of record both at the time of giving of notice provided for in
Section 2(a) of this Article V and at the time of the special meeting, who is entitled to vote at the meeting and who complied with the notice procedures set forth in Section 2(a) of this Article V. In the event the Trust calls a special
meeting of Shareholders for the purpose of electing one or more Trustees to the Board of Trustees, any such Shareholder may nominate a person or persons (as the case may be) for election to such position as specified in the Trust’s notice of
meeting, if the Shareholder’s notice containing the information required by this Section 2(a) shall be delivered to the Secretary at the principal executive offices of the Trust not earlier than the close of business on the 120
th
day prior to such special meeting and not later than the close of business on the later of the 90
th
day prior to such special meeting or the
tenth day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Trustees to be elected at such meeting. In no event shall the public announcement of a
postponement or adjournment of a special meeting to a later date or time commence a new time period for the giving of a Shareholder’s notice as described above.
Section 4.
Written Waiver
. Whenever any notice is required to be given under the provisions of applicable law or of the Agreement
or of these Bylaws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto.
ARTICLE VI
CERTIFICATES
OF SHARES AND SHARE OWNERSHIP
Section 1.
Uncertificated Shares
. Except as otherwise required by applicable law or the
Governing Instrument, the Trust shall not issue share certificates and no Shareholder shall have the right to demand or require that a certificate be issued to him, her or it.
Section 2.
Transfer of Shares
. Shares shall be transferable on the records of the Trust only by the record holder thereof or by
its agent duly authorized in writing, upon delivery to the transfer agent of the Trust of a duly executed instrument of transfer, together with such evidence of the genuineness of each such execution and authorization and of other matters (including
compliance with any securities laws) as may reasonably be required. Upon such delivery the transfer shall be recorded on the applicable register of the Trust. Until such record is made, the Shareholder shall be deemed to be the holder of such Shares
for all purposes hereof and neither the Trustees nor any transfer agent or registrar nor any officer, employee or agent of the Trust shall be affected by any notice of the proposed transfer.
Section 3.
Shareholder Book
. The Trust shall keep or cause to be kept a Shareholder book, which may be maintained by means of
computer systems, containing the names, alphabetically arranged, of all persons who are Shareholders of the Trust, showing their places of residence, the number of any Shares held by them, respectively, and the dates when they became the record
owners thereof.
Section 4.
Registered Shareholders
. The Trust shall be entitled to recognize the exclusive right of a person
registered on its books as the owner of Shares to receive dividends, and to vote as such owner, and shall not be bound to recognize any equitable or other claim of interest in such Share or Shares on the part of any other person, whether or not it
shall have express or other notice hereof.
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Section 5.
Record Date for Receiving Dividends and Other Actions
. In order that the
Trustees may determine the Shareholders entitled to receive payment of any dividend or other distribution of allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of Shares or for the purpose of
any other lawful action, the Board of Trustees may fix a record date, which record date (i) shall be set forth in the resolution or resolutions authorizing the payment of such dividend or other lawful action and (ii) shall not precede the
date upon which the resolution fixing the record date is adopted by the Board of Trustees.
ARTICLE VII
GENERAL PROVISIONS
Section 1.
Seal
. The Trust is not required to have any seal, and the adoption or use of a seal shall be purely ornamental and be
of no legal effect. The seal, if any, of the Trust may be affixed to any instrument, and the seal and its attestation may be lithographed, engraved or otherwise printed on any document with the same force and effect as if it had been imprinted and
affixed manually in the same manner and with the same force and effect as if done by a Delaware business corporation. The presence or absences of a seal shall have no effect on the validity, enforceability or binding nature of any document or
instrument that is otherwise duly authorized, executed and delivered.
Section 2.
Severability
. The provisions of these Bylaws
are severable. If any provision hereof shall be held invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall attach only to such provision only in such jurisdiction and shall not affect any other provision of these
Bylaws.
Section 3.
Headings
. Headings are placed in these Bylaws for convenience of reference only and in case of any
conflict, the text of these Bylaws rather than the headings shall control.
ARTICLE VIII
INDEMNIFICATION
Section 1.
Indemnification
.
(a) To the maximum extent permitted by law, the Trust shall indemnify any person who was or is a party or is threatened to be made a party to,
or is involved as a witness in, any proceeding (other than a proceeding by or in the right of the Trust) by reason of the fact that such person is or was a Covered Person, against expenses, judgments, fines and amounts paid in settlement actually
and reasonably incurred by such person in connection with such proceeding.
(b) To the maximum extent permitted by law, the Trust shall
indemnify any person who was or is a party or is threatened to be made a party to, or is involved as a witness in, any proceeding by or in the right of the Trust to procure a judgment in its favor by reason of the fact that such person is or was a
Covered Person, against expenses actually and reasonably incurred by that person in connection with the defense or settlement of such proceeding.
11
(c) Notwithstanding any provision to the contrary contained herein, no Covered Person shall be
indemnified for any expenses, judgments, fines, amounts paid in settlement, or other liability or loss arising by reason of disabling conduct. The termination of any proceeding by conviction, or a plea of
nolo contendere
or its equivalent, or
an entry of an order of probation prior to judgment, creates a rebuttable presumption that the person engaged in disabling conduct.
Section 2.
Advance Payment of Indemnification Expenses
. To the maximum extent permitted by law, the Trust shall advance to any
person who was or is a party or is threatened to be made a party to, or is involved as a witness in, any proceeding by reason of the fact that such person is or was a Trustee or officer of the Trust the expenses actually and reasonably incurred by
such person in connection with the defense of such proceeding in advance of its final disposition. To the maximum extent permitted by law, the Trust may advance to any person who was or is a party or is threatened to be made a party to any
proceeding by reason of the fact that such person is or was a Covered Person (other than a Trustee or officer of the Trust) the expenses actually and reasonably incurred by such person in connection with the defense of such proceeding in advance of
its final disposition. Notwithstanding any provision to the contrary contained herein, the Trust shall not advance expenses to any Covered Person (including a Trustee or officer of the Trust) unless:
(a) the Trust has received an undertaking by or on behalf of such Covered Person that the amount of all expenses so advanced will be paid over
by such person to the Trust unless it is ultimately determined that such person is entitled to indemnification for such expenses; and
(b)
(i) such Covered Person shall have provided appropriate security for such undertaking, or (ii) such Covered Person shall have insured the Trust against losses arising out of any such advance payments, or (iii) either (1) the Trustees,
by the vote of a majority of a quorum of qualifying Trustees, or (2) independent legal counsel in a written opinion, shall have determined, based upon a review of readily available facts (as opposed to a full trial-type inquiry) that there is
reason to believe that such Covered Person ultimately will be found entitled to indemnification.
Section 3.
Determination of
Entitlement to Indemnification
. Any indemnification required or permitted under this Article VIII (unless ordered by a court) shall be made by the Trust only as authorized in the specific case upon a reasonable determination, based upon a review
of the facts, that the Covered Person is entitled to indemnification because (i) he or she is not liable by reason of disabling conduct, or (ii) in cases where there is no liability, he or she has not engaged in disabling conduct. Such
determination shall be made by (i) the vote of a majority of a quorum of qualifying Trustees; or (ii) if there are no such Trustees, or if such Trustees so direct, by independent legal counsel in a written opinion. Notwithstanding anything
to the contrary in Section 2 of this Article VIII, if a determination that a Covered Person engaged in disabling conduct is made in accordance with this Section 3, no further advances of expenses shall be made, and all prior advances, and
insurance premiums paid for by the Trust, if applicable, must be repaid.
Section 4.
Contract Rights
. With respect to any
person who was or is a party or is threatened to be made a party to, or is involved as a witness in, any proceeding by reason of the fact that such person is or was a Covered Person, the rights to indemnification conferred in Section 1 of this
Article VIII, and with respect to any person who was or is a party or is
12
threatened to be made a party to, or is involved as a witness in, any proceeding by reason of the fact that such person is or was a Trustee or officer of the Trust, the advancement of expenses
conferred in Section 2 of this Article VIII shall be contract rights. Any amendment, repeal, or modification of, or adoption of any provision inconsistent with, this Article VIII (or any provision hereof) shall not adversely affect any right to
indemnification or advancement of expenses granted to any such person pursuant hereto with respect to any act or omission of such person occurring prior to the time of such amendment, repeal, modification, or adoption (regardless of whether the
proceeding relating to such acts or omissions is commenced before or after the time of such amendment, repeal, modification, or adoption). Any amendment or modification of, or adoption of any provision inconsistent with, this Article VIII (or any
provision hereof), that has the effect of positively affecting any right to indemnification or advancement of expenses granted to any such person pursuant hereto, shall not apply retroactively to any person who was not serving as a Trustee, officer,
employee or agent of the Trust at the time of such amendment, modification or adoption.
Section 5.
Claims
.
(a) If (X) a claim under Section 1 of this Article VIII with respect to any right to indemnification is not paid in full by the Trust
within sixty days after a written demand has been received by the Trust or (Y) a claim under Section 2 of this Article VIII with respect to any right to the advancement of expenses is not paid in full by the Trust within thirty days after
a written demand has been received by the Trust, then the Covered Person seeking to enforce a right to indemnification or to an advancement of expenses, as the case may be, may at any time thereafter bring suit against the Trust to recover the
unpaid amount of the claim.
(b) If successful in whole or in part in any suit brought pursuant to Section 5(a) of this Article VIII,
or in a suit brought by the Trust to recover an advancement of expenses (whether pursuant to the terms of an undertaking or otherwise), the Covered Person seeking to enforce a right to indemnification or an advancement of expenses hereunder or the
Covered Person from whom the Trust sought to recover an advancement of expenses, as the case may be, shall be entitled to be paid by the Trust the reasonable expenses (including attorneys’ fees) of prosecuting or defending such suit.
Section 6.
Definitions
. For purposes of this Article VIII: (a) references to “Trust” include Invesco Exchange Fund,
a California limited partnership, and any domestic or foreign predecessor entity of this Trust in a merger, consolidation, or other transaction in which the predecessor’s existence ceased upon consummation of the transaction; (b) the term
“disabling conduct” means willful misfeasance, bad faith, gross negligence, or the reckless disregard of the duties involved in the conduct of the Covered Person’s office with the Trust; (c) the term “expenses”
includes, without limitations, attorneys’ fees; (d) the term “proceeding” means any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative; and (e) the term
“qualifying Trustee” means any Trustee who is not an interested person (as defined in the 1940 Act) of the Trust and is not a party to the proceeding.
13
ARTICLE IX
AMENDMENTS
Section 1.
Amendments
. These Bylaws may be altered or repealed by the Trustees without the vote or approval of the Shareholders at
any regular or special meeting of the Board of Trustees without prior notice. These Bylaws may also be altered or repealed by the Shareholders at any special meeting of the Shareholders, but only if the Board of Trustees resolves to put a proposed
alteration or repealer to the vote of the Shareholders and notice of such alteration or repealer is contained in a notice of the special meeting being held for such purpose.
14
MASTER INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made this 30
th
day of September, 2015, by and between Invesco
Exchange Fund, a Delaware Statutory Trust (the “Fund”), and Invesco Advisers, Inc., a Delaware corporation (the “Adviser”).
RECITALS
WHEREAS, the
Fund is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company;
WHEREAS, the Adviser is registered under the Investment Advisers Act of 1940, as amended (the “Advisers Act”), as an investment
advisor and engages in the business of acting as an investment advisor;
WHEREAS, the Fund and the Adviser desire to enter into an
agreement to provide for investment advisory services to the Fund upon the terms and conditions hereinafter set forth;
NOW THEREFORE, in
consideration of the mutual covenants herein contained and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows:
1.
Advisory Services.
The Adviser shall act as investment advisor for the Fund and shall, in such capacity,
supervise all aspects of the Fund’s operations, including the investment and reinvestment of cash, securities or other properties comprising the Fund’s assets, subject at all times to the policies and control of the Board of Trustees. The
Adviser shall give the Fund the benefit of its best judgment, efforts and facilities in rendering its services as investment advisor.
2.
Investment Analysis and Implementation.
In carrying out its obligations under Section 1 hereof, the
Adviser shall:
(a) supervise all aspects of the operations of the Fund;
(b) obtain and evaluate pertinent information about significant developments and economic, statistical and financial data,
domestic, foreign or otherwise, whether affecting the economy generally or the Fund, and whether concerning the individual issuers whose securities are included in the assets of the Fund or the activities in which such issuers engage, or with
respect to securities which the Adviser considers desirable for inclusion in the Fund’s assets;
(c) determine
which issuers and securities shall be represented in the Fund’s investment portfolios and regularly report thereon to the Board of Trustees;
(d) formulate and implement continuing programs for the purchases and sales of the securities of such issuers and
regularly report thereon to the Board of Trustees; and
(e) take, on behalf of the Fund, all actions which appear
to the Fund necessary to carry into effect such purchase and sale programs and supervisory functions as aforesaid, including but not limited to the placing of orders for the purchase and sale of securities for the Fund.
3.
Securities Lending Duties and Fees.
The Adviser agrees to provide the following services in connection with
the securities lending activities of the Fund: (a) oversee participation in the securities lending program to ensure compliance with all applicable regulatory and investment guidelines; (b) assist the securities lending agent or principal
(the “Agent”) in determining which specific securities are available for loan; (c) monitor the Agent to ensure that securities loans are effected in accordance with the Adviser’s instructions and with procedures adopted by the
Board of Trustees; (d) prepare appropriate periodic reports for, and seek appropriate approvals from, the Board of Trustees with respect to securities lending activities; (e) respond to Agent inquiries; and (f) perform such other
duties as necessary.
As compensation for such services provided by the Adviser in connection with
securities lending activities, the Fund shall pay the Adviser a fee equal to 25% of the net monthly interest or fee income retained or paid to the Fund from such activities.
4.
Delegation of Responsibilities.
The Adviser is authorized to delegate any or all of its rights, duties and
obligations under this Agreement to one or more sub-advisers, and may enter into agreements with sub-advisers, and may replace any such sub-advisers from time to time in its discretion, in accordance with the 1940 Act, the Advisers Act, and rules
and regulations thereunder, as such statutes, rules and regulations are amended from time to time or are interpreted from time to time by the staff of the Securities and Exchange Commission (“SEC”), and if applicable, exemptive orders or
similar relief granted by the SEC and upon receipt of approval of such sub-advisers by the Board of Trustees and by shareholders (unless any such approval is not required by such statutes, rules, regulations, interpretations, orders or similar
relief).
5.
Independent Contractors.
The Adviser and any sub-advisers shall for all purposes herein be
deemed to be independent contractors and shall, unless otherwise expressly provided or authorized, have no authority to act for or represent the Fund in any way or otherwise be deemed to be an agent of the Fund.
6.
Control by Board of Trustees.
Any investment program undertaken by the Adviser pursuant to this Agreement,
as well as any other activities undertaken by the Adviser on behalf of the Fund, shall at all times be subject to any directives of the Board of Trustees.
7.
Compliance with Applicable Requirements.
In carrying out its obligations under this Agreement, the Adviser
shall at all times conform to:
(a) all applicable provisions of the 1940 Act and the Advisers Act and any rules and
regulations adopted thereunder;
(b) the provisions of the registration statement of the Fund, as the same may be
amended from time to time under the Securities Act of 1933 and the 1940 Act;
(c) the provisions of the Declaration of
Trust, as the same may be amended from time to time;
(d) the provisions of the by-laws of the Fund, as the same may
be amended from time to time; and
(e) any other applicable provisions of state, federal or foreign law.
8.
Broker-Dealer Relationships.
The Adviser is responsible for decisions to buy and sell securities for the
Fund, broker-dealer selection, and negotiation of brokerage commission rates.
(a) The Adviser’s primary
consideration in effecting a security transaction will be to obtain the best execution.
(b) In selecting a
broker-dealer to execute each particular transaction, the Adviser will take the following into consideration: the best net price available; the reliability, integrity and financial condition of the broker-dealer; the size of and the difficulty in
executing the order; and the value of the expected contribution of the broker-dealer to the investment performance of the Fund on a continuing basis. Accordingly, the price to the Fund in any transaction may be less favorable than that available
from another broker-dealer if the difference is reasonably justified by other aspects of the fund execution services offered.
(c) Subject to such policies as the Board of Trustees may from time to time determine, the Adviser shall not be deemed to
have acted unlawfully or to have breached any duty created by this Agreement or otherwise solely by reason of its having caused the Fund to pay a broker or dealer that provides brokerage and research services to the Adviser an amount of commission
for effecting a fund investment transaction in excess of the amount of commission another broker or dealer would have charged for effecting that transaction, if the Adviser determines in good faith that such amount of commission was reasonable in
relation to the value of
2
the brokerage and research services provided by such broker or dealer, viewed in terms of either that particular transaction or the Adviser’s overall responsibilities with respect to the
Fund, and to other clients of the Adviser as to which the Adviser exercises investment discretion. The Adviser is further authorized to allocate the orders placed by it on behalf of the Fund to such brokers and dealers who also provide research or
statistical material, or other services to the Fund, to the Adviser, or to any sub-adviser. Such allocation shall be in such amounts and proportions as the Adviser shall determine and the Adviser will report on said allocations regularly to the
Board of Trustees indicating the brokers to whom such allocations have been made and the basis therefor.
(d) With
respect to the Fund, to the extent the Adviser does not delegate trading responsibility to one or more sub-advisers, in making decisions regarding broker-dealer relationships, the Adviser may take into consideration the recommendations of any
sub-adviser appointed to provide investment research or advisory services in connection with the Fund, and may take into consideration any research services provided to such sub-adviser by broker-dealers.
(e) Subject to the other provisions of this Section 8, the 1940 Act, the Securities Exchange Act of 1934, and rules
and regulations thereunder, as such statutes, rules and regulations are amended from time to time or are interpreted from time to time by the staff of the SEC, any exemptive orders issued by the SEC, and any other applicable provisions of law, the
Adviser may select brokers or dealers with which it or the Fund are affiliated.
9.
Compensation.
The
compensation that the Fund shall pay the Adviser is set forth in Appendix A attached hereto.
10.
Expenses of
the Fund.
All of the ordinary business expenses incurred in the operations of the Fund and the offering of its shares shall be borne by the Fund unless specifically provided otherwise in this Agreement. These expenses borne by the Fund
include but are not limited to brokerage commissions, taxes, legal, accounting, auditing, or governmental fees, the cost of preparing share certificates, custodian, transfer and shareholder service agent costs, expenses of issue, sale, redemption
and repurchase of shares, expenses of registering and qualifying shares for sale, expenses relating to trustees and shareholder meetings, the cost of preparing and distributing reports and notices to shareholders, the fees and other expenses
incurred by the Fund in connection with membership in investment company organizations and the cost of printing copies of prospectuses and statements of additional information distributed to the Fund’s shareholders.
11.
Services to Other Companies or Accounts.
The Fund understands that the Adviser now acts, will continue to
act and may act in the future as investment manager or Adviser to fiduciary and other managed accounts, and as investment manager or adviser to other investment companies, including any offshore entities, or accounts, and the Fund has no objection
to the Adviser so acting, provided that whenever the Fund and one or more other investment companies or accounts managed or advised by the Adviser have available funds for investment, investments suitable and appropriate for each will be allocated
in accordance with a formula believed to be equitable to each company and account. The Fund recognizes that in some cases this procedure may adversely affect the size of the positions obtainable and the prices realized for the Fund.
12.
Non-Exclusivity.
The Fund understands that the persons employed by the Adviser to assist in the
performance of the Adviser’s duties under this Agreement will not devote their full time to such service and nothing contained in this Agreement shall be deemed to limit or restrict the right of the Adviser or any affiliate of the Adviser to
engage in and devote time and attention to other businesses or to render services of whatever kind or nature. The Fund further understands and agrees that officers or directors of the Adviser may serve as officers or partners of the Fund, and that
officers or partners of the Fund may serve as officers or directors of the Adviser to the extent permitted by law; and that the officers and directors of the Adviser are not prohibited from engaging in any other business activity or from rendering
services to any other person, or from serving as partners, officers, directors or trustees of any other firm or trust, including other investment advisory companies.
13.
Effective Date, Term and Approval.
This Agreement shall become effective with respect to the Fund, if
approved by the shareholders of the Fund, on the date indicated above. If so approved, this Agreement shall
3
thereafter continue in force and effect until two years after the date indicated above, and may be continued from year to year thereafter, provided that the continuation of the Agreement is
specifically approved at least annually:
(a) (i) by the Board of Trustees or (ii) by the vote of “a
majority of the outstanding voting securities” of the Fund (as defined in Section 2(a)(42) of the 1940 Act); and
(b) by the affirmative vote of a majority of the Trustees who are not parties to this Agreement or “interested
persons” (as defined in the 1940 Act) of a party to this Agreement (other than as Trustees of the Fund), by votes cast in person at a meeting specifically called for such purpose.
14.
Termination.
This Agreement may be terminated as to the Fund at any time, without the payment of any
penalty, by vote of the Board of Trustees or by vote of a majority of the outstanding voting securities of the Fund, or by the Adviser, on sixty (60) days’ written notice to the other party. The notice provided for herein may be waived by
the party entitled to receipt thereof. This Agreement shall automatically terminate in the event of its assignment, the term “assignment” for purposes of this paragraph having the meaning defined in Section 2(a)(4) of the 1940 Act.
15.
Amendment.
No amendment of this Agreement shall be effective unless it is in writing and signed by
the party against which enforcement of the amendment is sought.
16.
Liability of Adviser and Fund.
In the
absence of willful misfeasance, bad faith, gross negligence or reckless disregard of obligations or duties hereunder on the part of the Adviser or any of its officers, directors or employees, the Adviser shall not be subject to liability to the Fund
or to any shareholder of the Fund for any act or omission in the course of, or connected with, rendering services hereunder or for any losses that may be sustained in the purchase, holding or sale of any security.
17.
Liability of Shareholders.
Notice is hereby given that, as provided by applicable law, the obligations of
or arising out of this Agreement are not binding upon any of the shareholders of the Fund individually but are binding only upon the assets and property of the Fund and that the shareholders shall be entitled, to the fullest extent permitted by
applicable law, to the same limitation on personal liability as shareholders of private corporations for profit.
18.
Notices.
Any notices under this Agreement shall be in writing, addressed and delivered, telecopied or
mailed postage paid, to the other party entitled to receipt thereof at such address as such party may designate for the receipt of such notice. Until further notice to the other party, it is agreed that the address of the Fund and that of the
Adviser shall be 11 Greenway Plaza, Suite 1000, Houston, Texas 77046-1173.
19.
Questions of
Interpretation.
Any question of interpretation of any term or provision of this Agreement having a counterpart in or otherwise derived from a term or provision of the 1940 Act or the Advisers Act shall be resolved by reference to such term
or provision of the 1940 Act or the Advisers Act and to interpretations thereof, if any, by the United States Courts or in the absence of any controlling decision of any such court, by rules, regulations or orders of the SEC issued pursuant to said
Acts. In addition, where the effect of a requirement of the 1940 Act or the Advisers Act reflected in any provision of the Agreement is revised by rule, regulation or order of the SEC, such provision shall be deemed to incorporate the effect of such
rule, regulation or order. Subject to the foregoing, this Agreement shall be governed by and construed in accordance with the laws (without reference to conflicts of law provisions) of the State of Texas.
20.
License Agreement.
The Fund shall have the non-exclusive right to use the name “Invesco” to
designate any current or future series of shares only so long as Invesco Advisers, Inc. serves as investment manager or Adviser to the Fund with respect to such series of shares.
4
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in duplicate by
their respective officers on the day and year first written above.
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Invesco Exchange Fund
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Attest:
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By:
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/s/ Seba P. Kurian
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By:
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/s/ John M. Zerr
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Seba P. Kurian
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Name:
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John M. Zerr
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Assistant Secretary
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Title:
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Senior Vice President
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(SEAL)
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Invesco Advisers, Inc.
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Attest:
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By:
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/s/ Seba P. Kurian
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By:
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/s/ John M. Zerr
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Seba P. Kurian
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Name:
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John M. Zerr
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Assistant Secretary
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Title:
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Senior Vice President
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(SEAL)
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5
APPENDIX A
COMPENSATION TO THE ADVISER
The Fund shall pay the Adviser, out of its assets, as full compensation for all services rendered, an advisory fee for the Fund set forth
below. Such fee shall be calculated by applying the following annual rates to the average daily net assets of the Fund for the calendar year.
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Fund
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Annual Rate
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Invesco Exchange Fund
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0.30% of the Fund’s average net assets
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6
MASTER INTERGROUP SUB-ADVISORY CONTRACT
This contract is made as of September 30, 2015 by and among Invesco Advisers, Inc. (the “Adviser”) and each of Invesco
Canada Ltd., Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Ltd., Invesco Hong Kong Limited, and Invesco Senior Secured Management, Inc. (each a “Sub-Adviser” and,
collectively, the “Sub-Advisers”).
WHEREAS:
A) The Adviser has entered into an investment advisory agreement with Invesco Exchange Fund (the “Fund”),
an open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”);
B) The Adviser is authorized to delegate certain, any or all of its rights, duties and obligations under investment
advisory agreements to sub-advisers, including sub-advisers that are affiliated with the Adviser;
C) Each Sub-Adviser
represents that it is registered with the U.S. Securities and Exchange Commission (“SEC”) as an investment adviser under the Investment Advisers Act of 1940 (“Advisers Act”) as an investment adviser, or will be so registered
prior to providing any services to the Fund under this Contract, and engages in the business of acting as an investment adviser; and
D) The Sub-Advisers and their affiliates have personnel in various locations throughout the world and have been formed in
part for the purpose of researching and compiling information and recommendations on the economies of various countries and securities of issuers located in such countries or on various types of investments and investment techniques, and providing
investment advisory services in connection therewith.
NOW THEREFORE, in consideration of the promises and the mutual covenants herein
contained, it is agreed between the parties hereto as follows:
1.
Appointment.
The Adviser hereby appoints
each Sub-Adviser as a sub-adviser of the Fund for the period and on the terms set forth herein. Each Sub-Adviser accepts such appointment and agrees to render the services herein set forth, for the compensation herein provided.
2.
Duties as Sub-Adviser.
Subject to paragraph 7 below, the Adviser may, in its discretion, appoint each
Sub-Advisor to perform one or more of the following services with respect to all or a portion of the investments of the Fund. The services and the portion of the investments of the Fund to be advised or managed by each Sub-Adviser shall be as agreed
upon from time to time by the Adviser and the Sub-Advisers. Each Sub-Adviser shall pay the salaries and fees of all personnel of such Sub-Adviser performing services for the Fund related to research, statistical and investment activities.
(a)
Investment Advice
.
If and to the extent requested by the Adviser, each Sub-Adviser shall provide
investment advice to the Fund and the Adviser with respect to all or a portion of the investments of the Fund or with respect to various investment techniques, and in connection with such advice shall furnish the Fund and the Adviser with such
factual information, research reports and investment recommendations as the Adviser may reasonably require.
(b)
Order Execution
.
If and to the extent requested by the Adviser, each Sub-Adviser shall place orders for
the purchase and sale of portfolio securities or other investments for the Fund. In so doing, each Sub-Adviser agrees that it shall comply with paragraph 3 below.
(c)
Discretionary Investment Management
.
If and to the extent requested by the Adviser, each Sub-Adviser
shall, subject to the supervision of the Fund’s Board of Trustees (the “Board”) and the Adviser, manage all or a portion of the investments of the Fund in accordance with the investment objectives, policies and limitations provided in
the Fund’s Registration Statement and such other limitations as the Fund or the Adviser may impose
with respect to the Fund by notice to the applicable Sub-Adviser(s) and otherwise in accordance with paragraph 5 below. With respect to the portion of the investments of the Fund under its
management, each Sub-Adviser is authorized to: (i) make investment decisions on behalf of the Fund with regard to any stock, bond, other security or investment instrument, including but not limited to foreign currencies, futures, options and
other derivatives, and with regard to borrowing money; (ii) place orders for the purchase and sale of securities or other investment instruments with such brokers and dealers as the Sub-Adviser may select; and (iii) upon the request of the
Adviser, provide additional investment management services to the Fund, including but not limited to managing the Fund’s cash and cash equivalents and lending securities on behalf of the Fund. In selecting brokers or dealers to execute trades
for the Fund, each Sub-Adviser will comply with its written policies and procedures regarding brokerage and trading, which policies and procedures shall have been approved by the Board. All discretionary investment management and any other
activities of each Sub-Adviser shall at all times be subject to the control and direction of the Adviser and the Board.
3.
Broker-Dealer Relationships.
Each Sub-Adviser agrees that, in placing orders with brokers and dealers, it will
attempt to obtain the best net result in terms of price and execution. Consistent with this obligation, each Sub-Adviser may, in its discretion, purchase and sell portfolio securities from and to brokers and dealers who sell shares of the Fund or
provide the Fund, the Adviser’s other clients, or a Sub-Adviser’s other clients with research, analysis, advice and similar services. Each Sub-Adviser may pay to brokers and dealers, in return for such research and analysis, a higher
commission or spread than may be charged by other brokers and dealers, subject to such Sub-Adviser determining in good faith that such commission or spread is reasonable in terms either of the particular transaction or of the overall responsibility
of the Adviser and such Sub-Adviser to the Fund and their other clients and that the total commissions or spreads paid by the Fund will be reasonable in relation to the benefits to the Fund over the long term. In no instance will portfolio
securities be purchased from or sold to a Sub-Adviser, or any affiliated person thereof, except in accordance with the applicable securities laws and the rules and regulations thereunder and any exemptive orders currently in effect. Whenever a
Sub-Adviser simultaneously places orders to purchase or sell the same security on behalf of the Fund and one or more other accounts advised by such Sub-Adviser, such orders will be allocated as to price and amount among all such accounts in a manner
believed to be equitable to each account.
4.
Books and Records.
Each Sub-Adviser will maintain all required
books and records with respect to the securities transactions of the Fund, and will furnish the Board and the Adviser with such periodic and special reports as the Board or the Adviser reasonably may request. Each Sub-Adviser hereby agrees that all
records which it maintains for the Adviser are the property of the Adviser, and agrees to preserve for the periods prescribed by applicable law any records which it maintains for the Adviser and which are required to be maintained, and further
agrees to surrender promptly to the Adviser any records which it maintains for the Adviser upon request by the Adviser.
5.
Further Duties
.
(a) In all matters relating to the performance of this Contract, each Sub-Adviser will act in conformity with the
Declaration of Trust, By-Laws and Registration Statement of the Fund and with the instructions and directions of the Adviser and the Board and will comply with the requirements of the 1940 Act, the rules, regulations, exemptive orders and no-action
positions thereunder, and all other applicable laws and regulations.
(b) Each Sub-Adviser shall maintain compliance
procedures for the Fund that it and the Adviser reasonably believe are adequate to ensure compliance with the federal securities laws (as defined in Rule 38a-1 of the 1940 Act) and the investment objective(s) and policies as stated in the
Fund’s prospectus and statement of additional information. Each Sub-Adviser at its expense will provide the Adviser or the Fund’s Chief Compliance Officer with such compliance reports relating to its duties under this Contract as may be
requested from time to time. Notwithstanding the foregoing, each Sub-Adviser will promptly report to the Adviser any material violations of the federal securities laws (as defined in Rule 38a-1 of the 1940 Act) that it is or should be aware of
or of any material violation of the Sub-Adviser’s compliance policies and procedures that pertain to the Fund.
(c) Each Sub-Adviser at its expense will make available to the Board and the Adviser at reasonable times its portfolio
managers and other appropriate personnel, either in person or, at the mutual convenience of the Adviser and the Sub-Adviser, by telephone, in order to review the investment policies, performance and other investment
related information regarding the Fund and to consult with the Board and the Adviser regarding the Fund’s investment affairs, including economic, statistical and investment matters related
to the Sub-Adviser’s duties hereunder, and will provide periodic reports to the Adviser relating to the investment strategies it employs. Each Sub-Adviser and its personnel shall also cooperate fully with counsel and auditors for, and the Chief
Compliance Officer of, the Adviser and the Fund.
(d) Each Sub-Adviser will assist in the fair valuation of portfolio
securities held by the Fund. The Sub-Adviser will use its reasonable efforts to provide, based upon its own expertise, and to arrange with parties independent of the Sub-Adviser such as broker-dealers for the provision of, valuation information or
prices for securities for which prices are deemed by the Adviser or the Fund’s administrator not to be readily available in the ordinary course of business from an automated pricing service. In addition, each Sub-Adviser will assist the Fund
and its agents in determining whether prices obtained for valuation purposes accurately reflect market price information relating to the assets of the Fund at such times as the Adviser shall reasonably request, including but not limited to, the
hours after the close of a securities market and prior to the daily determination of the Fund’s net asset value per share.
(e) Each Sub-Adviser represents and warrants that it has adopted a code of ethics meeting the requirements of
Rule 17j-1 under the 1940 Act and the requirements of Rule 204A-1 under the Advisers Act and has provided the Adviser and the Board a copy of such code of ethics, together with evidence of its adoption, and will promptly provide copies of
any changes thereto, together with evidence of their adoption. Upon request of the Adviser, but in any event no less frequently than annually, each Sub-Adviser will supply the Adviser a written report that (A) describes any issues arising under
the code of ethics or procedures since the Sub-Adviser’s last report, including but not limited to material violations of the code of ethics or procedures and sanctions imposed in response to the material violations; and (B) certifies that
the procedures contained in the Sub-Adviser’s code of ethics are reasonably designed to prevent “access persons” from violating the code of ethics.
(f) Upon request of the Adviser, each Sub-Adviser will review draft reports to shareholders and other documents provided
or available to it and provide comments on a timely basis. In addition, each Sub-Adviser and each officer and portfolio manager thereof designated by the Adviser will provide on a timely basis such certifications or sub-certifications as the Adviser
may reasonably request in order to support and facilitate certifications required to be provided by the Fund’s Principal Executive Officer and Principal Financial Officer and will adopt such disclosure controls and procedures in support of the
disclosure controls and procedures adopted by the Fund as the Adviser, on behalf of the Fund, deems are reasonably necessary.
(g) Unless otherwise directed by the Adviser or the Board, each Sub-Adviser will vote all proxies received in accordance
with the Adviser’s proxy voting policy or, if the Sub-Adviser has a proxy voting policy approved by the Board, the
Sub-Adviser’s
proxy voting policy. Each Sub-Adviser shall maintain and shall forward
to the Fund or its designated agent such proxy voting information as is necessary for the Fund to timely file proxy voting results in accordance with Rule 30b1-4 of the 1940 Act.
(h) Each Sub-Adviser shall provide the Fund’s custodian on each business day with information relating to all
transactions concerning the assets of the Fund and shall provide the Adviser with such information upon request of the Adviser.
6.
Services Not Exclusive.
The services furnished by each Sub-Adviser hereunder are not to be deemed exclusive and
such Sub-Adviser shall be free to furnish similar services to others so long as its services under this Contract are not impaired thereby. Nothing in this Contract shall limit or restrict the right of any director, officer or employee of a
Sub-Adviser, who may also be a Trustee, officer or employee of the Fund, to engage in any other business or to devote his or her time and attention in part to the management or other aspects of any other business, whether of a similar nature or a
dissimilar nature.
7.
Use of Subsidiaries and Affiliates.
Each Sub-Adviser may perform any or all of the
services contemplated hereunder, including but not limited to providing investment advice to the Fund pursuant to paragraph 2(a) above and placing orders for the purchase and sale of portfolio securities or other investments for the Fund
pursuant to paragraph 2(b) above, directly or through such of its subsidiaries or other affiliates, including each of the other Sub-Advisers, as such Sub-Adviser shall determine; provided, however, that performance of such services
through such subsidiaries or other affiliates shall have been approved, when required by the 1940 Act, by (i) a vote of a majority of the independent Trustees who are not parties to this
Contract or “interested persons” (as defined in the 1940 Act) of a party to this Contract, other than as Board members (“Independent Trustees”), cast in person at a meeting called for the purpose of voting on such approval,
and/or (ii) a vote of a majority of that Fund’s outstanding voting securities.
8.
Compensation
.
(a) The only fees payable to the Sub-Advisers under this Contract are for providing discretionary investment
management services pursuant to paragraph 2(c) above. For such services, the Adviser will pay each Sub-Adviser a fee, computed daily and paid monthly, equal to (i) 40% of the monthly compensation that the Adviser receives from the Fund
pursuant to its advisory agreement with the Fund, multiplied by (ii) the fraction equal to the net assets of the Fund as to which the Sub-Adviser shall have provided discretionary investment management services pursuant to paragraph 2(c)
above for that month divided by the net assets of the Fund for that month. This fee shall be payable on or before the last business day of the next succeeding calendar month. This fee shall be reduced to reflect contractual or voluntary fee waivers
or expense limitations by the Adviser, if any, in effect from time to time as set forth in paragraph 9 below. In no event shall the aggregate monthly fees paid to the Sub-Advisers under this Contract exceed 40% of the monthly compensation that
the Adviser receives from the Fund pursuant to its advisory agreement with the Fund, as reduced to reflect contractual or voluntary fee waivers or expense limitations by the Adviser, if any.
(b) If this Contract becomes effective or terminates before the end of any month, the fees for the period from the
effective date to the end of the month or from the beginning of such month to the date of termination, as the case may be, shall be prorated according to the proportion which such period bears to the full month in which such effectiveness or
termination occurs.
(c) If a Sub-Adviser provides the services under paragraph 2(c) above to the Fund for a
period that is less than a full month, the fees for such period shall be prorated according to the proportion which such period bears to the applicable full month.
9.
Fee Waivers and Expense Limitations.
If, for any fiscal year of the Fund, the amount of the advisory fee which
such Fund would otherwise be obligated to pay to the Adviser is reduced because of contractual or voluntary fee waivers or expense limitations by the Adviser, the fee payable to each Sub-Adviser pursuant to paragraph 8 above shall be reduced
proportionately; and to the extent that the Adviser reimburses the Fund as a result of such expense limitations, such Sub-Adviser shall reimburse the Adviser that proportion of such reimbursement payments which the fee payable to each Sub-Adviser
pursuant to paragraph 8 above bears to the advisory fee under this Contract.
10.
Limitation of Liability of
Sub-Adviser and Indemnification.
No Sub-Adviser shall be liable for any costs or liabilities arising from any error of judgment or mistake of law or any loss suffered by the Fund in connection with the matters to which this Contract relates
except a loss resulting from willful misfeasance, bad faith or gross negligence on the part of such Sub-Adviser in the performance by such Sub-Adviser of its duties or from reckless disregard by such Sub-Adviser of its obligations and duties under
this Contract. Any person, even though also an officer, partner, employee, or agent of a Sub-Adviser, who may be or become a Trustee, officer, employee or agent of the Fund, shall be deemed, when rendering services to the Fund or acting with respect
to any business of the Fund, to be rendering such service to or acting solely for the the Fund and not as an officer, partner, employee, or agent or one under the control or direction of such Sub-Adviser even though paid by it.
11.
Duration and Termination
.
(a) This Contract shall become effective with respect to each Sub-Adviser upon the later of the date hereabove written and
the date that such Sub-Adviser is registered with the SEC as an investment adviser under the Advisers Act, if a Sub-Adviser is not so registered as of the date hereabove written; provided, however, that this Contract shall not take effect with
respect to the Fund unless it has first been approved (i) by a vote of a majority of the Independent Trustees, cast in person at a meeting called for the purpose of voting on such
approval, and (ii) by vote of a majority of the Fund’s outstanding voting securities, when required by the 1940 Act.
(b) Unless sooner terminated as provided herein, this Contract shall continue in force and effect until two years after
its effective date determined in 11(a). Thereafter, if not terminated, with respect to each Fund, this Contract shall continue automatically for successive periods not to exceed twelve months each, provided that such continuance is specifically
approved at least annually (i) by a vote of a majority of the Independent Trustees, cast in person at a meeting called for the purpose of voting on such approval, and (ii) by the Board or by vote of a majority of the outstanding voting
securities of that Fund.
(c) Notwithstanding the foregoing, with respect to the Fund or any Sub-Adviser(s), this
Contract may be terminated at any time, without the payment of any penalty, (i) by vote of the Board or by a vote of a majority of the outstanding voting securities of the Fund on sixty days’ written notice to such Sub-Adviser(s); or
(ii) by the Adviser on sixty days’ written notice to such Sub-Adviser(s); or (iii) by a Sub-Adviser on sixty days’ written notice to the Fund. Should this Contract be terminated with respect to a Sub-Adviser, the Adviser shall
assume the duties and responsibilities of such Sub-Adviser unless and until the Adviser appoints another Sub-Adviser to perform such duties and responsibilities. Termination of this Contract with respect to one Sub-Adviser(s) shall not affect the
continued effectiveness of this Contract with respect to any remaining Sub-Adviser(s). This Contract will automatically terminate in the event of its assignment.
12.
Amendment.
No provision of this Contract may be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought, and, when required by the 1940 Act, no amendment of this Contract shall be effective until approved by vote of a
majority of the Fund’s outstanding voting securities.
13.
Notices.
Any notices under this Contract shall
be in writing, addressed and delivered, telecopied or mailed postage paid, to the other party entitled to receipt thereof at such address as such party may designate for the receipt of such notice. Until further notice to the other party, it is
agreed that the address of the Fund and the Adviser shall be 11 Greenway Plaza, Suite 1000, Houston, Texas 77046-1173. Until further notice to the other party, it is agreed that the address of each Sub-Adviser shall be set forth in
Exhibit A attached hereto.
14.
Governing Law.
This Contract shall be construed in accordance with the
laws of the State of Texas and the 1940 Act. To the extent that the applicable laws of the State of Texas conflict with the applicable provisions of the 1940 Act, the latter shall control.
15.
Multiple Sub-Advisory Agreements.
This Contract has been signed by multiple parties; namely the Adviser, on one
hand, and each Sub-Adviser, on the other. The parties have signed one document for administrative convenience to avoid a multiplicity of documents. It is understood and agreed that this document shall constitute a separate sub-advisory agreement
between the Adviser and each Sub-Adviser with respect to the Fund, as if the Adviser and such Sub-Adviser had executed a separate sub-advisory agreement naming such Sub-Adviser as a sub-adviser to the Fund. With respect to any one Sub-Adviser,
(i) references in this Contract to “a Sub-Adviser” or to “each Sub-Adviser” shall be deemed to refer only to such Sub-Adviser, and (ii) the term “this Contract” shall be construed according to the foregoing
provisions.
16.
Miscellaneous.
The captions in this Contract are included for convenience of reference only
and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect. If any provision of this Contract shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this
Contract shall not be affected thereby. This Contract shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors. Any question of interpretation of any term or provision of this Contract having a
counterpart in or otherwise derived from a term or provision of the 1940 Act or the Advisers Act shall be resolved by reference to such term or provision of the 1940 Act or the Advisers Act and to interpretations thereof, if any, by the United
States Courts or in the absence of any controlling decision of any such court, by rules, regulations or orders of the SEC issued pursuant to said Acts. In addition, where the effect of a requirement of the 1940 Act or the Advisers Act reflected in
any provision of the Contract is revised by rule, regulation or order of the SEC, such provision shall be deemed to incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Contract to be executed by their officers
designated as of the day and year first above written.
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INVESCO ADVISERS, INC.
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Adviser
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By:
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Name:
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John M. Zerr
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Title:
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Senior Vice President
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INVESCO ASSET MANAGEMENT
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INVESCO ASSET MANAGEMENT
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DEUTSCHLAND GMBH
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LIMITED
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Sub-Adviser
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Sub-Adviser
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By:
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By:
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Name:
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Name:
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Title:
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Title:
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INVESCO ASSET MANAGEMENT (JAPAN) LIMITED
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Sub-Adviser
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By:
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Name:
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Title:
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INVESCO HONG KONG LIMITED
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INVESCO SENIOR SECURED MANAGEMENT, INC.
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Sub-Adviser
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Sub-Adviser
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By:
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By:
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Name:
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Name:
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Title:
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Title:
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INVESCO CANADA LTD.
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Sub-Adviser
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By:
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Name:
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Title:
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By:
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Name:
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Title:
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EXHIBIT A
Addresses of Sub-Advisers
Invesco
Asset Management Deutschland GmbH
An der Welle 5, 1st Floor
Frankfurt, Germany 60322
Invesco Asset Management Limited
30 Finsbury Square
London, United Kingdom
EC2A 1AG
ENGLAND
Invesco Asset Management (Japan) Limited
Roppongi Hills Mori
Tower 14F
6-10-1 Roppongi, Minato-ku, Tokyo 106-6114
Invesco Hong Kong Limited
41/F Citibank Tower
3 Garden Road, Central
Hong Kong
Invesco Senior Secured Management, Inc.
1166 Avenue of the
Americas, 27th Floor
New York, NY 10036
USA
Invesco Canada Ltd.
5140 Yonge Street
Suite 900
Toronto, ON, M2N 6X7
TERMINATION AGREEMENT
This Agreement is made as of January 16, 2015, by and among Invesco Advisers, Inc. (the “Adviser”) and Invesco Australia
Limited (the “Subadviser”).
BACKGROUND
The Adviser has entered into an investment advisory agreement with each of the Trusts (the “Trusts”), each on behalf of itself and
its series portfolios, if any, listed on Schedules A and B hereto, and with Invesco Exchange Fund (the “Limited Partnership”) (collectively, the “Invesco Funds”). The Adviser is authorized to delegate certain of its rights and
obligations under the advisory agreements to subadvisers and has entered into Master Intergroup Sub-Advisory Contracts for Mutual Funds with certain affiliated subadvisers including the Subadviser (the “Subadvisory Contracts”).
Capitalized terms not defined herein, are used as defined in the Subadvisory Contracts. The Adviser and the Subadviser desire to terminate the
Subadvisory Contracts solely with respect to the Subadviser. Pursuant to Section 11 of the Subadvisory Contracts, the contracts may be terminated at any time without the payment of any penalty with sixty (60) days’ written notice from
the Adviser to the Subadviser or from the Subadviser to a Trust or to the Limited Partnership.
Upon termination, the Adviser will assume
all the duties and responsibilities of the Subadviser. The Subadviser has not undertaken any current duties under the Subadvisory Contracts and has no existing obligations or responsibilities thereunder. The Adviser and the Subadviser, with notice
to and consent of the Invesco Funds, desire to terminate the Subadvisory Contracts solely with respect to the Subadviser with immediate effect.
NOW, THEREFORE, in consideration of the promises and the mutual covenants herein contained, it is
agreed between the parties hereto, as follows:
1. Effective on execution of this Agreement, all Subadvisory Contracts are terminated with
respect to the Subadviser.
2.
Notice to and Consent of Invesco Funds
. This Agreement provides notice to each of the Invesco Funds
of the termination of the Subadviser. By signing this Agreement, each Trust, on behalf of itself and its series portfolios, and the Limited Partnership acknowledge that the Subadvisory Contracts between the Adviser and the Subadviser will terminate
immediately with respect to the Subadviser, and waives the requirement for sixty (60) days prior notice.
3.
Effect on Other
Contracts
. For ease of administration, the Subadvisory Contracts were signed by multiple parties including other subadvisers. It is understood and agreed that this Termination Agreement only constitutes an agreement between the Adviser and the
Subadviser and in no way releases or affects any of the other Subadvisers or any other Subadvisory Contracts.
4.
Release
. In
consideration of the early termination of the Subadvisory Contracts, the Subadviser releases the Adviser and each of the Invesco Funds from any conditions or liabilities under the Subadvisory Contracts. The Subadviser acknowledges that no
compensation is due to the Subadviser upon this release.
- 2 -
IN WITNESS WHEREOF, the parties hereto have caused this Termination Agreement to be executed by
their officers as the day and year above first written.
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INVESCO ADVISERS, INC.
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By:
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/s/ John M. Zerr
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Name:
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John M. Zerr
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Title:
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Senior Vice President
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INVESCO AUSTRALIA LIMITED
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By:
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/s/ Nick Burrell /s/
Mark Yesberg
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Name:
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Nick Burrell
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Mark Yesberg
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Title:
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Company Secretary
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Director
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- 3 -
NOTICE ACKNOWLEDGED AND CONSENT TO IMMEDIATE TERMINATION
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Each Trust (listed on Schedule A) on behalf of itself and each Fund listed on Schedule A
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By:
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Name:
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Title:
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AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), on behalf of itself and each Portfolio listed on
Schedule B
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By:
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Name:
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Title:
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Short-Term Investments Trust, on behalf of itself and each Portfolio listed on Schedule B
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By:
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Name:
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Title:
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Invesco Exchange Fund (listed on Schedule A), a California limited partnership
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By:
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Name:
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Title:
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- 4 -
SCHEDULE A
AIM
Counselor Series Trust (Invesco Counselor Series Trust)
Invesco American Franchise Fund
Invesco California Tax-Free Income Trust
Invesco Core Plus Bond
Fund
Invesco Equally-Weighted S & P 500 Fund
Invesco
Equity and Income Fund
Invesco Floating Rate Fund
Invesco
Global Real Estate Income Fund
Invesco Growth and Income Fund
Invesco Low Volatility Equity Yield Fund
Invesco Pennsylvania
Tax Free Income Fund
Invesco S & P 500 Index Fund
Invesco Small Cap Discovery Fund
Invesco Strategic Real Return
Fund
AIM Equity Funds (Invesco Equity Funds)
Invesco Charter Fund
Invesco Diversified Dividend Fund
Invesco Summit Fund
AIM Funds Group (Invesco Funds Group)
Invesco European Small Company Fund
Invesco Global Core
Equity Fund
Invesco International Small Company Fund
Invesco Small Cap Equity Fund
AIM Growth Series (Invesco
Growth Series)
Invesco Alternative Strategies Fund
Invesco Balanced-Risk Retirement Now Fund
Invesco Balanced-Risk
Retirement 2020 Fund
Invesco Balanced-Risk Retirement 2030 Fund
Invesco Balanced-Risk Retirement 2040 Fund
Invesco Balanced-Risk
Retirement 2050 Fund
Invesco Conservative Allocation Fund
Invesco Convertible Securities Fund
Invesco Global Low
Volatility Equity Yield Fund
Invesco Growth Allocation Fund
Invesco Income Allocation Fund
Invesco International Allocation
Fund
Invesco Mid Cap Core Equity Fund
Invesco Multi-Asset
Inflation Fund
Invesco Moderate Allocation Fund
Invesco
Small Cap Growth Fund
Invesco U.S. Mortgage Fund
- 5 -
AIM International Mutual Funds (Invesco International Mutual Funds)
Invesco Asia Pacific Growth Fund
Invesco European Growth Fund
Invesco Global Growth Fund
Invesco Global Opportunities
Fund
Invesco Global Small & Mid Cap Growth Fund
Invesco International Core Equity Fund
Invesco International
Growth Fund
Invesco Select Opportunities Fund
AIM
Investment Funds (Invesco Investment Funds)
Invesco All Cap Market Neutral Fund
Invesco Balanced-Risk Allocation Fund
Invesco Balanced-Risk
Commodity Strategy Fund
Invesco China Fund
Invesco
Developing Markets Fund
Invesco Emerging Market Local Currency Debt Fund
Invesco Emerging Markets Equity Fund
Invesco Endeavor Fund
Invesco Global Health Care Fund
Invesco Global Infrastructure
Fund
Invesco Global Market Neutral Fund
Invesco Global
Markets Strategy Fund
Invesco Global Targeted Returns Fund
Invesco International Total Return Fund
Invesco Long/Short
Equity Fund
Invesco Low Volatility Emerging Markets Fund
Invesco Macro International Equity Fund
Invesco Macro Long/Short
Fund
Invesco MLP Fund
Invesco Pacific Growth Fund
Invesco Premium Income Fund
Invesco Select Companies Fund
Invesco Strategic Income Fund
Invesco Unconstrained Bond Fund
AIM Investment Securities Funds (Invesco Investment Securities Fund)
Invesco Corporate Bond Fund
Invesco Global Real Estate Fund
Invesco High Yield Fund
Invesco Limited Maturity Treasury Fund
Invesco Money Market Fund
Invesco Real Estate Fund
Invesco Short Term Bond Fund
Invesco U.S. Government Fund
- 6 -
AIM Sector Funds (Invesco Sector Funds)
Invesco American Value Fund
Invesco Comstock Fund
Invesco Dividend Income Fund
Invesco Energy Fund
Invesco Gold & Precious Metals Fund
Invesco Mid Cap
Growth Fund
Invesco Small Cap Value Fund
Invesco Technology
Fund
Invesco Technology Sector Fund
Invesco Value
Opportunities Fund
AIM Tax-Exempt Funds (Invesco Tax-Exempt Funds)
Invesco High Yield Municipal Fund
Invesco Intermediate Term
Municipal Fund
Invesco Municipal Income Fund
Invesco New
York Tax Free Income Fund
Invesco Tax-Exempt Cash Fund
Invesco Tax-Free Intermediate Fund
AIM Variable Insurance
Funds (Invesco Variable Insurance Funds)
Invesco V.I. American Franchise Fund
Invesco V.I. American Value Fund
Invesco V.I. Balanced-Risk
Allocation Fund
Invesco V.I. Comstock Fund
Invesco V.I.
Core Equity Fund
Invesco V.I. Diversified Dividend Fund
Invesco V.I. Diversified Income Fund
Invesco V.I.
Equally-Weighted S & P 500 Fund
Invesco V.I. Equity And Income Fund
Invesco V.I. Global Core Equity Fund
Invesco V.I. Global Health
Care Fund
Invesco V.I. Global Real Estate Fund
Invesco V.
I. Government Securities Fund
Invesco V.I. Growth And Income Fund
Invesco V.I. High Yield Fund
Invesco V.I. International Growth
Fund
Invesco V.I. Managed Volatility Fund
Invesco V.I. Mid
Cap Core Equity Fund
Invesco V.I. Mid Cap Growth Fund
Invesco V.I. Money Market Fund
Invesco V.I. S & P 500 Index
Fund
Invesco V.I. Small Cap Equity Fund
Invesco V.I.
Technology Fund
Invesco V.I. Value Opportunities Fund
- 7 -
Invesco Management Trust
Invesco Conservative Income Fund
Invesco Securities Trust
Invesco Balanced-Risk Aggressive Allocation Fund
Closed-End Funds
Invesco Advantage Municipal Income Trust II
Invesco Bond Fund
Invesco California Value Municipal Income
Trust
Invesco Dynamic Credit Opportunities Fund
Invesco
High Income Trust II
Invesco Municipal Income Opportunities Trust
Invesco Municipal Opportunity Trust
Invesco Municipal Trust
Invesco Pennsylvania Value Municipal Income Trust
Invesco
Quality Municipal Income Trust
Invesco Senior Income Trust
Invesco Total Property Market Income Fund
Invesco Trust For
Investment Grade Municipals
Invesco Trust For Investment Grade New York Municipals
Invesco Value Municipal Income Trust
Invesco Senior Loan Fund
Invesco Exchange Fund
- 8 -
SCHEDULE B
AIM
Treasurer’s Series Trust (Invesco Treasurer’s Series Trust)
Premier Portfolio
Premier Tax-Exempt Portfolio
Short-Term Investments Trust
Government & Agency Portfolio
Government
TaxAdvantage Portfolio
Liquid Assets Portfolio
STIC Prime
Portfolio
Tax-Free Cash Reserve Portfolio
Treasury
Portfolio
- 9 -
TRANSFER AGENCY AND SERVICE AGREEMENT
between
INVESCO
EXCHANGE FUND
and
INVESCO INVESTMENT SERVICES, INC.
TABLE OF CONTENTS
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Page
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ARTICLE 1
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TERMS OF APPOINTMENT; DUTIES OF THE TRANSFER AGENT
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3
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ARTICLE 2
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FEES AND EXPENSES
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ARTICLE 3
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REPRESENTATIONS AND WARRANTIES OF THE TRANSFER AGENT
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ARTICLE 4
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REPRESENTATIONS AND WARRANTIES OF THE FUND
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6
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ARTICLE 5
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INDEMNIFICATION
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ARTICLE 6
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COVENANTS OF THE FUND AND THE TRANSFER AGENT
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7
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ARTICLE 7
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TERMINATION OF AGREEMENT
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ARTICLE 8
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LIMITATION OF SHAREHOLDER LIABILITY
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ARTICLE 9
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ASSIGNMENT
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ARTICLE 10
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AMENDMENT
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ARTICLE 11
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TEXAS LAW TO APPLY
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ARTICLE 12
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MERGER OF AGREEMENT
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ARTICLE 13
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COUNTERPARTS
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2
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the 30
th
day of September, 2015, by and between INVESCO EXCHANGE
FUND, a Delaware Statutory Trust, having its principal office and place of business at 11 Greenway Plaza, Suite 1000, Houston, Texas 77046 (the “Fund”), and Invesco Investment Services, Inc., a Delaware corporation, having
its principal office and place of business at 11 Greenway Plaza, Suite 100, Houston, Texas 77046 (the “Transfer Agent”).
WHEREAS, the Transfer Agent is registered as such with the Securities and Exchange Commission (the “SEC”); and
WHEREAS, the Fund is authorized to issue shares in separate classes, with each such class having different distribution arrangements; and
WHEREAS, the Fund desires to appoint the Transfer Agent as its transfer agent, and agent in connection with certain other activities, and the
Transfer Agent desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties
hereto agree as follows:
ARTICLE 1
TERMS OF APPOINTMENT; DUTIES OF THE TRANSFER AGENT
1.01 Subject to the terms and conditions set forth in this Agreement, the Fund hereby employs and appoints the Transfer Agent to act as, and
the Transfer Agent agrees to act as, its transfer agent for the authorized and issued shares of the Fund (“Shares”), dividend disbursing agent, and agent in connection with any accumulation or similar plans provided to shareholders of the
Fund (the “Shareholders”), including without limitation any periodic investment plan or periodic withdrawal program, as provided in the currently effective prospectus and statement of additional information (the “Prospectus”) of
the Fund.
1.02 The Transfer Agent agrees that it will perform the following services:
(a) The Transfer Agent shall, in accordance with procedures established from time to time by agreement between the Fund and the Transfer
Agent:
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(i)
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receive for acceptance, orders for the purchase of Shares, and promptly deliver payment and appropriate documentation thereof to the Custodian of the Fund authorized pursuant to the Charter of the Fund (the
“Custodian”);
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(ii)
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pursuant to purchase orders, issue the appropriate number of Shares and hold such Shares in the appropriate Shareholder account;
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(iii)
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receive for acceptance redemption requests and redemption directions and deliver the appropriate documentation thereof to the Custodian;
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(iv)
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at the appropriate time as and when it receives monies paid to it by the Custodian with respect to any redemption, pay over or cause to be paid over in the appropriate manner such monies as instructed by the Fund;
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(v)
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effect transfers of Shares by the registered owners thereof upon receipt of appropriate instructions;
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(vi)
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prepare and transmit payments for dividends and distributions declared by the Fund on behalf of the Shares;
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(vii)
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maintain records of account for and advise the Fund and its Shareholders as to the foregoing; and
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(viii)
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record the issuance of Shares of the Fund and maintain pursuant to SEC Rule 17Ad-1O(e) a record of the total number of Shares which are authorized, based upon data provided to it by the Fund, and issued and outstanding.
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The Transfer Agent shall also provide the Fund on a regular basis with the total number of Shares which are authorized and
issued and outstanding and shall have no obligation, when recording the issuance of Shares, to monitor the issuance of such Shares or to take cognizance of any laws relating to the issue or sale of such Shares, which function shall be the sole
responsibility of the Fund.
(b) In addition to the services set forth in the above paragraph (a), the Transfer Agent shall: perform the
customary services of a transfer agent, including but not limited to maintaining all Shareholder accounts, mailing Shareholder reports and prospectuses to current Shareholders, preparing and mailing confirmation forms and statements of accounts to
Shareholders for all purchases and redemptions of Shares and other confirmable transactions in Shareholder accounts, preparing and mailing activity statements for Shareholders, and providing Shareholder account information.
(c) Procedures as to who shall provide certain of these services may be established from time to time by agreement between the Fund and the
Transfer Agent. The Transfer Agent may at times perform only a portion of these services and the Fund or its other agents may perform these services on the Fund’s behalf.
1.03 Pursuant to procedures established from time to time by agreement between the Fund and the Transfer Agent, the Transfer Agent may, as
agent and acting on behalf of the Fund, enter into certain sub-transfer agency, omnibus account service, and sub-accounting agreements (collectively, “third-party servicing arrangements”) whereby an intermediary agrees to provide
individual shareholder and/or record keeping services with respect to investments in the Portfolios that would otherwise be required to be provided by the Transfer Agent hereunder, provided that such intermediary has entered or will concurrently
enter into an Intermediary Agreement Regarding Compliance with SEC Rule 22c-2 in substantially the form approved by the Fund. Such third-party servicing arrangements may, but are not required to, further provide that such intermediaries may
designate sub-agents for purposes of receiving orders for the purchase and redemption of Shares, provided that an intermediary appointing such a sub-agent remains contractually responsible for the receipt and processing of orders received by such
sub-agent. The Fund, or the Transfer Agent as
4
agent for and on behalf of the Fund, shall maintain copies of all written agreements evidencing third-party servicing arrangements that are in effect, or that were in effect at any time during
the past six years, in an easily accessible place.
ARTICLE 2
FEES AND EXPENSES
2.01
For performance by the Transfer Agent pursuant to this Agreement, the Fund agrees to pay the Transfer Agent fees as set forth in Schedule A, attached hereto. Such fees and out-of-pocket expenses and advances identified under Section 2.02 below
may be changed from time to time subject to mutual written agreement between the Fund and the Transfer Agent.
2.02 In addition to the fee
paid under Section 2.01 above, the Fund agrees to reimburse the Transfer Agent for out-of-pocket expenses or advances incurred by the Transfer Agent for the items set forth in Schedule A. In addition, any other expenses incurred by the Transfer
Agent at the request or with the consent of the Fund, will be reimbursed by the Fund on behalf of the applicable Shares.
2.03 The Fund
agrees to pay all fees and reimbursable expenses following the mailing of the respective billing notice. Postage for mailing of dividends, proxies, Fund reports and other mailings to all Shareholder accounts shall be advanced to the Transfer Agent
by the Fund at least seven (7) days prior to the mailing date of such materials.
2.04 The Fund agrees to pay all fees payable under
third-party servicing arrangements.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE TRANSFER AGENT
The Transfer Agent represents and warrants to the Fund that:
3.01 It is a corporation duly organized and existing and in good standing under the laws of the state of Delaware.
3.02 It is duly qualified to carry on its business in Delaware and in Texas.
3.03 It is empowered under applicable laws and by its Charter and By-Laws to enter into and perform this Agreement.
3.04 All requisite corporate proceedings have been taken to authorize it to enter into and perform this Agreement.
3.05 It has and will continue to have access to the necessary facilities, equipment and personnel to perform its duties and obligations under
this Agreement.
3.06 It is registered as a Transfer Agent as required by the federal securities laws.
3.07 This Agreement is a legal, valid and binding obligation to it.
5
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE FUND
The Fund represents and warrants to the Transfer Agent that:
4.01 It is a statutory trust duly organized and existing and in good standing under the laws of Delaware.
4.02 It is empowered under applicable laws and by its Declaration of Trust and By-Laws to enter into and perform this Agreement.
4.03 All corporate proceedings required by said Declaration of Trust and
By-Laws
have been taken to
authorize it to enter into and perform this Agreement.
4.04 It is a management investment company registered under the Investment Company
Act of 1940, as amended.
4.05 A registration statement under the Securities Act of 1933, as amended, is currently effective and will
remain effective, with respect to all Shares of the Fund being offered for sale.
ARTICLE 5
INDEMNIFICATION
5.01 The
Transfer Agent shall not be responsible for, and the Fund shall indemnify and hold the Transfer Agent harmless from and against, any and all losses, damages, costs, charges, counsel fees, payments, expenses and liability arising out of or
attributable to:
(a) all actions of the Transfer Agent or its agents or subcontractors required to be taken pursuant to this Agreement,
provided that such actions are taken in good faith and without negligence or willful misconduct;
(b) the Fund’s lack of good faith,
negligence or willful misconduct which arise out of the breach of any representation or warranty of the Fund hereunder;
(c) the reliance
on or use by the Transfer Agent or its agents or subcontractors of information, records and documents or services which (i) are received or relied upon by the Transfer Agent or its agents or subcontractors and/or furnished to it or performed by
on behalf of the Fund, and (ii) have been prepared, maintained and/or performed by the Fund or any other person or firm on behalf of the Fund; provided such actions are taken in good faith and without negligence or willful misconduct;
(d) the reliance on, or the carrying out by the Transfer Agent or its agents or subcontractors of any instructions or requests of the Fund;
provided such actions are taken in good faith and without negligence or willful misconduct; or
(e) the offer or sale of Shares in
violation of any requirement under the federal securities laws or regulations or the securities laws or regulations of any state that such Shares be registered in such state or in violation of any stop order or other determination or ruling by any
federal agency or any state with respect to the offer or sale of such Shares in such state.
6
5.02 The Transfer Agent shall indemnify and hold the Fund harmless from and against any and all
losses, damages, costs, charges, counsel fees, payments, expenses and liability arising out of or attributable to any action or failure or omission to act by the Transfer Agent as result of the Transfer Agent’s lack of good faith, negligence or
willful misconduct.
5.03 At any time the Transfer Agent may apply to any officer of the Fund for instructions, and may consult with legal
counsel with respect to any matter arising in connection with the services to be performed by the Transfer Agent under this Agreement, and the Transfer Agent and its agents or subcontractors shall not be liable to and shall be indemnified by the
Fund for any action taken or omitted by it in reliance upon such instructions or upon the opinion of such counsel. The Transfer Agent shall be protected and indemnified in acting upon any paper or document furnished by or on behalf of the Fund,
reasonably believed to be genuine and to have been signed by the proper person or persons, or upon any instruction, information, data, records or documents provided to the Transfer Agent or its agents or subcontractors by machine readable input,
telex, CRT data entry or other similar means authorized by the Fund, and shall not be held to have notice of any change of authority of any person, until receipt of written notice thereof from the Fund.
5.04 In the event either party is unable to perform its obligations under the terms of this Agreement because of acts of God, strikes,
equipment or transmission failure or damage reasonably beyond its control, or other causes reasonably beyond its control, such party shall not be liable for damages to the other for any damages resulting from such failure to perform or otherwise
from such causes.
5.05 Neither party to this Agreement shall be liable to the other party for consequential damages under any provision
of this Agreement or for any consequential damages arising out of any act or failure to act hereunder.
5.06 In order that the
indemnification provisions contained in this Article 5 shall apply, upon the assertion of a claim for which either party may be required to indemnify the other, the party seeking indemnification shall promptly notify the other party of such
assertion, and shall keep the other party advised with respect to all developments concerning such claim. The party who may be required to indemnify shall have the option to participate with the party seeking indemnification in the defense of such
claim. The party seeking indemnification shall in no case confess any claim or make any compromise in any case in which the other party may be required to indemnify it except with the other party’s prior written consent.
ARTICLE 6
COVENANTS OF
THE FUND AND THE TRANSFER AGENT
6.01 The Fund shall, upon request, promptly furnish to the Transfer Agent the following:
(a) a certified copy of the resolution of the Board of Trustees of the Fund authorizing the appointment of the Transfer Agent and the
execution and delivery of this Agreement; and
(b) a copy of the Declaration of Trust and By-Laws of the Fund and all amendments thereto.
7
6.02 The Transfer Agent shall keep records relating to the services to be performed hereunder, in
the form and manner as it may deem advisable. To the extent required by Section 31 of the Investment Company Act of 1940, as amended, and the Rules thereunder, the Transfer Agent agrees that all such records prepared or maintained by the
Transfer Agent relating to the services to be performed by the Transfer Agent hereunder are the property of the Fund and will be preserved, maintained and made available in accordance with such Section and Rules, and will be surrendered promptly to
the Fund on and in accordance with its request.
6.03 The Transfer Agent and the Fund agree that all books, records, information and data
pertaining to the business of the other party which are exchanged or received pursuant to the negotiation or the carrying out of this Agreement shall remain confidential, and shall not be voluntarily disclosed to any other person, except as may be
required by law.
6.04 In case of any requests or demands for the inspection of the Shareholder records of the Fund, the Transfer Agent
will endeavor to notify the Fund and to secure instructions from an authorized officer of the Fund as to such inspection. The Transfer Agent reserves the right, however, to exhibit the Shareholder records to any person whenever it is advised by its
counsel that it may be held liable for the failure to exhibit the Shareholder records to such person.
ARTICLE 7
TERMINATION OF AGREEMENT
7.01 This Agreement may be terminated by either party upon sixty (60) days written notice to the other.
7.02 Should the Fund exercise its right to terminate this Agreement, all out-of-pocket expenses associated with the movement of records and
material will be borne by the Fund. Additionally, the Transfer Agent reserves the right to charge for any other reasonable expenses associated with such termination and/or a charge equivalent to the average of three (3) months’ fees.
ARTICLE 8
LIMITATION OF
SHAREHOLDER LIABILITY
8.01 Notice is hereby given that this Agreement is being executed by the Fund by a duly authorized officer
thereof acting as such and not individually. The obligations of this Agreement are not binding upon any of the trustees, officers, shareholders or the investment advisor of the Fund individually but are binding only upon the assets and property
belonging to the Fund for the benefit of which the trustees or directors have caused this Agreement to be executed.
ARTICLE 9
ASSIGNMENT
9.01 Except as
provided in Section 9.03 below, neither this Agreement nor any rights or obligations hereunder may be assigned by either party without the written consent of the other party.
9.02 This Agreement shall inure to the benefit of and be binding upon the parties and their respective permitted successors and assigns.
8
9.03 The Transfer Agent may, without further consent on the part of the Fund, subcontract for the
performance hereof with any entity which is duly registered as a transfer agent pursuant to Section 17A(c)(1) of the Securities Exchange Act of 1934 as amended (“Section 17A(c)(1)”); provided, however, that the Transfer Agent shall be
as fully responsible to the Fund for the acts and omissions of any subcontractor as it is for its own acts and omissions.
ARTICLE 10
AMENDMENT
10.01
This Agreement may be amended or modified by a written agreement executed by both parties and authorized or approved by a resolution of the Board of Trustees of the Fund.
ARTICLE 11
TEXAS LAW TO
APPLY
11.01 This Agreement shall be construed and the provisions thereof interpreted under and in accordance with the laws of the
State of Texas.
ARTICLE 12
MERGER OF AGREEMENT
12.01
This Agreement constitutes the entire agreement between the parties hereto and supersedes any prior agreement with respect to the subject matter hereof whether oral or written.
ARTICLE 13
COUNTERPARTS
13.01 This Agreement may be executed by the parties hereto on any number of counterparts, and all of said counterparts taken together
shall be deemed to constitute one and the same instrument.
9
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in their names
and on their behalf by and through their duly authorized officers, as of the day and year first above written.
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INVESCO EXCHANGE FUND
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By:
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/s/ John M. Zerr
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Name:
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John M. Zerr
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Title:
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Senior Vice President
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ATTEST:
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/s/ Seba P. Kurian
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Assistant Secretary
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INVESCO INVESTMENT SERVICES, INC.
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By:
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/s/ William J. Galvin, Jr.
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Name:
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William J. Galvin, Jr.
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Title:
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President
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ATTEST:
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/s/ Seba P. Kurian
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Assistant Secretary
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SCHEDULE A
Open Account Fee.
For performance by the Transfer
Agent pursuant to this Agreement, the Trust agrees to pay the Transfer Agent for shareholder accounts holding Shares that are open during any monthly period, an annualized fee of (i) 0.02% of average daily net assets, plus (ii) $18.60 per
account.
Closed Account Fee.
For performance by the Transfer Agent pursuant to this Agreement, the Trust agrees to pay the
Transfer Agent an annualized fee for shareholder accounts which previously held Shares that were closed during any monthly period at a rate of $0.70, to be paid for twelve months following the date on which an account was closed.
Determining Number of Billable Accounts.
The Open Account Fee and the Closed Account Fee shall be paid only with respect to
accounts serviced directly by the Transfer Agent and not with respect to accounts serviced by third parties pursuant to omnibus account service or sub-accounting agreements, as provided in Section 2.04 of the Agreement.
Billing of Fees.
Both the Open and Closed Account Fees shall be billed by the Transfer Agent monthly in arrears on a prorated
basis of 1/12 of the annualized fee for all such accounts.
The total fees due to the Transfer Agent from all funds affiliated
with the Trust shall be reduced by an amount equal to the investment income earned by the Transfer Agent, if any, on the balances of the disbursement accounts for those funds. Such credits shall be allocated among accounts holding Shares on the
basis of fiscal year-to-date average net assets.
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3.
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Out-of-Pocket
Expenses
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The Trust shall reimburse the Transfer Agent monthly for applicable
out-of-pocket
expenses relating to the procurement of the following goods and services, as they relate to the performance of the Transfer Agent’s obligations set
forth in Article I of the Agreement, including, but not limited to:
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(a)
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Remote access, license and usage charges paid by the Transfer Agent for use of shareholder record keeping and related systems provided by DST Systems, Inc., and used by the Transfer Agent to service Shareholder
accounts, including but not limited to:
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(i)
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TA2000
®
, the record keeping system on which records related to most Shareholder accounts will be maintained;
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(ii)
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TRAC2000
®
, the record keeping system on which records related to Shareholder accounts held by and through employer-sponsored retirement plans are maintained;
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(iii)
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Automated Work Distributor
TM
, a document imaging, storage and distribution system;
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(iv)
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Financial Access Network, a computer system and related software applications which will provide the necessary interfaces to allow customers to access account information residing on the TA2000 and TRAC2000 systems
through aiminvestments.com;
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(v)
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PowerSelect
TM
, a reporting database that the Transfer Agent can query to produce reports derived from Shareholder account data residing on the TA2000 and TRAC2000
systems; and
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(vi)
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Client specific system enhancements.
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(b)
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Computer and data processing and storage equipment, communication lines and equipment, printers and other equipment used in connection with the provision of services hereunder, and any expenses incurred in connection
with the installation and use of such equipment and lines.
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(c)
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Microfiche, microfilm and electronic image scanning equipment.
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(d)
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Electronic data and image storage media and related storage costs.
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(e)
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Record retention, retrieval and destruction costs, including, but not limited to exit fees charged by third party record keeping vendors.
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(f)
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Telephone and telecommunication costs, including all lease, maintenance and line costs.
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(g)
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Programming costs, system access and usage fees, electronic presentment service fees, data and document delivery fees, and other related fees and costs which relate to the printing and delivery of the following
documents to Shareholders and to each Shareholder’s broker of record:
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(i)
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Investment confirmations;
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(ii)
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Periodic account statements;
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(h)
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Printing costs, including, without limitation, the costs associated with printing stationery, envelopes, share certificates, checks, investment confirmations, periodic account statements, and tax forms.
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(i)
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Postage (bulk,
pre-sort,
ZIP+4, bar coding, first class), certified and overnight mail and private delivery services, courier services and related insurance.
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(j)
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Certificate insurance.
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(k)
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Banking charges, including without limitation, incoming and outgoing wire charges and charges associated with the receipt and processing of government allotments.
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(m)
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Federal Reserve charges for check clearance.
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(o)
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Audit, consulting and legal fees which relate to the provision of service hereunder.
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(p)
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Shareholder information and education mailings, including, but not limited to, periodic shareholder newsletters and tax guides.
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(r)
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Such other miscellaneous expenses reasonably incurred by the Transfer Agent in performing its duties and responsibilities.
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(s)
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Due diligence mailings.
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The Trust agrees that postage and mailing expenses will be paid on the day of
or prior to mailing. In addition, the Trust will promptly reimburse the Transfer Agent for any other unscheduled expenses incurred by the Transfer Agent whenever the Trust and the Transfer Agent mutually agree that such expenses are not otherwise
properly borne by the Transfer Agent as part of its duties and obligations under the Agreement.
The amount of the Trust’s fiscal
year-to-date out-of-pocket expenses shall be allocated among accounts holding Shares, as applicable, on the basis of fiscal year-to-date average net assets.
13
MASTER ADMINISTRATIVE SERVICES AGREEMENT
This MASTER ADMINISTRATIVE SERVICES AGREEMENT (the “Agreement”) is made this
30
th
day of September, 2015 by and between INVESCO ADVISERS, INC., a Delaware corporation (the “Administrator”) and INVESCO EXCHANGE FUND, a Delaware Statutory Trust (the
“Fund”).
W I T N E S S E T H:
WHEREAS, the Fund is a
open-end
investment company registered under the Investment Company Act of
1940, as amended (the “1940 Act”); and
WHEREAS, the Fund, has retained the Administrator to perform (or arrange for the
performance of) accounting, shareholder servicing and other administrative services as well as investment advisory services to the Fund, and that the Administrator may receive reasonable compensation or may be reimbursed for its costs in providing
such additional services, upon the request of the Board of Trustees (the “Board”) and upon a finding by the Board that the provision of such services is in the best interest of the Fund and its shareholders; and
WHEREAS, the Board has found that the provision of such administrative services is in the best interest of the Fund and its shareholders, and
has requested that the Administrator perform such services;
NOW, THEREFORE, the parties hereby agree as follows:
1. The Administrator hereby agrees to provide, or arrange for the provision of, any or all of the following services by the Administrator or
its affiliates:
(a) the services of a principal financial officer of the Fund (including related office space, facilities and equipment)
whose normal duties consist of maintaining the financial accounts and books and records of the Fund, including the review of daily net asset value calculations and the preparation of tax returns; and the services (including related office space,
facilities and equipment) of any of the personnel operating under the direction of such principal financial officer;
(b) to the extent not
otherwise required under the Administrator’s investment advisory agreement with the Fund, supervising the operations of the custodian(s), transfer agent(s) or dividend paying agent(s) for the Fund, auction agent(s) for the Fund’s preferred
shares, if issued, and other agents as agreed upon by the Fund; or otherwise providing services to shareholders of the Fund; and the Administrator from time to time;
(c) supervising the Fund’s relationship with any stock exchange on which the Fund’s common shares are listed; and
(d) to the extent not otherwise required under the Administrator’s investment advisory agreement with the Fund, such other administrative
services as may be furnished from time to time by the Administrator to the Fund at the request of the Fund’s Board, provided, however, that nothing in this Agreement shall require the Administrator to pay the salary or other compensation (or
any portion of such salary or other compensation) of any other officer of the Fund that the
1
Fund’s Board has agreed should be paid by the Fund so long as such agreement is evidenced by a resolution of the Board.
2. The services provided hereunder shall at all times be subject to the direction and supervision of the Fund’s Board.
3. As full compensation for the services performed and the facilities furnished by or at the direction of the Administrator, the Fund shall
pay the Administrator in accordance with the Fee Schedule as set forth in Appendix A attached hereto, as the same may be amended from time to time. Such amounts shall be paid to the Administrator on a monthly basis.
4. The Administrator shall not be liable for any error of judgment or for any loss suffered by the Fund in connection with any matter to which
this Agreement relates, except a loss resulting from the Administrator’s willful misfeasance, bad faith or gross negligence in the performance of its duties or from reckless disregard of its obligations and duties under this Agreement.
5. The Fund and the Administrator each hereby represent and warrant, but only as to themselves, that each has all requisite authority to enter
into, execute, deliver and perform its obligations under this Agreement and that this Agreement is legal, valid and binding, and enforceable in accordance with its terms.
6. Nothing in this Agreement shall limit or restrict the rights of any director, officer or employee of the Administrator who may also be a
trustee, officer or employee of the Fund to engage in any other business or to devote his time and attention in part to the management or other aspects of any business, whether of a similar or a dissimilar nature, nor limit or restrict the right of
the Administrator to engage in any other business or to render services of any kind to any other corporation, firm, individual or association.
7. This Agreement shall become effective with respect to the Fund on the Effective Date as set forth in Appendix A attached hereto. This
Agreement shall continue in effect until June 30, 2017, and may be continued from year to year thereafter, provided that the continuation of the Agreement is specifically approved at least annually:
(a) (i) by the Fund’s Board or (ii) by the vote of “a majority of the outstanding voting securities”
of such Portfolio (as defined in Section 2(a)(42) of the 1940 Act); and
(b) by the affirmative vote of a majority of
the trustees who are not parties to this Agreement or “interested persons” (as defined in the 1940 Act) of a party to this Agreement (other than as trustees of the Fund), by votes cast in person at a meeting specifically called for such
purpose.
This Agreement shall terminate automatically in the event of its assignment (as defined in Section 2(a) (4) of the
1940 Act).
8. This Agreement may be amended or modified, but only by a written instrument signed by both the Fund and the Administrator.
9. Notice is hereby given that, as provided by applicable law, the obligations of or arising out of this Agreement are not binding upon
any of the shareholders of the Fund individually but are binding only upon the assets and property of the Fund and that the shareholders shall be entitled, to the fullest extent permitted by applicable law, to the same limitation on personal
liability as stockholders of private corporations for profit.
2
10. Any notice or other communication required to be given pursuant to this Agreement shall be
deemed duly given if delivered or mailed by registered mail, postage prepaid, (a) to the Administrator at Eleven Greenway Plaza, Suite 1000, Houston, Texas 77046, Attention: President, with a copy to the General Counsel, or (b) to the Fund
at Eleven Greenway Plaza, Suite 1000, Houston, Texas 77046, Attention: President, with a copy to the General Counsel.
11. This Agreement
contains the entire agreement between the parties hereto and supersedes all prior agreements, understandings and arrangements with respect to the subject matter hereof.
12. This Agreement shall be governed by and construed in accordance with the laws (without reference to conflicts of law provisions) of the
State of Texas.
3
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their
officers designated below as of the day and year first above written.
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INVESCO ADVISERS, INC.
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Attest:
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/s/ Seba P. Kurian
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By:
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/s/ John M. Zerr
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Assistant Secretary
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Name:
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John M. Zerr
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Title:
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Senior Vice President
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(SEAL)
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INVESCO EXCHANGE FUND
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Attest:
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/s/ Seba P. Kurian
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By:
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/s/ John M. Zerr
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Assistant Secretary
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Name:
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John M. Zerr
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Title:
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Senior Vice President
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(SEAL)
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4
APPENDIX A
FEE SCHEDULE TO
MASTER
ADMINISTRATIVE SERVICES AGREEMENT
OF
INVESCO EXCHANGE FUND
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Portfolio
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Effective Date of Agreement
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Invesco Exchange Fund
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September 30, 2015
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The Administrator may receive from the Fund reimbursement for costs or reasonable compensation for such
services as follows:
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Rate*
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Net Assets
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0.023%
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First $
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1.5 billion
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0.013%
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Next $
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1.5 billion
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0.003%
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Over $
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3 billion
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*
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Annual fee for the Trust shall be $50,000 in the event that the foregoing formula does not result in a fee that is above $50,000.
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5
Invesco Advisers, Inc.
CODE OF ETHICS
January 1, 2015
TABLE OF CONTENTS
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Section
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Item
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Page
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I.
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Introduction
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3
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II.
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Statement of Fiduciary Principles
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3
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III.
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Compliance with Laws, Rules and Regulations; Reporting of Violations
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4
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IV.
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Limits on Personal Investing
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4
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A. Personal Investing
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4
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1
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Pre-clearance of Personal Securities Transactions
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4
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2
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Blackout Period
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6
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•
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De Minimis
Exemptions
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6
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3
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Prohibition of Short-Term Trading Profits
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7
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4
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Initial Public Offerings
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7
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5
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Prohibition of Short Sales by Investment Personnel
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7
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6
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Restricted List Securities
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8
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7
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Other Criteria Considered in Pre-clearance
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8
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8
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Brokerage Accounts
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8
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9
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Private Securities Transactions
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9
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10
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Limited Investment Opportunity
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9
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11
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Excessive Short-Term Trading in Funds
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9
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B. Invesco Ltd. Securities
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9
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C. Limitations on Other Personal Activities
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10
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1
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Outside Business Activities
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10
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2
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Gifts and Entertainment
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10
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•
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Gifts
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10
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•
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Entertainment
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10
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3
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U.S. Department of Labor Reporting
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11
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D. Parallel Investing Permitted
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11
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V.
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Reporting Requirements
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11
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a.
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Initial Holdings Reports
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11
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b.
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Quarterly Transaction Reports
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12
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c.
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Annual Holdings Reports
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13
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d.
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Gifts and Entertainment Reporting
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13
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e.
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Certification of Compliance
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13
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VI.
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Reporting of Potential Compliance Issues
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13
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VII.
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Administration of the Code of Ethics
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VIII.
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Sanctions
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14
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IX.
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Exceptions to the Code
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14
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X.
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Definitions
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14
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XI.
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Invesco Ltd. Policies and Procedures
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17
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XII.
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Code of Ethics Contacts
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18
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Invesco Advisers, Inc.
CODE OF ETHICS
(Originally adopted February 29, 2008; Amended effective January 1, 2015)
I. Introduction
Invesco Advisers, Inc. has a fiduciary
relationship with respect to each portfolio under management. The interests of Clients and of the shareholders of investment company Clients take precedence over the personal interests of Covered Persons (defined below). Capitalized terms used
herein and not otherwise defined are defined at the end of this document.
This Code of Ethics (“the Code”) applies to Invesco Advisers, Inc.,
Invesco Advisers, Inc’s. affiliated Broker-dealers (Invesco Distributors, Inc. and Invesco Capital Markets, Inc.), all Invesco Affiliated Mutual Funds, and all of their Covered Persons. Covered Persons include:
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any director, officer, full or part time Employee of Invesco Advisers, Inc. or any full or part time Employee of any of Invesco Advisers, Inc.’s affiliates that, in connection with his or her regular functions or
duties: makes, participates in, or obtains any information concerning any Client’s purchase or sale of Covered Securities or who is involved in making investment recommendations, or obtains information concerning investment recommendations,
with respect to such purchase or sale of Covered Securities; or has access to non-public information concerning any Client’s purchase or sale of Covered Securities, access to non-public securities recommendations, or access to non-public
information concerning portfolio holdings of any portfolio advised or sub-advised by Invesco Advisers, Inc.;
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all Employees of Invesco Ltd. located in the United States who are not covered by the Code of Ethics of a registered investment advisory affiliate of Invesco Ltd.; and
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any other persons falling within the definitions of Access Person or Advisory Person under Rule 17j-1 of the Investment Company Act of 1940, as amended (the “Investment Company Act”) or Rule 204A-1 under the
Investment Advisers Act of 1940, as amended (the “Advisers Act”) and such other persons that may be deemed to be Covered Persons by Compliance.
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Invesco Funds have created a separate Code of Ethics for Trustees of the Affiliated Mutual Funds. Independent Trustees are not Covered Persons
under the Invesco Advisers, Inc. Code of Ethics. Trustees who are not Independent Trustees and are not Employees of Invesco are also not Covered Persons under the Invesco Advisers, Inc. Code of Ethics, but must report his or her securities holdings,
transactions, and accounts as required in the separate Code of Ethics for Trustees of the Affiliated Mutual funds.
II.
Statement of Fiduciary
Principles
The following fiduciary principles govern Covered Persons:
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the interests of Clients and shareholders of investment company Clients must be placed first at all times and Covered Persons must not take inappropriate advantage of his or her positions; and
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all personal securities transactions must be conducted consistent with this Code and in a manner to avoid any abuse of an individual’s position of trust and responsibility; and
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this Code is our effort to address conflicts of interest that may arise in the ordinary course of our business and does not attempt to identify all possible conflicts of interest. This Code does not necessarily shield
Covered Persons from liability for personal trading or other conduct that violates a fiduciary duty to Clients and shareholders of investment company Clients.
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III.
Compliance with Laws, Rules and Regulations; Reporting of Violations
All Covered Persons are required to comply with applicable state and federal securities laws, rules and regulations and this Code. Covered Persons shall
promptly report any violations of laws or regulations or any provision of this Code of which they become aware to Invesco Advisers, Inc.’s Chief Compliance Officer or his/her designee. Additional methods of reporting potential violations or
compliance issues are described in Section VI. of this Code under “Reporting of Potential Compliance Issues.”
IV.
Limits on Personal
Investing
A. Personal Investing
1.
Pre-clearance of Personal Security Transactions
. All Covered Persons must pre-clear with Compliance, using the automated review
system, all personal security transactions involving Covered Securities in which they have a Beneficial Interest. A Covered Person may be considered to have a Beneficial Interest in securities held by members of his or her immediate family sharing
the same household (i.e., a spouse or equivalent domestic partner, children, etc.) or by certain partnerships, trusts, corporations, or other arrangements.
Any approval granted to a Covered Person to execute a personal security transaction is valid for that business day only, except that if
approval is granted after the close of the trading day such approval is good through the next trading day
.
If a Covered Person does not execute the proposed securities transaction prior to closing of the market immediately following the
approval, the Covered Person must resubmit the request on another day for approval.
Additionally, all Covered Persons must pre-clear
personal securities transactions involving Covered Securities over which they have discretion. For example, if a Covered Person is directing the transactions for a friend or family member (regardless of whether they share the same household) all
transactions in Covered Securities must be pre-cleared.
Covered Securities include, but are not limited to, all investments that can be
traded by an Invesco Advisers, Inc. entity for its Clients, including stocks, bonds, municipal bonds, exchange-traded funds (ETFs), closed-end mutual funds, and any of their derivatives such as options. All Invesco Affiliated Mutual Funds (including
both open-end and closed-end funds) and Invesco PowerShares ETFs are considered Covered Securities.
Requirements for Invesco Affiliated Mutual Funds:
Although Affiliated Mutual Funds are considered Covered Securities, those that are held by Employees at the Affiliated Mutual Funds’
transfer agent or in the Invesco Ltd. 401(k) or Money Purchase Plan (excluding the Personal Choice Retirement Account (PCRA)) do not need to be pre-cleared through the automated review system because compliance monitoring for these plans is done
through a separate process.
Affiliated Mutual Funds that are held in external brokerage accounts or in the PCRA
must
be pre-cleared
through the automated review system.
Requirements for Exchange Traded Funds (ETFs)
:
Employees are exempt from pre-clearing ETFs listed on the
Pre-clearance Exempt ETF List
, and any derivatives of these securities such as
options.
All Invesco PowerShares ETFs and ETFs not listed on the Pre-clearance Exempt ETF List must be pre-cleared.
ETFs are Covered Securities and are still subject to requirements and limits on personal investing as described in Section IV.
and V. of the Code, irrespective of whether pre-clearance is required.
Requirements for Invesco Ltd. Securities and Other Employer
Stock:
All transactions in Invesco Ltd. securities, including the Invesco Ltd. stock fund held in the Invesco 401(k) and Money
Purchase plan, must be pre-cleared. Please refer to section IV.B for additional guidelines on Invesco Ltd. securities. Any transaction in a previous employer’s company stock that is obtained through an employee benefit plan or company stock
fund held in an external retirement plan requires pre-clearance.
Exempted Securities:
Covered Securities do not include shares of money market funds, U.S. government securities, certificates of deposit or shares of open-end
mutual funds
not
advised by Invesco Advisers, Inc. Unit investment trusts, including those advised by Invesco Advisers, Inc., are not Covered Securities. However, this definition shall not apply to any series of the PowerShares QQQ Trust or
the BLDRS Index Fund Trust. (Please refer to the “Definitions” section of this Code for more information on the term, Covered Security.)
If you are unclear about whether a proposed transaction involves a Covered Security, contact Compliance via email at
codeofethicsnorthamerica@invesco.com
or by phone at 1-877-331- CODE [1-877-331-2633] prior to executing the transaction.
Compliance
will consider the following factors, among others, in determining whether or not pre-clearance approval will be provided. Please note that you must obtain pre-clearance even if you believe your transactions request satisfies the criteria below. The
automated review system will review personal trade requests from Covered Persons based on the following considerations:
2.
Blackout Period
. Invesco Advisers, Inc. does not permit Covered Persons to trade in a
Covered Security if there is conflicting activity in an Invesco Client account.
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Non-Investment Personnel.
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may not buy or sell a Covered Security within two trading days after a Client trades in that security.
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may not buy or sell a Covered Security if there is a Client order on that security currently with the trading desk.
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may not buy or sell a Covered Security within three trading days before or after a Client trades in that security.
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may not buy or sell a Covered Security if there is a Client order on that security currently with the trading desk.
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For practical purposes, an Employee without knowledge of investment activity of a Client account would not know of such activity in advance of
a Client trade. Therefore, for those Employees, trading with pre-clearance approval granted prior to a Client transaction will not be considered a violation of this Code of Ethics. Compliance will review personal securities transactions to identify
potential conflicts in which there is an appearance that such an Employee could have traded while he or she was aware of upcoming Client transactions. If a potential conflict exists, this would be considered a violation of the blackout period
required by this Code of Ethics.
De Minimis Exemptions
. Compliance will apply the following
de minimis
exemptions in
granting pre-clearance when a Client has recently traded or is trading in a security involved in a Covered Person’s proposed personal securities transaction:
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Equity de minimis exemptions
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If a Covered Person
does
not
have knowledge of Client trading activity in a particular equity security, he or she may execute up to 500 shares of such security in a rolling 30-day period provided the
issuer of such security is included in the Russell 1000 Index or any of the main indices globally included on the De Minimis Indices List which can be accessed on the Invesco intranet using the following link:
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http://sharepoint/sites/Compliance-COE-
NA/Training/Documents/De%20Minimis%20Indices%20List.pdf
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If a Covered Person
does
not
have knowledge of Client trading activity in a particular equity security, he or she may execute up to 500 shares of such security in a rolling 30 day period provided that
there is no conflicting Client activity in that security during the blackout period or on the trading desk that exceeds 500 shares per trading day.
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Fixed income de minimis exemption.
If a Covered Person
does
not
have knowledge of Client trading activity in a particular fixed income security he or she may execute up to $100,000 of par value of
such security in a rolling 30-day period.
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The automated review system will confirm that there is no activity currently on
the trading desk on the security involved in the proposed personal securities transaction and will verify that there have been no Client transactions for the requested security within the last two trading days for all Covered Persons except
Investment Personnel for whom the blackout period is the last three trading days. For Investments, Portfolio Administration and IT personnel, Compliance will also check the trading activity of affiliates with respect to which such personnel have
potential access to transactional information to verify that there have been no Client transactions in the requested security during the blackout period. Compliance will notify the Covered Person of the approval or denial of the proposed personal
securities transaction. Any approval granted to a Covered Person to execute a personal security transaction is valid for that business day only, except that if approval is granted after the close of the trading day such approval is good through the
next trading day. If a Covered Person does not execute the proposed securities transaction prior to closing of the market immediately following the approval, the Covered Person must resubmit the request on another day for approval.
Any failure to pre-clear transactions is a violation of the Code and will be subject to the following potential sanctions:
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A Letter of Education will be provided to any Covered Person whose failure to pre-clear is considered immaterial or inadvertent.
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Deliberate failures to pre-clear transactions, as well as repeat and/or material violations, may result in in-person training, probation, withdrawal of personal trading privileges or employment termination, depending on
the nature and severity of the violations.
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3.
Prohibition of Short-Term Trading Profits
. Covered Persons are
prohibited from engaging in the purchase and sale, or short sale and cover of the same Covered Security within 60 days at a profit. If a Covered Person trades a Covered Security within the 60 day time frame, any profit from the trade will be
disgorged to a charity of Invesco Advisers, Inc.’s choice and a letter of education may be issued to the Covered Person.
4.
Initial Public Offerings
. Covered Persons are prohibited from directly or indirectly acquiring Beneficial Interest of any security in an equity Initial Public Offering. Exceptions will only be granted in unusual circumstances and must be
recommended by Compliance and approved by the Chief Compliance Officer or General Counsel (or designee) and the Chief Investment Officer (or designee) of the Covered Person’s business unit.
5.
Prohibition of Short Sales by Investment Personnel
. Investment Personnel are prohibited from effecting short sales of Covered
Securities in his or her personal accounts if a Client of Invesco Advisers, Inc. for whose account they have investment management responsibility has a long position in those Covered Securities.
6.
Restricted List Securities
. Employees requesting pre-clearance to buy or sell a
security on the Restricted List may be restricted from executing the trade because of potential conflicts of interest.
7.
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.
8.
Brokerage Accounts.
a. Covered Persons may only maintain brokerage accounts with:
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full service broker-dealers,
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discount broker-dealers.
discount broker-dealer accounts are accounts in which all trading is completed online. These accounts must be held with firms that provide electronic feeds of confirmations
directly to Compliance as detailed below in Section d.
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Invesco Advisers, Inc’s. -affiliated Broker-dealers (Invesco Distributors, Inc. and Invesco Capital Markets, Inc.)
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b. Brokerage account requirements for Affiliated Mutual Funds.
Covered Persons may own shares of Affiliated Mutual Funds that are
held at a broker-dealer that is not affiliated with Invesco Advisers, Inc.
only
if the broker-dealer provides an electronic feed of all transactions and statements to Invesco Advisers, Inc.’s Compliance Department. All Covered Persons
must arrange for his or her broker-dealers to forward to Compliance on a timely basis duplicate confirmations of all personal securities transactions and copies of periodic statements for all brokerage accounts, in an electronic format if they
include holdings in Affiliated Mutual Funds and preferably in an electronic format for holdings other than Affiliated Mutual Funds.
c. Requirement to move accounts that do not meet Compliance requirement:
Every person who becomes a Covered Person under this
Code must move all of his or her brokerage accounts that do not comply with the above provision of the Code within thirty (30) days from the date the Covered Person becomes subject to this Code.
d. Firms that provide electronic feeds to Invesco’s Compliance Department:
Please refer to the following link on the Invesco intranet site for a list of broker-dealers that currently provide electronic transaction and
statement feeds to Invesco Advisers, Inc.:
http://sharepoint/sites/Compliance-COE-
NA/Training/Documents/Approved%20Discount%20Broker%20List.pdf
e. Discretionary Managed Accounts.
In order to establish a discretionary managed
account, a Covered Person must grant the manager complete investment discretion over a Covered Persons account. Pre-clearance is not required for trades in this account; however, a Covered Person may not participate, directly or indirectly, in
individual investment decisions or be aware of such decisions before transactions are executed. This restriction does not preclude a Covered Person from establishing investment guidelines for the manager, such as indicating industries in which a
Covered Person desires to invest, the types of securities a Covered Person wants to purchase or a Covered Persons overall investment objectives. However, those guidelines may not be changed so frequently as to give the appearance that a Coverd
Person is actually directing account investments. Covered Persons must receive approval from Compliance to establish and maintain such an account and must provide written evidence that complete investment discretion over the account has been turned
over to a professional money manager or other third party. Covered Persons are not required to pre-clear or list transactions for such managed accounts in the automated review system; however, Covered Persons with these types of accounts must
provide an annual certification that they do not exercise direct or indirect control over the managed accounts.
9.
Private Securities
Transactions
. Covered Persons may not engage in a Private Securities Transaction without first (a) giving Compliance a detailed written notification describing the transaction and indicating whether or not they will receive compensation and
(b) obtaining prior written permission from Compliance. Investment Personnel who have been approved to acquire securities of an issuer in a Private Securities Transaction must disclose that investment to Compliance and the Chief Investment
Officer of the Investment Personnel’s business unit when they are involved in a Client’s subsequent consideration of an investment in the same issuer. The business unit’s decision to purchase such securities on behalf of Client
account must be independently reviewed by Investment Personnel with no personal interest in that issuer.
10.
Limited Investment
Opportunity (e.g. private placements, hedge funds, etc.)
. Covered Persons may not engage in a limited investment opportunity without first (a) giving Compliance a detailed written notification describing the transaction and
(b) obtaining prior written permission from Compliance.
11.
Excessive Short Term Trading in Funds
. Employees are prohibited
from excessive short term trading of any mutual fund advised or sub-advised by Invesco Advisers, Inc. and are subject to various limitations outlined in the respective prospectus and other fund disclosure documents.
B. Invesco Ltd. Securities
1. No Employee may effect short sales of Invesco Ltd. securities.
2. No Employee may engage in transactions in publicly traded options, such as puts, calls and other derivative securities relating to the
Invesco Ltd’s securities, on an exchange or any other organized market.
3. For all Covered Persons, transactions, including transfers
by gift, in Invesco Ltd. securities are subject to pre-clearance regardless of the size of the transaction, and are subject to “black-
out” periods established by Invesco Ltd. and holding periods prescribed under the terms of the agreement or program under which the securities were received.
4. Holdings of Invesco Ltd. securities in Covered Persons’ accounts are subject to the reporting requirements specified in Section IV.A.8
of this Code.
C. Limitations on Other Personal Activities
1.
Outside Business Activities
. Employees may not engage in any outside business activity, regardless of whether or not he or she
receives compensation, without prior approval from Compliance. Absent prior written approval of Compliance, Employees may not serve as directors, officers, or employees of unaffiliated public or private companies, whether for profit or non-profit.
If the outside business activity is approved, the Employee must recuse himself or herself from making Client investment decisions concerning the particular company or issuer as appropriate, provided that this recusal requirement shall not apply with
respect to certain Invesco Advisers, Inc.’s Employees, who may serve on corporate boards as a result of, or in connection with, Client investments made in those companies. Employees must always comply with all applicable Invesco Ltd. policies
and procedures, including those prohibiting the use of material non-public information in Client or employee personal securities transactions.
2.
Gift and Entertainment
. Employees may not give or accept Gifts or Entertainment that may be considered excessive either in dollar
value or frequency to avoid the appearance of any potential conflict of interest. The Invesco Ltd. Gifts and Entertainment Policy includes specific conditions under which Employees may accept or give Gifts or Entertainment. Where there are conflicts
between a minimal standard established by a policy of Invesco Ltd. and the standards established by a policy of Invesco Advisers, Inc., including this Code, the latter shall control.
Under no circumstances may an Employee give or accept cash or any possible cash equivalent from a broker or vendor.
An Employee may not provide or receive any Gift or Entertainment that is conditioned upon Invesco Advisers, Inc., its parents or affiliates
doing business with the other entity or person involved.
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Gifts.
Employees are prohibited from accepting or giving the following: a single Gift valued in excess of $100 in any calendar year; or Gifts from one person or firm valued in excess of $100 in the
aggregate during a calendar year period.
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Entertainment.
Employees may not reimburse Business Partners for the cost of tickets that would be considered excessive or for travel related expenses without approval of Compliance.
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Examples of Entertainment that may be considered excessive in value include Super Bowls, All-Star games, Kentucky Derby, hunting trips, ski
trips, etc. An occasional sporting event, golf outing or concert when accompanied by the Business Partner may not be excessive.
3.
U.S. Department of Labor Reporting
: Under current U.S. Department of Labor (DOL)
Regulations, Invesco Advisers, Inc. is required to disclose to the DOL certain specified financial dealings with a union or officer, agent, shop steward, employee, or other representative of a union (collectively referred to as “union
officials”). Under the Regulations, practically any gift or entertainment furnished by Invesco Advisers, Inc.’s Employees to a union or union official is considered a payment reportable to the DOL.
Although the Regulations provide for a
de minimis
exemption from the reporting requirements for payments made to a union or union
official that do not exceed $250 a year, that threshold applies to all of Invesco Advisers, Inc.’s Employees in the aggregate with respect to each union or union official. Therefore, it is Invesco Advisers, Inc.’s policy to require that
ALL Gifts or Entertainment furnished by an Employee be reported to Invesco Advisers, Inc. using the Invesco Advisers, Inc. Finance Department’s expense tracking application, Oracle E-Business Suite or any other application deployed for that
purpose which has the capability to capture all the required details of the payment. Such details include the name of the recipient, union affiliation, address, amount of payment, date of payment, purpose and circumstance of payment, including the
terms of any oral agreement or understanding pursuant to which the payment was made.
Invesco Advisers, Inc. is obligated to report on an
annual basis all payments, subject to the
de minimis
exemption, to the DOL on Form LM-10 Employer Report.
If you have any question
whether a payment to a union or union official is reportable, please contact Compliance. A failure to report a payment required to be disclosed will be considered a material violation of this Code. The DOL also requires all unions and union
officials to report payments they
receive
from entities such as Invesco Advisers, Inc. and their Employees.
D.
Parallel Investing Permitted
Subject to the provisions of this Code, Employees may invest in or own the same securities as those
acquired or sold by Invesco Advisers, Inc. for its Clients.
V.
Reporting Requirements
a.
Initial Holdings Reports
. Within 10 calendar days of becoming a Covered Person, each Covered Person must complete an Initial
Holdings Report by inputting into the automated pre-clearance system, Star Compliance, the following information (the information must be current within 45 days of the date the person becomes a Covered Person):
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A list of all security holdings, including the security name, the number of shares (for equities) and the principal amount (for debt securities) in which the Covered Person has direct or indirect Beneficial Interest. A
Covered Person may have a Beneficial Interest in securities held by members of his or her immediate family sharing the same household (i.e., a spouse or equivalent domestic partner, children, etc.) or by certain partnerships, trusts, corporations,
or other arrangements;
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The security identifier for each Covered Security (CUSIP, symbol, etc.);
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The name of any broker-dealer or bank with which the Covered Person maintains an account in which any securities are held for the direct or indirect benefit of the Covered Person; and
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The date that the report is submitted by the Covered Person to Compliance.
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b.
Quarterly
Transaction Reports
. All Covered Persons must report, no later than 30 days after the end of each calendar quarter, the following information for all transactions during the quarter in a Covered Security in which a Covered Person has a
direct or indirect Beneficial Interest:
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The date of all transactions in that quarter, the security name, the number of shares (for equity securities); or the interest rate and maturity date (if applicable) and the principal amount (for debt securities) for
each Covered Security;
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The nature of the transaction (buy, sell, etc.);
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The security identifier (CUSIP, symbol, etc.);
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The price of the Covered Security at which the transaction was executed;
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The name of the broker-dealer or bank executing the transaction; and
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The date that the report is submitted by the Covered Person to Compliance.
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All Covered
Persons must submit a Quarterly Transaction Report regardless of whether they executed transactions during the quarter or not.
If a Covered Person did not execute transactions subject to reporting requirements during a quarter, the report must
include a representation to that effect. Covered Persons need not include transactions made through an Automatic Investment Plan/Dividend Reinvestment Plan or similar plans and transactions in Covered Securities held in the Invesco 401(k), Invesco
Money Purchase Plan (MPP), or accounts held directly with Invesco in the Quarterly Transaction Report.
Additionally, Covered Persons must
report information on any new brokerage account established by the Covered Person during the quarter for the direct or indirect benefit of the Covered Person (including Covered Securities held in a 401(k) or other retirement vehicle, including plans
sponsored by Invesco Advisers, Inc. or its affiliates). The report shall include:
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The date the account was established;
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The name of the broker-dealer or bank; and
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The date that the report is submitted by the Covered Person to Compliance.
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Compliance may
identify transactions by Covered Persons that technically comply with the Code for review based on any pattern of activity that has an appearance of a conflict of interest.
c.
Annual Holdings Reports
. All Covered Persons must report annually the following
information, which must be current within 45 days of the date the report is submitted to Compliance:
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A list of all security holdings, including the security name, the number of shares (for equities) or the interest rate and maturity date (if applicable) and principal amount (for debt securities) for each Covered
Security in which the Covered Person has any direct or indirect Beneficial Interest;
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The security identifier for each Covered Security (CUSIP, symbol, etc.);
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The name of the broker-dealer or bank with or through which the security is held; and
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The date that the report is submitted by the Covered Person to Compliance.
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d.
Gifts and
Entertainment Reporting.
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Reporting of Gifts and Entertainment given to an Invesco Employee by a Client or Business Partner
. All Gifts and Entertainment received by an Employee must be reported through the automated pre-clearance
system within thirty (30) calendar days after the receipt of the Gift or the attendance of the Entertainment event. The requirement to report Entertainment includes dinners or any other event with a business partner of Invesco Advisers, Inc. in
attendance.
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Reporting of Gifts and Entertainment given by an Invesco Employee to a Client or Business Partner
. All Gifts and Entertainment given by an Employee must be reported through the reporting requirements of
the Employee’s business unit. All Employee’s should contact his or her manager or Compliance if they are not sure how to report gifts they intend to give or have given to a Client or Business Partner.
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e.
Certification of Compliance.
All Covered Persons must certify annually in writing that they have read and understand the Code
and recognize that they are subject to the Code. In addition, all Covered Persons must certify in writing annually that they have complied with the requirements of the Code and that they have disclosed or reported all personal securities
transactions required to be disclosed or reported under the Code. If material changes are made to the Code during the year, these changes will also be reviewed and approved by Invesco Advisers, Inc. and the relevant funds’ boards. All Covered
Persons must certify in writing within 30 days of the effective date of the amended code that they have read and understand the Code and recognize that they are subject to the Code.
VI.
Reporting of Potential Compliance Issues
Invesco Advisers, Inc. has created several channels for Employees to raise compliance issues and concerns on a confidential basis. An Employee should first
discuss a compliance issue with his or her supervisor, department head or with Invesco Advisers, Inc.’s General Counsel or Chief Compliance Officer. Human Resources matters should be directed to the Human Resources Department, an additional
anonymous vehicle for reporting such concerns.
In the event that an Employee does not feel comfortable discussing compliance issues through normal channels, the
Employee may anonymously report suspected violations of law or Invesco policy, including this Code, by calling the toll-free Invesco Whistleblower Hotline at
1-855-234-9780.
This hotline is available to employees of multiple operating units
of Invesco Ltd. Employees may also report his or her concerns by visiting the Invesco Whistleblower Hotline website at:
www.invesco.ethicspoint.com
. To ensure your confidentiality, the phone line and website are provided by an independent
company and available 24 hours a day, 7 days a week. All submissions to the Invesco Whistleblower Hotline will be reviewed and handled in a prompt, fair and discreet manner. Employees are encouraged to report these questionable practices so that
Invesco has an opportunity to address and resolve these issues before they become more significant regulatory or legal issues.
VII.
Administration
of the Code of Ethics
Invesco Advisers, Inc. has used reasonable diligence to institute procedures reasonably necessary to prevent violations of
this Code.
No less frequently than annually, Invesco Advisers, Inc. will furnish to the Affiliated Mutual Funds’ Boards of Trustees a written report
that:
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describes significant issues arising under the Code since the last report to the funds’ board, including information about material violations of the Code and sanctions imposed in response to material violations;
and
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certifies that Invesco Advisers, Inc. has adopted procedures reasonably designed to prevent Covered Persons from violating the Code.
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VIII.
Sanctions
Compliance will issue a letter of
education to the Covered Persons involved in violations of the Code that are determined to be inadvertent or immaterial.
Invesco Advisers, Inc. may
impose additional sanctions in the event of repeated violations or violations that are determined to be material or not inadvertent, including disgorgement of profits (or the differential between the purchase or sale price of the personal security
transaction and the subsequent purchase or sale price by a relevant Client during the enumerated period), a letter of censure or suspension, or termination of employment.
IX.
Exceptions to the Code
Invesco Advisers,
Inc.’s Chief Compliance Officer (or designee) may grant an exception to any provision in this Code.
X.
Definitions
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“Affiliated Mutual Funds”
generally includes all open-end or closed-end mutual funds advised or sub-advised by Invesco Advisers, Inc.
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“Automatic Investment Plan/Dividend Reinvestment Plan”
means a program in which regular purchases or sales are made automatically in or from investment accounts in accordance with a predetermined
schedule and allocation, including dividend reinvestment plans.
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“Beneficial Interest”
has the same meaning as the ownership interest of a “beneficial owner” pursuant to Rule 16a-1(a)(2) under the Securities Exchange Act of 1934, as amended (“the
’34 Act”). To have a Beneficial Interest, Covered Persons must have directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, have or share a “direct or indirect pecuniary interest,”
which is the opportunity to profit directly or indirectly from a transaction in securities. Thus a Covered Person may have a Beneficial Interest in securities held by members of his or her immediate family sharing the same household (i.e. a spouse
or equivalent domestic partner, children, etc.) or by certain partnerships, trusts, corporations, or other arrangements.
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“Client”
means any account for which Invesco Advisers, Inc. is either the adviser or sub-adviser including Affiliated Mutual Funds.
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“Control”
has the same meaning as under Section 2(a)(9) of the Investment Company Act.
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“Covered Person”
means and includes:
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any director, officer, full or part time Employee of Invesco Advisers, Inc. or any full or part time Employee of any of Invesco Advisers, Inc.’s affiliates that, in connection with his or her regular functions or
duties: makes, participates in, or obtains any information concerning any Client’s purchase or sale of Covered Securities or who is involved in making investment recommendations, or obtains information concerning investment recommendations,
with respect to such purchase or sale of Covered Securities; or has access to non-public information concerning any Client’s purchase or sale of Covered Securities, access to non-public securities recommendations or access to non-public
information concerning portfolio holdings of any portfolio advised or sub-advised by Invesco Advisers, Inc.
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all Employees of Invesco Ltd. located in the United States who are not covered by the Code of Ethics of a registered investment advisory affiliate of Invesco Ltd.
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any other persons falling within the definition of Access Person under Rule 17j-1 of the Investment Company Act of 1940 , as amended (the “Investment Company Act”) or Rule 204A-1 under the Investment Advisers
Act of 1940, as amended (the “Advisers Act”) and such other persons that may be so deemed to be Covered Persons by Compliance.
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Invesco Funds have created a separate Code of Ethics for Trustees of the Affiliated Mutual Funds. Independent Trustees are not Covered Persons
under the Invesco Advisers, Inc. Code of Ethics. Trustees who are not Independent Trustees and are not Employees of Invesco are also not Covered Person under the Invesco Advisers, Inc. Code of Ethics, but must report his or her securities holdings,
transactions, and accounts as required in the separate Code of Ethics for Trustees of the Affiliated Mutual Funds.
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“Covered Security”
means a security as defined in Section 2(a)(36) of the Investment Company Act except that it does not include the following (Please note: exchange traded funds (ETFs) are
considered Covered Securities):
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Direct obligations of the Government of the United States or its agencies;
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Bankers’ acceptances, bank certificates of deposit, commercial paper and high quality short-term debt instruments, including repurchase agreements;
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Any open-end mutual fund not advised or sub-advised by Invesco Advisers, Inc. All Affiliated Mutual Funds shall be considered Covered Securities regardless of whether they are advised or sub-advised by Invesco Advisers,
Inc.;
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Any unit investment trust,
including
unit investment trusts advised or sub-advised by Invesco Advisers, Inc. However, this definition shall not apply to any series of the PowerShares QQQ Trust or the BLDRS Index
Fund Trust;
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Invesco Ltd. stock because it is subject to the provisions of Invesco Ltd.’s Code of Conduct. Notwithstanding this exception, transactions in Invesco Ltd. securities are subject to all the pre-clearance and
reporting requirements outlined in other provisions of this Code and any other corporate guidelines issued by Invesco Ltd.
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“Employee”
means and includes:
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Any full or part time Employee of Invesco Advisers, Inc. or any full or part time Employee of any Invesco Advisers, Inc.’s affiliates that, in connection with his or her regular functions or duties, makes or
participates in, or obtains any information concerning any Client’s purchase or sale of Covered Securities or who is involved in making or obtains information concerning investment recommendations with respect to such purchase or sales of
Covered Securities; or who has access to non-public information concerning any Client’s purchase or sale of Covered Securities, access to non-public securities recommendations or access to non-public information concerning portfolio holdings of
any portfolio advised or sub-advised by Invesco Advisers, Inc.
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All Employees of Invesco Ltd. located in the United States who are not covered by the Code of Ethics of a registered investment advisory affiliate of Invesco Ltd.
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Any other persons falling within the definitions of Access Person or Advisory Person under Rule 17j-1 of the Investment Company Act or Rule 204A-1 under the Advisers Act and such other persons that may be deemed to be
an Employee by Compliance.
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“Gifts”, “Entertainment” and “Business Partner”
have the same meaning as provided in the Invesco Ltd. Gifts and Entertainment Policy.
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“Independent Trustee”
means a Trustee who is not an interested person within the meaning of Section 2(a)(19) of the Investment Company Act.
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“Initial Public Offering”
means an offering of securities registered under the Securities Act of 1933, as amended, the issuer of which, immediately before the registration, was not subject to the
reporting requirements of Section 13 or 15(d) of the ’34 Act.
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“Invesco Advisers, Inc.’s -affiliated Broker-dealer”
means Invesco Distributors, Inc. or Invesco Capital Markets, Inc. or their successors.
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“Investment Personnel”
means any full or part time Employee of Invesco Advisers, Inc. or any full or part time Employee of any Invesco Advisers, Inc.’s affiliates who, in connection with his or her
regular functions or duties, makes or participates in making recommendations regarding the purchase or sale of Covered Securities by Clients or any natural person who Controls a Client or an investment adviser and who obtains information concerning
recommendations made to the Client regarding the purchase or sale of securities by the Client as defined in Rule 17j-1.
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“Non-Investment Personnel”
means any Employee that does not meet the definition of Investment Personnel as listed above.
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“Private Securities Transaction”
means any securities transaction relating to new offerings of securities which are not registered with the Securities and Exchange Commission, provided however that
transactions subject to the notification requirements of Rule 3050 of the Financial Industry Regulatory Authority’s (FINRA) Conduct Rules, transactions among immediate family members (as defined in the interpretation of the FINRA Board of
Governors on free-riding and withholding) for which no associated person receives any selling compensation, and personal securities transactions in investment company and variable annuity securities shall be excluded.
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“Restricted List Securities”
means the list of securities that are provided to the Compliance Department by Invesco Ltd. or investment departments, which include those securities that are restricted
from purchase or sale by Client or Employee accounts for various reasons (e.g., large concentrated ownership positions that may trigger reporting or other securities regulatory issues, or possession of material, non-public information, or existence
of corporate transaction in the issuer involving an Invesco Ltd. unit).
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“Trustee”
means any member of the Board of Trustees for an open-end or closed-end mutual fund advised or sub-advised by Invesco Advisers, Inc.
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XI.
Invesco Ltd. Policies and Procedures
All
Employees are subject to the policies and procedures established by Invesco Ltd., including the Code of Conduct, Insider Trading Policy, Political Contributions Policy and Gift and Entertainment Policy and must abide by all their requirements,
provided that where there is a conflict between a minimal standard established by an Invesco Ltd. policy and the standards established by an Invesco Advisers, Inc. policy, including this Code, the latter shall control.
XII.
Code of Ethics Contacts
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Telephone Hotline: 1-877-331-CODE [2633]
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E-Mail: codeofethicsnorthamerica@invesco.com
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Last Revised:
January 1, 2015
INVESCO UK
CODE OF ETHICS
2014
2014 Code of Ethics (UK)
Page 1 of 25
CONTENTS
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SECTION
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PAGE
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1. Statement of Fiduciary Principles
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4
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2. Material non-public information
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5
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3. Personal Investing Activities, Pre-Clearance and Pre-Notification
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7
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4. Trade Restrictions on Personal Investing
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10
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5. Economic Opportunities, Confidentiality and Outside Directorships
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13
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6. Client Investments in Securities Owned by Invesco Employees
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14
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7. Certifications and Reporting
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15
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8. Miscellaneous
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18
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APPENDICIES
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A: Definitions
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19
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B: Acknowledgement of Receipt of Revised Code of Ethics
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21
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C: Annual Certification of Compliance with the Code of Ethics
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22
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D: Types of Transactions in Invesco Shares: Pre-Clearance Guidance
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25
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2014 Code of Ethics (UK)
Page 2 of 25
This revised Code of Ethics Policy (‘the Code’) applies to all Employees of all entities of Invesco UK
(“Invesco”). It covers the following topics:
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Prohibitions related to material, non-public information;
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Personal securities investing; and
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Service as a director and other business opportunities.
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This Code also imposes on Employees certain
restrictions and reporting obligations which are specified below. Adherence to this Code, both letter and spirit, is a fundamental and absolute condition of employment with Invesco.
The following Invesco Policies are referred to in this Code of Ethics and the latest version of each of these Policies can be found on the Compliance Europe Intranet
Site or the Legal and Compliance intranet site:-
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Gifts, Benefits and Entertainment (Inducements) Policy;
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Conflicts of Interest Policy;
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Treating Customers Fairly Policy;
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Insider Trading Policy; and
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It is appreciated that no Code of Ethics can address every circumstance that may give
rise to a conflict, a potential conflict or an appearance of a conflict of interest. Every Employee should be alert to any actual, potential or appearance of a conflict of interest with Invesco’s clients and to conduct himself or herself with
good judgment. Failure to exercise good judgment, as well as violations of this Code, may result in the imposition of sanctions on the Employee, including suspension or dismissal. All Covered Persons are required to comply with applicable laws,
rules and regulations and this Code. Covered Persons shall promptly report any violations of law or regulations or any provision of this Code of which they become aware to the Compliance Officer or his/her designee.
The requirements within this Code will apply in full to all permanent Invesco employees. In addition, there are individuals who, whilst not permanent Invesco Employees,
have access to Invesco offices and/or systems who could therefore potentially acquire certain material, non-public information. The applicability of this Code to those individuals is as follows:
Non-Executive Directors:
subject to pre-clearance through the UK Compliance Team, and certification requirements on the purchase and sale of IVZ shares and in
respect of outside interests. Not subject to the pre-clearance requirements on the purchase and sale of Invesco affiliated investments unless the individual is in possession of material non-public information.
Temporary staff, contractors, catering staff, post room staff, and security and maintenance staff:
the Code applies in full.
Auditors, staff seconded from Legal or Accountancy Firms, Actuarial Function Holder:
the Code will apply in full unless the individual confirms that they are
subject to an equivalent Code.
Physio/GP/Gym staff:
Code will only apply where the individual has access to relevant Invesco systems.
Cleaning Staff
: Code requirements will not apply.
Where individuals do not
have access STAR, the distribution of the Code, the pre-clearance of transactions and other notifications will occur directly with the Compliance Department. Inquiries regarding these requirements and requests to pre-clear should be directed to the
2014 Code of Ethics (UK)
Page 3 of 25
IVZ Code of Ethics Team by email to
codeofethics@invesco.com
or by phone to 0203-219-2799.
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1
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Statement of Fiduciary Principals
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1.1
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As a fiduciary, Invesco owes an undivided duty of loyalty to its clients. It is Invesco’s policy that all Employees conduct themselves so as to avoid not only actual conflicts of interest with Invesco clients, but
also that they refrain from conduct which could give rise to the appearance of a conflict of interest that may compromise the trust our clients have placed in us.
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1.2
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The Code is designed to ensure, among other things, that the personal securities transactions of all Employees are conducted in accordance with the following general principles:
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1.2.1
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A duty at all times to place the interests of Invesco’s clients first and foremost;
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1.2.2
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The requirement that all personal securities transactions be conducted in a manner consistent with this Code and in such a manner as to avoid any actual, potential or appearance of a conflict of interest or any abuse of
an Employee’s position of trust and responsibility; and
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1.2.3
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The requirement that Employees should not take inappropriate advantage of their positions.
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1.3
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Invesco’s policy is to avoid actual or apparent conflicts of interest but, where they unavoidably occur, to record, manage, and disclose them to prevent abuse and protect our clients, Employees and other
counterparties.
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1.4
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Invesco does not make political contributions with corporate funds. No Employees may, under any circumstances, use company funds to make political contributions, nor may you represent your personal political views as
being those of the company.
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1.5
|
Invesco seeks to do business with clients and suppliers on a fair and equitable basis. Employees may not accept or provide gifts, entertainment or other non-monetary benefits of an unreasonable value which could create
a conflict with the duty owed to clients. Any limits imposed by our business unit’s policies, local laws, or regulations with respect to the acceptance or provision of gifts, entertainment and non-monetary benefits must be complied with.
Invesco lays down written standards regarding the nature of gifts, benefits and entertainment, with strict monetary and frequency limitations. Only gifts, benefits and entertainment which comply with regulatory requirements and internal standards,
are designed to enhance the quality of service to customers and do not create conflicts of interest, can be given or received. Subject to regulatory requirements and internal limits, the types of benefits which may be given or received by the
Invesco Group include: gifts, hospitality and promotional competition prizes; joint marketing exercises; participation in seminars and conferences; provision of technical services and information technology; training; and travel and accommodation
expenses.
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1.6
|
Invesco does not tolerate bribery. Employees must not offer, give, request, or agree to accept or accept financial or non-financial advantages of any kind where the purpose is to influence a person to behave improperly
in their decisions or actions or to reward them for having done so. Charitable donations must not be made as an inducement or reward for improper behaviour. Unofficial payments to speed up routine government or other processes must never be made,
however small. These restrictions apply to Invesco staff and to anybody appointed to act on Invesco’s behalf and cover relationships with prospective or existing clients or business partners. Further information can be found in the Anti-Bribery
Policy.
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2014 Code of Ethics (UK)
Page 4 of 25
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1.7
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Legislation exists to protect Employees who ‘blow the whistle’ about wrongdoing within the Firm. This legislation encourages Employees to raise concerns internally in the first instance. Invesco Employees
should feel able to raise any such concerns internally, confident that it will be dealt with properly and that all reasonable steps will be taken to prevent victimisation. If Employees wish to report concerns anonymously they can call the Invesco
Whistleblower Hotline, 1-855-234-9780. The toll-free telephone number for calls from the UK is 0800-032-8483. Employees may also report their concerns by visiting the Invesco Whistleblower Hotline website at:
www.invesco.ethicspoint.com
. To ensure confidentiality, this telephone line and website is provided by an independent company and is available twenty-four hours a day, seven days a week. All submissions to the Invesco Whistleblower
Hotline will be reviewed and handled in a prompt, fair, and discreet manner. Employees are encouraged to report questionable practices so that Invesco has an opportunity to address and resolve these before they become more significant regulatory or
legal issues.
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1.8
|
It is Invesco UK policy, in the context of being an Asset Manager, to treat its customers fairly.
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1.9
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No Employee should have ownership in or other interest in or employment by any outside concern which does business with Invesco Ltd. This does not apply to stock or other investments in a publicly held company,
provided
that the stock and other investments do not, in the aggregate, exceed 5% of the outstanding ownership interests of such company. Invesco Ltd. may, following a review of the relevant facts, permit ownership interests which exceed
these amounts if management or the Board of Directors, as appropriate, concludes that such ownership interests will not adversely affect Invesco’s business interests or the judgment of the affected staff.
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1.10
|
Employees are prohibited from using personal hedging strategies or remuneration or liability related contracts of insurance to undermine any risk alignment effects embedded in their remuneration arrangements. This
includes, for instance, entering into an arrangement with a third party under which that third party will make payments directly, or indirectly, to the Employee that are linked to, or commensurate with, the amounts by which the Employee’s
remuneration is subject to reductions arising from the implementation of EU Directives and associated legislation and regulation.
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2
|
MATERIAL, NON-PUBLIC INFORMATION
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2.1
|
Restriction on Trading or Recommending Trading
Each Employee is reminded that it constitutes a violation of law and/or market abuse regulations for any person to trade in or recommend trading in the
securities of a company while in possession of material, non-public information concerning that company, or to disclose such information to any person not entitled to receive it if there is reason to believe that such information will be used in
connection with a trade in the securities of that company. Violations of law and regulations may give rise to civil as well as criminal liability, including the imposition of monetary penalties or prison sentences upon the individuals involved.
Tippees (i.e, persons who receive material, non-public information) also may be held liable if they trade or if they do not trade but pass along such information to others.
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2.2
|
What is material, non-public information?
‘Material information’
is any information about a company which, if disclosed, is likely to
affect the market price of the company’s securities or to be considered important by an average investor in deciding whether to purchase or sell those securities. Examples of information which should be presumed to be “material” are
matters such as dividend increases or decreases, earnings estimates by the company, changes in the company’s previously released earnings estimates, significant new products or discoveries, major litigation by or against the company, liquidity
or
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2014 Code of Ethics (UK)
Page 5 of 25
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solvency problems, extraordinary management developments, significant merger or acquisition proposals, or similar major events which would be viewed as having materially altered the “total
mix” of information available regarding the company or the market for any of its securities.
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2.3
|
‘Non-public information’,
often referred to as ‘inside information,’ is information that has not yet been publicly disclosed. Information about a company is considered to be non-public
information if it is received under circumstances which indicate that it is not yet in general circulation and that such information may be attributable, directly or indirectly, to the company or its insiders, or that the recipient knows to have
been furnished by someone in breach of a fiduciary obligation. Courts have held that fiduciary relationships exist between a company and another party in a broad variety of situations involving a relationship between a company and its lawyers,
investment bankers, financial printers, Employees, technical advisors and others. This list is not exhaustive and the types of fiduciary relationships and the way in which they are formed are extensive.
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2.4
|
Information should not be considered to have been publicly disclosed until a reasonable time after it has been made public (for example, by a press release). Someone with access to inside information may not “beat
the market” by trading simultaneously with, or immediately after, the official release of material information.
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2.5
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The responsibility of ensuring that the proposed transaction does not constitute insider dealing or a conflict with the interests of a client remains with the relevant Employee and obtaining pre-clearance to enter into
a transaction under Section 3.3 below does not absolve that responsibility.
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2.6
|
Invesco is in a unique position, being privy to market research and rumours and being privy also to information about its clients which may be public companies. Invesco Employees must be aware and vigilant to ensure
that they cannot be accused of being a party of any ‘insider dealing’ or market abuse situations.
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2.7
|
In particular, the following investment activities must not be entered into without carefully ensuring that there are no implications of insider trading:
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2.7.1
|
Trading in shares for a client in any other client of Invesco which is a Company quoted on a recognised stock exchange.
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2.7.2
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Trading in shares for a client in a quoted company where Invesco:
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i)
|
obtains information in any official capacity which may be price sensitive and has not been made available to the general public.
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ii)
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obtains any other information which can be substantiated in connection with a quoted company which is also both price sensitive and has not been made available to the general public.
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2.7.3
|
Manipulation of the market through the release of information to regular market users which is false or misleading about a company.
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2.7.4
|
Release of information about a company that would have the effect of distorting the market in such a way to be considered market abuse.
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2.8
|
Reporting Requirement.
Whenever an Employee believes that he or she may have come into possession of material, non-public information about a public company, he or she personally must immediately notify the
Compliance Department and should not discuss such information with anyone else including Invesco Employees and should not engage in transactions for himself or others, including Invesco clients.
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2014 Code of Ethics (UK)
Page 6 of 25
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2.9
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Upon receipt of such information, the Compliance Department will include the company name on the
‘IVZ Restricted List’
in respect of which no transactions may be entered into. This list will be advised
to the Equity dealing desk and no discussion will be entered into.
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2.10
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Confidentiality.
No information regarding the affairs of any client of Invesco may be passed to anyone outside Invesco unless specifically requested by law, regulation or court order. In any event, the Compliance
and Legal Departments must be consulted prior to furnishing such information.
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2.11
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Employees should maintain the confidentiality of information entrusted to them by the Company and their fellow Employees. External publication or distribution of internal company information, policies or procedures is
prohibited except when disclosure is properly authorised by the functional owner of the information or legally mandated. Employees should make all reasonable efforts to safeguard such information that is in their possession against inadvertent
disclosure and shall comply with any non-disclosure obligations imposed on Invesco in its agreements with third parties.
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2.12
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Sanctions.
Any Employee, who knowingly trades or recommends trading while in possession of material, non-public information, may be subject to civil and criminal penalties, as well as to immediate suspension
and/or dismissal from Invesco.
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3
|
PERSONAL INVESTING ACTIVITIES, PRE-CLEARANCE AND PRE-NOTIFICATION REQUIREMENTS
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3.1
|
Transactions covered by this Code
All transactions (other than transactions described in section 3.2) in investments made for “Covered Accounts” are subject to the pre-clearance procedures,
trading restrictions, pre-notification and reporting requirements described below, unless otherwise indicated.
For a list of the types of Employee and other accounts which are “Covered Accounts”, please see the definition in Appendix
A.
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3.2
|
Transactions in the following investments (“Exempt Investments”) are not subject to the trading restrictions or other requirements of this Code and do not need to be pre-notified, pre-cleared, or reported
other than as described below:
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3.2.1
|
Registered
unaffiliated
(e.g. Schroders) open-ended Collective Investment Schemes [CIS] including; open-ended mutual funds, open-ended investment companies/ICVCs or unit trusts — but not Exchange-Traded
Funds (ETFs) or closed-end funds, e.g. Investment Trusts;
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3.2.2
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Securities which are direct obligations of an OECD country (e.g. US Treasury Bonds);
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3.2.3
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In-specie transfers; and
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3.2.4
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Bankers’ acceptances, bank certificates of deposit, commercial paper and high quality short-term debt instruments, including repurchase agreements.
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Employees are required to provide statements for all Covered Accounts as described in Section 7.4. If an account has the ability to invest in
Covered Securities, the account is considered a Covered Account and the full statement must be provided to Compliance including information regarding Exempt Investments.
2014 Code of Ethics (UK)
Page 7 of 25
Transactions which require pre-notification and pre-clearance
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3.3.1
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Transactions in a Covered Account which must be notified to the Compliance department for pre-clearance, regardless of whether the order is placed directly or through a broker/adviser, include the following:
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•
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buys or sales of ordinary securities, equivalent securities, venture capital schemes such as Venture Capital Trusts (VCTs), Investment Trusts and Exchange Traded Funds (ETFs), including any of these investments which
are held within a product/wrapper such as a Self-Invested Personal Pension (SIPP) or Individual Savings Account (ISA);
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•
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buys, sales, or switches in Invesco UK ICVCs, GPR Funds, Pension Funds or other affiliated schemes, including any of these investments which are held within an unaffiliated product/wrapper e.g. Invesco ICVCs held with a
Hargreaves Lansdown ISA or Invesco pension funds held within an Aviva Group Personal Pension (GPP).
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All Employees must receive prior
approval using the Star Compliance system or from the IVZ Code of Ethics Team in order to engage in a personal securities transaction in a Covered Security.
Pre-clearance will not be given if the proposed personal securities transaction is in conflict with any of the rules outlined in this Policy, including
the Blackout Rule.
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3.3.2
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The Pre-clearance Process
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The pre-clearance process involves the following steps:
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•
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The proposed trade must be entered into the Star Compliance system.
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•
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Covered persons (e.g. an Employee’s spouse, non-employee without Invesco system access) who do not have access to the Star Compliance system can submit their trade requests either through the Invesco Employee who
will submit the request through STAR Compliance or may contact the IVZ Code of Ethics Team directly.
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•
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The Star Compliance system will confirm if there is any Client activity in the same or equivalent security currently on the trading desk and verify if there have been any transactions within the corresponding Blackout
Rule period (refer to section 4.1.2).
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•
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The Star Compliance system will check to see if the security is on the restricted list (refer to section 4.1.1).
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•
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If any potential conflicts are identified by the Star Compliance system, the request will be reviewed by the IVZ Code of Ethics Team.
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•
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An automated response will be received by the Employee for all pre-approval requests indicating whether the transaction has been approved or denied.
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3.3.3
|
Executing Approved Transactions
|
All authorized personal securities transactions must be
executed by 4.30pm GMT/BST on the same business day. If the trade is not executed within this time period, a new pre-clearance request must
2014 Code of Ethics (UK)
Page 8 of 25
be submitted and approved if the Employee still intends to trade in that security. Any exception to this rule must be approved by the Compliance Officer or the IVZ Code of Ethics Team.
All approved trades that are not executed must be retracted in the Star Compliance system by the Employee.
Employees may be requested to reverse any trades processed without the required pre-approval.
Any costs or losses associated with the reversal are the responsibility of the Employee. The Employee may also be asked to disgorge any profits from the
trade.
No order for a Securities Transaction for which pre-clearance authorisation is sought may be placed prior to the receipt of authorisation of
the transaction.
Any approval granted to a Covered Person to execute a personal security transaction is valid for that business day only, except in
the following situations:
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•
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Approval is granted after the close of trading day. In this case, approval is valid through the next trading day.
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•
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Where trade instructions are sent via the post to IFDS, this period will be extended, and the trade must be executed by the close of market two trading days after permission has been granted.
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•
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Unless the Compliance Officer’s authorisation to extend this period has been obtained.
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3.3.4
|
Copies of the relevant contract notes (or equivalent) must be sent to the Code of Ethics inbox.
This must be done within 14 days of the transaction.
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3.4
|
Transactions that do not need to be pre-cleared
. The pre-clearance requirements (and the trading restrictions on personal investing described below) do not apply to the following transactions:
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3.4.1
|
Discretionary Accounts.
Transactions effected in any Covered Account over which the Employee has no direct or indirect influence or control (a “Discretionary Account”). An Employee shall be deemed to
have “no direct or indirect influence or control” over an account only if all of the following conditions are met:
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i)
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investment discretion for such account has been delegated in writing to an independent fiduciary and such investment discretion is not shared with the Employee; and
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ii)
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the Employee certifies in writing that he or she has not and will not discuss any potential investment decisions with such independent fiduciary; and
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iii)
|
the advisor also certifies in writing that he or she will not discuss any potential investment decisions with the owner of the account or the Employee; and
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iv)
|
duplicate periodic statements are provided to the IVZ Code of Ethics Team.
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v)
|
the Compliance Department has determined that the account satisfies the foregoing requirements.
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3.4.2
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Governmental Issues.
Investments in the debt obligations of state and municipal governments or agencies, (e.g. Essex Council Electricity Bond).
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2014 Code of Ethics (UK)
Page 9 of 25
|
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3.4.3
|
Non-Volitional Trades.
Transactions which are non-volitional on the part of the Employee (such as the receipt of securities pursuant to a stock dividend or merger).
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3.4.4
|
Automatic Transactions
Purchases of the stock of a company pursuant to an automatic dividend reinvestment plan or an Employee stock purchase plan sponsored by such company.
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3.4.5
|
Rights Offerings
Receipt or exercise of rights issued by a company on a
pro rata
basis to all holders of a class of security. Employees must, however, pre-clear transactions for the acquisition of such
rights from a third party or the disposition of such rights.
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3.4.6
|
Non-Executive Director’s Transactions
Transactions in securities, except for Invesco Ltd. shares and/or Investment Trusts and GPR Funds managed by Invesco, by Non-Executive Directors. Transactions by
Non-Executive Directors will be pre-cleared outside of Star Compliance.
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3.4.7
|
Note that all of the transactions described in paragraphs 3.4.1. to 3.4.6, while not subject to pre-clearance, are nevertheless subject to all of the reporting requirements set forth below in paragraph 7.3.
This must
be done within 14 days of the transaction
.
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4
|
TRADE RESTRICTIONS ON PERSONAL INVESTING
|
|
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4.1
|
All transactions in Covered Accounts which are subject to the preclearance requirements specified in this Code are also subject to the following trading restrictions:
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4.1.1
|
Restricted Lists
Employees requesting pre-clearance to buy or sell a security on the Restricted List may be restricted from executing the trade because of potential conflicts of interest.
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4.1.2
|
Blackout Periods
An employee may not buy or sell, or permit any Covered Account to buy or sell, a security or any instrument if there is conflicting activity in an Invesco Client account.
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Non-Investment Personnel.
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•
|
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may not buy or sell a Covered Security within two trading days before or after a Client trades in that security; and
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•
|
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may not buy or sell a Covered Security if there is a Client order on that security currently with the trading desk.
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Investment Personnel.
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•
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may not buy or sell a Covered Security within three trading days before or after a Client trades in that security; and
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•
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may not buy or sell a Covered Security if there is a Client order on that security with the trading desk.
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De Minimis
Exemptions. Compliance will apply the following
de minimis
exemptions in granting pre-clearance when a Client has recently
traded or is trading in a security involved in a Covered Person’s proposed personal securities transaction:
o Equity de minimis
exemptions.
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|
•
|
|
If a Covered Person does not have knowledge of trading activity in a particular equity security, he or she may execute up to 500 shares of such security in a
rolling 30-day period provided the issuer of such security is included in the FTSE 100 Index S&P TSX Composite Index, Russell 1000, ASX 300 Accumulation Index, Hang Seng Index, Straits Times
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2014 Code of Ethics (UK)
Page 10 of 25
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Index STI (FSSTI), Korea Composite Stock Price Index (KOSPI), NIKKEI 225, or the NSE S&P CNX Nifty Index.
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|
•
|
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If a Covered Person does not have knowledge of trading activity in a particular equity security, he or she may execute up to 500 shares of such security in a rolling 30-day period provided that there is no conflicting
client activity in that security during the blackout period or on the trading desk that exceeds 500 shares per trading day.
|
o
Fixed income
de minimis
exemptions
. If a Covered Person does not have knowledge of trading activity in a particular fixed income security he or she may execute up to £60,000 of par value of such security in a rolling 30-day
period.
The automated review system will confirm that there is no activity currently on the trading desk on the security involved in the proposed
personal securities transaction and will verify that there have been no Client transactions for the requested security within the last two trading days for all Covered Persons except Investment Personnel for whom the blackout period is the last
three trading days.
For Investments, Portfolio Administration and IT personnel, Compliance will also check the trading activity of affiliates with
respect to which such personnel have access to transactional information to verify that there have been no Client transactions in the requested security during the blackout period. Compliance will notify the Covered Person of the approval or denial
of the proposed personal securities transaction.
Any approval granted to a Covered Person to execute a personal security transaction is valid for
that business day only, except that if approval is granted after the close of the trading day such approval is good through the next trading day. If a Covered Person does not execute the proposed securities transaction prior to closing of the market
immediately following the approval, the Covered Person must resubmit the request on another day for approval.
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|
4.1.3
|
In the event there is a trade in a client account in the same security or instrument within a blackout period, the Employee may be required to close out the position and to disgorge any profit to a charitable
organisation chosen by Invesco Compliance.
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|
|
4.1.4
|
Invesco Ltd. Securities
|
1. No Employee may effect short sales of Invesco Ltd.
securities.
2. No Employee may engage in transactions in publicly traded options, such as puts, calls and other derivative securities relating to
the Invesco Ltd.’s securities, on an exchange or any other organized market.
3. For all Covered Persons, all transactions, including transfers
by gift, in Invesco Ltd. Securities are subject to pre-clearance regardless of the size of the transaction, and are subject to “blackout” periods established by Invesco Ltd. and holding periods prescribed under the terms of the agreement
or program under which the securities were received.
4. Holdings of Invesco Ltd. securities in Covered Persons accounts are subject to the
reporting requirements specified in Section 7.3 of this Code.
Any Employee who becomes aware of material non-public information about Invesco
is prohibited from trading in Invesco Securities. Full details of the Invesco stock transaction Pre-
2014 Code of Ethics (UK)
Page 11 of 25
Clearance Guide and restrictions for all Employees of Invesco can be found in Appendix D.
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|
4.1.5
|
Invesco Investment Trusts
Staff dealing in Invesco Investment Trusts will also be subject to closed periods as dictated by each of the Trusts.
|
|
|
4.1.6
|
UK ICVCs
and other affiliated schemes will be subject to the Short - Term Trading restrictions (60 day rule — see 4.1.7). The preferential rate of sales charge allowed to staff will be withdrawn in
circumstances where it is apparent that the Employee has traded on a short-term basis in those shares i.e. where previous transactions by that person have resulted in the short-term holding of those investments. Shares of UK ICVCs and affiliated
schemes will not be accepted for redemption if the funds themselves are closed for redemption due to the effects of subsequent market or currency movements.
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|
|
4.1.7
|
Short-Term Trading Profits
It is Invesco’s policy to restrict the ability of Employees to benefit from short-term trading in securities and instruments. Employees must disgorge profits made on the
sale of any security or instrument held less than 60 days. This section (4.1.9) will not apply to Financial Spread Betting transactions which have been approved under the Exceptions section (4.1.15) of this Policy.
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|
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4.1.8
|
Initial Public Offerings
No Employee may purchase or permit any Covered Account to purchase a security offered pursuant to an initial public offering, except in a Venture Capital Trust or Real Estate
Investment Trust (REIT), wherever such offering is made. However where the public offering is made by a Government of where the Employee is resident and different amounts of the offering are specified for different investor types e.g. private and
institutional, the Compliance Officer may allow such purchases after consultation with the local Chief Executive Officer or his designee.
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|
|
4.1.9
|
Privately-Issued Securities
Employees may not purchase or permit a Covered Account to purchase or acquire any privately-issued securities, other than in exceptional cases specifically approved by the local
Chief Executive Officer (e.g. where such investment is part of a family-owned and operated business venture that would not be expected to involve an investment opportunity of interest to any Invesco client). Requests for exceptions should be made in
the first instance to the IVZ Code of Ethics Team.
|
|
|
4.1.10
|
Employees, however, may invest in interests in private investment funds (i.e. hedge funds) that are established to invest predominantly in public securities and instruments, subject to the pre-clearance procedures,
trading restrictions and reporting requirements contained in this Code. Employees may also invest in residential co-operatives and private recreational clubs (such as sports clubs, country clubs, luncheon clubs and the like) for their personal use;
such investments are not subject to the pre-clearance procedures, trading restrictions and reporting requirements unless the Employee’s investing is part of a business conducted by the Employee. Such ownership should be reported to the
Compliance Officer.
|
|
|
4.1.11
|
Short Sales
An Employee may not sell short a security. Requests for exceptions should be made to the IVZ Code of Ethics Team.
|
|
|
4.1.12
|
Financial Spread Betting
Employees may not enter into Financial Spread betting arrangements unless they have applied in writing to
|
2014 Code of Ethics (UK)
Page 12 of 25
|
|
do so under the Exceptions section of this Policy (4.1.15) and have received written confirmation that this is permitted. Exceptions will not be granted for Financial Spread Betting on
single stocks but, depending on the circumstances, spread betting on Foreign Exchange Rates, Main Indices and Government Bonds may be allowed on an exceptions basis.
|
|
|
4.1.13
|
Futures
Employees may not write, sell or buy exchange-traded futures, synthetic futures, swaps and similar non-exchange traded instruments.
|
|
|
4.1.14
|
Investment Clubs
Employee participation in an investment club is prohibited.
|
|
|
4.1.15
|
Exceptions
The Chief Executive Officer or his designee in consultation with the Compliance Officer may, on a case by case basis, grant exceptions from these trading restrictions upon written request. Any
exceptions granted will be reported to the local Board of Directors at least annually.
|
|
5
|
ECONOMIC OPPORTUNITIES, CONFIDENTIALITY AND OUTSIDE DIRECTORSHIPS
|
|
|
5.1
|
In order to reduce potential conflicts of interest arising from the participation of Employees on the boards of directors of public, private, non-profit and other enterprises, all Employees are subject to the following
restrictions and guidelines:
|
|
|
5.1.1
|
An Employee may not serve as a director of a public company without the approval of the Compliance Officer after consultation with the local Chief Executive Officer.
|
|
|
5.1.2
|
An Employee may serve on the board of directors or participate as an adviser or otherwise, or advisers of a private company only if:
|
|
|
(i)
|
client assets have been invested in such company and having a seat on the board would be considered beneficial to our clients interest; and
|
|
|
(ii)
|
service on such board has been approved in writing by the Compliance Officer. The Employee must resign from such board of directors as soon as the company contemplates going public, except where the Compliance Officer
has determined that an Employee may remain on a board. In any event, an Employee shall not accept any compensation for serving as a director (or in a similar capacity) of such company; any compensation offered shall either be refused or, if unable
to be refused, distributed
pro rata
to the relevant client accounts.
|
|
|
5.1.3
|
An Employee must receive prior written permission from the Compliance Officer or his designee before serving as a director, non-executive director, trustee or member of an advisory board of either:
|
|
|
(i)
|
any non-profit or charitable institution; or
|
|
|
(ii)
|
a private family-owned and operated business.
|
|
|
5.1.4
|
An Employee may serve as an officer or director of a residential co-operative, but must receive prior written permission from the Compliance Officer before
serving as a director if, in the course of
|
2014 Code of Ethics (UK)
Page 13 of 25
|
|
such service, he or she gives advice with respect to the management of the co-operative’s funds.
|
|
|
5.1.5
|
If an Employee serving on the board of directors or advisers of any entity comes into possession of material, non-public information through such service, he or she must immediately notify the Compliance Officer.
|
|
|
5.1.6
|
An Invesco Employee shall not take personal advantage of any economic opportunity properly belonging to an Invesco Client or to Invesco itself. Such opportunities could arise, for example, from confidential information
belonging to a client or the offer of a directorship. Employees must not disclose information relating to a client’s intentions, activities or portfolios except:
|
|
|
i)
|
to fellow Employees, or other agents of the client, who need to know it to discharge their duties; or
|
|
|
ii)
|
to the client itself.
|
|
|
5.1.7
|
Employees may not cause or attempt to cause any Client to purchase, sell or hold any Security in a manner calculated to create any personal benefit to the Employee or Invesco.
|
|
|
5.1.8
|
If an Employee or immediate family member stands to materially benefit from an investment decision for an Advisory Client that the Employee is recommending or participating in, the Employee must disclose that interest
to persons with authority to make investment decisions and to the Compliance Officer. Based on the information given, a decision will be made on whether or not to restrict the Employee’s participation in causing a client to purchase or sell a
Security in which the Employee has an interest.
|
|
|
5.1.9
|
An Employee must disclose to those persons with authority to make investment decisions for a Client (or to the Compliance Officer if the Employee in question is a person with authority to make investment decisions for
the Client), any Beneficial Interest that the Employee (or immediate family) has in that Security or an Equivalent Security, or in the issuer thereof, where the decision could create a material benefit to the Employee (or immediate family) or the
appearance of impropriety. The person to whom the Employee reports the interest, in consultation with the Compliance Officer, must determine whether or not the Employee will be restricted in making investment decisions.
|
|
6
|
CLIENT INVESTMENTS IN SECURITIES OWNED BY INVESCO EMPLOYEES
|
|
|
6.1
|
General principles
In addition to the specific prohibitions on certain personal securities transactions as set forth herein, and in-line with the requirements of the Fraud Policy, all Employees are
prohibited from:
|
|
|
6.1.1
|
Employing any device, scheme or artifice to defraud any prospect or client;
|
|
|
6.1.2
|
Making any untrue statement of a material fact or omitting to state to a client or a prospective client, a material fact necessary in order to make the statements made, in light of the circumstances under which they are
made, not misleading;
|
|
|
6.1.3
|
Engaging in any act, practice or course of business which operates or would operate as a fraud or deceit upon any prospect or client;
|
2014 Code of Ethics (UK)
Page 14 of 25
|
|
6.1.4
|
Engaging in any manipulative practice with respect to any prospect or client; or
|
|
|
6.1.5
|
Revealing to any other person (except in the normal course of his or her duties on behalf of a client) any information regarding securities transactions by any client or by Invesco,
|
|
|
6.1.6
|
Revealing to any other person (except in the normal course of his or her duties on behalf of a client) the consideration of any securities transactions by any client or by Invesco.
|
|
7
|
Certifications and Reporting Requirements
|
|
|
7.1
|
This Code forms part of an employee’s contract of employment and any breach may be grounds for disciplinary action up to and including summary dismissal.
|
|
|
7.2
|
In order to implement the general principles, restrictions and prohibitions contained in this Code, each Employee is required to provide the following certifications and reports described in sections 7.2 to 7.4
below.:
|
|
|
7.2.1
|
On commencing employment at Invesco, each new employee shall receive a copy of the Code via electronic means and will be expected to confirm that they understand and accept this Code within 10 days of commencing
employment.
|
|
|
7.2.2
|
New employees are also required, within 10 days of commencing employment, to provide the following to the Compliance Department:
|
|
|
(i)
|
a list of all Covered Accounts (see Initial Holdings Report 7.3.1); and
|
|
|
(ii)
|
details of any directorships (or similar positions) of for-profit, non-profit and other enterprises.
|
|
|
7.3
|
Employees are required to sign-off and submit various reports in the Star Compliance system as detailed in sections 7.3.1 to 7.3.4 below. Employees that do not hold any Covered Securities or Covered Accounts are still
required to sign-off on these reports.
|
|
|
7.3.1
|
Initial Holdings Reports.
Within 10 calendar days of becoming a Covered Person, each Covered Person must complete an Initial Holdings Report by inputting into the automated system, Star Compliance, the
following information (the information must be current within 45 days of the date the person becomes a Covered Person):
|
|
|
•
|
|
A list of all security holdings, including the name, number of shares (for equities) and the principal amount (for debt securities) in which the person has direct or indirect Beneficial Interest. A Covered Person may
have a Beneficial Interest in securities held by members of their immediate family sharing the same household (i.e., a spouse and children) or by certain partnerships, trusts, corporations, or other arrangements.
|
|
|
•
|
|
The security identifier (CUSIP, symbol, etc.);
|
|
|
•
|
|
The name of any broker-dealer or bank with which the person maintains an account in which any securities are held for the direct or indirect benefit of the person; and
|
|
|
•
|
|
The date that the report is submitted by the Covered Person
|
2014 Code of Ethics (UK)
Page 15 of 25
|
|
7.3.2
|
Quarterly Transactions Reports.
All Covered Persons must report, no later than 30 days after the end of each calendar quarter, the following information for all transactions in a Covered Security in which
a Covered Person has a direct or indirect Beneficial Interest:
|
|
|
•
|
|
The date of all transactions in that quarter, the security name, the number of shares (for equity securities); or the interest rate and maturity date (if applicable) and the principal amount (for debt securities) for
each Covered Security;
|
|
|
•
|
|
The nature of the transaction (buy, sell, etc.);
|
|
|
•
|
|
The security identifier (CUSIP, symbol, etc.);
|
|
|
•
|
|
The price of the Covered Security at which the transaction was executed;
|
|
|
•
|
|
The name of the broker-dealer or bank executing the transaction; and
|
|
|
•
|
|
The date that the report is submitted to Compliance.
|
All Covered Persons must submit a Quarterly
Transaction Report regardless of whether they executed transactions during the quarter or not. If a Covered Person did not execute transactions subject to reporting requirements during a quarter, the Report must include a representation to that
effect. Covered Persons need not include transactions that do not require pre-clearance such as transactions made through an Automatic Investment Plan/Dividend Reinvestment plan or Exempt Investments (refer to section 3.2).
Additionally, Covered Persons must report information on any new brokerage account established by the Covered Person during the quarter for the direct
or indirect benefit of the Covered Person (including Covered Securities held in a retirement vehicle, including plans sponsored by Invesco or its affiliates).
The report shall include:
|
|
•
|
|
The date the account was established;
|
|
|
•
|
|
The name of the broker-dealer or bank; and
|
|
|
•
|
|
The date that the report is submitted to Compliance.
|
Compliance may identify transactions by Covered
Persons that technically comply with the Code for review based on any pattern of activity that has an appearance of a conflict of interest.
|
|
7.3.3
|
Annual Holdings Reports.
All Covered Persons must report annually the following information, which must be current within 45 days of the date the report is submitted to Compliance:
|
|
|
•
|
|
The security name and the number of shares (for equities) or the interest rate and maturity date (if applicable) and principal amount (for debt securities) for each Covered Security in which the Covered Person has any
direct or indirect Beneficial Interest;
|
|
|
•
|
|
The security identifier for each Covered Security (CUSIP, symbol, etc.);
|
|
|
•
|
|
The name of the broker-dealer or bank with or through which the security is held;
|
|
|
•
|
|
With respect to Discretionary Accounts, if any, certifications that such Employee does not discuss any investment decisions with the person making investment decisions;
|
|
|
•
|
|
With respect to any non-public security owned by such Employee, a statement indicating whether the issuer has changed its name or publicly issued securities during such calendar year; and
|
|
|
•
|
|
The date that the report is submitted by the Covered Person to Compliance.
|
2014 Code of Ethics (UK)
Page 16 of 25
|
|
7.3.4
|
Certification of Compliance.
All Covered Persons must certify annually that they have read and understand the Code and recognize that they are subject to the Code.
|
In addition, all Covered Persons must certify annually that they have complied with the requirements of the Code and that they have disclosed or
reported all personal securities transactions required to be disclosed or reported under the Code. If material changes are made to the Code during the year, these changes will also be reviewed and approved by the Invesco UK Conflicts of Interest
Committee.
All Covered Persons must certify within 30 days of the effective date of the amended code that they have read and understand the Code
and recognize that they are subject to the Code. On an annual basis, Employees are required to provide an updated list of the following to Compliance:
|
|
i)
|
directorships (or similar positions) of for-profit, non-profit and other enterprises;
|
|
|
ii)
|
potential conflicts of interest identified which have not yet been reported to the Compliance Department; and
|
|
|
iii)
|
potential Treating Customers Fairly issues identified which have not yet been reported to the Compliance Department.
|
|
|
7.4
|
Confirmations and Statements.
Within 14 calendar days of trade date of each personal securities transaction involving a Covered Security the Employee engaging in the transaction must provide the IVZ Code
of Ethics team a duplicate copy of the trade confirmation, or such other confirmations as are available.
|
Employees are encouraged to
direct their brokers to deliver to the Invesco Compliance Department, duplicate trade confirmations and account statements for their Covered Accounts in a timely manner. If duplicate contract notes are not provided by the broker, the Employee must
provide the statements directly to Compliance within 14 calendar days following a trade or receipt of a periodic statement. In addition, Employees must provide duplicate trade confirmations and account statements directly to the IVZ Code of Ethics
team upon request.
The IVZ Code of Ethics Team will review reports submitted and report any breaches of this Policy or any other concerns relating
to personal trading to the Invesco UK Compliance department. All material breaches and concerns are also reported to Invesco UK Conflicts of Interest Committee.
|
|
7.5
|
Exempt Investments
Confirmations, periodic statements, and periodic reports need not be provided with respect to Exempt Investments (see 3.2). If an account has the ability to hold both Covered Securities
and Exempt Investments, the periodic statement will need to be provided and may include information regarding Exempt Investments.
|
|
|
7.6
|
Disclaimer of Beneficial Interest
Any report required under this Code may contain a statement that such report is not to be construed as an admission by the person making the report that he or she has any
direct and indirect beneficial interest of the security to which the report relates.
|
|
|
7.7
|
Annual Review
The Compliance Officer will review the Code on an annual basis and as necessary, in light of legal and business developments and experience in implementing the Code, and will prepare a report
to the relevant Executive Committee that:
|
|
|
7.7.1
|
summarizes existing procedures concerning personal investing and any changes in the procedures made during the past year,
|
2014 Code of Ethics (UK)
Page 17 of 25
|
|
7.7.2
|
identifies any violations requiring significant remedial action during the past year, and
|
|
|
7.7.3
|
identifies any recommended changes in existing restrictions or procedures based on the experience under the Code, evolving industry practices, or developments in applicable laws or regulations
|
|
|
8.1
|
Interpretation
The provisions of this Code will be interpreted by the Compliance Officer. Questions of interpretation should be directed in the first instance to the Compliance Officer or his/her designee
or, if necessary, with the Compliance Officer of another Invesco entity. The interpretation of the Compliance Officer is final.
|
|
|
8.2
|
Sanctions
Compliance will issue a letter of education to the Covered Persons involved in violations of the Code that are determined to be inadvertent or immaterial.
|
Invesco may impose additional sanctions in the event of repeated violations or violations that are determined to be material or not inadvertent,
including disgorgement of profits (or the differential between the purchase or sale price of the personal security transaction and the subsequent purchase or sale price by a relevant Client during the enumerated period), a letter of censure or
suspension, or termination of employment.
Any violations of this Code and sanctions therefore will be reported to the local Board of Directors at
least annually.
|
|
8.3
|
Effective Date
This revised Code shall become effective as of 1 April 2014.
|
|
|
8.4
|
IVZ Code of Ethics Team Contact Information
You may direct any questions regarding this Code to the IVZ Code of Ethics Team by email to
codeofethics@invesco.com
or by phone to 203-219-2799.
|
2014 Code of Ethics (UK)
Page 18 of 25
APPENDIX A
DEFINITIONS
|
1.
|
‘
Advisory Client’
means any client (including both investment companies and managed accounts) for which Invesco serves as an investment adviser, renders investment advice, or makes investment decisions.
|
|
2.
|
‘Beneficial Interest’
means the opportunity to share, directly or indirectly, in any profit or loss on a transaction in Securities, including but not limited to all joint accounts, partnerships and
trusts.
|
|
3.
|
A
‘Covered Account‘
is defined for purposes of this Policy as any account:
|
|
|
•
|
|
Where the Employee is the registered owner of the securities in the account, thereby having a direct financial interest or benefit from the account; or
|
|
|
•
|
|
In which an Employee has indirect financial interest or indirect benefit, such as accounts held in the name of the Employee’s spouse, civil partner, or child living in the same household.
|
|
|
•
|
|
In which an Employee has direct control, such as any account for which the Employee has a power of attorney or trading authorization, trust accounts on which the Employee is appointed a trustee, or corporate accounts
for which the Employee is an authorized signing officer.
|
The examples provided above are not all-inclusive. There may be other account
types and registrations not listed above that are considered covered for the purposes of this Policy.
|
4.
|
‘Employee’
means a person who has a contract of employment with, or employed by, Invesco UK or any associated Invesco Company within Europe; including consultants, contractors or temporary Employees.
|
|
5.
|
‘Equivalent Security’
means any Security issued by the same entity as the issuer of a security, including options, rights, warrants, preferred stock, restricted stock, bonds and other obligations of
that company.
|
|
6.
|
‘Fund’
means an investment company for which Invesco serves as an adviser or subadviser.
|
|
7.
|
‘High quality short-term debt instruments’
means any instrument having a maturity at issuance of less than 366 days and which is treated in one of the highest two rating categories by a Nationally
Recognised Statistical Rating Organisation, or which is unrated but is of comparable quality.
|
|
8.
|
‘Independent Fund Director’
means an independent director of an investment company advised by Invesco.
|
|
9.
|
‘Initial Public Offering’
means any security which is being offered for the first time on a Recognised Stock Exchange.
|
|
10.
|
‘Open-Ended Collective Investment Scheme’
means any Open-ended Investment Company, US Mutual Fund, UK ICVC or Irish Unit Trust, Luxembourg SICAV, French SICAV or Bermuda Fund.
|
|
11.
|
‘Securities Transaction’
means a purchase of or sale of Securities.
|
|
12.
|
‘Security’
includes stock, notes, bonds, debentures and other evidences of indebtedness (including loan participations and assignments), limited partnership interests, investment contracts, and all
derivative instruments, such as options and warrants.
|
2014 Code of Ethics (UK)
Page 19 of 25
|
13.
|
“
UK ICVC and affiliate schemes”
defined as all UK domiciled Invesco ICVCs, all Invesco Continental European domestic ranges and all Invesco Ireland and Luxembourg SICAVs and Unit Trusts.
|
2014 Code of Ethics (UK)
Page 20 of 25
APPENDIX B
ACKNOWLEDGMENT OF RECEIPT
OF INVESCO UK
REVISED CODE OF ETHICS
Only complete this version of the Annual Acknowledgement where you are unable to complete the electronic version.
I acknowledge that I have received the Invesco Code of Ethics dated 1 April 2014, and represent that:
|
1.
|
In accordance with Section 7 of the Code of Ethics, I will fully disclose the Securities holdings in Covered Accounts*;
|
|
2.
|
In accordance with Section 3 of the Code of Ethics, I will obtain prior authorisation for all Securities Transactions in each of my Covered Accounts except for transactions exempt from pre-clearance under
Section 3 of the Code of Ethics*;
|
|
3.
|
In accordance with section 7 of the Code of Ethics, I will report all Securities Transactions in each of my Covered Accounts except for transactions exempt from reporting under Section 3 of the Code of Ethics;
|
|
4.
|
I have notified all individuals who own accounts that are Covered Accounts of the requirements set forth in this Code and understand that these accounts are subject to the Code including reporting and pre-clearance
requirements;
|
|
5.
|
I have been authorised by all individuals who own Covered Accounts to provide the relevant details concerning their securities transactions in accordance with the Code;
|
|
6.
|
I will comply with the Code of Ethics in all other respects; and
|
|
7.
|
I understand that a violation of the Code may be grounds for disciplinary action or termination of my employment and may also be a violation of law and regulations which may give rise to civil as well as criminal
liability.
|
Date:
|
*
|
Representations Nos: 1 and 2 do not apply to Independent Fund Directors
|
2014 Code of Ethics (UK)
Page 21 of 25
APPENDIX C
ANNUAL CERTIFICATION OF COMPLIANCE WITH THE INVESCO CODE OF ETHICS
To be completed by all Employees following the end of each calendar year -
only complete this version of the Annual Certification where you are unable to
complete the electronic version.
I hereby certify that, with respect to the calendar year ending on 31 December, 2013 (the ‘Calendar Year), I have
reported to Invesco all Securities Transactions in respect of each of my Covered Account(s). I further certify that I have reviewed the attachments hereto and confirm that:
|
a)
|
Sections A & B contain a complete list of Covered Account(s) as well as a complete list of my directorships, advisory board memberships and similar positions;
|
|
b)
|
Section C contains a complete list of trades, other than Exempt Investments, in my Covered Account(s) during the Calendar Year for which contract notes/confirmations have not been forwarded;
|
|
c)
|
Sections D & E contain details of any potential Conflicts of Interest and Treating Customers Fairly issues identified during the year but not yet reported.
|
I further certify that:
|
a)
|
For any of my Covered Accounts which have been approved by the Compliance Department as a Discretionary Account(s) (which have been identified on Section A with an ‘E’ prefix), that I have not exercised
investment discretion or influenced any investment decisions and that I will not exercise investment discretion or influence any potential investment decisions with such Discretionary Account(s);
|
|
b)
|
As appropriate, I have identified on Section A hereto those Covered Accounts which contain open-ended Collective Investment Schemes/Investment Companies shares only but for which account statements and confirms are not
and have not been provided and hereby confirm that all securities transactions in these accounts are and will be limited exclusively to transactions in shares of open-ended Collective Investment Schemes;
|
|
c)
|
For any privately-issued security held by me or my Covered Account(s), I will inform the Compliance Department upon learning that any issuer has either changed its name or has issued or proposed to issue any class of
security to the public;
|
|
d)
|
I have complied with the requirements of the Conflicts of Interest Policy, the Gifts, Benefits and Entertainment (Inducements) Policy, the Anti-Bribery Policy, the Market Abuse Policy, Insider Trading Policy, Fraud
Policy and the Treating Customers Fairly Policy;
|
|
e)
|
I have not used personal hedging strategies or remuneration or liability related insurance contracts to undermine any risk alignment effects embedded in my remuneration arrangements;
|
|
f)
|
I have read and understand my department’s procedures;
|
|
g)
|
I have admitted to and reported any errors at the time they occurred or as soon I became aware of them; and
|
|
h)
|
I have received a copy of and understand the Code in its entirety and acknowledge that I am subject to its provisions. I also certify that I have complied and will comply with its requirements;
|
To the extent that any of the attached Schedules contain inaccurate or incomplete information, I have noted and initialled the change directly on the Schedule and
returned this certification along with all Schedules to the Compliance Department. Capitalised terms used herein without definition shall have the meanings given to them in the Code.
Date:
UPON YOUR FULL REVIEW AND EXECUTION, PLEASE RETURN THE ENTIRE PACKAGE
IMMEDIATELY TO THE COMPLIANCE DEPARTMENT IN HENLEY
2014 Code of Ethics (UK)
Page 22 of 25
APPENDIX C
Annual Certificate of Compliance with
THE INVESCO CODE OF ETHICS
Section A — COVERED ACCOUNTS
The following is a list of Covered
Accounts subject to the Invesco Code of Ethics:
Section B - Directorships, Advisory Board Memberships and Similar Positions held
The following is a list of directorships, advisory board memberships and similar positions that I hold:
2014 Code of Ethics (UK)
Page 23 of 25
APPENDIX C
Annual Certificate of Compliance with THE INVESCO CODE OF ETHICS
Section C — Trades
The following is a list of trades undertaken
during the period for which contract notes/confirmations have not been forwarded:
Section D - Conflicts of Interest
The following is a list of potential conflicts of interest I have identified during the course of the year and not already reported to the Compliance Department:
Section E - Treating Customers Fairly (TCF)
The following is a list of
potential TCF issues I have identified during the course of the year and not already reported via the TCF Scorecards:
2014 Code of Ethics (UK)
Page 24 of 25
APPENDIX D
|
|
|
|
|
|
|
|
|
|
|
|
|
Type of Transaction in IVZ
|
|
Pre
Clearance
|
|
Basis for Approval
|
|
Quarterly Reporting of
Transactions
|
|
Annual Report of
Holdings
|
|
- Open market purchases & sales
|
|
Yes
|
|
Not permitted in
|
|
Yes
|
|
Yes
|
|
- Transactions in plan
|
|
|
|
blackout periods.
|
|
|
|
|
|
|
|
Compliance Officer
|
|
|
|
Compliance
Officer
|
|
Compliance Officer
|
|
|
|
|
|
|
|
Exercise of Employee Stock Options when same day sale
|
|
Yes
|
|
Not permitted in
closed periods for
|
|
Yes
|
|
n/a
|
|
•
Rec’d when merged w/ Invesco
|
|
IVZ Company
|
|
those in the
|
|
Compliance
Officer
|
|
|
|
•
Options for Stock Grants
|
|
Secretarial
|
|
‘Blackout Group’.
|
|
|
|
|
|
• Options for Global Stock Plans
|
|
|
|
|
|
|
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• Options for Restricted StkAwards
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Option holding
period must be
satisfied.
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Sale of Stocks Exercised and held
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Yes
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Not permitted in
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Yes
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Yes
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until later date.
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closed periods for
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Options Exercised will have been received as follows:
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those in the
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•
Rec’d when merged w/ Invesco
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Compliance Officer
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‘Blackout Group’.
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Compliance Officer
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Compliance Officer
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•
Options for Stock Grants
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• Options for Global Stock Plans
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• Options for Restricted StkAwards
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Stock holding
period must be
satisfied.
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Sale of Stock Purchased through Sharesave
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Yes
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Not permitted in
closed periods for
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Yes
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Yes
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Compliance Officer
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those in the
‘Blackout Group’.
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Compliance
Officer
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Compliance Officer
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Sale of Stock Purchased through UK Share Incentive
Plan
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Yes
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Not permitted in
closed periods for
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Yes
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Yes
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Compliance Officer
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those in the
‘Blackout Group’.
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Compliance
Officer
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Compliance Officer
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1) Open market purchases/sales -
Pre-clearance to deal is required from Compliance, no dealing is permitted during close periods
for those in the ‘Blackout Group’. Details of closed periods are posted to the intranet site by Company Secretarial.
2) Employee Stock Options
(a) exercise/same day sale -
authorisation of the Option is granted by Company Secretarial Department and signed by Trustees of the Scheme.
3) Employee
Stock Options (b) exercise/take possession/subsequent day sale -
same as above, except that individual would pay for the shares and pay tax. The stock would then be lodged in the Employee share service arrangement — then if subsequent
disposal was sought the normal pre-clearance process would apply (pre-clearance from Compliance — no dealing during closed periods for ‘Blackout Group’ members).
4) Stock Grants (Global Stock Plans) -
Awards made yearly, stock would be purchased through Company Secretarial and held for three years. After three years elect
to keep the shares or distribute — stock would be transferred to Employee share service arrangement with normal pre-clearance/closed period requirements.
5)
Employees who receive IVZ stock when their company is purchased by IVZ -
stock distribution as part of the transaction to buy the Company concerned. Stock would be issued to the individual concerned and, depending on the terms of the deal, may
be required to be held for a period. Stock would be transferred into the Employee share service, and subject to terms of the Company deal would then follow normal pre-clearance/close period guidelines.
6) Restricted Stock Awards -
similar to stock grants as above — except tax not paid initially - pre-clearance from Compliance and closed period restrictions
apply.
7) Transactions in IVZ stock via a pension plan -
Transaction no different to open market purchases - pre-clearance required, dealing in closed
periods not allowed.
8) Sharesave -
If Sharesave is exercised then stock would be placed into Employee share service arrangement. Then if individual sells
they go through normal pre-clearance and closed period process. Special rules may be brought in at share save anniversary dates. These will be communicated as appropriate.
9) UK Share Incentive Plan (SIP)
- A UK SIP is open to UK Employees — which is a tax efficient way of purchasing shares on a monthly basis. The shares must
be held for 5 years from initial purchase date — sell before and then tax would be paid. If you sell after the five year period, then normal pre-clearance and closed period restrictions would apply.
2014 Code of Ethics (UK)
Page 25 of 25
Invesco Ltd. Code of Conduct
Our company’s Mission
“Helping Investors Worldwide Achieve Their Financial
Objectives”
is a logical starting point for our Code of Conduct. To help guide us in achieving our Mission, Invesco has developed the following set of Principles:
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•
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We are passionate about our clients’ success
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•
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We earn trust by acting with integrity
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•
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People are the foundation of our success
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•
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Working together, we achieve more
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•
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We believe in the continuous pursuit of performance excellence
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This Code of Conduct (“Code of
Conduct” or “Code”) has been created to assist us in accomplishing our Mission. It contains a number of policies and standards which, when taken together, are designed to help define the essence of the conduct of an Invesco
representative. These policies and standards are also intended to provide guidance to Invesco personnel in fulfilling their obligations to comply with applicable laws, rules and regulations (“applicable laws”). This Code of Conduct applies
to all officers and other employees of Invesco and its subsidiaries (collectively, “Covered Persons”).
Our Principles also help define the
Invesco culture. In practice, this means that our clients’ interests must always come first, that Covered Persons should treat each other with respect and consideration, and that Invesco should participate as a responsible corporate citizen in
every community in which it operates. This commitment is a vital part of our achieving our principal responsibility as a publicly-held company: producing a fair return on our shareholders’ capital.
This Code of Conduct contains broad and general principles that supplement the specific policies, procedures and training within each business unit of
Invesco.
Page 1 of 19
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B.
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Statement of General Principles
|
Invesco operates in a highly-regulated and complex environment. There are
numerous layers of overlapping, and occasionally conflicting, laws, customs and local practices. This Code of Conduct was designed to provide all of us who are part of Invesco with a clear statement of our firm’s ethical and cultural standards.
Generally, we serve our clients as fiduciaries. Fiduciary businesses are generally held to a higher standard of conduct than other businesses, and as
such there are special obligations that apply. The following key duties and principles govern our conduct as fiduciaries:
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•
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Best interests of clients - As fiduciaries, we have a duty to act with reasonable care, skill and caution in the best interests of our clients, and to avoid conflicts of interest.
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•
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Global fiduciary standards - Invesco seeks to maintain the same high fiduciary standards throughout the world, even though those standards may not be legally required, or even recognized, in some countries.
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•
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Client confidentiality - We must maintain the confidentiality of information relating to the client, and comply with the data protection requirements imposed by many jurisdictions.
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•
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Information - Clients must be provided with timely and accurate information regarding their accounts.
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•
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Segregation and protection of assets - Processes must be established for the proper maintenance, control and protection of client assets. Fiduciary assets must be segregated from Invesco assets and property.
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•
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Delegation of duties - Fiduciary duties should be delegated only when the client consents and where permitted by applicable law. Reasonable care, skill and caution must be exercised in the selection of agents and review
of their performance.
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•
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Client guidelines - Invesco is responsible for making investment decisions on behalf of clients that are consistent with the prospectus, contract, or other controlling document relating to the client’s account.
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•
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Relations with regulators - We seek relationships with regulators that are open and responsive in nature.
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Page 2 of 19
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1.
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Fair and Honest Dealing
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Covered Persons shall deal fairly and honestly with Invesco’s
shareholders, customers, suppliers, competitors and employees. Covered Persons shall behave in an ethical manner and shall not take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of
material facts, or any other unfair dealing practice.
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2.
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Anti-Discrimination and Harassment
|
Invesco is committed to providing a work environment that is free of
discrimination and harassment. Such conduct, whether overt or subtle, is demeaning, may be illegal, and undermines the integrity of the employment relationship.
Sexual harassment can include unwelcome sexual advances, requests for sexual favors, pressure to engage in a sexual relationship as a condition of employment
or promotion, or conduct which creates a hostile or offensive work environment.
Discrimination can take many forms including actions, words, jokes, or
comments based upon an individual’s race, citizenship, ethnicity, color, religion, sex, veteran status, national origin, age, disability, sexual orientation, marital status or other legally protected characteristic. Any Covered Person who
engages in harassment or discrimination will be subject to disciplinary action, up to and including termination of employment.
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3.
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Electronic Communications
|
The use of electronic mail, the Internet and other technology assets is an
important part of our work at Invesco. Used improperly, this technology presents legal and business risks for the company and for individual employees. There are also important privacy issues associated with the use of technology, and related
regulations are evolving.
In accordance with Invesco’s IT Systems: Acceptable Use policies, all Covered Persons are required to use information
technology for proper business purposes and in a manner that does not compromise the confidentiality of sensitive or proprietary information. All communications with the public, clients, prospects and fellow employees must be conducted with dignity,
integrity, and competence and in an ethical and professional manner.
We must not use information technology to: transmit or store materials which are
obscene, pornographic, or otherwise offensive; engage in criminal activity; obtain unauthorized access to data or files; commit copyright violations; install personal software without permission; or make Internet statements, without permission, that
suggest that the user is speaking on behalf of Invesco or its affiliates.
Page 3 of 19
Invesco is committed to providing a safe and healthy work place for all employees. The
use, possession, sale, transfer, purchase, or being “under the influence” of drugs at any time while on company premises or on company business is prohibited. The term “drug” includes alcoholic beverages (other than in connection
with entertainment events, or in other appropriate settings), prescriptions not authorized by your doctor, inhalants, marijuana, cocaine, heroin and other illegal substances.
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5.
|
Political Activities and Lobbying
|
Covered Persons, as private citizens, are encouraged to exercise
their rights and duties in any political or civic process. For example, voting in elections for which they are eligible, or making contributions supporting candidates or parties of their choice.
Invesco does not make political contributions with corporate funds. No Covered Person may, under any circumstances, use company funds to make political
contributions, nor may you represent your personal political views as being those of the company.
In the United States, Invesco does support a Political
Action Committee.
Invesco and its Covered Persons must adhere to the highest standards of honest and
ethical conduct. A conflict of interest exists when a Covered Person acts in a manner that is not in the best interests of Invesco, our clients, or our shareholders. Often, this is because the Covered Person or someone with whom they have a close
personal relationship (e.g. a relative or friend) will benefit personally.
All Covered Persons must act in a manner that is in the best interests of
Invesco, our clients, and our shareholders and must avoid any situation that gives rise to an actual or apparent conflict of interest. At no time may a Covered Person use Invesco property, information, or their position to profit personally or to
assist others in profiting at the expense of the company, to compete with Invesco, or to take advantage of opportunities that are discovered in the course of serving Invesco.
All Covered Persons shall promptly communicate to the applicable member of the Legal and Compliance Department any material transaction, relationship, or
situation that reasonably could be expected to give rise to a conflict of interest so that the company and the Covered Person may take steps to minimize the conflict.
While not all-inclusive, the following sections describe in more detail key areas where real or perceived conflicts of interest can arise.
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1.
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Outside Activities and Compensation
|
No Covered Person shall perform work or render services for any
competitor of Invesco or for any organization with which Invesco does business, or which seeks to do
Page 4 of 19
business with Invesco, outside of the normal course of his or her employment with Invesco, without the prior
written approval of the company. Nor shall any such person be a director, officer, or consultant of such an organization, or permit his or her name to be used in any fashion that would tend to indicate a business connection with such organization,
without such approval. Outside organizations can include public or private corporations, partnerships, charitable foundations and other not-for-profit institutions. With the above approval, Covered Persons may receive compensation for such
activities.
Service with organizations outside of Invesco can; however, raise serious regulatory issues, including conflicts of interest and access to
material non-public information.
As an outside board member or officer, a Covered Person may come into possession of material non-public information
about the outside company or other public companies. It is critical that a proper information barrier be in place between Invesco and the outside organization, and that the Covered Person does not communicate such information to other Covered
Persons in violation of the information barrier.
Similarly, Invesco may have a business relationship with the outside organization or may seek a
relationship in the future. In those circumstances, the Covered Person must not be involved in any way in the business relationship between Invesco and the outside organization.
Invesco retains the right to prohibit membership by Covered Persons on any board of directors/trustees or as an officer of an outside organization where such
membership might conflict with the best interests of the company. Approval will be granted on a case-by-case basis, subject to proper resolution of potential conflicts of interest. Outside activities will be approved only if these issues can be
satisfactorily resolved.
Purchasing and selling securities in a Covered Person’s own account, or accounts
over which the Covered Person has access or control, particularly in securities owned by client accounts, can give rise to potential conflicts of interest. As fiduciaries, we are held to the highest standards of conduct. Improperly gaining advance
knowledge of portfolio transactions, or conducting securities transactions based upon information obtained at Invesco, can be a violation of those standards.
Every Covered Person must also comply with the specific personal trading rules in effect for the Covered Person’s business unit.
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3.
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Information Barriers and Material Non-Public Information
|
In the conduct of our business, Covered
Persons may come into possession of material non-public information. This information could concern an issuer, a client, a portfolio, the market for a particular security, or Invesco itself. The Board of Directors of the company has adopted an
Insider Trading Policy (“Insider Trading Policy”) which applies to all Covered Persons. The Insider Trading Policy prohibits all Covered Persons from
Page 5 of 19
using such information in ways that violate the law, including for personal gain. Non-public information must be kept confidential, which may include keeping it confidential from other Covered
Persons. The purchase or sale of Invesco’s securities or the securities of other publicly-traded companies while aware of material nonpublic information about such company, or the disclosure of material nonpublic information to others who then
trade in such company’s securities, is prohibited by this Code of Conduct and by United States and other jurisdictions’ securities laws.
With
regard to Invesco securities, the Insider Trading Policy, among other provisions, prohibits directors, officers, and other Covered Persons who are deemed to have access to material, non-public information relating to the company from trading during
specified Blackout Periods (as defined therein). All Covered Persons should review the Invesco Insider Trading Policy carefully and follow the policies and procedures described therein. The failure of a Covered Person to comply with the
company’s Insider Trading Policy may subject him or her to company-imposed sanctions, up to and including termination for cause, whether or not the failure to comply results in a violation of law. Please contact an appropriate member of the
Legal and Compliance Department on any questions regarding this subject and the company’s Insider Trading Policy.
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4.
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Gifts and Relationships with Customers and Suppliers
|
Invesco seeks to do business with clients and
suppliers on a fair and equitable basis. We may not accept or provide gifts of other than nominal value, or lavish entertainment, or other valuable benefits or special favors to or from customers or suppliers. We must observe any limits imposed by
our business unit’s policies, local laws, or regulations with respect to the acceptance or provision of gifts and entertainment.
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E.
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Compliance with Applicable Laws
|
Invesco strives to ensure that all activity by or on behalf of Invesco is in
compliance with applicable laws. As Invesco operates in major countries and securities markets throughout the world, we have a duty to comply with applicable laws of the jurisdictions in which we operate. While not exhaustive, this section describes
several areas where such legislation may exist.
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1.
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Anti-Bribery and Dealings with Governmental Officials
|
Invesco does not tolerate bribery. We, and those
working on Invesco’s behalf, must not offer, request, receive, give, accept or agree to accept bribes to or from anyone whether in the private or public sector with the intent to induce or reward improper performance of duties.
Page 6 of 19
Many of the countries in which Invesco conducts its business prohibit the improper influencing of governmental
officials or other business persons by the payment, giving or offering of bribes, gifts, political contributions, lavish hospitality or by other means. Our policy requires adherence to those restrictions.
Do not directly or indirectly promise, offer or make payment in money or give an advantage or anything of value to anyone including a government official,
agent or employee of a government, political party, labor organization, charity, a business entity or its representatives, a candidate of a political party or their families, with the intent to induce favorable business treatment or improper
performance of their business or government decisions and actions.
This policy prohibits actions intended to, for example, improperly:
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•
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influence a specific decision or action or
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•
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enhance future relationships or
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•
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maintain existing relationships
|
We must not request, accept or agree to accept payments or other advantages
that are intended to improperly influence our decisions or actions or additionally, agree to any business relationships that are conditional on such advantages being given or received.
In general, all travel and entertainment that Covered Persons provide to existing or perspective business partners and governmental officials must be
pre-approved within the appropriate business unit. If approved, and in the case of situations involving government officials, a written confirmation that such expenses do not violate local law must be obtained from an appropriate third party (e.g.,
the business unit’s legal counsel or the government official’s supervisor).
Covered Persons shall comply with applicable laws governing
political campaign finance and lobbying activities and shall not engage in any conduct that is intended to avoid the application of such laws to activities undertaken on Invesco’s behalf. In addition, appropriate executive officers shall
monitor compliance with lobbyist registration and disclosure requirements by all individuals who act on behalf of Invesco.
These prohibitions in this
section extend to any consultants or agents we may retain on behalf of Invesco.
Further information can be found in Invesco’s Global Anti-Bribery
policy. Guidance regarding genuine and allowable gifts, benefits and entertainment is set out in the Gifts, Benefits and Entertainment Policy.
Page 7 of 19
In the global marketplace, the attempted use of financial institutions and
instruments to launder money is a significant problem that has resulted in the passage of strict laws in many countries. Money laundering is the attempt to disguise money derived from or intended to finance illegal activity including drug
trafficking, terrorism, organized crime, fraud, and many other crimes. Money launderers go to great lengths to hide the sources of their funds. Among the most common stratagems are placing cash in legitimate financial institutions, layering between
numerous financial institutions, and integrating the laundered proceeds back into the economy as apparently legitimate funds.
All Covered Persons must be
vigilant in the fight against money laundering, and must not allow Invesco to be used for money laundering. Each business unit has developed an anti-money laundering program that is consistent with Invesco’s policy. Each Covered Person must
comply with the applicable program.
The laws of many countries are designed to protect consumers from illegal competitive actions
such as price fixing and dividing markets. It is Invesco’s policy and practice to compete based on the merits of our products and services. In order to further that policy, Covered Persons must not fix or control prices with competitors, divide
up territories or markets, limit the production or sale of products, boycott certain suppliers or customers, unfairly control or restrict trade in any way, restrict a competitor’s marketing practices, or disparage a competitor. Covered Persons
must never discuss products, pricing or markets with competitors with the intent to fix prices or divide markets.
If you conduct business for Invesco outside of the U.S., in addition to being
familiar with the local laws of the other countries involved, be sure you are familiar with the following U.S. laws and regulations. Violations of these laws can result in substantial fines, imprisonment and severe restrictions on the company’s
ability to do business.
Foreign Corrupt Practices Act
The United States Foreign Corrupt Practices Act (FCPA) and similar laws in many other countries have a variety of provisions that regulate business in other
countries and with foreign citizens. In essence, these laws make it a crime to promise or give anything of value to a foreign official or political party in order to obtain or keep business or obtain any improper advantage. It is also illegal to
make payments to agents, sales representatives or other third parties if you have reason to believe your gift will be used illegally. Seek advice from the appropriate member of the Legal and Compliance
Page 8 of 19
Department for interpretation of the FCPA or similar laws if you are involved in any business dealings that involve foreign countries.
Anti-Boycott Laws
From time to time, various countries
may impose restrictions upon the ability of businesses in their jurisdiction to engage in commerce with designated individuals, countries or companies. These laws are commonly referred to as boycotts or trade embargoes. It may be against the law to
cooperate in any boycotts between foreign countries not sanctioned by the laws of the place where your office is located. All requests for boycott support or boycott-related information must be reported to your supervisor and the member of the Legal
and Compliance Department with responsibility for your office.
Similarly, many countries contribute the names of criminal or terrorist organizations or
individuals to a common database and require financial institutions to screen customer lists against the database as part of their “Know Your Customer” obligations. We must be aware of, and where appropriate, adhere to any such
restrictions.
Embargo Sanctions
The United States
Treasury Department’s Office of Foreign Assets Control prohibits U.S. companies and their foreign subsidiaries from doing business with certain countries and agencies and certain individuals. The laws of other countries may have similar types
of prohibitions. The regulations vary depending on the country and the type of transaction and often change as countries’ foreign policies change. If you are aware of any sensitive political issues with a country in which Invesco is doing or
considering doing business, seek advice from the appropriate member of the Legal and Compliance Department.
|
F.
|
Information Management
|
|
1.
|
Confidential Information
|
Confidential information includes all non-public information that might be of
use to competitors, or harmful to the company or its customers, if disclosed. All information (in any form, including electronic information) that is created or used in support of company business activities is the property of Invesco. This company
information is a valuable asset and Covered Persons are expected to protect it from unauthorized disclosure. This includes Invesco customer, supplier, business partner, and employee data. United States (federal and state) and other
jurisdictions’ laws may restrict the use of such information and impose penalties for impermissible use or disclosure.
Covered Persons must maintain
the confidentiality of information entrusted to them by the company or its customers, vendors or consultants except when disclosure is properly authorized by the company or legally mandated. Covered Persons shall take
Page 9 of 19
all reasonable efforts to safeguard such confidential information that is in their possession against inadvertent disclosure and shall comply with any non-disclosure obligations imposed on
Invesco in its agreements with third parties.
Information pertaining to Invesco’s competitive position or business strategies, and information
relating to negotiations with Covered Persons or third parties, should be protected and shared only with Covered Persons having a need to know such information in order to perform their job responsibilities.
Data privacy, as it relates both to our clients and our employees, has become a major
political and legal issue in many jurisdictions in which we do business. A variety of laws in each of those jurisdictions governs the collection, storage, dissemination, transfer, use, access to and confidentiality of personal information and
patient health information. These laws can work to limit transfers of such data across borders and even among affiliated entities within Invesco. Invesco and its Covered Persons will comply with all provisions of these laws that relate to its
business, including the privacy, security and electronic transmission of financial, health and other personal information. The company expects its Covered Persons to keep all such data confidential and to protect, use and disclose information in the
conduct of our business only in compliance with these laws. The company will consider and may release personal information to third parties to comply with law or to protect the rights, property or safety of Invesco and its customers. In accordance
with Invesco policies, each business unit has developed required disclosures and data security procedures applicable to that business unit. All Covered Persons must comply with the applicable procedures.
With respect to Invesco Covered Persons, all salary, benefit, medical and other personal information relating to Covered Persons shall generally be treated as
confidential. Personnel files, payroll information, disciplinary matters, and similar information are to be maintained in a manner designed to protect confidentiality in accordance with applicable laws. All Covered Persons shall exercise due care to
prevent the release or sharing of such information beyond those persons who may need such information to fulfill their job functions. Notwithstanding the foregoing, all personnel information belongs solely to Invesco and may be reviewed or used by
the company as needed to conduct its business.
Page 10 of 19
|
G.
|
Protecting Invesco’s Assets
|
All Covered Persons shall strive to preserve and protect the company’s
assets and resources and to promote their efficient use. The standards set forth below are intended to guide Covered Persons by articulating Invesco’s expectations as they relate to activities or behaviors that may affect the company’s
assets.
|
1.
|
Personal Use of Corporate Assets
|
Theft, carelessness and waste have a direct impact on Invesco’s
profitability. Covered Persons are not to convert assets of the company to personal use. Company property should be used for the company’s legitimate business purposes and the business of the company shall be conducted in a manner designed to
further Invesco’s interest rather than the personal interest of an individual Covered Person. Covered Persons are prohibited from the unauthorized use or taking of Invesco’s equipment, supplies, materials or services. Prior to engaging in
any activity on company time which will result in remuneration to the Covered Person or the use of Invesco’s equipment, supplies, materials or services for personal or non-work related purposes, officers and other Covered Persons shall obtain
the approval of the supervisor of the appropriate business unit.
|
2.
|
Use of Company Software
|
Covered Persons use software programs for word processing, spreadsheets, data
management, and many other applications. Software products purchased by the company are covered by some form of licensing agreement that describes the terms, conditions and allowed uses. It is the company’s policy to respect copyright laws and
observe the terms and conditions of any license agreements. Copyright laws in the United States and other countries impose civil and criminal penalties for illegal reproductions and use of licensed software. You must be aware of the restrictions on
the use of software and abide by those restrictions. Invesco business equipment may not be used to reproduce commercial software. In addition, you may not use personal software on company equipment without prior written approval.
|
3.
|
Computer Resources/E-mail
|
The company’s computer resources, which include the electronic messaging
systems (e-mail, SMS, etc.), belong to Invesco and not to the Covered Person. They are not intended to be used for amusement, solicitation, or other non-business purposes. While it is recognized that Covered Persons will occasionally use the system
for personal communications, it is expected that such uses will be kept to a minimum and that Covered Persons will be responsible and professional in their use of these functions. The use of the computer systems to make or forward derogatory or
offensive remarks about other people or groups is prohibited. E-mail/Text messages should be treated as any other written business communication.
Page 11 of 19
|
4.
|
Invesco Intellectual Property
|
Covered Persons must carefully maintain and manage the intellectual
property rights of Invesco, including patents, trademarks, copyrights and trade secrets, to preserve and protect their value. Information, ideas and intellectual property assets of Invesco are important to the company’s success.
Invesco’s name, logo, trademarks, inventions, processes and innovations are intellectual property assets and their protection is vital to the success of
the company’s business. The company’s and any of its subsidiaries’ names, logos and other trademarks and service marks are to be used only for authorized company business and never in connection with personal or other activities
unless appropriately approved and in accordance with company policy. In addition, our Covered Persons must respect the intellectual property rights of third parties. Violation of these rights can subject both you and the company to substantial
liability, including criminal penalties.
Any work product produced in the course of performing your job shall be deemed to be a “work made for
hire” and shall belong to Invesco and is to be used only for the benefit of Invesco. This includes such items as marketing plans, product development plans, computer programs, software, hardware and similar materials. You must share any
innovations or inventions you create with your supervisor so that the company can take steps to protect these valuable assets.
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5.
|
Retention of Books and Records
|
Invesco corporate records are important assets. Corporate records
include essentially everything you produce as a Covered Person, regardless of its format. A corporate record may be in the form of paper, electronic data, e-mail, or voice mail. It may be something as obvious as a memorandum or a contract or
something not as obvious, such as a desk calendar, an appointment book, or an expense record.
Invesco is required by law to maintain certain types of
corporate records, usually for a specified period of time. Failure to retain such documents for such minimum periods could subject Invesco to penalties and fines, cause the loss of rights, obstruct justice, place Invesco in contempt of court, or
place Invesco at a serious disadvantage in litigation. However, storage of voluminous records over time is costly. Therefore, Invesco has established controls to assure retention for required periods and timely destruction of retrievable records,
such as paper copies and records on computers and electronic systems. Even if a document is retained for the legally required period, liability could still result if a document is destroyed before its scheduled destruction date.
Invesco and its affiliates are subject to the regulatory requirements of numerous countries and regulatory agencies. Virtually all of them have specific
requirements concerning the creation, maintenance and storage of business records. Invesco expects all Covered Persons to become familiar with and fully comply with the records retention/destruction schedule for the departments and office locations
for which they
Page 12 of 19
work. If you believe documents should be retained beyond the applicable retention period, consult with the Legal and Compliance Department.
|
6.
|
Sales and Marketing Materials
|
Invesco is committed to building sustained, open, and honest
relationships with our customers, and to complying with all relevant regulatory requirements. This requires that all marketing and sales-related materials be prepared under standards approved by the Legal and Compliance Department and, prior to use,
reviewed and approved by the appropriate supervisor within a business unit. Covered materials include but are not limited to, requests for proposals, client presentations, performance summaries, advertisements, published market commentaries,
brochures and web site content.
|
H.
|
Disclosure of Invesco Information
|
|
1.
|
Integrity and Accuracy of Financial Records
|
The preparation and maintenance of accurate books, records
and accounts is required by law and essential to the proper discharge of financial, legal and reporting obligations. All Covered Persons are prohibited from directly or indirectly falsifying or causing to be false or misleading any financial or
accounting book, record or account. In addition, all financial data must be completely and accurately recorded in compliance with applicable law and Invesco’s accounting policies and procedures. A Covered Person may violate this section by
acting or by failing to act when he or she becomes aware of a violation or potential violation of this section.
|
2.
|
Disclosure in Reports and Documents
|
Filings and Public Materials.
As a public company, it is
important that the company’s filings with the SEC and other U.S. federal, state, domestic and international regulatory agencies are full, fair, accurate, timely and understandable. The company also makes many other filings with the SEC and
other U.S. and international regulatory agencies on behalf of the funds that its subsidiaries and affiliates manage. Further, the company prepares mutual fund account statements, client investment performance information, prospectuses and
advertising materials that are sent out to its mutual fund shareholders and clients.
Disclosure and Reporting Policy.
The company’s policy is
to comply with all applicable disclosure, financial reporting and accounting regulations applicable to the company. The company maintains the highest commitment to its disclosure and reporting requirements, and expects and requires all Covered
Persons to record information accurately and truthfully in the books and records of the company.
Information for Filings.
Depending on his or her
position with the company, a Covered Person may be called upon to provide necessary information to assure that the company’s public reports and regulatory filings are full, fair, accurate, timely and
Page 13 of 19
understandable. The company expects all Covered Persons to be diligent in providing accurate information to the inquiries that are made related to the company’s public disclosure
requirements.
Disclosure Controls and Procedures and Internal Control Over Financial Reporting.
Covered Persons are required to cooperate and
comply with the company’s disclosure controls and procedures and internal controls over financial reporting so that the company’s reports and documents filed with the SEC and other U.S. federal, state, domestic and international regulatory
agencies comply in all material respects with applicable laws and provide full, fair, accurate, timely and understandable disclosure.
|
3.
|
Improper Influence on the Conduct of Audits
|
Every Covered Person must deal fairly and honestly with
outside accountants performing audits, reviews or examinations of Invesco’s and its subsidiaries’ financial statements. To that end, no Covered Person of Invesco may make or cause to be made a materially false or misleading statement (or
omit facts necessary to make the statements made not misleading) in connection with an audit, review or examination of financial statements by independent accountants or the preparation of any document or report required to be filed with a
governmental or regulatory authority. Covered Persons of Invesco also are prohibited from coercing, manipulating, misleading or fraudulently inducing any independent public or certified public accountant engaged in the performance or review of
financial statements that are required to be filed with a governmental or regulatory authority if he or she knows or should have known that his or her actions could result in making those financial statements materially misleading.
|
4.
|
Standards for Invesco’s Financial Officers
|
Invesco’s Chief Executive Officer, Chief Financial
Officer and Chief Accounting Officer (the “Financial Officers”) are required to take all reasonable steps to provide full, fair, accurate, timely and understandable disclosures in the reports and documents that Invesco files with or
submits to the SEC and other regulatory bodies and in other public communications made by Invesco. In the event that a Financial Officer learns that any such report, document or communication does not meet this standard and such deviation is
material, then the Financial Officers are required to review and investigate such deviation, advise the Board of Directors or the Audit Committee of the Board of Directors regarding the deviation and, where necessary, revise the relevant report,
document or communication.
Although a particular accounting treatment for one or more of Invesco’s operations may be permitted under applicable
accounting standards, the Financial Officers may not authorize or permit the use of such an accounting treatment if the effect is to distort or conceal Invesco’s true financial condition. The accounting standards and treatments utilized by
Invesco must, in all instances, be determined on an objective and uniform basis and without reference to a single transaction or series of transactions and their impact on Invesco’s financial results for a particular time period. Any new or
novel
Page 14 of 19
accounting treatment or standard that is to be utilized in the preparation of Invesco’s financial statements must be discussed with Invesco’s Audit Committee and its independent
auditors.
|
5.
|
Communications with the Media, Analysts and Shareholders
|
Invesco has a long-standing policy of
co-operating with the news media and the financial community. This policy is intended to enhance respect for the company, provide accurate information, and achieve our business goals.
Invesco employs media relations professionals who are responsible for handling all contacts with the news media. Invesco’s Communications and Public
Affairs Department is responsible for formulating and directing our media relations policy worldwide. Other Invesco employees may not speak to or disseminate information to the news media unless such contact has been requested and arranged by or
coordinated with an Invesco media relations professional in accordance with the company’s media relations policy. Any contact from the news media should be referred promptly and without comment to an Invesco media relations professional. If you
do not know the appropriate media relations professional for your unit, you can refer the contact to the Invesco Communications and Public Affairs Department.
Many countries have detailed rules with regard to the dissemination of information about public companies. In particular, a public company must have
procedures for controlling the release of information that may have a material impact on its share price. The Chief Executive Officer and the Chief Financial Officer are responsible for Invesco’s relationships with the financial community,
including the release of price sensitive information. Other Invesco employees may not speak to or disseminate information regarding the company to the financial community (including analysts, investors, shareholders, Company lenders, and rating
agencies) unless such contact has been requested and arranged by the Chief Executive Officer, the Chief Financial Officer or the Investor Relations Group within the Finance Department
Page 15 of 19
|
I.
|
Compliance with the Code of Conduct
|
One person’s misconduct can damage our entire company’s hard-earned
reputation and compromise the public’s trust in the company. Every Covered Person should therefore be familiar with this Code and abide strictly by its provisions.
|
2.
|
Reporting Violations of the Code
|
As part of being accountable to each other and Invesco, all Covered
Persons are required to report possible violations of the Invesco Code of Conduct, laws or regulations. Such violations can include, but are not limited to:
|
|
•
|
|
Violations of any laws or regulations generally involving Invesco;
|
|
|
•
|
|
Questionable accounting matters, internal accounting controls, auditing matters, breaches of fiduciary duty or violations of United States or foreign securities laws or rules (collectively, “Accounting
Matters”) including, but not limited to:
|
|
|
•
|
|
fraud or deliberate error in the preparation, evaluation, review or audit of any financial statement of Invesco;
|
|
|
•
|
|
fraud or deliberate error in the recording and maintaining of financial records of Invesco;
|
|
|
•
|
|
deficiencies in or non-compliance with Invesco’s internal accounting controls;
|
|
|
•
|
|
misrepresentation or false statements to or by a senior officer or accountant regarding a matter contained in the financial records, financial reports or audit reports of Invesco;
|
|
|
•
|
|
deviation from full and fair reporting of Invesco’s financial condition; or
|
|
|
•
|
|
fraudulent or criminal activities engaged in by officers, directors or employees of Invesco;
|
You may report
your concerns in any of three ways:
Contact your supervisor
We encourage you to first contact your immediate supervisor or another appropriate person in your own management chain of any concerns raised.
Page 16 of 19
Contact the Legal, Compliance, Internal Audit or Human Resources Departments
If you prefer not to discuss a concern with your own supervisor or others in your own management chain, you may instead contact the Legal, Compliance, Internal
Audit or Human Resources Departments directly. The individual you report the matter to would be responsible for working with you to determine the details of your concern as well as following Invesco’s reporting and escalation processes in order
to address the matter.
Call our Invesco Whistleblower Hotline
If raising a concern in the first two methods make you uncomfortable for any reason, or if you and/or the individual you have reported your concern do not feel
Invesco’s established reporting and escalation channels would effectively address or is not effectively addressing the matter you have raised, you may also report your concerns confidentially and anonymously by calling the Invesco Whistleblower
Hotline. If you are calling from a U.S. or Canadian location, dial
1-855-234-9780
. For calls from all other locations, Use the following link to identify a toll-free number for your country:
Link to International Toll-Free Numbers
You may also report your concern by visiting the Invesco Whistleblower Hotline website at
www.invesco.ethicspoint.com
.
The Invesco Whistleblower Hotline is administered by an outside vendor and is available 24 hours a day, seven days a week. For more information on the Invesco
Whistleblower Hotline, please click here:
Invesco Whistleblower Hotline
.
Complaints relating to Accounting Matters will be reviewed pursuant to
the Audit Committee’s policy and procedures and under its direction and oversight by such persons as the Audit Committee determines to be appropriate. All other matters will be reviewed under the direction and oversight of the appropriate
departments within Invesco, usually also including the Legal and Compliance Department. Prompt and appropriate corrective action will be taken when and as warranted in the judgment of the Audit Committee or other reviewing department.
Invesco will not permit retaliation, retribution, harassment, or intimidation of any employee who in good faith reports a possible violation. Along with the
three reporting methods described above, this also includes, but is not limited to an employee who discloses information to a government or law enforcement agency, or any other national, state or provincial securities regulatory authority where the
employee has reasonable cause to believe that the information discloses a violation or possible violation of federal or state law or regulation.
Page 17 of 19
However, employees who file reports or provide evidence which they know to be false or without a reasonable
belief in the truth and accuracy of such information may be subject to disciplinary action, including termination of their employment.
It is your responsibility at all times to comply with the law and behave in an
ethical manner. Failure to obey laws and regulations violates this Code and may expose both you and the company to criminal or civil sanctions. Invesco will investigate reported violations of the Code and, if violations are found, may take
disciplinary action, if appropriate, against the individuals involved up to and including termination. Invesco may also seek civil remedies from you and even refer criminal misconduct to law enforcement agencies, and may make reports, if
appropriate, to regulatory authorities. Nothing in this Code restricts the company from taking any disciplinary action on any matters pertaining to the conduct of a Covered Person, whether or not expressly set forth in the Code.
As Covered Persons, each of us is obligated to read and understand this Code of
Conduct and our relevant business unit’s policies and procedures. All Covered Persons are expected to abide by both the letter and spirit of the Code and will certify their adherence on an annual basis.
This Code cannot anticipate every possible situation or cover every topic in detail.
The company has established special policies to address specific subjects and will update this Code and those specific policies from time-to-time. Covered Persons are also expected to perform their work with honesty and integrity in any areas not
specifically addressed by the Code. If you are unclear about a situation, please speak with your supervisor or an appropriate member of the Legal and Compliance Department before taking action.
In certain limited situations, Invesco may waive the application of a provision of
the Code to employees or Executive Officers (as defined in Rule 3b-7 under the Securities Exchange Act of 1934, “Executive Officers”). For the purposes of the Code, the term “waiver” shall mean a material departure from a
provision of the Code.
For all employees, including Executive Officers, any requests for waivers must be made to the Legal and Compliance Department. For
waiver requests not involving an Executive Officer, the Legal and Compliance Department shall forward the request to the General Counsel of the business unit for consideration.
Page 18 of 19
For waiver requests involving an Executive Officer, the Legal and Compliance Department will forward the request
to the Invesco Board of Directors or a committee thereof for consideration. Only the Board of Directors or one of its committees may approve a waiver for an Executive Officer. Any such waiver granted to an Executive Officer shall be promptly
disclosed to shareholders within four (4) business days as required by SEC rules and the corporate governance listing standards of the New York Stock Exchange and other applicable laws.
Criteria for a Waiver:
Any employee or Executive Officer
requesting a waiver of the Code must demonstrate that such a waiver:
|
|
•
|
|
is necessary to alleviate undue hardship or in view of unforeseen circumstances or is otherwise appropriate under all the relevant facts and circumstances;
|
|
|
•
|
|
will not be inconsistent with the purposes and objectives of the Code;
|
|
|
•
|
|
will not adversely affect the interests of clients of the company or the interests of the company; and
|
|
|
•
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|
will not result in a transaction or conduct that would violate provisions of applicable laws or regulations.
|
This Code is intended solely for the internal use by the company and does not
constitute an admission, by or on behalf of the company, as to any fact, circumstance, or legal conclusion. To the extent required by law, the company shall publicly (
e.g.
, in its Annual Report on Form 10-K and/or on its website) disclose
this Code of Conduct and its application to all of the company’s Covered Persons.
This Code may only be amended by Invesco’s Board of Directors or a duly authorized
committee thereof. To the extent required by law, amendments to the Code of Conduct shall be disclosed publicly. As set forth in the company’s filings with the SEC, the company has elected to disclose certain amendments to the Code that affect,
and any waivers of the Code granted to, Financial Officers on the company’s Web site.
Revised: October 2014
Page 19 of 19
Staff Ethics and Personal Share Dealing
|
10.1.1
|
As a fiduciary, Invesco owes an undivided duty of loyalty to its clients. It is Invesco’s policy that all employees conduct themselves so as to avoid not only actual conflicts of interest with Invesco
clients, but also that they refrain from conduct which could give rise to the appearance of a conflict of interest that may compromise the trust that clients have placed in Invesco.
|
|
10.1.2
|
The personal securities transactions of all employees must be conducted in accordance with the following general principles:
|
|
|
(a)
|
There is duty at all times to place the interests of Invesco clients first and foremost;
|
|
|
(b)
|
All personal securities transactions be conducted in a manner consistent with these rules and in such a manner as to avoid any actual, potential or appearance of a conflict of interest or any abuse of an employee’s
position of trust and responsibility; and
|
|
|
(c)
|
Employees should not take inappropriate advantage of their positions.
|
|
10.1.3
|
Invesco’s policy is to avoid conflicts and, where they unavoidably occur, to resolve them in a manner that clearly places our clients’ interests first.
|
|
10.1.4
|
A copy of the Invesco Ltd. Insider Dealing Policy & Social Media Policy are attached as Appendix 10.8 & 10.9 respectively.
|
|
10.1.5
|
The policy on personal securities transactions is set out under the Code of Ethics adopted by Invesco Hong Kong Limited (Appendix 10.1a) covering the following topics:
|
|
|
(ii)
|
Statement of Fiduciary Principles
|
|
|
(iii)
|
Compliance with Laws, Rules and Regulations; Reporting of Violations
|
|
|
(iv)
|
Limits on Personal Investing
|
|
|
(v)
|
Pre-clearance of Personal Securities Transactions
|
|
|
(vi)
|
Prohibition of Short-Term Trading Profits
|
|
|
(vii)
|
Initial Public Offerings
|
|
|
(viii)
|
Prohibition of Short Sales by Investment Personnel
|
|
|
(ix)
|
Restricted List Securities
|
|
|
(x)
|
Other Criteria to Consider in Pre-Clearance
|
|
|
(xii)
|
Reporting Requirements
|
|
|
(xiii)
|
Private Securities Transactions
|
|
|
(xiv)
|
Limited Investment Opportunity
|
|
|
(xv)
|
Excessive Short-Term Trading in Funds
|
|
|
(xvi)
|
Invesco Ltd. Securities
|
|
10.2
|
Definition of “Business Associate”
|
Staff Ethics and Personal Share Dealing
|
10.2.1
|
“Business Associate” shall mean any person or organisation that provides services to Invesco, that may do business or is being solicited to do business with Invesco or that is associated with an
organisation that does or seeks to do business with Invesco.
|
|
10.3
|
Code of Ethics adopted by Invesco Hong Kong Limited
|
|
10.3.1
|
For the avoidance of doubt, the Code of Ethics adopted by Invesco Hong Kong Limited (Appendix 10.1a) will also apply to all Invesco offices in the Asia Region which are supported by the Hong Kong Compliance Team.
References to “Invesco Hong Kong Limited” and “IHKL” in the Code of Ethics shall be construed as references to the respective Invesco offices in the Asia Region which are supported by the Hong Kong Compliance Team for the
purposes of this Compliance Manual.
|
10.4 to 10.14 [Deleted]
|
10.15
|
Gifts and Entertainment
|
|
10.15.1
|
For the avoidance of doubt, the Policy on Gifts and Entertainment adopted by Invesco Hong Kong Limited (Appendix 10.1b) will also apply to all Invesco offices in the Asia Region which are supported by the Hong
Kong Compliance Team.
|
10.15.2 to 10. 15.14 [Deleted]
Staff Ethics and Personal Share Dealing
|
10.16.1
|
In order to reduce potential conflicts of interest arising from the participation of employees on the boards of directors of public, private, non-profit and other enterprises, all employees are subject to the
following restrictions and guidelines.
|
|
10.16.2
|
An employee may not serve as a director of a public company without the approval of the Head of Asia Pacific after consultation with the local Head of Compliance.
|
|
10.16.3
|
An employee may serve on the board of directors or participate as an adviser or otherwise, or advisers of a private company only if:
|
|
|
(a)
|
client assets have been invested in such company; and
|
|
|
(b)
|
service on a such board has been approved in writing by the Head of Asia Pacific. The employee must resign from such board of directors as soon as the company contemplates going public, except where the Head of Asia
Pacific has determined that an employee may remain on a board. (In any event, an employee shall not accept any compensation for serving as a director (or in a similar capacity) of such company; except with the prior written approval of the Head of
Asia Pacific.
|
|
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(c)
|
service on such a board is directly as a result of the employee position or status at Invesco. In this case any fees received for being a director must be reimbursed to Invesco.
|
|
10.16.5
|
If an employee serving on the board of directors or advisers of any entity comes into possession of material, nonpublic information through such service, he or she must immediately notify his or her local Head of
Compliance. The local Head of Compliance will then consider the totality of facts and decide if there is conflict of interest. If such conflicts of interest do exist, employee must resign from the board of directors or advisers immediately.
|
|
10.17
|
Economic Opportunities
|
|
10.17.1
|
An Invesco employee shall not take personal advantage of any economic opportunity properly belonging to a Invesco client or to Invesco itself. Such opportunities could arise, for example, from confidential
information belonging to a client or the offer of a directorship. Employees must not disclose information relating to a client’s intentions, activities or portfolios except:
|
|
|
(a)
|
to fellow employees, or other agents of the client, who need to know it to discharge their duties; or
|
|
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(b)
|
to the client itself.
|
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10.17.2
|
Employees may not cause or attempt to cause any client to purchase, sell or hold any Security in a manner calculated to create any personal benefit to the employee or Invesco.
|
|
10.17.3
|
If an employee or immediate family member stands to materially benefit from an investment decision for a Client that the employee is
recommending or participating
|
Staff Ethics and Personal Share Dealing
|
|
in, the employee must disclose that interest to persons with authority to make investment decisions or to the Head of Compliance. Based on the information given, a decision will be made on
whether or not to restrict the employee’s participation in causing a client to purchase or sell a Security in which the employee has an interest.
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10.17.4
|
Employees must disclose to those persons with authority to make investment decisions for a client (or to the Head of Compliance if the employee in question is a person with authority to make investment decisions
for the client), any beneficial interest that the employee (or immediate family member) has in that Security, or in the issuer thereof, where the decision could create a material benefit to the employee (or immediate family member) or the appearance
of impropriety. The person to whom the employee reports the interest, in consultation with the Head of Compliance, must determine whether or not the employee will be restricted in making investment decisions.
|
Staff Ethics and Personal Share Dealing
|
10.18.1
|
These rules will be interpreted by the local Head of Compliance, as applicable. Questions of interpretation should be directed in the first instance to the local Head of Compliance or his/her designee or, if
necessary, with the Head of Compliance of another Invesco entity.
|
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10.18.2
|
If advised of a material violation of these rules by an employee, the Head of Compliance will report to the Head of Asia Pacific and discuss the appropriate action with him.
|
Compliance Department performs a review at least once a
year.
Any person who has a question about the above Policies or its
application to any proposed transaction may obtain additional guidance from the Local Compliance Department. Do not try to resolve uncertainties on your own because the rule are often complex, not always intuitive and carry severe consequences.
Policy on Gifts and Entertainment
Appendix 10.1b
Invesco Hong Kong Limited
Policy on Gifts and Entertainment
|
1.
|
It is required that all Invesco personnel adhere to the highest standards of ethical conduct, including sensitivity to actual or apparent conflicts of interest. The provision or receipt of Gifts or Entertainment can
create, or can have the appearance of creating, conflicts of interest. In addition, Invesco’s clients and their personnel may be subject to similar restrictions regarding the receipt of Gifts or Entertainment.
|
|
2.
|
This Policy establishes minimum standards to protect Invesco. If the laws or regulations establish higher standards, we must adhere to those standards.
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3.
|
For purposes of this Policy, a “Gift” is anything of value given (1) by the Company or its personnel to a Business Partner (as defined in section 5 below), or to a member of such a person’s immediate
family, or (2) by a Business Partner to any Invesco personnel, or to a member of such a person’s immediate family. Gifts may include, but are not limited to, personal items, office accessories and sporting equipment (e.g., golf clubs,
tennis rackets, etc.). For purposes of this Policy, Gifts also include charitable contributions made to or at the request of a Business Partner. For purposes of this Policy, Gifts do not include promotional items of nominal value (e.g., golf balls,
pens, etc.) that display the logo of Invesco, or of the Business Partner.
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4.
|
“Entertainment” involves attendance at activities, including but not limited to meals, sporting events, the theatre, parties or receptions, and similar functions. Entertainment requires the presence of both
Invesco personnel and the Business Partner; unless personnel from both entities attend, the activity constitutes a Gift. The value of Entertainment includes the cost of the activity itself (for example, the cost of tickets or a meal), as well as the
cost of any related activities or services provided (such as prizes, transportation, and lodging in connection with the event). Entertainment does not include research or analysts meetings provided by issuers and attended by investment personnel or
industry educational events sponsored by industry groups, so long as such events are for educational or research purposes. All Invesco personnel also should keep in mind that regulators may attempt to treat Entertainment as “Gifts” for
compliance purposes, particularly where the Entertainment appears excessive in value or frequency.
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5.
|
“Business Partner” shall mean any person or organisation that provides services to Invesco, that may do business or is being solicited to do business with Invesco or that is associated with an organisation
that does or seeks to do business with Invesco.
|
Policy on Gifts and Entertainment
|
6.
|
The providing or receiving of any Gift or Entertainment that is conditioned upon the Company doing business or not doing business with the Business Partner or any other person are
strictly prohibited
.
|
|
7.
|
Gifts
. An Employee may not retain a Gift received from a Business Partner without the approval of the Compliance Department or Invesco’s Code of Ethics Compliance Group. Reporting and approval are required
for Gifts received during festive seasons, including Christmas dinner sponsor, mooncakes, hampers, and flower and fruit baskets.
|
|
8.
|
Under no circumstances, the value of Gift given or received should exceed
HKD1,600 per individual annually
. The aforesaid Gift limit is applied to each individual office. Employees of each individual office may
thus give Gifts to a single person of a Business Partner up to HKD1,600 in value in aggregate in a calendar year. Each individual Employee may also receive Gifts up to HKD1,600 in value from a Business Partner in a calendar year. If the value of the
Gift received is not able to be determined, professional judgment should be used to determine the value of the Gift. Should the value exceed HKD1,600, it should be returned to the donor, passed to the Human Resources or donates to the charity.
Prior approval
from the Compliance Department is
not
necessary. However,
post approval
from the Compliance Department is required. If the Gift is not giving to any particular person, the Gift shall be passed to Human Resources
Department and distributed to the staff on a raffle basis.
|
|
9.
|
Employees may not give, and must tactfully refuse, any Gift of cash, a Gift certificate or a Gift that is substantially the same as cash. Notwithstanding this requirement, Employees may give or receive Lai-See (red
envelopes) at Lunar New Year of an amount not more than HKD200 each. In case the amount is more than HKD200, the case must be reported to the Head of Department and the local Head of Compliance. Due to Chinese custom, it may be difficult to return
the Lai-See. Therefore, the full amount should be donated to a charitable organization in Hong Kong, and the Business Partner be informed of the donation.
|
|
10.
|
Gifts should not be given to an Employee of any securities firm which is making a public offering of a fund advised by Invesco nor given in connection with the acquisition of a new client by Invesco.
|
|
11.
|
Entertainment
. Each Employee is expected to use professional judgment, subject to review by his or her supervisor, in entertaining and in being entertained by a Business Partner.
|
|
12.
|
Provided that the Employee and Business Partner both attend, an Employee may accept from a single Business Partner, or provide to a single person or a
Business Partner for Entertainment of value
up to HKD9,300 in a calendar year
. Under no circumstances, the value of the Entertainment should exceed
HKD3,100 per individual per event
. The aforesaid Entertainment limits are applied to
each individual office.
Prior approval
from the Compliance Department is
not
necessary. However,
post approval
from the Compliance Department is required. If the event of the Entertainment such as movie tickets is not giving to
any particular Employee,
|
Policy on Gifts and Entertainment
|
|
the event of the Entertainment shall be passed to the Human Resources Department and distributed to the staff on a raffle basis.
|
|
13.
|
For Gifts and Entertainment received from or provided to Business Partner, each Employee is required to report through the automated review system as referred to in the Code of Ethics adopted by Invesco Hong Kong
Limited within 30 calendar days after the day of event, except when such timeline is unattainable for justifiable reason.
|
|
14.
|
The relevant information required is set out in the relevant section(s) of the aforesaid automated review system. Approval request will not be accepted if there is missing information.
|
|
15.
|
Approval from the Compliance Department is required before Gift and Entertainment expenses will be reimbursed by Finance. Review will be performed on a regular basis to test reimbursements for compliance approval.
|
Invesco Hong Kong Limited
CODE OF ETHICS
January 1, 2015
1
TABLE OF CONTENTS
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Section
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Item
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Page
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I.
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Introduction
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3
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II.
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Statement of Fiduciary Principles
|
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3
|
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III.
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Compliance with Laws, Rules and Regulations; Reporting of Violations
|
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4
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IV.
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Limits on Personal Investing
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4
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A. Personal Investing
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1 Pre-clearance of Personal Securities Transactions
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2 Blackout Period
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De Minimis
Exemptions
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3 Prohibition of Short-Term Trading Profits
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4 Initial Public Offerings
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5 Prohibition of Short Sales by Investment Personnel
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6 Restricted List Securities
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7 Other Criteria Considered in Pre-clearance
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8 Brokerage Accounts
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9 Private Securities Transactions
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10 Limited Investment Opportunity
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11 Excessive Short-Term Trading in Funds
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B. Invesco Ltd. Securities
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C. Limitations on Other Personal Activities
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1 Outside Business Activities
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2 Gifts and Entertainment Policy
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• Gifts
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• Entertainment
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D. Parallel Investing Permitted
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V.
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Reporting Requirements
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a. Initial Holdings Reports
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b. Quarterly Transaction Reports
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c. Annual Holdings Reports
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d. Gifts and Entertainment Reporting
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e. Certification of Compliance
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VI.
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Reporting of Potential Compliance Issues
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VII.
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Administration of the Code of Ethics
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VIII.
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Sanctions
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IX.
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Exceptions to the Code
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X.
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Definitions
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XI.
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Invesco Ltd. Policies and Procedures
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X1.
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Code of Ethics Contact
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2
Invesco Hong Kong Limited
CODE OF ETHICS
I.
Introduction
Invesco Hong Kong Limited (“IHKL”) has a fiduciary relationship with respect to each portfolio under management. The interests of Clients
and of the shareholders of investment company take precedence over the personal interests of IHKL’s Covered Persons (defined below). Capitalized terms used herein and not otherwise defined are defined at the end of this document.
This Code of Ethics (“the Code”) applies to IHKL’s affiliated broker-dealers, all IHKL Affiliated Mutual Funds and all of their Covered
Persons. Covered Persons include:
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any director, officer, full or part time, temporary or permanent Employee of IHKL or
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any full or part time Employee of any of IHKL’s affiliates that, in connection with his or her regular functions or duties: makes, participates in, or obtains any information concerning any Client’s purchase
or sale of Covered Securities or who is involved in making investment recommedations, or obtains information concerning investment recommendations with respect to such purchase or sales of Covered Securities; or has access to non-public information
concerning any Client’s purchase or sale of Covered Securities, access to non-public securities recommendations, or access to non-public information concerning portfolio holdings of any portfolio advised or sub-advised by IHKL.
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any other persons falling within the definitions of Access Person or Advisory Person under Rule 17j-1 of the Investment Company Act of 1940, as amended (the “Investment Company Act”) or Rule 204A-1 under the
Investment Advisers Act of 1940, as amended (the “Advisers Act”) and such other persons that may be deemed to be Covered Persons by Compliance.
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any other persons that may be so deemed by the Head of Compliance, Greater China.
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II.
Statement of
Fiduciary Principles
The following fiduciary principles govern Covered Persons.
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the interests of Clients and shareholders of the investment company must be placed first at all times and Covered Persons must not take inappropriate advantage of his or her positions; and
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all personal securities transactions must be conducted consistent with this Code and in a manner to avoid any abuse of an individual’s position of trust and responsibility; and
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this Code is our effort to address conflicts of interest that may arise in the ordinary course of our business and does not attempt to identify all
possible conflicts of
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interest. This Code does not necessarily shield Covered Persons from liability for personal trading or other conduct that violates a fiduciary duty to Clients and shareholders of the investment
company.
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III.
Compliance with Laws, Rules and Regulations; Reporting of Violations
All Covered Persons are required to comply with applicable securities laws, rules and regulations and this Code. Covered Persons shall promptly report any
violations of laws or regulations or any provision of this Code of which they become aware to IHKL’s Head of Compliance, Greater China or his/her designee. Additional methods of reporting potential violations or compliance issues are described
in Section VI of this Code under “Reporting of Potential Compliance Issues.”
IV.
Limits on Personal Investing
A. Personal Investing
1.
Pre-clearance of Personal Security Transactions
. All Covered Persons must pre-clear with Compliance using the automated review system, all personal security transactions involving Covered Securities in which they have a Beneficial Interest. A
Covered Person may be considered to have a Beneficial Interest in securities held by members of his or her immediate family sharing the same household (i.e., a spouse or equivalent domestic partner, children, etc.) or by certain partnerships,
trusts, corporations, or other arrangements.
Any approval granted to a Covered Person to execute a personal security transaction is
valid for that business day only, except that if approval is granted after the close of the trading day such approval is good through the next trading day
. If a Covered Person does not execute the proposed securities transaction prior to
closing of the market immediately following the approval, the Covered Person must resubmit the request on another day for approval.
Additionally, all Covered Persons must pre-clear personal securities transactions involving securities over which they have discretion. For
example, if a Covered Person is directing the transactions for a friend or family member (regardless of whether they share the same household) all transactions in Covered Securities must be pre-cleared.
Covered Securities include but are not limited to all investments that can be traded by IHKL for its Clients, including stocks, bonds,
municipal bonds, Affiliated Mutual Funds, exchange-traded funds (ETFs), closed-end mutual funds, and any of their derivatives such as options. All Affiliated Mutual Funds (including both open-end and closed-end funds) and Invesco PowerShares ETFs
are considered Covered Securities.
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Requirements for Affiliated Mutual Funds:
Although Affiliated Mutual Funds are considered Covered Securities, those that are held under Local Pension Schemes do not need to be
pre-cleared through the automated review system.
Affiliated Mutual Funds MUST be pre-cleared through the automated review system.
Requirements for Invesco Ltd. Securities and Other Employer Stock:
All transactions in Invesco Ltd. securities, including Invesco Ltd. stock must be pre-cleared. Please refer to section IV.B for additional
guidelines on Invesco Ltd. securities. Any transaction in a previous employer’s company stock that is obtained through an employee benefit plan or company stock fund held in an external retirement plan requires pre-clearance.
Exempted Securities:
Covered Securities do not include shares of money market funds, local and U.S. government securities, certificates of deposit, or interests in
open-ended collective investment schemes (including mutual funds and/or unit trusts) not advised or sub-advised by any entity within the Invesco group. (Please refer to the “Definitions” section of this Code for more information on the
term, Covered Security.)
If you are unclear about whether a proposed transaction involves a Covered Security, please contact Compliance
prior to executing the transaction via email at:
CodeofEthicsGreaterChina@invesco.com
or by phone at 111-2633 from your Invesco office phone.
Compliance will consider the following factors, among others, in determining whether or not pre-clearance approval will be provided. Please
note that you must obtain pre-clearance even if you believe your transactions request satisfies the criteria below. The automated review system will review personal trade requests from Covered Persons based on the following considerations:
2.
Blackout Period.
IHKL does not permit Covered Persons to trade in a Covered Security if there is conflicting activity in an Invesco
Client account.
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Non-Investment Personnel.
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may not buy or sell a Covered Security within two trading days after a Client trades in that security.
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may not buy or sell a Covered Security if there is a Client order on that security currently with the trading desk.
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may not buy or sell a Covered Security within three trading days before or after a Client trades in that security.
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may not buy or sell a Covered Security if there is a Client order on that security currently with the trading desk.
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For practical purposes, an Employee without knowledge of investment activity of a Client account would not know of such activity in advance of
a Client trade. Therefore, for those Employees, trading with pre-clearance approval granted prior to a Client transaction will not be considered a violation of this Code of Ethics. Compliance will review personal securities transactions to identify
potential conflicts in which there is an appearance that such an Employee could have traded while he or she was aware of upcoming Client transactions. If a potential conflict exists, this would be considered a violation of the blackout period
required by this Code of Ethics.
De Minimis Exemptions
. Compliance will apply the following
de minimis
exemptions in
granting pre-clearance when a Client has recently traded or is trading in a security involved in a Covered Person’s proposed personal securities transaction:
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Equity de minimis exemptions
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If a Covered Person
does
not
have knowledge of Client trading activity in a particular equity security, he or she may execute up to 500 shares of such security in a rolling 30-day period provided the
issuer of such security is included in the Hang Seng Index, Straits Times Index STI (FSSTI), or Korea Composite Stock Price Index (KOSPI) or any of the main indices globally included on the De Minimis Indices List which can be accessed on the
Invesco intranet using the following link:
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http://sharepoint/sites/Compliance-COE-NA/Training/Documents/De%20Minimis%20Indices%20List.pdf
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For any other security, if a Covered Person
does
not
have knowledge of Client trading activity in a particular equity security, he or she may execute up to 500 shares of such security in a rolling 30 day
period provided that there is no conflicting Client activity in that security during the blackout period or on the trading desk that exceeds 500 shares per trading day.
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Fixed income de minimis exemption
. If a Covered Person
does
not
have knowledge of Client trading activity in a particular fixed income security he or she may execute up to HKD800,000 of par value of
such security in a rolling 30-day period.
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The automated review system will confirm that there is no activity currently on the trading desk
on the security involved in the proposed personal securities transaction and will verify that there have been no Client transactions for the requested security within the last two trading days for all Covered Persons except Investment Personnel for
whom the black-out period is the last three trading days. For Investments, Portfolio Administration and IT personnel, Compliance will also check the trading activity of affiliates with respect to which such personnel have potential access to
transactional information to verify that there have been no Client transactions in the requested security during the blackout period. Compliance will notify the Covered Person of the approval or denial of the proposed personal securities
transaction. The approval of a personal securities transaction request is only valid for that business day. If a Covered Person does not execute the proposed securities transaction on the business day the approval is granted, the Covered Person must
resubmit the request on another day for approval.
Any failure to pre-clear transactions is a violation of the Code and will be subject to
the following potential sanctions:
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A Letter of Education will be provided to any Covered Person whose failure to pre-clear is considered immaterial or inadvertent.
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Deliberate failures to pre-clear transactions, as well as repeat and/or material violations, may result in in-person training, probation, withdrawal of personal trading privileges or employment termination, depending on
the nature and severity of the violations.
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3.
Prohibition of Short-Term Trading Profits
. Covered Persons are
prohibited from engaging in the purchase and sale, or short sale and cover of the same Covered Security within 60 calendar days at a profit. If a Covered Person trades a Covered Security within the 60 day time frame, any profit from the trade will
be disgorged to a charity of IHKL’s choice and a letter of education may be issued to the Covered Person.
4.
Initial Public
Offerings
. Covered Persons are prohibited from directly or indirectly acquiring Beneficial Interest of any security in an equity Initial Public Offering. Exceptions will only be granted in unusual circumstances and must be recommended by
Compliance and approved by the Head of Compliance, Greater China or Head of Legal, Greater China (or designee) and the Chief Investment Officer, Asia ex-Japan (or designee) of the Covered Person’s business unit.
5.
Prohibition of Short Sales by Investment Personnel
. Investment Personnel are prohibited from effecting short sales of Covered
Securities in his or her personal accounts if a Client of IHKL for whose account they have investment management responsibility has a long position in those Covered Securities.
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6.
Restricted List Securities.
Employees requesting pre-clearance to buy or sell a
security on the Restricted List may be restricted from executing the trade because of potential conflicts of interest.
7.
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.
7.
Brokerage Accounts
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a. Covered Persons may only maintain brokerage accounts with:
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full service broker-dealers.
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b. Requirement to move
accounts that do not meet Compliance requirement:
Every person who becomes a Covered Person under this Code must move all of his or her brokerage accounts that do not comply with the above provision of the Code within thirty
(30) calendar days from the date the Covered Person becomes subject to this Code.
c. Discretionary Managed
Accounts.
In order to establish a Discretionary Managed Account, a Covered Person must grant the manager complete investment discretion over a Covered Person’s account. Pre-clearance is not required for trades in this account; however,
a Covered Person may not participate, directly or indirectly, in individual investment decisions or be aware of such decisions before transactions are executed. This restriction does not preclude a Covered Person from establishing investment
guidelines for the manager, such as indicating industries in which a Covered Person desires to invest, the types of securities a Covered Person wants to purchase or a Covered Person’s overall investment objectives. However, those guidelines may
not be changed so frequently as to give the appearance that a Covered Person is actually directing account investments. Covered Persons must receive approval from Compliance to establish and maintain such an account and must provide written evidence
that complete investment discretion over the account has been turned over to a professional money manager or other third party. Covered Persons are not required to pre-clear or list transactions for such managed accounts in the automated review
system; however, Covered Persons with these types of accounts must provide an annual certification that they do not exercise direct or indirect control over the managed accounts.
9.
Private Securities Transactions
. Covered Persons may not engage in a Private Securities Transaction without first (a) giving
Compliance a detailed written notification describing the transaction and indicating whether or not they will receive compensation and (b) obtaining prior written permission from Compliance. Investment Personnel who have been approved to
acquire securities of an issuer in a Private
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Securities Transaction must disclose that investment to Compliance and the Chief Investment Officer, Asia ex-Japan when they are involved in a Client’s subsequent consideration of an
investment in the same issuer. The Investment Personnel’s decision to purchase such securities on behalf of Client account must be independently reviewed by Regional Head of Investments, Asia Pacific or Chief Investment Officer, Asia ex-Japan
with no personal interest in that issuer.
10.
Limited Investment Opportunity (e.g. private placements, hedge funds, etc.)
. Covered
Persons may not engage in a limited investment opportunity without first (a) giving Compliance a detailed written notification describing the transaction and (b) obtaining prior written permission from Compliance.
11.
Excessive Short-Term Trading in Funds
. Employees are prohibited from excessive short term trading of any collective investment
schemes (including mutual funds and/or unit trusts) advised or sub-advised by any entity within the Invesco Group and are subject to various limitations outlined in the respective prospectus and other fund disclosure documents.
B. Invesco Ltd. Securities
1. No Employee may effect short sales of Invesco Ltd. securities.
2. No Employee may engage in transactions in publicly traded options, such as puts, calls and other derivative securities relating to the
Invesco Ltd’s securities, on an exchange or any other organized market.
3. For all Covered Persons, transactions, including transfers
by gift, in Invesco Ltd. securities are subject to pre-clearance regardless of the size of the transaction, and are subject to “black-out” periods established by Invesco Ltd. and holding periods prescribed under the terms of the agreement
or program under which the securities were received.
4. Holdings of Invesco Ltd. securities in Covered Persons accounts are subject to the
reporting requirements specified in Section IVA.8 of this Code.
C. Limitations on Other Personal Activities
1.
Outside Business Activities
. You may not engage in any outside business activity, regardless of whether or not you receive
compensation, without prior approval from Compliance. Absent prior written approval of Compliance, Employees may not serve as directors, officers, or employees of unaffiliated public or private companies, whether for profit or non-profit. If the
outside business activity is approved, the Employee must recuse himself or herself from making Client investment decisions concerning the particular company or issuer as appropriate, provided that this recusal requirement shall not apply with
respect to certain IHKL’s Employees, who may serve on corporate boards as a result of, or in connection with, Client investments made in those companies.
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Employees must always comply with all applicable Invesco Ltd. policies and procedures, including those prohibiting the use of material non-public information in Client or employee personal
securities transactions.
2.
Gift and Entertainment
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Employees may not give or accept Gifts or Entertainment that may be
considered excessive either in dollar value or frequency to avoid the appearance of any potential conflict of interest. The Invesco Ltd. Gifts and Entertainment Policy includes specific conditions under which Employees may accept or give Gifts or
Entertainment. Where there are conflicts between a minimal standard established by a policy of Invesco Ltd. and the standards established by a policy of IHKL, including this Code, the latter shall control.
Under no circumstances may an Employee give or accept cash or any possible cash equivalent from a broker or vendor.
An Employee may not provide or receive any Gift or Entertainment that is conditioned upon IHKL, its parents or affiliates doing business with
the other entity or person involved.
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Gifts
. Under no circumstances, should the value of Gift given or received exceed
HKD1,600 per individual annually
. In other words, each individual Employee may (a) give Gifts up to HKD1,600 in
value to each individual Business Associate in a calendar year and (b) receive Gifts up to HKD1,600 in value from a Business Associate in a calendar year. If the value of the Gift received is not able to be determined, professional judgment
should be used to determine the value of the Gift. Should the value exceed HKD1,600, it should be returned to the donor, and passed to the Human Resources or donates to the charity.
Prior approval
from Compliance is
not
necessary.
However,
post approval
from Compliance is required. If the Gift is not giving to any particular person, the Gift shall be passed to Human Resources Department and distributed to the staff on a raffle basis. The Gift limit is applied to each
individual office.
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Entertainment
. Provided that the Employee and Business Associate both attend an event, an Employee may accept from a single Business Partner, or provide to a single person of a Business Partner for
Entertainment of value
up to HKD9,300 in a calendar year
. Under no circumstances, the value of the entertainment should exceed
HKD3,100 per individual per event
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Prior approval
from Compliance is
not
necessary. However,
post approval
from Compliance is required.
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Employees may not reimburse Business Partners for the cost of tickets
that would be considered excessive or for travel related expenses without approval of Compliance.
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Examples of Entertainment that may be considered excessive in value include Super Bowls, All-Star
games, Kentucky Derby, hunting trips, ski trips, etc. An occasional sporting event, golf outing or concert when accompanied by the Business Partner may not be excessive.
Approval from Compliance is required before Gifts and Entertainment expenses will be reimbursed by Finance. Review will be performed on a
regular basis to test reimbursements for Compliance approval.
D. Parallel Investing Permitted
Subject to the provisions of this Code, Employees may invest in or own the same securities as those acquired or sold by IHKL for its Clients.
V.
Reporting Requirements
a.
Initial Holdings Reports
. Within 10 calendar days of becoming a Covered Person, each Covered Person must complete an Initial Holdings Report by inputting into the automated pre-clearance system, Star Compliance, the following
information (the information must be current within 45 calendar days of the date the person becomes a Covered Person):
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A list of all security holdings, including the name, number of shares (for equities) and the principal amount (for debt securities) in which the Covered Person has direct or indirect Beneficial Interest. A Covered
Person may have Beneficial Interest in securities held by members of their immediate family sharing the same household (i.e., a spouse or equivalent domestic partner, children, etc.) or by certain partnerships, trusts, corporations, or other
arrangements;
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The security identifier (ISIN, SEDOL, symbol, etc.);
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The name of any broker-dealer or bank with which the person maintains an account in which any securities are held for the direct or indirect benefit of the person; and
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The date that the report is submitted by the Covered Person to Compliance
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b.
Quarterly
Transaction Reports
. All Covered Persons must report, no later than 30 calendar days after the end of each calendar quarter, the following information for all transactions in a Covered Security in which a Covered Person has a direct or
indirect Beneficial Interest:
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The date of all transactions in that quarter, the security name, the number of shares (for equity securities); or the interest rate and maturity date
(if
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applicable) and the principal amount (for debt securities) for each Covered Security;
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The security identifier (ISIN, SEDOL, symbol, etc.);
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The nature of the transaction (buy, sell, etc.);
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The price of the Covered Security at which the transaction was executed;
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The name of the broker-dealer or bank executing the transaction; and
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The date that the report is submitted to Compliance.
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All Covered Persons must submit a
Quarterly Transaction Report regardless of whether they executed transactions during the quarter or not.
If a Covered Person did not execute transactions subject to reporting requirements during a quarter, the report must include a
representation to that effect. Covered Persons need not include transactions made through an Automatic Investment Plan/Dividend Reinvestment Plan, any Local Pension Schemes or accounts held directly with Invesco in the quarterly transaction report.
Additionally, Covered Persons must report information on any new brokerage account established by the Covered Person during the quarter
for the direct or indirect benefit of the Covered Person. The report shall include:
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The date the account was established;
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The name of the broker-dealer or bank; and
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The date that the report is submitted to Compliance.
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Compliance may identify transactions by
Covered Persons that technically comply with the Code for review based on any pattern of activity that has an appearance of a conflict of interest.
c.
Annual Holdings Reports
. All Covered Persons must, no later than 30 calendar days after the end of calendar year subject to
any extension to be granted by Head of Compliance, Greater China having regard to the relevant circumstantial factors, report the following information, which must be current within 45 calendar days of the date the report is submitted to Compliance:
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The security and the number of shares (for equities) or the interest rate and maturity date (if applicable) and principal amount (for debt securities) for each Covered Security in which the Covered Person has any direct
or indirect Beneficial Interest;
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The security identifier (ISIN, SEDOL, symbol, etc.);
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The name of the broker-dealer or bank with or through which the security is held; and
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The date that the report is submitted by the Covered Person to Compliance.
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d.
Gifts and
Entertainment Reporting.
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Reporting of Gifts and Entertainment given to an Invesco Employee by a Client or Business Partner.
All Gifts and Entertainment received by an Employee must be reported through the automated review system
within thirty (30) calendar days after the receipt of the Gift or the attendance of the Entertainment event. The requirement to report Entertainment includes dinners or any other event with a business partner of IHKL in attendance.
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Reporting of Gifts and Entertainment given by an Invesco Employee to a Client or Business Partner.
All Gifts and Entertainment given by an Employee must be reported through the automated review system
within thirty (30) calendar days after the day of event. An Employee should contact their manager or Compliance if they are not sure how to report gifts or entertainment they intend to give or have given to a Client or Business Partner.
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e.
Certification of Compliance.
All Covered Persons must certify annually that they have read and understand
the Code and recognize that they are subject to the Code. In addition, all Covered Persons must certify annually that they have complied with the requirements of the Code and that they have disclosed or reported all personal securities transactions
required to be disclosed or reported under the Code. The IHKL Greater China Management Committee (“GCMAC”) will review and approve the Code annually. If material changes are made to the Code during the year, these changes will also be
reviewed and approved by the GCMAC. All Covered Persons must certify within 30 calendar days of the effective date of the amended code that they have read and understand the Code and recognize that they are subject to the Code.
VI.
Reporting of Potential Compliance Issues
IHKL
has created several channels for Employees to raise compliance issues and concerns on a confidential basis. An Employee should first discuss a compliance issue with his or her supervisor, department head or with IHKL’s Head of Legal, Greater
China, Head of Compliance, Greater China or Internal Audit. Human Resources matters should be directed to the Human Resources Department, an additional anonymous vehicle for reporting such concerns.
In the event that an Employee does not feel comfortable discussing compliance issues through normal channels, the Employee may anonymously report suspected
violations of law or Invesco policy, including this Code, by calling the toll-free Invesco Whistleblower Hotline. This hotline is available to employees of multiple operating units of Invesco Ltd. Use the following link to identify a toll-free
number for your country:
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International Toll-Free Numbers
Employees may also report his or her concerns by visiting the Invesco Whistleblower Hotline website at:
www.invesco.ethicspoint.com
. To ensure your
confidentiality, the phone line and website are provided by an independent company and available 24 hours a day, 7 days a week. More information on the Invesco Whistleblower Hotline is available on the intranet at:
Invesco Whistleblower Hotline Website
All submissions to
the Invesco Whistleblower Hotline will be reviewed and handled in a prompt, fair and discreet manner. Employees are encouraged to report these questionable practices so that Invesco has an opportunity to address and resolve these issues before they
become more significant regulatory or legal issues.
VII.
Administration of the Code of Ethics
IHKL has used reasonable diligence to institute procedures reasonably necessary to prevent violations of this Code.
Upon discovering a material violation of the Code, Compliance will notify the Head of Compliance, Greater China. The Head of Compliance, Greater China will
notify the GCMAC of any material violations at the next regularly scheduled meeting.
No less frequently than annually, IHKL will furnish to the GCMAC or
such committee as it may designate, a written report that:
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describes significant issues arising under the Code since the last report to the GCMAC, including information about material violations of the Code and sanctions imposed in response to material violations; and
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certifies that IHKL has adopted procedures reasonably designed to prevent Covered Persons from violating the Code.
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VIII.
Sanctions
Compliance will issue a letter of
education to the Covered Persons involved in violations of the Code that are determined to be inadvertent or immaterial.
IHKL may impose additional
sanctions in the event of repeated violations or violations that are determined to be material or not inadvertent, including disgorgement of profits (or the differential between the purchase or sale price of the Personal Security Transaction and the
subsequent purchase or sale price by a relevant Client during the enumerated period), a letter of censure or suspension, or termination of employment.
IX.
Exceptions to the Code
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Head of Compliance, Greater China (or designee) may grant an exception to any provision in this Code.
X.
Definitions
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“Affiliated Mutual Funds”
generally includes all collective investment schemes (including mutual funds and/or unit trusts) advised or sub-advised by IHKL.
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“Automatic Investment Plan/Dividend Reinvestment Plan”
means a program in which regular purchases or sales are made automatically in or from investment accounts in accordance with a predetermined
schedule and allocation, including dividend reinvestment plans.
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“Beneficial Interest”
has the same meaning as the ownership interest of a “beneficial owner” pursuant to Rule 16a-1(a)(2) under the Securities Exchange Act of 1934, as amended (“the
’34 Act”). To have a Beneficial Interest, Covered Persons must have directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, have or share a “direct or indirect pecuniary interest,”
which is the opportunity to profit directly or indirectly from a transaction in securities. Thus a Covered Person may have Beneficial Interest in securities held by members of his or her immediate family sharing the same household (i.e. a spouse or
equivalent domestic partner, children, etc.) or by certain partnerships, trusts, corporations, or other arrangements.
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“Client”
means any account for which IHKL is either the adviser or sub-adviser including Affiliated Mutual Funds.
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“Control” means, in general, the power to exercise a controlling influence, and
has the same meaning as under Section 2(a)(9) of the Investment Company Act.
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“Covered Person”
means and includes:
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any director, officer, full or part time, temporary or permanent Employee of IHKL or any full or part time Employee of any of IHKL’s affiliates that, in connection with his or her regular functions or duties:
makes, participates in, or obtains any information concerning any Client’s purchase or sale of Covered Securities or who is involved in making investment recommendations or obtains information concerning investment recommendations, with respect
to such purchase or sale of Covered Securities ; or has access to non-public information concerning any Client’s purchase or sale of Covered Securities, access to non-public securities recommendations or access to non-public information
concerning portfolio holdings of any portfolio advised or sub-advised by IHKL.
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any other persons falling within the definition of Access Person under Rule 17j-1 of the Investment Company Act of 1940 , as amended (the
“Investment Company
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Act”)or Rule 204A-1 under the Investment Advisers Act of 1940, as amended (the “Advisers Act”) and such other persons that may be so deemed by Compliance.
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any other persons that may be so deemed by the Head of Compliance, Greater China.
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“Covered Security”
means a security as defined in Section 2(a)(36) of the Investment Company Act except that it does not include the following (Please note : exchange traded funds (ETFs) are
considered Covered Securities).
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Direct obligations of the Government of the United States or its agencies or the country in which the employee is a resident;
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Bankers’ acceptances, bank certificates of deposit, commercial paper and high quality short-term debt instruments, including repurchase agreements;
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Any interests in open-ended collective investment schemes (including mutual fund and/or unit trusts) not advised or sub-advised by any entity within the Invesco Group (All Affiliated Mutual Funds shall be considered
Covered Securities regardless of whether they are advised or sub-advised by IHKL).\
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Invesco Ltd. stock because it is subject to the provisions of Invesco Ltd.’s Code of Conduct. Notwithstanding this exception, transactions in Invesco Ltd. securities are subject to all the pre-clearance and
reporting requirements outlined in other provisions of this Code and any other corporate guidelines issued by Invesco Ltd.
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“Employee”
means and includes:
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Any full or part time, temporary or permanent Employee of IHKL or
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Any full or part time Employee of any IHKL’s affiliates that, in connection with his or her regular functions or duties, makes or participates in, or obtains any information concerning any Client’s purchase or
sale of Covered Securties or who is involved in making or obtains information concerning investment recommendations with respect to such purchase or sales of Covered Securities; or who has access to non-public information concerning any
Client’s purchase or sale of Covered Securities, access to non-public securities recommendations or access to non-public information concerning portfolio holdings of any portfolio advised or sub-advised by IHKL.
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Any other persons falling within the definitions of Access Person or Advisory Person under Rule 17j-1 of the Investment Company Act or Rule 204A-1 under the Advisers Act and such other persons that may be deemed to be
an Employee by Compliance.
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For any other persons that may be so deemed by the Head of Compliance, Greater China.
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“Gifts”, “Entertainment” and “Business Partner”
have the same meaning as provided in the Invesco Ltd. Gifts and Entertainment Policy.
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“Initial Public Offering”
means a public offering where shares of stock in a company are sold to the general public, on a securities exchange, for the first time.
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“Investment Personnel”
means any full or part time Employee of Invesco Advisers, Inc. or any full or part time Employee of any Invesco Advisers, Inc.’s affiliates who, in connection with his or her
regular functions or duties, makes or participates in making recommendations regarding the purchase or sale of Covered Securities by Clients or any natural person who Controls a Client or an investment adviser and who obtains information concerning
recommendations made to the Client regarding the purchase or sale of securities by the Client as defined in Rule 17j-1.
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“Local Pension Schemes”
means any local mandatory provident fund schemes, registered or exempted occupational retirement schemes or statutory pension schemes (excluding any voluntary contributions to be
made in addition to mandatory contributions).
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“Non-Investment Personnel”
means any Employee that does not meet the definition of Investment Personnel as listed above.
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“Private Securities Transaction”
means any securities transaction relating to offerings of securities which are not publicly traded. Employees may not purchase or acquire any privately-issued
securities, other than in exceptional cases where such investment is part of a family-owned and operated business venture that would not be expected to involve an investment opportunity of interest to any Invesco client.
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“Restricted List Securities”
means the list of securities that are provided to the Compliance Department by Invesco Ltd. or investment departments, which include those securities that are restricted
from purchase or sale by Client or Employee accounts for various reasons (e.g., large concentrated ownership positions that may trigger reporting or other securities regulatory issues, or possession of material, non-public information, or existence
of corporate transaction in the issuer involving an Invesco Ltd. unit).
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X.
Invesco Ltd. Policies and Procedures
All Employees are subject to the policies and procedures established by Invesco Ltd., including the Code of Conduct, Insider Trading Policy and Gifts and
Entertainment Policy and must abide by all their requirements, provided that where there is a conflict between a minimal standard established by an Invesco Ltd. policy and the standards established by an IHKL policy, including this Code, the latter
shall control.
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XI.
Code of Ethics Contacts
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Telephone Hotline: 111-2633 from your Invesco office phone
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E-Mail: CodeofEthicsGreaterChina@invesco.com
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Last Revised: January 1,
2015
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Invesco Ltd. Code of Conduct
Our company’s Mission
“Helping Investors Worldwide Achieve Their Financial
Objectives”
is a logical starting point for our Code of Conduct. To help guide us in achieving our Mission, Invesco has developed the following set of Principles:
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We are passionate about our clients’ success
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We earn trust by acting with integrity
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People are the foundation of our success
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Working together, we achieve more
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We believe in the continuous pursuit of performance excellence
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This Code of Conduct (“Code of
Conduct” or “Code”) has been created to assist us in accomplishing our Mission. It contains a number of policies and standards which, when taken together, are designed to help define the essence of the conduct of an Invesco
representative. These policies and standards are also intended to provide guidance to Invesco personnel in fulfilling their obligations to comply with applicable laws, rules and regulations (“applicable laws”). This Code of Conduct applies
to all officers and other employees of Invesco and its subsidiaries (collectively, “Covered Persons”).
Our Principles also help define the
Invesco culture. In practice, this means that our clients’ interests must always come first, that Covered Persons should treat each other with respect and consideration, and that Invesco should participate as a responsible corporate citizen in
every community in which it operates. This commitment is a vital part of our achieving our principal responsibility as a publicly-held company: producing a fair return on our shareholders’ capital.
This Code of Conduct contains broad and general principles that supplement the specific policies, procedures and training within each business unit of
Invesco.
Page 1 of 19
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B.
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Statement of General Principles
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Invesco operates in a highly-regulated and complex environment. There are
numerous layers of overlapping, and occasionally conflicting, laws, customs and local practices. This Code of Conduct was designed to provide all of us who are part of Invesco with a clear statement of our firm’s ethical and cultural standards.
Generally, we serve our clients as fiduciaries. Fiduciary businesses are generally held to a higher standard of conduct than other businesses, and as
such there are special obligations that apply. The following key duties and principles govern our conduct as fiduciaries:
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Best interests of clients - As fiduciaries, we have a duty to act with reasonable care, skill and caution in the best interests of our clients, and to avoid conflicts of interest.
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Global fiduciary standards - Invesco seeks to maintain the same high fiduciary standards throughout the world, even though those standards may not be legally required, or even recognized, in some countries.
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Client confidentiality - We must maintain the confidentiality of information relating to the client, and comply with the data protection requirements imposed by many jurisdictions.
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Information - Clients must be provided with timely and accurate information regarding their accounts.
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Segregation and protection of assets - Processes must be established for the proper maintenance, control and protection of client assets. Fiduciary assets must be segregated from Invesco assets and property.
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Delegation of duties - Fiduciary duties should be delegated only when the client consents and where permitted by applicable law. Reasonable care, skill and caution must be exercised in the selection of agents and review
of their performance.
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Client guidelines - Invesco is responsible for making investment decisions on behalf of clients that are consistent with the prospectus, contract, or other controlling document relating to the client’s account.
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Relations with regulators - We seek relationships with regulators that are open and responsive in nature.
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Fair and Honest Dealing
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Covered Persons shall deal fairly and honestly with Invesco’s
shareholders, customers, suppliers, competitors and employees. Covered Persons shall behave in an ethical manner and shall not take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of
material facts, or any other unfair dealing practice.
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Anti-Discrimination and Harassment
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Invesco is committed to providing a work environment that is free of
discrimination and harassment. Such conduct, whether overt or subtle, is demeaning, may be illegal, and undermines the integrity of the employment relationship.
Sexual harassment can include unwelcome sexual advances, requests for sexual favors, pressure to engage in a sexual relationship as a condition of employment
or promotion, or conduct which creates a hostile or offensive work environment.
Discrimination can take many forms including actions, words, jokes, or
comments based upon an individual’s race, citizenship, ethnicity, color, religion, sex, veteran status, national origin, age, disability, sexual orientation, marital status or other legally protected characteristic. Any Covered Person who
engages in harassment or discrimination will be subject to disciplinary action, up to and including termination of employment.
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Electronic Communications
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The use of electronic mail, the Internet and other technology assets is an
important part of our work at Invesco. Used improperly, this technology presents legal and business risks for the company and for individual employees. There are also important privacy issues associated with the use of technology, and related
regulations are evolving.
In accordance with Invesco’s IT Systems: Acceptable Use policies, all Covered Persons are required to use information
technology for proper business purposes and in a manner that does not compromise the confidentiality of sensitive or proprietary information. All communications with the public, clients, prospects and fellow employees must be conducted with dignity,
integrity, and competence and in an ethical and professional manner.
We must not use information technology to: transmit or store materials which are
obscene, pornographic, or otherwise offensive; engage in criminal activity; obtain unauthorized access to data or files; commit copyright violations; install personal software without permission; or make Internet statements, without permission, that
suggest that the user is speaking on behalf of Invesco or its affiliates.
Page 3 of 19
Invesco is committed to providing a safe and healthy work place for all employees. The
use, possession, sale, transfer, purchase, or being “under the influence” of drugs at any time while on company premises or on company business is prohibited. The term “drug” includes alcoholic beverages (other than in connection
with entertainment events, or in other appropriate settings), prescriptions not authorized by your doctor, inhalants, marijuana, cocaine, heroin and other illegal substances.
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Political Activities and Lobbying
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Covered Persons, as private citizens, are encouraged to exercise
their rights and duties in any political or civic process. For example, voting in elections for which they are eligible, or making contributions supporting candidates or parties of their choice.
Invesco does not make political contributions with corporate funds. No Covered Person may, under any circumstances, use company funds to make political
contributions, nor may you represent your personal political views as being those of the company.
In the United States, Invesco does support a Political
Action Committee.
Invesco and its Covered Persons must adhere to the highest standards of honest and
ethical conduct. A conflict of interest exists when a Covered Person acts in a manner that is not in the best interests of Invesco, our clients, or our shareholders. Often, this is because the Covered Person or someone with whom they have a close
personal relationship (e.g. a relative or friend) will benefit personally.
All Covered Persons must act in a manner that is in the best interests of
Invesco, our clients, and our shareholders and must avoid any situation that gives rise to an actual or apparent conflict of interest. At no time may a Covered Person use Invesco property, information, or their position to profit personally or to
assist others in profiting at the expense of the company, to compete with Invesco, or to take advantage of opportunities that are discovered in the course of serving Invesco.
All Covered Persons shall promptly communicate to the applicable member of the Legal and Compliance Department any material transaction, relationship, or
situation that reasonably could be expected to give rise to a conflict of interest so that the company and the Covered Person may take steps to minimize the conflict.
While not all-inclusive, the following sections describe in more detail key areas where real or perceived conflicts of interest can arise.
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Outside Activities and Compensation
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No Covered Person shall perform work or render services for any
competitor of Invesco or for any organization with which Invesco does business, or which seeks to do
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business with Invesco, outside of the normal course of his or her employment with Invesco, without the prior
written approval of the company. Nor shall any such person be a director, officer, or consultant of such an organization, or permit his or her name to be used in any fashion that would tend to indicate a business connection with such organization,
without such approval. Outside organizations can include public or private corporations, partnerships, charitable foundations and other not-for-profit institutions. With the above approval, Covered Persons may receive compensation for such
activities.
Service with organizations outside of Invesco can; however, raise serious regulatory issues, including conflicts of interest and access to
material non-public information.
As an outside board member or officer, a Covered Person may come into possession of material non-public information
about the outside company or other public companies. It is critical that a proper information barrier be in place between Invesco and the outside organization, and that the Covered Person does not communicate such information to other Covered
Persons in violation of the information barrier.
Similarly, Invesco may have a business relationship with the outside organization or may seek a
relationship in the future. In those circumstances, the Covered Person must not be involved in any way in the business relationship between Invesco and the outside organization.
Invesco retains the right to prohibit membership by Covered Persons on any board of directors/trustees or as an officer of an outside organization where such
membership might conflict with the best interests of the company. Approval will be granted on a case-by-case basis, subject to proper resolution of potential conflicts of interest. Outside activities will be approved only if these issues can be
satisfactorily resolved.
Purchasing and selling securities in a Covered Person’s own account, or accounts
over which the Covered Person has access or control, particularly in securities owned by client accounts, can give rise to potential conflicts of interest. As fiduciaries, we are held to the highest standards of conduct. Improperly gaining advance
knowledge of portfolio transactions, or conducting securities transactions based upon information obtained at Invesco, can be a violation of those standards.
Every Covered Person must also comply with the specific personal trading rules in effect for the Covered Person’s business unit.
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Information Barriers and Material Non-Public Information
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In the conduct of our business, Covered
Persons may come into possession of material non-public information. This information could concern an issuer, a client, a portfolio, the market for a particular security, or Invesco itself. The Board of Directors of the company has adopted an
Insider Trading Policy (“Insider Trading Policy”) which applies to all Covered Persons. The Insider Trading Policy prohibits all Covered Persons from
Page 5 of 19
using such information in ways that violate the law, including for personal gain. Non-public information must be kept confidential, which may include keeping it confidential from other Covered
Persons. The purchase or sale of Invesco’s securities or the securities of other publicly-traded companies while aware of material nonpublic information about such company, or the disclosure of material nonpublic information to others who then
trade in such company’s securities, is prohibited by this Code of Conduct and by United States and other jurisdictions’ securities laws.
With
regard to Invesco securities, the Insider Trading Policy, among other provisions, prohibits directors, officers, and other Covered Persons who are deemed to have access to material, non-public information relating to the company from trading during
specified Blackout Periods (as defined therein). All Covered Persons should review the Invesco Insider Trading Policy carefully and follow the policies and procedures described therein. The failure of a Covered Person to comply with the
company’s Insider Trading Policy may subject him or her to company-imposed sanctions, up to and including termination for cause, whether or not the failure to comply results in a violation of law. Please contact an appropriate member of the
Legal and Compliance Department on any questions regarding this subject and the company’s Insider Trading Policy.
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Gifts and Relationships with Customers and Suppliers
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Invesco seeks to do business with clients and
suppliers on a fair and equitable basis. We may not accept or provide gifts of other than nominal value, or lavish entertainment, or other valuable benefits or special favors to or from customers or suppliers. We must observe any limits imposed by
our business unit’s policies, local laws, or regulations with respect to the acceptance or provision of gifts and entertainment.
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Compliance with Applicable Laws
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Invesco strives to ensure that all activity by or on behalf of Invesco is in
compliance with applicable laws. As Invesco operates in major countries and securities markets throughout the world, we have a duty to comply with applicable laws of the jurisdictions in which we operate. While not exhaustive, this section describes
several areas where such legislation may exist.
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Anti-Bribery and Dealings with Governmental Officials
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Invesco does not tolerate bribery. We, and those
working on Invesco’s behalf, must not offer, request, receive, give, accept or agree to accept bribes to or from anyone whether in the private or public sector with the intent to induce or reward improper performance of duties.
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Many of the countries in which Invesco conducts its business prohibit the improper influencing of governmental
officials or other business persons by the payment, giving or offering of bribes, gifts, political contributions, lavish hospitality or by other means. Our policy requires adherence to those restrictions.
Do not directly or indirectly promise, offer or make payment in money or give an advantage or anything of value to anyone including a government official,
agent or employee of a government, political party, labor organization, charity, a business entity or its representatives, a candidate of a political party or their families, with the intent to induce favorable business treatment or improper
performance of their business or government decisions and actions.
This policy prohibits actions intended to, for example, improperly:
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influence a specific decision or action or
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enhance future relationships or
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maintain existing relationships
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We must not request, accept or agree to accept payments or other advantages
that are intended to improperly influence our decisions or actions or additionally, agree to any business relationships that are conditional on such advantages being given or received.
In general, all travel and entertainment that Covered Persons provide to existing or perspective business partners and governmental officials must be
pre-approved within the appropriate business unit. If approved, and in the case of situations involving government officials, a written confirmation that such expenses do not violate local law must be obtained from an appropriate third party (e.g.,
the business unit’s legal counsel or the government official’s supervisor).
Covered Persons shall comply with applicable laws governing
political campaign finance and lobbying activities and shall not engage in any conduct that is intended to avoid the application of such laws to activities undertaken on Invesco’s behalf. In addition, appropriate executive officers shall
monitor compliance with lobbyist registration and disclosure requirements by all individuals who act on behalf of Invesco.
These prohibitions in this
section extend to any consultants or agents we may retain on behalf of Invesco.
Further information can be found in Invesco’s Global Anti-Bribery
policy. Guidance regarding genuine and allowable gifts, benefits and entertainment is set out in the Gifts, Benefits and Entertainment Policy.
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In the global marketplace, the attempted use of financial institutions and
instruments to launder money is a significant problem that has resulted in the passage of strict laws in many countries. Money laundering is the attempt to disguise money derived from or intended to finance illegal activity including drug
trafficking, terrorism, organized crime, fraud, and many other crimes. Money launderers go to great lengths to hide the sources of their funds. Among the most common stratagems are placing cash in legitimate financial institutions, layering between
numerous financial institutions, and integrating the laundered proceeds back into the economy as apparently legitimate funds.
All Covered Persons must be
vigilant in the fight against money laundering, and must not allow Invesco to be used for money laundering. Each business unit has developed an anti-money laundering program that is consistent with Invesco’s policy. Each Covered Person must
comply with the applicable program.
The laws of many countries are designed to protect consumers from illegal competitive actions
such as price fixing and dividing markets. It is Invesco’s policy and practice to compete based on the merits of our products and services. In order to further that policy, Covered Persons must not fix or control prices with competitors, divide
up territories or markets, limit the production or sale of products, boycott certain suppliers or customers, unfairly control or restrict trade in any way, restrict a competitor’s marketing practices, or disparage a competitor. Covered Persons
must never discuss products, pricing or markets with competitors with the intent to fix prices or divide markets.
If you conduct business for Invesco outside of the U.S., in addition to being
familiar with the local laws of the other countries involved, be sure you are familiar with the following U.S. laws and regulations. Violations of these laws can result in substantial fines, imprisonment and severe restrictions on the company’s
ability to do business.
Foreign Corrupt Practices Act
The United States Foreign Corrupt Practices Act (FCPA) and similar laws in many other countries have a variety of provisions that regulate business in other
countries and with foreign citizens. In essence, these laws make it a crime to promise or give anything of value to a foreign official or political party in order to obtain or keep business or obtain any improper advantage. It is also illegal to
make payments to agents, sales representatives or other third parties if you have reason to believe your gift will be used illegally. Seek advice from the appropriate member of the Legal and Compliance
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Department for interpretation of the FCPA or similar laws if you are involved in any business dealings that involve foreign countries.
Anti-Boycott Laws
From time to time, various countries
may impose restrictions upon the ability of businesses in their jurisdiction to engage in commerce with designated individuals, countries or companies. These laws are commonly referred to as boycotts or trade embargoes. It may be against the law to
cooperate in any boycotts between foreign countries not sanctioned by the laws of the place where your office is located. All requests for boycott support or boycott-related information must be reported to your supervisor and the member of the Legal
and Compliance Department with responsibility for your office.
Similarly, many countries contribute the names of criminal or terrorist organizations or
individuals to a common database and require financial institutions to screen customer lists against the database as part of their “Know Your Customer” obligations. We must be aware of, and where appropriate, adhere to any such
restrictions.
Embargo Sanctions
The United States
Treasury Department’s Office of Foreign Assets Control prohibits U.S. companies and their foreign subsidiaries from doing business with certain countries and agencies and certain individuals. The laws of other countries may have similar types
of prohibitions. The regulations vary depending on the country and the type of transaction and often change as countries’ foreign policies change. If you are aware of any sensitive political issues with a country in which Invesco is doing or
considering doing business, seek advice from the appropriate member of the Legal and Compliance Department.
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F.
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Information Management
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Confidential Information
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Confidential information includes all non-public information that might be of
use to competitors, or harmful to the company or its customers, if disclosed. All information (in any form, including electronic information) that is created or used in support of company business activities is the property of Invesco. This company
information is a valuable asset and Covered Persons are expected to protect it from unauthorized disclosure. This includes Invesco customer, supplier, business partner, and employee data. United States (federal and state) and other
jurisdictions’ laws may restrict the use of such information and impose penalties for impermissible use or disclosure.
Covered Persons must maintain
the confidentiality of information entrusted to them by the company or its customers, vendors or consultants except when disclosure is properly authorized by the company or legally mandated. Covered Persons shall take
Page 9 of 19
all reasonable efforts to safeguard such confidential information that is in their possession against inadvertent disclosure and shall comply with any non-disclosure obligations imposed on
Invesco in its agreements with third parties.
Information pertaining to Invesco’s competitive position or business strategies, and information
relating to negotiations with Covered Persons or third parties, should be protected and shared only with Covered Persons having a need to know such information in order to perform their job responsibilities.
Data privacy, as it relates both to our clients and our employees, has become a major
political and legal issue in many jurisdictions in which we do business. A variety of laws in each of those jurisdictions governs the collection, storage, dissemination, transfer, use, access to and confidentiality of personal information and
patient health information. These laws can work to limit transfers of such data across borders and even among affiliated entities within Invesco. Invesco and its Covered Persons will comply with all provisions of these laws that relate to its
business, including the privacy, security and electronic transmission of financial, health and other personal information. The company expects its Covered Persons to keep all such data confidential and to protect, use and disclose information in the
conduct of our business only in compliance with these laws. The company will consider and may release personal information to third parties to comply with law or to protect the rights, property or safety of Invesco and its customers. In accordance
with Invesco policies, each business unit has developed required disclosures and data security procedures applicable to that business unit. All Covered Persons must comply with the applicable procedures.
With respect to Invesco Covered Persons, all salary, benefit, medical and other personal information relating to Covered Persons shall generally be treated as
confidential. Personnel files, payroll information, disciplinary matters, and similar information are to be maintained in a manner designed to protect confidentiality in accordance with applicable laws. All Covered Persons shall exercise due care to
prevent the release or sharing of such information beyond those persons who may need such information to fulfill their job functions. Notwithstanding the foregoing, all personnel information belongs solely to Invesco and may be reviewed or used by
the company as needed to conduct its business.
Page 10 of 19
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G.
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Protecting Invesco’s Assets
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All Covered Persons shall strive to preserve and protect the company’s
assets and resources and to promote their efficient use. The standards set forth below are intended to guide Covered Persons by articulating Invesco’s expectations as they relate to activities or behaviors that may affect the company’s
assets.
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1.
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Personal Use of Corporate Assets
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Theft, carelessness and waste have a direct impact on Invesco’s
profitability. Covered Persons are not to convert assets of the company to personal use. Company property should be used for the company’s legitimate business purposes and the business of the company shall be conducted in a manner designed to
further Invesco’s interest rather than the personal interest of an individual Covered Person. Covered Persons are prohibited from the unauthorized use or taking of Invesco’s equipment, supplies, materials or services. Prior to engaging in
any activity on company time which will result in remuneration to the Covered Person or the use of Invesco’s equipment, supplies, materials or services for personal or non-work related purposes, officers and other Covered Persons shall obtain
the approval of the supervisor of the appropriate business unit.
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2.
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Use of Company Software
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Covered Persons use software programs for word processing, spreadsheets, data
management, and many other applications. Software products purchased by the company are covered by some form of licensing agreement that describes the terms, conditions and allowed uses. It is the company’s policy to respect copyright laws and
observe the terms and conditions of any license agreements. Copyright laws in the United States and other countries impose civil and criminal penalties for illegal reproductions and use of licensed software. You must be aware of the restrictions on
the use of software and abide by those restrictions. Invesco business equipment may not be used to reproduce commercial software. In addition, you may not use personal software on company equipment without prior written approval.
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3.
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Computer Resources/E-mail
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The company’s computer resources, which include the electronic messaging
systems (e-mail, SMS, etc.), belong to Invesco and not to the Covered Person. They are not intended to be used for amusement, solicitation, or other non-business purposes. While it is recognized that Covered Persons will occasionally use the system
for personal communications, it is expected that such uses will be kept to a minimum and that Covered Persons will be responsible and professional in their use of these functions. The use of the computer systems to make or forward derogatory or
offensive remarks about other people or groups is prohibited. E-mail/Text messages should be treated as any other written business communication.
Page 11 of 19
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4.
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Invesco Intellectual Property
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Covered Persons must carefully maintain and manage the intellectual
property rights of Invesco, including patents, trademarks, copyrights and trade secrets, to preserve and protect their value. Information, ideas and intellectual property assets of Invesco are important to the company’s success.
Invesco’s name, logo, trademarks, inventions, processes and innovations are intellectual property assets and their protection is vital to the success of
the company’s business. The company’s and any of its subsidiaries’ names, logos and other trademarks and service marks are to be used only for authorized company business and never in connection with personal or other activities
unless appropriately approved and in accordance with company policy. In addition, our Covered Persons must respect the intellectual property rights of third parties. Violation of these rights can subject both you and the company to substantial
liability, including criminal penalties.
Any work product produced in the course of performing your job shall be deemed to be a “work made for
hire” and shall belong to Invesco and is to be used only for the benefit of Invesco. This includes such items as marketing plans, product development plans, computer programs, software, hardware and similar materials. You must share any
innovations or inventions you create with your supervisor so that the company can take steps to protect these valuable assets.
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5.
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Retention of Books and Records
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Invesco corporate records are important assets. Corporate records
include essentially everything you produce as a Covered Person, regardless of its format. A corporate record may be in the form of paper, electronic data, e-mail, or voice mail. It may be something as obvious as a memorandum or a contract or
something not as obvious, such as a desk calendar, an appointment book, or an expense record.
Invesco is required by law to maintain certain types of
corporate records, usually for a specified period of time. Failure to retain such documents for such minimum periods could subject Invesco to penalties and fines, cause the loss of rights, obstruct justice, place Invesco in contempt of court, or
place Invesco at a serious disadvantage in litigation. However, storage of voluminous records over time is costly. Therefore, Invesco has established controls to assure retention for required periods and timely destruction of retrievable records,
such as paper copies and records on computers and electronic systems. Even if a document is retained for the legally required period, liability could still result if a document is destroyed before its scheduled destruction date.
Invesco and its affiliates are subject to the regulatory requirements of numerous countries and regulatory agencies. Virtually all of them have specific
requirements concerning the creation, maintenance and storage of business records. Invesco expects all Covered Persons to become familiar with and fully comply with the records retention/destruction schedule for the departments and office locations
for which they
Page 12 of 19
work. If you believe documents should be retained beyond the applicable retention period, consult with the Legal and Compliance Department.
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6.
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Sales and Marketing Materials
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Invesco is committed to building sustained, open, and honest
relationships with our customers, and to complying with all relevant regulatory requirements. This requires that all marketing and sales-related materials be prepared under standards approved by the Legal and Compliance Department and, prior to use,
reviewed and approved by the appropriate supervisor within a business unit. Covered materials include but are not limited to, requests for proposals, client presentations, performance summaries, advertisements, published market commentaries,
brochures and web site content.
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H.
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Disclosure of Invesco Information
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1.
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Integrity and Accuracy of Financial Records
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The preparation and maintenance of accurate books, records
and accounts is required by law and essential to the proper discharge of financial, legal and reporting obligations. All Covered Persons are prohibited from directly or indirectly falsifying or causing to be false or misleading any financial or
accounting book, record or account. In addition, all financial data must be completely and accurately recorded in compliance with applicable law and Invesco’s accounting policies and procedures. A Covered Person may violate this section by
acting or by failing to act when he or she becomes aware of a violation or potential violation of this section.
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2.
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Disclosure in Reports and Documents
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Filings and Public Materials.
As a public company, it is
important that the company’s filings with the SEC and other U.S. federal, state, domestic and international regulatory agencies are full, fair, accurate, timely and understandable. The company also makes many other filings with the SEC and
other U.S. and international regulatory agencies on behalf of the funds that its subsidiaries and affiliates manage. Further, the company prepares mutual fund account statements, client investment performance information, prospectuses and
advertising materials that are sent out to its mutual fund shareholders and clients.
Disclosure and Reporting Policy.
The company’s policy is
to comply with all applicable disclosure, financial reporting and accounting regulations applicable to the company. The company maintains the highest commitment to its disclosure and reporting requirements, and expects and requires all Covered
Persons to record information accurately and truthfully in the books and records of the company.
Information for Filings.
Depending on his or her
position with the company, a Covered Person may be called upon to provide necessary information to assure that the company’s public reports and regulatory filings are full, fair, accurate, timely and
Page 13 of 19
understandable. The company expects all Covered Persons to be diligent in providing accurate information to the inquiries that are made related to the company’s public disclosure
requirements.
Disclosure Controls and Procedures and Internal Control Over Financial Reporting.
Covered Persons are required to cooperate and
comply with the company’s disclosure controls and procedures and internal controls over financial reporting so that the company’s reports and documents filed with the SEC and other U.S. federal, state, domestic and international regulatory
agencies comply in all material respects with applicable laws and provide full, fair, accurate, timely and understandable disclosure.
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3.
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Improper Influence on the Conduct of Audits
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Every Covered Person must deal fairly and honestly with
outside accountants performing audits, reviews or examinations of Invesco’s and its subsidiaries’ financial statements. To that end, no Covered Person of Invesco may make or cause to be made a materially false or misleading statement (or
omit facts necessary to make the statements made not misleading) in connection with an audit, review or examination of financial statements by independent accountants or the preparation of any document or report required to be filed with a
governmental or regulatory authority. Covered Persons of Invesco also are prohibited from coercing, manipulating, misleading or fraudulently inducing any independent public or certified public accountant engaged in the performance or review of
financial statements that are required to be filed with a governmental or regulatory authority if he or she knows or should have known that his or her actions could result in making those financial statements materially misleading.
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4.
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Standards for Invesco’s Financial Officers
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Invesco’s Chief Executive Officer, Chief Financial
Officer and Chief Accounting Officer (the “Financial Officers”) are required to take all reasonable steps to provide full, fair, accurate, timely and understandable disclosures in the reports and documents that Invesco files with or
submits to the SEC and other regulatory bodies and in other public communications made by Invesco. In the event that a Financial Officer learns that any such report, document or communication does not meet this standard and such deviation is
material, then the Financial Officers are required to review and investigate such deviation, advise the Board of Directors or the Audit Committee of the Board of Directors regarding the deviation and, where necessary, revise the relevant report,
document or communication.
Although a particular accounting treatment for one or more of Invesco’s operations may be permitted under applicable
accounting standards, the Financial Officers may not authorize or permit the use of such an accounting treatment if the effect is to distort or conceal Invesco’s true financial condition. The accounting standards and treatments utilized by
Invesco must, in all instances, be determined on an objective and uniform basis and without reference to a single transaction or series of transactions and their impact on Invesco’s financial results for a particular time period. Any new or
novel
Page 14 of 19
accounting treatment or standard that is to be utilized in the preparation of Invesco’s financial statements must be discussed with Invesco’s Audit Committee and its independent
auditors.
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5.
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Communications with the Media, Analysts and Shareholders
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Invesco has a long-standing policy of
co-operating with the news media and the financial community. This policy is intended to enhance respect for the company, provide accurate information, and achieve our business goals.
Invesco employs media relations professionals who are responsible for handling all contacts with the news media. Invesco’s Communications and Public
Affairs Department is responsible for formulating and directing our media relations policy worldwide. Other Invesco employees may not speak to or disseminate information to the news media unless such contact has been requested and arranged by or
coordinated with an Invesco media relations professional in accordance with the company’s media relations policy. Any contact from the news media should be referred promptly and without comment to an Invesco media relations professional. If you
do not know the appropriate media relations professional for your unit, you can refer the contact to the Invesco Communications and Public Affairs Department.
Many countries have detailed rules with regard to the dissemination of information about public companies. In particular, a public company must have
procedures for controlling the release of information that may have a material impact on its share price. The Chief Executive Officer and the Chief Financial Officer are responsible for Invesco’s relationships with the financial community,
including the release of price sensitive information. Other Invesco employees may not speak to or disseminate information regarding the company to the financial community (including analysts, investors, shareholders, Company lenders, and rating
agencies) unless such contact has been requested and arranged by the Chief Executive Officer, the Chief Financial Officer or the Investor Relations Group within the Finance Department
Page 15 of 19
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I.
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Compliance with the Code of Conduct
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One person’s misconduct can damage our entire company’s hard-earned
reputation and compromise the public’s trust in the company. Every Covered Person should therefore be familiar with this Code and abide strictly by its provisions.
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2.
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Reporting Violations of the Code
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As part of being accountable to each other and Invesco, all Covered
Persons are required to report possible violations of the Invesco Code of Conduct, laws or regulations. Such violations can include, but are not limited to:
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Violations of any laws or regulations generally involving Invesco;
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Questionable accounting matters, internal accounting controls, auditing matters, breaches of fiduciary duty or violations of United States or foreign securities laws or rules (collectively, “Accounting
Matters”) including, but not limited to:
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fraud or deliberate error in the preparation, evaluation, review or audit of any financial statement of Invesco;
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fraud or deliberate error in the recording and maintaining of financial records of Invesco;
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deficiencies in or non-compliance with Invesco’s internal accounting controls;
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misrepresentation or false statements to or by a senior officer or accountant regarding a matter contained in the financial records, financial reports or audit reports of Invesco;
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deviation from full and fair reporting of Invesco’s financial condition; or
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fraudulent or criminal activities engaged in by officers, directors or employees of Invesco;
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You may report
your concerns in any of three ways:
Contact your supervisor
We encourage you to first contact your immediate supervisor or another appropriate person in your own management chain of any concerns raised.
Page 16 of 19
Contact the Legal, Compliance, Internal Audit or Human Resources Departments
If you prefer not to discuss a concern with your own supervisor or others in your own management chain, you may instead contact the Legal, Compliance, Internal
Audit or Human Resources Departments directly. The individual you report the matter to would be responsible for working with you to determine the details of your concern as well as following Invesco’s reporting and escalation processes in order
to address the matter.
Call our Invesco Whistleblower Hotline
If raising a concern in the first two methods make you uncomfortable for any reason, or if you and/or the individual you have reported your concern do not feel
Invesco’s established reporting and escalation channels would effectively address or is not effectively addressing the matter you have raised, you may also report your concerns confidentially and anonymously by calling the Invesco Whistleblower
Hotline. If you are calling from a U.S. or Canadian location, dial
1-855-234-9780
. For calls from all other locations, Use the following link to identify a toll-free number for your country:
Link to International Toll-Free Numbers
You may also report your concern by visiting the Invesco Whistleblower Hotline website at
www.invesco.ethicspoint.com
.
The Invesco Whistleblower Hotline is administered by an outside vendor and is available 24 hours a day, seven days a week. For more information on the Invesco
Whistleblower Hotline, please click here:
Invesco Whistleblower Hotline
.
Complaints relating to Accounting Matters will be reviewed pursuant to
the Audit Committee’s policy and procedures and under its direction and oversight by such persons as the Audit Committee determines to be appropriate. All other matters will be reviewed under the direction and oversight of the appropriate
departments within Invesco, usually also including the Legal and Compliance Department. Prompt and appropriate corrective action will be taken when and as warranted in the judgment of the Audit Committee or other reviewing department.
Invesco will not permit retaliation, retribution, harassment, or intimidation of any employee who in good faith reports a possible violation. Along with the
three reporting methods described above, this also includes, but is not limited to an employee who discloses information to a government or law enforcement agency, or any other national, state or provincial securities regulatory authority where the
employee has reasonable cause to believe that the information discloses a violation or possible violation of federal or state law or regulation.
Page 17 of 19
However, employees who file reports or provide evidence which they know to be false or without a reasonable
belief in the truth and accuracy of such information may be subject to disciplinary action, including termination of their employment.
It is your responsibility at all times to comply with the law and behave in an
ethical manner. Failure to obey laws and regulations violates this Code and may expose both you and the company to criminal or civil sanctions. Invesco will investigate reported violations of the Code and, if violations are found, may take
disciplinary action, if appropriate, against the individuals involved up to and including termination. Invesco may also seek civil remedies from you and even refer criminal misconduct to law enforcement agencies, and may make reports, if
appropriate, to regulatory authorities. Nothing in this Code restricts the company from taking any disciplinary action on any matters pertaining to the conduct of a Covered Person, whether or not expressly set forth in the Code.
As Covered Persons, each of us is obligated to read and understand this Code of
Conduct and our relevant business unit’s policies and procedures. All Covered Persons are expected to abide by both the letter and spirit of the Code and will certify their adherence on an annual basis.
This Code cannot anticipate every possible situation or cover every topic in detail.
The company has established special policies to address specific subjects and will update this Code and those specific policies from time-to-time. Covered Persons are also expected to perform their work with honesty and integrity in any areas not
specifically addressed by the Code. If you are unclear about a situation, please speak with your supervisor or an appropriate member of the Legal and Compliance Department before taking action.
In certain limited situations, Invesco may waive the application of a provision of
the Code to employees or Executive Officers (as defined in Rule 3b-7 under the Securities Exchange Act of 1934, “Executive Officers”). For the purposes of the Code, the term “waiver” shall mean a material departure from a
provision of the Code.
For all employees, including Executive Officers, any requests for waivers must be made to the Legal and Compliance Department. For
waiver requests not involving an Executive Officer, the Legal and Compliance Department shall forward the request to the General Counsel of the business unit for consideration.
Page 18 of 19
For waiver requests involving an Executive Officer, the Legal and Compliance Department will forward the request
to the Invesco Board of Directors or a committee thereof for consideration. Only the Board of Directors or one of its committees may approve a waiver for an Executive Officer. Any such waiver granted to an Executive Officer shall be promptly
disclosed to shareholders within four (4) business days as required by SEC rules and the corporate governance listing standards of the New York Stock Exchange and other applicable laws.
Criteria for a Waiver:
Any employee or Executive Officer
requesting a waiver of the Code must demonstrate that such a waiver:
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is necessary to alleviate undue hardship or in view of unforeseen circumstances or is otherwise appropriate under all the relevant facts and circumstances;
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will not be inconsistent with the purposes and objectives of the Code;
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will not adversely affect the interests of clients of the company or the interests of the company; and
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will not result in a transaction or conduct that would violate provisions of applicable laws or regulations.
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This Code is intended solely for the internal use by the company and does not
constitute an admission, by or on behalf of the company, as to any fact, circumstance, or legal conclusion. To the extent required by law, the company shall publicly (
e.g.
, in its Annual Report on Form 10-K and/or on its website) disclose
this Code of Conduct and its application to all of the company’s Covered Persons.
This Code may only be amended by Invesco’s Board of Directors or a duly authorized
committee thereof. To the extent required by law, amendments to the Code of Conduct shall be disclosed publicly. As set forth in the company’s filings with the SEC, the company has elected to disclose certain amendments to the Code that affect,
and any waivers of the Code granted to, Financial Officers on the company’s Web site.
Revised: October 2014
Page 19 of 19
D6. Gifts and Entertainment
Policy Number: D-6 Implementation Date: March
2006 Effective Date: May 2014
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1.
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Purpose and Background
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Invesco Ltd.’s (“Invesco”) Code of Conduct requires that
all Invesco personnel adhere to the highest standards of ethical conduct, including sensitivity to actual or apparent conflicts of interest. Exchanging gifts and entertainment is an accepted business practice that helps to build strong business
relationships between Invesco Canada Ltd. (“Invesco Canada”) and its business partners. However, the provision or receipt of gifts or entertainment can create, or can have the appearance of creating conflicts of interest.
The Invesco Gifts and Entertainment Policy (the “Invesco Policy”) establishes limits and guidelines designed to reduce the likelihood that the
provision or receipt of such gifts or entertainment obligates, appears to obligate, or inappropriately influences the recipient. The Invesco Policy is applicable to Invesco and its individual business units worldwide.
This policy is intended to work with and supplement the Invesco Policy with local rules.
Employees shall be permitted to provide gifts and entertainment for the purposes of
building stronger relationships with business partners and shall only do so within the limits set forth in this policy. The limits provided in this policy are designed to limit the frequency and excessiveness of gifts and entertainment; such that
the appearance of impropriety is mitigated. The provision of gifts and entertainment must not be conditioned upon Invesco Canada doing business with the business partner involved.
Solicitation of gifts and entertainment is prohibited, except for the purpose of charity events. Employees shall not solicit for gifts or entertainment and
shall immediately advise the Chief Compliance Officer (“CCO”) if a business partner solicits for gifts or entertainment other than a charitable donation or request for sponsorship. In the cases of soliciting for gifts as prizes for charity
events, any gift received for this purpose is not subject to the gift threshold provided in section 4 of this policy.
For Invesco internal use
only. No portion of this policy may be reproduced or redistributed.
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1
of
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For the purposes of this policy, a Business Partner is any person or entity that has
direct or indirect existing or potential business relationships with Invesco Canada, or to a member of such a person’s immediate family.
This policy
shall be applicable to all Invesco Canada directors (excluding independent directors) and employees; including officers, temporary, part-time, contract and seasonal personnel, agency temps and contingent workers (“Employees”).
Employees shall neither receive from nor give to any single Business Partner a gift
exceeding the total value of $250 CAD. The maximum total value of gifts per Business Partner is $250 CAD annually.
A gift is anything of value given to
or received by an Employee or a family member of an Employee from or to a Business Partner. Gifts may include, but are not limited to, personal items, air miles, services, office accessories, electronic equipment, event or show tickets and sporting
equipment. Any prize given or received during the course of an entertainment event (e.g. golf tournament) where only the Business Partner or only the Employee will be in attendance must be recorded as gifts. For the purposes of this policy, gifts do
not include promotional items of nominal value (approximately $20 CAD or less - e.g., golf balls, pens, etc.). Promotional items are items that display the logo of Invesco Canada, an affiliated business unit, or a Business Partner.
With respect to approved cooperative marketing practices as provided in the
Sales Practices
policy, such as sales communications and investor seminars,
where Invesco Canada pays a portion of the cost, Employees shall only be permitted to provide nominal value promotional items to the dealer’s clients. Nominal speaker gifts shall be permitted and shall be considered part of expenses paid for
approved dealer-sponsored events for financial advisors.
Employees shall neither receive from nor give to any single Business Partner
entertainment exceeding the total value of $400 CAD per Business Partner per event. The maximum total value of entertainment per Business Partner is $1,200 CAD annually.
Entertainment includes meals, sporting events, the theatre, parties or receptions, and similar functions such as charity or sponsorship related activities and
events where both the Employee and the Business Partner are in attendance. Unless personnel from both entities are in attendance, the activity is considered a gift. The value of entertainment includes the Business Partner’s proportionate share
of the cost of the activity itself (for example, the cost of tickets or a meal), as well as the cost of any related activities or services provided. In addition, any prize given or received during the course of an entertainment event (e.g. golf
tournament) shall be recorded as a gift. The value of entertainment does not include the cost of overhead, such as rent or equipment rentals.
For Invesco internal use
only. No portion of this policy may be reproduced or redistributed.
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of
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Employees shall not give (pay for) or accept any travel and/or accommodation to or from a Business Partner
for travel and/or accommodation, except with the prior approval of the CCO.
With the exception of the retail and institutional sales departments, Employees shall
enter and maintain all gifts and entertainment records via the Star Compliance system. Retail and institutional sales employees shall keep the appropriate records on the systems they utilize for recording and managing gifts and entertainment.
Promotional items of nominal value (approximately $20 CAD or less) and in office (Invesco Canada’s office or the Business Partner’s office)
breakfasts or lunches with a Business Partner, such as branch meetings, do not need to be recorded. All other gifts and entertainment must be recorded. Where the value of the activity or item is not readily known, the employee shall record the
current estimated value.
Any exceptions to the established gifts and entertainment thresholds require prior
approval from the Invesco Risk Management Committee (“Risk Management Committee”) as set out below. Requests for exceptions will be considered on a case by case basis.
In order to request an exception, the department head of the requesting employee (“Department Head”) must submit a memo outlining the rationale for
the request to the CCO for initial consideration. The CCO shall review the memo to determine the reasonableness of the request and inform the Department Head of his/her decision. If the CCO has no objections, the CCO shall forward the memo to the
Invesco Global Assurance Officer who shall arrange for the Invesco Risk Management Committee to review and provide final decision.
Department Heads or
their designate shall maintain any exception approvals received for their department.
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8.
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Oversight and Monitoring
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This policy shall be overseen and administered by Invesco Canada’s
Ethics Committee (the “Ethics Committee”), which has responsibility for the overall scope, application and enforcement of this policy.
Department Heads are expected to be generally aware of the gifts and entertainment that the employees in their departments give or receive; and upon
identification of any concerns or trends, shall bring such concerns or issues to the attention of an AVP, Compliance.
On an annual basis, the Senior
Compliance Specialist responsible for testing and monitoring (“Senior Compliance Specialist”) shall conduct reviews of the gifts and entertainment logs and records to monitor compliance with this policy, including to determine whether
thresholds have been exceeded and to obtain insights into patterns of behavior that may require further examination. Each year, the Senior Compliance Specialist will use a risk-based approach to determine which departments to review. A summary of
such review, together with other relevant observations and
For Invesco internal use
only. No portion of this policy may be reproduced or redistributed.
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recommendations, shall be reported to the Ethics Committee. The Senior Compliance Specialist shall maintain evidence of the reviews must be maintained for a minimum of seven years.
The Ethics Committee shall receive the reports and recommendations from the reviews and from management from time to time and periodically revise this policy
as necessary.
The CCO or designate shall report any breaches identified through reviews or otherwise to the Ethics Committee, the Compliance Committee of
each of the Invesco Canada Funds Advisory Board and Invesco Corporate Class Inc., as well as the Invesco Canada Funds’ Independent Review Committee.
For Invesco internal use
only. No portion of this policy may be reproduced or redistributed.
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D7. Personal Trading Policy
Policy Number: D-7 Implementation Date: October
2006 Effective Date: July 2014
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1.
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Purpose and Background
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Personal trading is monitored and restricted to ensure that employees do
not take or cannot be perceived to be taking advantage of their knowledge of confidential trading information or their position with Invesco Canada Ltd. (“Invesco Canada”) to unfairly profit through their personal trading activities.
Invesco Canada has a fiduciary duty to its unitholders and in this position of trust must always place the best interest of its clients ahead of its own and its employees’ personal interests and avoid any actual or perceived conflict of
interest.
The purpose of this policy is to ensure the fair treatment of investment funds and separately managed portfolios managed or sub-advised by
Invesco Canada Ltd. (“Invesco Canada”) (a “Client Account” or collectively, “Client Accounts”) through the highest standard of integrity and ethical business conduct by employees.
This policy applies to all officers, directors and employees of Invesco including
temporary, part-time, contract, and seasonal personnel who are employed with Invesco for more than 3 months (an “Employee” or collectively, “Employees”). Independent directors of the Invesco Canada Funds Advisory Board or of the
Board of Invesco Corporate Class Inc. are not subject to this policy other than with respect to section 10 of this policy.
Invesco Canada recognizes that
certain relationships with non-employees, such as consultants or independent contractors, may present particular risks that inappropriate trading could occur in the event that they have access to nonpublic information. As part of the process for
engaging the services of consultants or other independent contractors, the Chief Compliance Officer (“CCO”) may deem it necessary to have a non-employee agree to be bound by this policy.
The Invesco Canada’s Ethics Committee (the “Committee”) shall be responsible for the overall scope, application and enforcement this policy and
the CCO shall be responsible for the administration of this policy.
For Invesco internal use
only. No portion of this policy may be reproduced or redistributed.
Page 1 of 11
Covered Accounts
A Covered Account is any account:
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Where the Employee is the registered and/or beneficial owner of the securities in the account, thereby having a direct financial interest or benefit from the account, including discretionary managed accounts;
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In which an Employee has indirect financial interest or indirect benefit, such as accounts held in the name of the Employee’s family member residing in the same household; or
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In which an Employee has direct control with securities trading, such as, but not limited to, any corporation, partnership or trust or any account for which the Employee has a power of attorney or trading authorization.
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Reportable Securities
For the
purposes of this policy, Reportable Securities include:
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Stocks, bonds, options, rights, warrants, exchange-traded funds (“ETFs”), and exchange-traded notes (“ETNs”);
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Any mutual funds or other proprietary investment products managed by Invesco Canada or any of its affiliates; and
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Invesco Ltd. shares (“IVZ”).
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Non-Reportable Securities
Non-Reportable Securities include:
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Unit investment trusts invested exclusively in open-end mutual funds that are not managed or distributed by Invesco;
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Open-end U.S. and Canadian mutual funds that are not managed or distributed by Invesco Canada or any of its affiliates;
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Securities held in Employee accounts administered by Group Retirement Services (“GRS”);
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Securities issued or guaranteed by the government of Canada or the United States;
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For Invesco internal use
only. No portion of this policy may be reproduced or redistributed.
Page 2 of 11
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Principal protected or Linked note investment products; and
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Money market instruments, money market mutual funds, guaranteed investment certificates, bankers’ acceptances, bank certificates of deposit, commercial paper and repurchase agreements.
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Employees shall conduct personal securities transactions in a manner that avoids any
actual or perceived conflict of interest and shall:
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•
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Place the interests of client accounts first at all times;
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Not take inappropriate advantage of their positions; and
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Not use any nonpublic information for their direct or indirect personal benefit.
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5.
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Reporting Requirements
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Employees shall submit and sign off on the reports listed below on the
Star Compliance system (“Star Compliance”) at the required frequencies. Employees who do not hold any Reportable Securities in any Covered Accounts shall remain responsible for signing off on these reports indicating same.
Initial Holdings Reports
Within ten days of becoming an
Employee, each Employee shall complete an Initial Holdings Report by entering into Star Compliance the following information:
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a complete list of all Covered Accounts, including the name of the financial institutions with which the accounts are maintained; and
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a list of Reportable Securities, including the number of shares (equities) or principal amount (debt securities) held in each Covered Account.
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The information must be current within 45 days of the date of becoming an Employee.
Quarterly Transaction Reports
Within thirty calendar
days after the end of each calendar quarter, each Employee shall submit a Quarterly Transaction Report using Star Compliance. The Employee shall ensure the report includes details of any personal securities transactions executed during the quarter
in a Reportable Security in each Covered Account.
For Invesco internal use
only. No portion of this policy may be reproduced or redistributed.
Page 3 of 11
Transactions effected by an automatic investment plan shall not be reportable on the Quarterly Transaction
Reports. An automatic investment plan is any program in which regular periodic purchases or withdrawals are made automatically in or from investment accounts in accordance with a predetermined schedule and allocation. An automatic investment plan
includes a dividend reinvestment plan.
Annual Holdings Reports
Within 30 calendar days after the end of the year, each Employee shall submit an Annual Holdings Report using Star Compliance. The Employee shall ensure that
the report includes the following information:
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•
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all Covered Accounts of such Employee , including the name of the financial institution with which the Employee maintained the account; and
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a list of Reportable Securities, including the number of shares (equities) or principal amount (debt securities) in each Covered Account.
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IVZ shares purchased through the employee stock purchase plan and vested IVZ shares that are acquired under the employee equity awards program are received
into Star Compliance from an electronic data feed provided by the custodian of the account. Since this information is received from an external party, employees shall verify that these holdings are correctly captured on Star Compliance and are
included in their Annual Holdings Report.
Trade Confirmations and Account Statements
Within ten calendar days of settlement of any transaction involving a Reportable Security, whether the transaction had to be pre-cleared or not, the Employee
shall submit a duplicate copy of the trade confirmation, or such other confirmations as available to the Code of Ethics (North America) team (“COE Team”) by email to CodeofEthicsNorthAmerica@Invesco.com.
The foregoing obligation may be fulfilled by Employees directing their brokers to deliver to the COE Team, duplicate trade confirmations and account
statements for their Covered Accounts in a timely manner. In addition, Employees shall provide duplicate trade confirmations and account statements directly to the COE Team upon request. The COE Team shall review all reports submitted and report any
breaches of this policy or any other concerns relating to personal trading to the AVP, Compliance responsible for investments (“AVP, Compliance”) and the CCO. The COE Team shall present all breaches and concerns to the Committee.
For Invesco internal use
only. No portion of this policy may be reproduced or redistributed.
Page 4 of 11
New Covered Accounts Opened Since Joining Invesco
Employees shall report on Star Compliance any new Covered Accounts within ten calendar days of opening the account..
Certification of Compliance
On an annual basis,
Employees shall confirm adherence to this policy by signing off on the Certificate of Compliance on Star Compliance and the Invesco Code of Conduct.
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6.
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Pre-Clearance Requirements
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Employees shall seek and obtain approval using Star Compliance or
from the COE Team prior to executing any transactions in a Reportable Security in a Covered Account, except with respect to the following Reportable Securities which are not subject to pre-clearance requirements:
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a)
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mutual funds, excluding ETFs, managed by Invesco; and
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b)
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shares purchased through the employee share purchase plan or the Invesco employee stock option purchase plan. For greater certainty, the sale of any shares obtained through the employee share purchase plan or the
Invesco employee stock option purchase plan are subject to pre-clearance requirements.
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Transactions in Reportable Securities that are
executed in a brokerage account that are initiated by the financial institution (e.g. a margin call) or by an automatic investment plan shall not be subject to pre-clearance requirements. For greater certainty, these shares must still be reported in
STAR Compliance.
Non-Reportable Securities shall not be subject to the pre-clearance requirements set forth by this policy.
Options
In the case of personal securities transactions
involving the purchase or sale of an option on an equity security, the number of underlying equity shares into which the option would convert upon exercise shall be the basis for the pre-clearance analysis. = Pre-clearance for entering into an
option does not guarantee pre-clearance for the exercise of the option and the Employee must also request pre-clearance to exercise the option.
Employees shall seek pre-clearance using the following process:
For Invesco internal use
only. No portion of this policy may be reproduced or redistributed.
Page 5 of 11
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The Employee shall enter all proposed trades that require pre-clearance into Star Compliance. For Covered Accounts in which an Employee has an interest but does not exercise control, the individual who exercises control
over the Covered Account (a “Covered Individual”) shall submit trade requests either through the Employee or by contacting the COE Team directly.
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After receiving approval, the Employee or Covered Individual shall have until 4pm ET of the next business day to execute the pre-approved trade. After that time, the pre-approval is no longer valid and if the trade has
not been executed by that time, the Employee or Covered Individual must re-submit the trade for pre-clearance if he or she still wishes to trade in the security.
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The Employee or Covered Individual must retract all unexecuted approved trades on Star Compliance.
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The COE
Team shall notify the CCO of all violations to the pre-clearance requirements and shall determine the appropriate action for each violation.
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8.
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Discretionary Managed Accounts
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Prior to establishing and maintaining a fully managed
discretionary account where investment discretion is given to an investment manager or trustee, an Employee shall seek and obtain approval from the COE Team. Approval shall be granted based on the following conditions:
The account is subject to a written contract and all investment discretion has been delegated to another party;
The Employee shall provide the COE Team with a copy of such written agreement; and
The Employee shall certify in writing that he or she has not discussed, and will not discuss, potential investment decisions with the party to whom investment
discretion has been delegated.
Discretionary managed accounts shall not include ones where the accountholder has given a power of attorney to another
person such as a broker for temporary discretionary trading.
Employees shall be not be required to record their discretionary managed accounts on Star
Compliance as this is completed by the COE Team for the purposes of the annual certification. Employees shall not be required to pre-clear or report in the Quarterly Transaction Reports transactions of individual securities executed in a
discretionary managed account.
For Invesco internal use
only. No portion of this policy may be reproduced or redistributed.
Page 6 of 11
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9.
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Restrictions and Prohibitions on Certain Activities
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Employees shall be subject to the following
additional restrictions and prohibitions relating to certain investment activities.
The Blackout Rule
Pre-clearance for a personal securities transaction shall be denied where there has been a transaction by a Client Account in the same, or equivalent, security
within three business days of the proposed personal securities transaction (“Restriction Period”) and the personal securities transaction does not qualify for the de minimis exemption (see below). An equivalent security is a security that
(1) is convertible into another security of the same issuer or (2) gives its holder the right to purchase another security of the same issuer. For example, a bond or preferred stock may be convertible into another security of the same
issuer, or an option or warrant may give the holder the right to purchase stock of the same issuer. American Depository Receipt and European Depository Receipt shares are considered equivalent to their corresponding foreign shares.
For practical purposes, an Employee without knowledge of the investment activity of a Client Account would not know of such activity in advance of the trade
by the Client Account. Therefore, for those Employees, the Restriction Period shall commence once a trade for a Client Account is entered into the trade order management system and any pre-clearance granted to the Employee before that time shall be
unaffected by the Client Account trade. For portfolio managers and other personnel with knowledge of investment activity of a Client Account, the Restriction Period shall commence at least three business days prior to the trade in the Client
Account. The Restriction Period may commence earlier if the portfolio manager has initiated a buying or selling program for a particular security, meaning that he or she intends, over a period of time, to accumulate a position or reduce a position
in a security. As a result of the foregoing, it is possible that a portfolio manager or other personnel will place a personal trade for a security which it then trades within the subsequent three days for a Client Account. In that case, the
portfolio manager or other personnel will be found to have violated this policy.
When a trade request is rejected as a result of a conflict with the
Restriction Period, the message on the STAR Compliance system may state either (a) that the proposed trade conflicts with a Restriction Period, (b) that the proposed trade conflicts with an Open Order Restriction, or (c) that the
proposed trade conflicts with a Blackout Period. An “Open Order Restriction” occurs when a trade request is made while a trade request in the same security for a Client Account has been made through the trade order management system and
remains in effect while the Client Account trade request remains unfilled. A “Blackout Period” only occurs once the Client Account trade request is filled, and the Blackout Period lasts for three business days following the Client Account
trade. Furthermore, as noted above in the case of portfolio managers and other personnel with
For Invesco internal use
only. No portion of this policy may be reproduced or redistributed.
Page 7 of 11
knowledge of the investment activity of a Client Account, the Blackout Period also extends to three business days prior to the Client Account trade. A Restriction Period, therefore, includes both
Open Order Restrictions and Blackout Periods.
De Minimis Exemptions
The COE team shall apply the following de minimis exemptions for an Employee’s proposed personal securities transaction involving a security a client has
recently traded or is trading:
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i.
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Equity de minimis exemption
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If an Employee does not have knowledge of trading activity
in a particular security, he or she shall be permitted to execute up to 500 shares of such security in a rolling 30 day period, provided that:
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a)
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For equity security, the issuer of the security is included in the S&P/TSX Composite Index or the Russell 1000 Index.
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b)
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For any other security, including ETFs, there is no conflicting client activity in the security or ETF during the Blackout Period or on the trading desk that exceed 500 shares per trading day.
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ii.
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Fixed Income de minimis exemption
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If an Employee does not have knowledge of trading
activity in a security, he or she shall be permitted to trade up to $100,000 of par value of a fixed income security in a rolling 30 day period.
Restricted List
Employees shall not be permitted to
trade in a security on the
Invesco Restricted List
. Pre-clearance shall be declined for all trades involving a security on the Invesco Restricted List, unless the request is individually reviewed and approval is granted by the CCO or the COE
Team. Refer to
Policy B4 – Securities Restricted List
for further details.
Short Sales
Employees shall be permitted to short sell, except in the following situations:
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Employees shall not short sell IVZ shares;
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For Invesco internal use
only. No portion of this policy may be reproduced or redistributed.
Page 8 of 11
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Employees shall not short sell securities where there has been a trade in the same security where the corresponding Blackout Rule period applies in one of the client accounts;
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Portfolio managers shall be prohibited from short selling a security for personal trading purposes if a Client Account the portfolio manager manages are long the security;
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If a portfolio manager is selling a security, the portfolio manager shall not short sell the same security for personal trading purposes until that position is completely sold. This provision includes the situation
where the portfolio manager stops selling the security for a short period, for example to let the market absorb what has been sold, and then resumes selling the position.
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Short-Term Trading Activities
Employees shall be
prohibited from engaging in the purchase and sale, or short sale and cover of the same Reportable Security within 60 days at a profit. If an Employee trades a Reportable Security within the 60 day time frame, any profit from the trade shall be
disgorged to a charity of Invesco’s choice and a letter of education may be issued to the Employee from the Employee’s direct manager, Compliance, or the COE Team, depending on the circumstances surrounding the transaction.
If applicable, this prohibition may be waived by Compliance or the COE Team if the Employee so requests, and only under certain instances including where an
Employee wishes to limit his or her losses on a security.
Purchases in Initial Public Offerings (“IPOs”)
Employees shall not purchase securities in IPOs, except when the securities in an IPO are purchased through a discretionary managed account.
Restricted Securities Issued by Public Companies
Restricted securities are securities acquired in an unregistered, private sale from an issuer. Unless approved by Compliance or the COE team, Employees shall
not invest in restricted securities of public companies including special warrant deals.
Restrictions on Hedge Funds and Private Placements
Unless approved by Compliance or the COE Team, Employees shall not purchase or sell any hedge funds or securities obtained through a private placement. If
approval is granted, the CCO or the COE Team who approved the hedge fund or private placement shall maintain a record of the approval and the rationale supporting the purchase.
For Invesco internal use
only. No portion of this policy may be reproduced or redistributed.
Page 9 of 11
Further, portfolio managers who have been authorized to acquire securities in a private placement shall
disclose such investment when he or she plays a part in any Client Account’s subsequent consideration of an investment in the issuer. In such circumstances an independent review of the relevant portfolio manager’s consideration of the
private placement for a Client Account shall be completed by an Investment Head or a portfolio manager designated by the Investment Heads (who must be unrelated to the Client Account).
Investment Clubs
Employees shall not participate in an
investment club.
IVZ Options
Employees shall not
engage in transactions involving publicly traded options, such as calls and puts, on IVZ shares.
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10.
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Independent Directors
|
For the purposes of this policy, an independent director is any director
of Invesco Canada’s corporate funds or members of the Invesco Canada Funds Advisory Board who is neither an officer nor Employee of Invesco or of any Invesco Company.
Independent directors shall not be subject to either the pre-clearance or reporting requirements set forth in this policy. Notwithstanding this exception,
such directors shall report on a quarterly basis to the AVP, Compliance or designate any personal securities transactions executed either by the director or the director’s spouse in IVZ shares or mutual funds managed by Invesco Canada or its
affiliates.
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11.
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Reporting and Oversight
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At least annually, the senior member of the Compliance department
responsible for oversight of the COE Team shall provide a written report to the Committee summarizing:
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Compliance with the policy for the period under review;
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Violations of the policy for the period under review;
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Sanctions imposed under the policy during the period under review;
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Changes in procedures recommended for the policy; and
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Any other information requested by the Committee.
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For Invesco internal use
only. No portion of this policy may be reproduced or redistributed.
Page 10 of 11
In addition, Compliance shall report on personal trading matters to the Compliance Committee of the Invesco
Canada Funds Advisory Board and Board of Invesco Corporate Class Inc. and shall provide an annual report to the Invesco Canada Funds Independent Review Committee.
For Invesco internal use
only. No portion of this policy may be reproduced or redistributed.
Page 11 of 11
INVESCO EMEA-EX UK EMPLOYEES
CODE OF ETHICS
2014
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Page 1 of 31
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2014 Code of Ethics (EMEA-ex UK)
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CONTENTS
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SECTION
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PAGE
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1 Statement of General Principles
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4
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2 Material, Non-Public Information
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6
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3 Personal Investing Activities, Pre-Clearance and Pre-Notification
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8
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4 Trade Restrictions on Personal Investing
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11
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5 Economic Opportunities, Confidentiality and Outside Directorships
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14
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6 Client Investments in Securities Owned by Invesco Employees
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16
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7 Reports
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16
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8 Training Requirements
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17
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9 Miscellaneous
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17
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10 Specific Provisions for Employees of Invesco Real Estate GmbH and employees associated with Real Estate transactions undertaken
by Invesco
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19
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APPENDICES
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A Definitions
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21
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B Procedures to Deal for Invesco
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23
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C Personal Account Dealing Guidance for Invesco Europe ex Ireland
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24
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D Personal Share Dealing Form
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25
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E Acknowledgement of Receipt of revised Code of Ethics
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26
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F Annual Certification of Compliance with the Code of Ethics
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27
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G Pre-Clearance Guide
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30
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Page 2 of 31
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2014 Code of Ethics (EMEA-ex UK)
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This revised Code of Ethics (‘the Code’) regarding ethical behaviour and conflicts of interest applies
to all Employees of all entities of Invesco EMEA-ex UK (“Invesco”). It covers the following topics:
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•
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Prohibitions related to material, non-public information
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Personal securities investing
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Service as a director and other business opportunities.
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This Code also imposes on Employees certain
restrictions and reporting obligations which are specified below. Adherence to this Code, once adopted, both letter and spirit, is a fundamental and absolute condition of employment with Invesco.
The following Invesco Policies are referred to in this Code of Ethics and the latest version of each of these Policies can be found on the Compliance Intranet
Site
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Gifts, Benefits and Entertainment (Inducements) Policy;
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•
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Conflicts of Interest Policy;
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Treating Customers Fairly Policy;
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Whilstleblowing Policy;
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•
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Insider Trading Policy and
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It is appreciated that no Code of Ethics can address every circumstance that may give rise
to a conflict, a potential conflict or an appearance of a conflict of interest. Every Employee should be alert to any actual, potential or appearance of a conflict of interest with Invesco’s clients and to conduct himself or herself with good
judgment. Failure to exercise good judgment, as well as violations of this Code, may result in the imposition of sanctions on the Employee, including suspension or dismissal.
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Page 3 of 31
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2014 Code of Ethics (EMEA-ex UK)
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1
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STATEMENT OF GENERAL PRINCIPLES
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1.1
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As a fiduciary, Invesco owes an undivided duty of loyalty to its clients. It is Invesco’s policy that all Employees conduct themselves so as to avoid not only actual conflicts of interest with Invesco clients, but
also that they refrain from conduct which could give rise to the appearance of a conflict of interest that may compromise the trust our clients have placed in us.
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1.2
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The Code is designed to ensure, among other things, that the personal securities transactions of all Employees are conducted in accordance with the following general principles:
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1.2.1
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A duty at all times to place the interests of Invesco’s clients first and foremost;
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1.2.2
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The requirement that all personal securities transactions be conducted in a manner consistent with this Code and national legal & regulatory requirements and in such a manner as to avoid any actual, potential
or appearance of a conflict of interest or any abuse of an Employee’s position of trust and responsibility; and
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1.2.3
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The requirement that Employees should not take inappropriate advantage of their positions.
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1.3
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Invesco’s policy is to avoid actual or apparent conflicts of interest but, where they unavoidably occur, to record, manage, and disclose them to prevent abuse and protect our clients, employees and other
counterparties
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1.4
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Invesco does not make political contributions with corporate funds. No Employees may, under any circumstances, use company funds to make political contributions, nor may you represent your personal political views as
being those of the company.
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1.5
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Invesco seeks to do business with clients and suppliers on a fair and equitable basis. Employees may not accept or provide gifts, entertainment or other non-monetary benefits of an unreasonable value which could create
a conflict with the duty owed to clients. Any limits imposed by our business unit’s policies, local laws, or regulations with respect to the acceptance or provision of gifts, entertainment and non-monetary benefits must be complied with.
Invesco lays down written standards regarding the nature of gifts, benefits and entertainment, with strict monetary and frequency limitations. Only gifts, benefits and entertainment which comply with regulatory requirements and internal standards,
are designed to enhance the quality of service to customers and do not create conflicts of interest, can be given or received. Subject to regulatory requirements and internal limits, the types of benefits which may be given or received by the
Invesco Group include: gifts, hospitality and promotional competition prizes; joint marketing exercises; participation in seminars and conferences; provision of technical services and information technology; training; and travel and accommodation
expenses.
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1.6
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Invesco does not tolerate bribery. Employees must not offer, give request or agree to accept or accept financial or non-financial advantages of any kind where the purpose is to influence a person to behave improperly in
their decisions or actions or to reward them for having done so. Charitable donations must not be made as an inducement or reward for improper behaviour. Unofficial payments to speed up routine government or other processes must never be made,
however small. These restrictions apply to Invesco staff and to anybody appointed to act on Invesco’s behalf and cover relationships with prospective or existing clients or business partners. Further information can be found in the Anti-Bribery
Policy.
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1.7
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Legislation exists to protects employees who ‘blow the whistle’ about wrongdoing within the Firm. This legislation encourages employees to
raise concerns internally in the first instance. Invesco employees should feel able to raise any such concern internally,
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Page 4 of 31
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2014 Code of Ethics (EMEA-ex UK)
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confident that it will be dealt with properly and that all reasonable steps will be taken to prevent victimisation. If employees wish to report concerns anonymously they can call the Invesco
Compliance Reporting Hotline: 1-855-234-9780.
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For calls originating outside of the U.S. and Canada, toll-free telephone
numbers are available and vary depending on your location. These telephone numbers are as follows:
Austria: 0800-291870
Belgium: 0800-77004
Czech
Republic: 800-142-550
France: 0800-902500
Germany: 0800-1016582
Ireland:
1800615403
Italy: 800-786907
Netherlands: 0800-0226174
Spain:
900-991498
Sweden: 020-79-8729
Switzerland: 0800-562907
Employees may also report their concerns by visiting the Invesco Whistleblower Hotline website at:
www.invesco.ethicspoint.com
. To
ensure confidentiality, this telephone line and website is provided by an independent company and is available twenty-four hours a day, seven days a week. All submissions to the Whistleblower Hotline will be reviewed and handled in a prompt, fair,
and discreet manner. Employees are encouraged to report these questionable practices so that Invesco has an opportunity to address and resolve these before they become more significant regulatory or legal issues.
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1.8
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It is Invesco policy, in the context of being an Asset Manager, to treat its customers fairly.
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1.9
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No Employee should have ownership in or other interest in or employment by any outside concern which does business with Invesco Ltd. This does not apply to stock or other investments in a publicly held company, provided
that the stock and other investments do not, in the aggregate, exceed 5% of the outstanding ownership interests of such company. Invesco Ltd may, following a review of the relevant facts, permit ownership interests which exceed these amounts if
management or the Board of Directors, as appropriate, concludes that such ownership interests will not adversely affect Invesco Ltd’s business interests or the judgment of the affected staff.
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1.10
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Employees are prohibited from using personal hedging strategies or remuneration or liability related contracts of insurance to undermine any risk alignment effects embedded in their remuneration arrangements. This
includes, for instance, entering into an arrangement with a third party under which that third party will make payments directly, or indirectly, to the Employee that are linked to, or commensurate with, the amounts by which the Employee’s
remuneration is subject to reductions arising from the implementation of EU Directives and associated legislation and regulation.
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Page 5 of 31
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2014 Code of Ethics (EMEA-ex UK)
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2
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MATERIAL, NON-PUBLIC INFORMATION
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2.1
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Restriction on Trading or Recommending Trading
|
Each Employee is reminded that it
constitutes a violation of law and/or Market Abuse regulations for any person to trade in or recommend trading in the securities of a company while in possession of material, non-public information concerning that company, or to disclose such
information to any person not entitled to receive it if there is reason to believe that such information will be used in connection with a trade in the securities of that company. Violations of law and regulations may give rise to civil as well as
criminal liability, including the imposition of monetary penalties or prison sentences upon the individuals involved. Persons who receive material, non-public information also may be held liable if they trade or if they do not trade but pass along
such information to others.
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2.2
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What is material, non-public information?
|
‘Material
information’
is any information about a company which, if disclosed, is likely to affect the market price of the company’s securities or to be considered important by an average investor in deciding whether to purchase or sell those
securities. Examples of information which should be presumed to be “material” are matters such as dividend increases or decreases, earnings estimates by the company, changes in the company’s previously released earnings estimates,
significant new products or discoveries, major litigation by or against the company, liquidity or solvency problems, extraordinary management developments, significant merger or acquisition proposals, or similar major events which would be viewed as
having materially altered the “total mix” of information available regarding the company or the market for any of its securities.
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2.3
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‘Non-public information’
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Non-public information – often referred to as
‘inside information’ – is information that has not yet been publicly disclosed. Information about a company is considered to be non-public information if it is received under circumstances which indicate that it is not yet in general
circulation and that such information may be attributable, directly or indirectly, to the company or its insiders, or that the recipient knows to have been furnished by someone in breach of a fiduciary obligation. Courts have held that fiduciary
relationships exist between a company and another party in a broad variety of situations involving a relationship between a company and its lawyers, investment bankers, financial printers, employees, technical advisors and others. This list is not
exhaustive and the types of fiduciary relationships and the way in which they are formed are extensive.
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2.4
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Information should not be considered to have been publicly disclosed until a reasonable time after it has been made public (for example, by a press release). Someone with access to inside information may not “beat
the market” by trading simultaneously with, or immediately after, the official release of material information.
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2.5
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The responsibility of ensuring that the proposed transaction does not constitute insider dealing or a conflict with the interests of a client remains with the relevant employee and obtaining pre-clearance to enter into
a transaction under Section 3.3 below does not absolve that responsibility.
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2.6
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Invesco is in a unique position, being privy to market research and rumours and being privy also to information about its clients which may be public companies. Invesco Employees must be aware and vigilant to ensure
that they cannot be accused of being a party of any ‘insider dealing’ or market abuse situations.
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2.7
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In particular, the following investment activities must not be entered into without carefully ensuring that there are no implications of insider trading:
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2.7.1
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Trading in shares for a client in any other client of Invesco which is a Company quoted on a recognised stock exchange.
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2.7.2
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Trading in shares for a client in a quoted company where Invesco:
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i)
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obtains information in any official capacity which may be price sensitive and has not been made available to the general public.
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ii)
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obtains any other information which can be substantiated in connection with a quoted company which is also both price sensitive and has not been made available to the general public.
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2.7.3
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Manipulation of the market through the release of information to regular market users which is false or misleading about a company.
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2.7.4
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Release of information about a company that would have the effect of distorting the market in such a way to be considered market abuse.
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2.8
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Reporting Requirement
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Whenever an Employee believes that he or she may have come into
possession of material or non-public information about a public company, he or she personally must immediately notify the Compliance Department and should not discuss such information with anyone else including Invesco employees and should not
engage in transactions for himself or others, including Invesco clients.
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2.9
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Upon receipt of such information the Compliance Department will include the company name on the ‘IVZ Restricted list’ of which no transactions may be entered into. This list will be advised to the Equity
dealing desk and no discussion will be entered into.
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No information regarding the affairs of any client of Invesco may be
passed to anyone outside Invesco unless specifically requested by law, regulation or court order. In any event, the Compliance and Legal Departments must be consulted prior to furnishing such information.
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2.11
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Employees should maintain the confidentiality of information entrusted to them by the Company and their fellow Employees. External publication or distribution of internal company information, policies or procedures is
prohibited except when disclosure is properly authorised by the functional owner of the information or legally mandated. Employees should make all reasonable efforts to safeguard such information that is in their possession against inadvertent
disclosure and shall comply with any non-disclosure obligations imposed on Invesco in its agreements with third parties
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Any Employee who knowingly trades or recommends trading while in possession
of material, non-public information may be subject to civil and criminal penalties, as well as to immediate suspension and/or dismissal from Invesco.
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3
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PERSONAL INVESTING ACTIVITIES, PRE-CLEARANCE AND PRE-NOTIFICATION REQUIREMENTS
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3.1
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Transactions covered by this Code
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All transactions in investments made for Covered
Accounts, other than those in respect of an exempted investment shown in 3.2 below, are subject to the pre-clearance procedures, trading restrictions, pre-notification and reporting requirements described below, unless otherwise indicated. For a
list of the types of Employee and other accounts which fall within the definition of “Covered Accounts” please see Appendix B.
Transactions in the following investments (“Exempt
Investments”) are not subject to the trading restrictions or other requirements of this Code and do not need not be pre-notified, pre-cleared or reported:
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3.2.1
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Registered
unaffiliated
(e.g. Schroders) open ended Collective Investment Schemes (CIS) including; open-ended mutual funds, open-ended investment companies/ICVCs/ SICAVs or unit trusts – but not Exchange
Traded Funds (ETFs) or closed-end funds, e.g. Investment Trusts;
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3.2.2
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Securities which are direct debt obligations of an OECD country (e.g. US Treasury Bills); and
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3.2.3
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In-specie transfers.
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3.3.1
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Transactions to buy or sell Venture Capital Trust ordinary securities or to buy, sell, switch or transfer holdings in Invesco Ltd ordinary shares, Invesco funds or investment products or other affiliated schemes are
subject to pre-clearance by the Compliance Department regardless of whether the order is placed directly or through a broker/adviser. Prior to entering an order for a Securities Transaction in a Covered Account, the Employee must complete a Trade
Authorisation Form (available on the Compliance intranet site) and submit the completed form electronically to the Compliance department by e-mail to *UK- Compliance Personal Share Dealing. Transactions are subject to the 60 day holding period
requirements.
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The Trade Authorisation Form requires Employees to provide certain information and to make certain
representations in connection with the specific securities transaction(s).
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3.3.2
|
If satisfactory, then the Form will be authorised by Compliance and confirmation returned by e-mail to the individual, who will then be at liberty to deal through his or her broker within the designated timescales.
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3.3.3
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Trading should not occur prior to receipt of authorisation: no order for a Securities Transaction for which pre-clearance authorisation is sought may be placed prior to the receipt of authorisation from Compliance. The
authorisation and date and time of the authorisation must be reflected on the Trade Authorisation Form. The original of the completed form will be kept as part of Invesco’s books and records. Further, the Employee is requested to send a copy of
the transaction note to their local Compliance Officer in order for it to be matched to the Trade Authorisation Form. Any mismatches will be escalated appropriately.
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If an Employee receives permission to trade a security or instrument, the trade must be executed by the close of business on the next business
day.
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3.3.4
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For any transaction to buy or sell Invesco Ltd ordinary shares pre clearance needs to be sought from Compliance. The trade authorisation form should be completed in the way detailed above and sent to *UK- Compliance
Personal Share Dealing.
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3.3.5
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Copies of the relevant contract notes (or equivalent) must be sent to the local Compliance function.
This must be
done within 14 days of the transaction
.
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3.4
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Transactions that do not need to be pre-cleared but must be reported.
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The pre-clearance
requirements (and the trading restrictions on personal investing described below) do not apply to the following transactions:
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3.4.1
|
Discretionary Accounts
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Transactions effected in any Covered Account over which the
Employee has no direct or indirect influence or control (a “Discretionary Account”). An Employee shall be deemed to have “no direct or indirect influence or control” over an account only if all of the following conditions are
met:
|
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i)
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investment discretion for such account has been delegated in writing to an independent fiduciary and such investment discretion is not shared with the Employee, or decisions for the account are made by a family member
or significant other and not by, or in connection with, the Employee;
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ii)
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the Employee (and, where applicable, the family member or significant other) certifies in writing that he or she has not and will not discuss any potential investment decisions with such independent fiduciary or
household member; and
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iii)
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the Compliance Department has determined that the account satisfies the foregoing requirements.
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3.4.2
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Governmental Issues
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Investments in the debt obligations of state and municipal
governments or agencies.
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3.4.3
|
Non-Volitional Trades
|
Transactions which are non-volitional on the part of the
Employee (such as the receipt of securities pursuant to a stock dividend or merger).
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3.4.4
|
Automatic Transactions
|
Purchases of the stock of a company pursuant to an automatic
dividend reinvestment plan or an employee stock purchase plan sponsored by such company.
Receipt or exercise of rights issued by a company on a
pro rata
basis to all holders of a class of security. Employees must,
however, pre-clear transactions for the acquisition of such rights
from a third party or the disposition of such rights.
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3.4.6
|
Interests in Securities comprising part of a broad-based, publicly traded market basket or index of stocks, e.g. S & P 500 Index, FTSE 100, DAX.
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3.4.7
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Non-Executive Director’s transactions
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Transactions in securities, except for
Invesco Ltd shares and/or UK Investment Trusts managed by Invesco, by non-executive Directors.
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3.4.8
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Note that all of the transactions described in paragraphs 3.4.1. to 3.4.7 while not subject to pre-clearance are nevertheless subject to all of the reporting requirements set forth below in paragraph 7.3.
This
must be done within 14 days of the transaction.
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4
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TRADE RESTRICTIONS ON PERSONAL INVESTING
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4.1
|
All transactions in Covered Accounts which are subject to the pre-clearance requirements specified in this Code are also subject to the following trading restrictions:
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4.1.1
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Blackout Restrictions
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Transactions in Covered Accounts generally will not be permitted
during a specific period (the “blackout period”) before and after a client account trades in the same security or instrument.
An Employee may not buy or sell, or permit any Covered Account to buy
or sell, a security or any instrument:
|
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i)
|
within
three
business days before or after the day on which any client account trades in the same security or instrument or in a security convertible into or exchangeable for such security or instrument
(including options) on transactions other than those covered under the paragraph below, or
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ii)
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within
two
business days before or after the day on which
a pro rata
“strip” trade, which includes such security, is made for the purpose of rebalancing client accounts.
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4.1.3
|
Exemptions from Blackout Periods
|
Blackout periods will no longer apply to equity and
corporate bond transactions in “main index” constituents, i.e. FTSE 100, Dow Jones, etc, subject to a cost and proceeds limit of 35.000 EUR per transaction for equities and 70,000 EUR per transaction for corporate bonds. Normal blackout
conditions will apply to transactions outside of these criteria. If in any doubt please consult your local Compliance Officer. On a case by case basis and at the discretion of the Compliance Officer in consultation with investment colleagues, this
limit may be relaxed.
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4.1.4
|
Trades effected by Invesco for the account of an index fund it manages in the ordinary course of such fund’s investment activity will not trigger the blackout period. However, the addition or removal of a security
from an index, thereby triggering an index fund trade, would cause Employee trades in such security to be blacked-out for the seven prior and subsequent calendar days, as described above.
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4.1.5
|
In the event there is a trade in a client account in the same security or instrument within a blackout period, the Employee may be required to close out the position and to disgorge any profit to a charitable
organisation chosen by the local Board of Directors; provided, however, that if an Employee has obtained pre-clearance for a transaction and a subsequent client trade occurs within the blackout period, the local Head of Office in consultation with
the Compliance Officer, upon a demonstration of hardship or extraordinary circumstances, may determine to review the application of the disgorgement policy to such transaction and may select to impose alternative restrictions on the Employee’s
position. The disgorgement of profits will only apply if the total profit exceeds 150 EUR within the blackout period.
|
Pre-clearance is also required to buy or sell Invesco Ltd Shares.
For staff who have been advised that they are part of the ‘Blackout Group’, permission will not be given during a’ closed period’.
Persons within the Blackout Group are determined on a quarterly basis and will be notified that they have been added to or removed from the
list.
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In line with the Invesco Insider Trading Policy, the Blackout Periods for each quarter commence
on 15 March, 15 June, 15 September and 15 December and end on the second business day following the Company’s issue of the relevant earnings release.
Full details of the Invesco Ltd stock transaction Pre-Clearance Guide and restrictions for all Employees of Invesco Ltd can be found on the
Compliance intranet site.
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4.1.7
|
Invesco Investment Trusts
|
Staff dealing in Invesco Investment Trusts will also be
subject to closed periods as dictated by each of the Trusts.
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|
4.1.8
|
UK ICVCs, the Global Product Range (GPR), PowerShares, and other affiliated (Invesco) schemes are subject to the Short Term Trading restrictions (60 day rule—see 4.1.9) . The preferential rate of sales charge
allowed to staff will be withdrawn in circumstances where it is apparent that the Employee has traded on a short term basis in those shares i.e. where previous transactions by that person have resulted in the short term holding of those investments.
If the funds themselves are closed for redemption due to the effects of subsequent market or currency movements, shares of UK ICVCs, the GPR, PowerShares and affiliated schemes will also not be accepted for redemption.
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4.1.9
|
Short Term Trading Profits
|
It is Invesco’s policy to restrict the ability of
Employees to benefit from short-term trading in securities and instruments. Employees must disgorge profits made on the sale by an Employee of any security or instrument held less than 60 days and will not be permitted to purchase any security or
instrument that has been sold by such Employee within the prior 60 days. Employees are required to disgorge profits made on the sale in a Covered Account within the 60 days period. Exceptions may be granted by the Compliance Department on a case by
case basis. This policy applies to trading in all types of securities and instruments, except where in a particular case the local Head of Office in consultation with the Compliance Officer has made a specific finding of hardship and it can be
demonstrated that no potential abuse or conflict is presented (for example, when an Employee’s request to sell a security purchased within 60 days prior to the request is prompted by a major corporate or market event, such as a tender offer,
and the security was not held in client accounts). This section (4.1.9) will not apply to Financial Spread Betting transactions which have been approved under the Exceptions section (4.1.16) of this Policy.
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|
4.1.10
|
Initial Public Offerings
|
No Employee may purchase or permit any Covered Account to
purchase a security offered pursuant to an initial public offering, wherever such offering is made except in a Venture Capital Trust. However, in certain circumstances an Employee may be permitted to buy an IPO for example where the public offering
is made by a Government of where the Employee is resident and different amounts of the offering are specified for different investor types e.g. private and institutional, the local Compliance Officer may allow such purchases after consultation with
the local Head of Office or his designee.
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|
4.1.11
|
Privately-Issued Securities
|
Employees may not purchase or permit a Covered Account to
purchase or acquire any privately-issued securities, other than in exceptional cases specifically approved by the local Head of Office (e.g. where such investment is part of a family-owned and operated business venture that would not be expected to
involve an investment opportunity of interest to
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any Invesco client). Requests for exceptions should be made in the first instance to the local
Compliance Officer.
|
|
4.1.12
|
Private Investment Funds
|
Employees, however, may invest in interests in private
investment funds (i.e. hedge funds) that are established to invest predominantly in public securities and instruments, subject to the pre-clearance procedures, trading restrictions and reporting requirements contained in this Code. Employees may
also invest in residential co-operatives and private recreational clubs (such as sports clubs, country clubs, luncheon clubs and the like) for their personal use; such investments are not subject to the pre-clearance procedures, trading restrictions
and reporting requirements unless the Employee’s investing is part of a business conducted by the Employee. Such ownership should be reported to the Compliance Officer.
An Employee may not sell short a security. Requests for exceptions should
be made to the local Compliance Officer.
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|
4.1.14
|
Financial Spread Betting
|
Employees may not enter into Financial Spread betting
arrangements unless they have applied in writing to do so under the Exceptions section of this Policy (4.1.16) and have received written confirmation that this is permitted. Exceptions will not be granted for Financial Spread Betting on single
stocks but, depending on the circumstances, spread betting on Exchange Rates, Main Indices, Commodities and Government Bonds may be allowed on an exceptions basis.
Employees may not write, sell or buy exchange-traded futures, synthetic
futures, swaps and similar non-exchange traded instruments.
The local Head of Office or his designee in consultation with the
Compliance Officer may, on a case by case basis, grant exceptions from these trading restrictions upon written request. Any exceptions granted will be reported to the local Board of Directors at least annually. Additionally, if a local Board or its
designee wish to impose additional restrictions these will be communicated to the relevant staff.
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5
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ECONOMIC OPPORTUNITIES, CONFIDENTIALITY AND OUTSIDE DIRECTORSHIPS
|
|
5.1
|
Monitoring the use of the name of Invesco
|
To be able to fully monitor the appearance
of the name of Invesco, any Employee’s activities on behalf of Invesco such as the participation in an industry body or an external consulting group need to be pre-cleared to the local Compliance Officer and the local Head of Office.
|
5.2
|
Avoiding conflicts of interests
|
In order to reduce potential conflicts of interest
arising from the participation of Employees on the boards of directors of public, private, non-profit and other enterprises, all Employees are subject to the following restrictions and guidelines:
|
|
5.2.1
|
An Employee may not serve as a director or non-executive director of a public or private company without the approval of the local Head of Office after consultation with the local Compliance Officer, with the exception
of approved industry associations.
|
|
|
5.2.2
|
An Employee may serve on the board of directors or participate as an adviser or otherwise, or advisers of a private company only if:
|
|
|
(i)
|
client assets have been invested in such company and having a seat on the board would be considered beneficial to our clients interest; and
|
|
|
(ii)
|
service on such board has been approved in writing by the local Head of Office. The Employee must resign from such board of directors as soon as the company contemplates going public, except where the local Chief
Executive Officer in consultation with the Compliance Officer has determined that an Employee may remain on a board. In any event, an Employee shall not accept any compensation for serving as a director (or in a similar capacity) of such company;
any compensation offered shall either be refused or, if unable to be refused, distributed
pro rata
to the relevant client accounts.
|
|
|
5.2.3
|
An Employee must receive prior written permission from the local Head of Office or his designee before serving as a director, non-executive director, trustee or member of an advisory board of either:
|
|
|
(i)
|
any non-profit or charitable institution; or
|
|
|
(ii)
|
a private family-owned and operated business.
|
|
|
5.2.4
|
An Employee may serve as an officer or director of a residential co-operative, but must receive prior written permission from the local Head of Office and the local Compliance function before serving as a director if,
in the course of such service, he or she gives advice with respect to the management of the co-operative’s funds.
|
|
|
5.2.5
|
If an Employee serving on the board of directors or advisers of any entity comes into possession of material, non-public information through such service, he or she must immediately notify the local Compliance Officer.
|
|
|
5.2.6
|
An Invesco Employee shall not take personal advantage of any economic opportunity properly belonging to an Invesco Client or to Invesco itself. Such
opportunities could arise, for example, from confidential information belonging to a client or the offer of a directorship.
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Employees must not disclose information relating to a client’s intentions, activities or
portfolios except:
|
|
i)
|
to fellow employees, or other agents of the client, who need to know it to discharge their duties; or
|
|
|
ii)
|
to the client itself.
|
|
|
5.2.7
|
Employees may not cause or attempt to cause any Client to purchase, sell or hold any Security in a manner calculated to create any personal benefit to the Employee or Invesco.
|
|
|
5.2.8
|
If an Employee or immediate family member stands to materially benefit from an investment decision for an Advisory Client that the Employee is recommending or participating in, the Employee must disclose that interest
to persons with authority to make investment decisions and to the local Compliance Officer. Based on the information given, a decision will be made on whether or not to restrict the Employee’s participation in causing a client to purchase or
sell a Security in which the Employee has an interest.
|
|
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5.2.9
|
An Employee must disclose to those persons with authority to make investment decisions for a Client (or to the Compliance Officer if the Employee in question is a person with authority to make investment decisions for
the Client), any Beneficial Interest that the Employee (or immediate family) has in that Security or an Equivalent Security, or in the issuer thereof, where the decision could create a material benefit to the Employee (or immediate family) or the
appearance of impropriety. The person to whom the Employee reports the interest, in consultation with the Compliance Officer, must determine whether or not the Employee will be restricted in making investment decisions.
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6
|
CLIENT INVESTMENTS IN SECURITIES OWNED BY INVESCO EMPLOYEES
|
In addition to the specific prohibitions on certain personal
securities transactions as set forth herein, and in line with the requirements of the Fraud Policy, all Employees are prohibited from:
|
|
6.1.1
|
Employing any device, scheme or artifice to defraud any prospect or client;
|
|
|
6.1.2
|
Making any untrue statement of a material fact or omitting to state to a client or a prospective client, a material fact necessary in order to make the statements made, in light of the circumstances under which they are
made, not misleading;
|
|
|
6.1.3
|
Engaging in any act, practice or course of business which operates or would operate as a fraud or deceit upon any prospect or client;
|
|
|
6.1.4
|
Engaging in any manipulative practice with respect to any prospect or client; or
|
|
|
6.1.5
|
Revealing to any other person (except in the normal course of his or her duties on behalf of a client) any information regarding securities transactions by any client or the consideration of any client or Invesco of any
securities transactions.
|
|
7.1
|
In order to implement the general principles, restrictions and prohibitions contained in this Code, each Employee is required to provide the following reports:
|
|
7.2
|
Initial Certification and Schedules.
|
This Code forms part of an Employee’s
contract of employment and any breach may be grounds for disciplinary action up to and including summary dismissal.
|
|
7.2.1
|
On commencing employment at Invesco, each new Employee shall receive a copy of the Code via electronic means (in exceptions hard copy is provided) and will be expected to confirm that they understand and accept this
Code within 10 days of commencing employment.
|
|
|
7.2.2
|
New Employees are also required, within 10 days of commencing employment, to provide the following to the Compliance Department:
|
|
|
(i)
|
A list of all Covered Accounts and
|
|
|
(ii)
|
Details of any directorships (or similar positions) of for-profit, non-profit and other enterprises.
|
|
|
7.3.1
|
Each Employee shall cause to be provided to the Compliance Department where an outside broker undertakes the transaction duplicate copies of confirmations of all transactions in each Covered Account. This must be done
within 14 days of the transaction.
|
|
|
|
Annual acceptance of the Code is normally submitted electronically and requires the Employee to provide an up-to-date list of:
|
|
|
i)
|
all Covered Accounts and any other transactions not included in the monthly statements; and
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|
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ii)
|
directorships (or similar positions) of for-profit, non-profit and other enterprises.
|
|
|
iii)
|
trades undertaken for which contract notes/confirmations have not been provided to the Compliance Department;
|
|
|
iv)
|
potential conflicts of interest identified which have not yet been reported to the Compliance Department;
|
|
|
v)
|
potential Treating Customers Fairly issues identified which have not yet been reported to the Compliance Department.
|
|
|
7.4.1
|
A schedule listing directorships (or similar positions) of for-profit, non-profit and other enterprises;
|
|
|
7.4.2
|
With respect to Discretionary Accounts, if any, certifications that such Employee does not discuss any investment decisions with the person making investment decisions; and
|
|
|
7.4.3
|
With respect to any non-public security owned by such Employee, a statement indicating whether the issuer has changed its name or publicly issued securities during such calendar year.
|
Confirmations and periodic reports need not be provided with respect
to Exempt Investments, (see 3.2).
|
7.6
|
Disclaimer of Beneficial Ownership
|
Any report required under this Code may contain a
statement that such report is not to be construed as an admission by the person making the report that he or she has any direct and indirect beneficial ownership of the security to which the report relates.
The Director of Compliance EMEA ex-UK in consultation with the local
Compliance Officers will review the Code as necessary, in light of legal and business developments and experience in implementing the Code, and will prepare a report to the relevant management committee that:
|
|
7.7.1
|
summarizes existing procedures concerning personal investing and any changes in the procedures made during the past year,
|
|
|
7.7.2
|
identifies any violations requiring significant remedial action during the past year, and
|
|
|
7.7.3
|
identifies any recommended changes in existing restrictions or procedures based on the experience under the Code, evolving industry practices, or developments in applicable laws or regulations.
|
In order to make sure that every Employee is fully aware
of the current rules and guidelines as well as changes in the local regulatory environment, he has to participate in Compliance and Anti Money Laundering training at least once a year. Several of these training events will be provided in the local
offices by the Compliance Officer and the AML Officer.
The provisions of this Code will be interpreted by the local Compliance
Officer, as applicable. Questions of interpretation should be directed in the first instance to the local Compliance Officer or his/her designee or, if necessary, with the Compliance
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2014 Code of Ethics (EMEA-ex UK)
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Officer of another Invesco entity. The interpretation of the local Compliance Officer is final.
If advised of a violation of this Code by an Employee, the local Chief Executive
Officer (or, in the case of the local Head of Office, the local Board of Directors) may impose such sanctions as are deemed appropriate. Any violations of this Code and sanctions therefore will be reported to the local Board of Directors at least
annually.
This revised Code shall become effective as of
1 July 2014
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Page 18 of 31
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2014 Code of Ethics (EMEA-ex UK)
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10.
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SPECIFIC PROVISIONS FOR EMPLOYEES OF INVESCO REAL ESTATE GmbH AND EMPLOYEES ASSOCIATED WITH REAL ESTATE TRANSACTIONS
UNDERTAKEN BY INVESCO:
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10.1
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The purpose of this section is to ensure all personal real estate transactions of Employees are conducted
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•
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to place the interests of Invesco’s clients first,
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•
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to avoid any actual, potential or appearance of a conflict of interest,
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•
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to avoid any abuse of an Employee’s position of trust and responsibility and
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•
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to avoid the possibility that Employees would take inappropriate advantage of their positions.
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10.2
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The requirements in these sections are an addition to rather than a substitute of all other requirements made in the Code of Ethics.
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Restrictions
Any
Employee who:
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•
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knowingly invests in real estate or recommends investments in real estate while in possession of material, non-public information,
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•
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informs somebody (outside of Invesco or the client) about a real estate investment or about a client using information he has received through his employment with Invesco
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may be subject to civil and criminal penalties, as well as to immediate suspension and/or dismissal from Invesco.
These restrictions also apply to investments undertaken by third parties on the Employee’s account or by the Employee for another person.
Definition
‘Material information’ is any information about a real estate investment which, if disclosed, is likely to affect the market price
of a real estate investment. Examples of information which should be presumed to be “material” are matters such as income from property, pollution of the premises, earnings estimates of a real estate project development plans or changes of
such estimates, or forthcoming transformation of land into building land prior to public planning.
‘Non-public information’ is
information that is not provided by publicly available sources. Information about a real estate investment is considered to be non-public if it is received under circumstances which indicate that such information may be attributable, directly or
indirectly, to any party involved in the real estate project or its insiders, or that the recipient knows to have been furnished by someone in breach of a fiduciary duty. An example of non-public information related to real estate investments is the
desire or need of a client to sell a real estate investment.
In particular, the following activities must not be entered into without
carefully ensuring that there are no implications of insider trading and no appearance of a conflict of interest:
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1.
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Personally investing in real estate for a client when another client or a business partner of Invesco is involved in setting up and selling the investment. I.e. as an intermediary or a financier.
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2.
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Entering into a private real estate transaction when any cost or fees brought forth by it are other than at arm’s length.
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3.
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Taking personal advantage of any economic opportunity properly belonging to an Invesco Client or to Invesco itself.
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4.
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Investing in real estate for a client where Invesco has access to information which may be price sensitive.
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Page 19 of 31
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2014 Code of Ethics (EMEA-ex UK)
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5.
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Manipulation of the market through the release of information to regular market users which is false or misleading about a company or a real estate investment.
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6.
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Release of any information (except in the normal course of his or her duties as an Employee of Invesco) about a client’s considerations of a real estate investment.
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7.
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Personally engaging in real estate investments and thereby using information received through the employment with Invesco.
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Personal Investing Activities, Pre-Clearance and Pre-Notification
Prior to engaging in any private real estate transaction the Employee must fully disclose the transaction to the local compliance officer along
with details of any non-public information held by the Employee. Further detail may be requested by Compliance including an independent valuation or confirmation of purchase price.
It will only be permitted if it is not contrary to the interests of Invesco or the clients of Invesco. In the event that such an engagement was
entered into before the Employee has joined Invesco and it is a commercial investment (not inhabited by the Employee or family members), it must be disclosed upon employment.
Disclosure of the transaction is also required if the Employee acts as an authorised agent or if the transaction is undertaken by a third party
for the account of the Employee.
Compliance will without delay inform the Employee about the decision. If the permission for a particular
investment is given, a time limit of one year applies to the actual engagement in this specific investment.
Exemptions
If investment discretion for an investment has been delegated in writing to an independent fiduciary and such investment discretion is not
shared with the Employee, or decisions for the account are made by a family member or significant other and not by, or in connection with, the Employee.
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Page 20 of 31
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2014 Code of Ethics (EMEA-ex UK)
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Appendix A
Page 1 of 2
DEFINITIONS
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1.
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‘
Advisory Client’
means any client (including both investment companies and managed accounts) for which Invesco serves as an investment adviser, renders investment advice, or makes investment decisions.
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2
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‘Beneficial Interest’
means the opportunity to share, directly or indirectly, in any profit or loss on a transaction in Securities, including but not limited to all joint accounts, partnerships and
trusts.
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3
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‘Covered Accounts’
means:
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3.1
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any account/securities held by you, or your family, while an Employee;
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3.2
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accounts/securities held by you for the benefit of your spouse, significant other, or any children or relatives who share your home;
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3.3
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accounts/securities for which you have or share, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise:
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(i)
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voting power
(which includes power to vote, or to direct the voting of, a security), or
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(ii)
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investment power
(which includes the power to dispose, or to direct the disposition) of a security; or
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3.4
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accounts/securities held by any other person to whose support you materially contribute or in which, by reason of any agreement or arrangement, you have or share benefits substantially equivalent to ownership,
including, for example:
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(i)
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arrangements such as Investment Clubs (which may be informal) under which you have agreed to share the profits from an investment, and
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(ii)
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accounts maintained or administered by you for a relative (such as children or parents) who do not share your home.
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3.5
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Families include husbands and wives, civil partner, significant other, sons and daughters and other immediate family only where any of those persons take part in discussion or passing on of investment information.
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4.
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‘Employee’
means a person who has a contract of employment with, or employed by, Invesco UK or any associated Invesco Company within Europe; including consultants, contractors or temporary employees.
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5.
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‘Equivalent Security’
means any Security issued by the same entity as the issuer of a security, including options, rights, warrants, preferred stock, restricted stock, bonds and other obligations of
that company.
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6.
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‘Fund’
means an investment company for which Invesco serves as an adviser or subadviser.
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7.
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‘High quality short-term debt instruments’
means any instrument having a maturity at issuance of less than 366 days and which is treated in one of the highest two rating categories by a Nationally
Recognised Statistical Rating Organisation, or which is unrated but is of comparable quality.
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8.
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‘Independent Fund Director’
means an independent director of an investment company advised by Invesco.
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Page 21 of 31
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2014 Code of Ethics (EMEA-ex UK)
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9.
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‘Initial Public Offering’
means any security which is being offered for the first time on a Recognised Stock Exchange.
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10.
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‘Open-Ended Collective Investment Scheme’
means any Open-ended Investment Company, US Mutual Fund, UK ICVC or Irish Unit Trust, Luxembourg SICAV, French SICAV or Bermuda Fund.
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11.
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‘Securities Transaction’
means a purchase of or sale of Securities.
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12.
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‘Security’
includes stock, notes, bonds, debentures and other evidences of indebtedness (including loan participations and assignments), limited partnership interests, investment contracts, and all
derivative instruments, such as options and warrants.
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13.
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“
UK ICVC and affiliate schemes”
defined as all UK domiciled Invesco ICVCs, all Invesco Continental European domestic ranges and all Invesco Ireland and Luxembourg SICAVs and Unit Trusts.
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14.
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“Main Index”
defined as a member of the FTSE 100 or equivalent. The equivalency will be determined by the Local Compliance Officer on a case by case basis.
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Page 22 of 31
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2014 Code of Ethics (EMEA-ex UK)
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APPENDIX B
Page 1 of 2
Procedures to deal
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The
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procedures to deal are as follows:
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A:
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Obtain the Pre-Clearance Trade Authorisation Form from the “forms” section of the Compliance Intranet site.
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(
http://sharepoint/sites/ComplianceEurope/Personal Share Dealing/Forms/AllItems.aspx
)
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B:
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Complete Trade Authorisation Form noting:
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i)
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permission sought to either buy or sell;
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ii)
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the amount in shares or currency;
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iii)
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is the transaction an Invesco ICVC/ISA/GPR or affiliated scheme – yes or no – if yes, then you will have to submit your pre-clearance form to *UK- Compliance Personal Share Dealing e-mail group – if no,
then pre-clearance is not required;
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v)
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name of company or other;
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vi)
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date of request to deal;
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vii)
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name of beneficial owner; and viii) address of beneficial owner.
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Then complete each of the
questions in connection with the transaction you require completed – “yes” or “no” answers will be required.
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C:
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For Venture Capital Trust ordinary securities or for Invesco ICVC/ISA/GPR Trades, you should now only complete section B. Once you have answered both questions, the pre-clearance form must be submitted to the e-mail
*UK- Compliance Personal Share Dealing
- Compliance will review the prospective transaction and revert to you by e-mail. Once you have received this confirmation e-mail you are free to deal. However, the trade must be completed by the end of
the next business day from the date of confirmation.
If dealing is not completed in this time frame, then additional pre-clearance MUST be sought via the same process.
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D:
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If you wish to sell/buy
Invesco
shares you should complete Section B as instructed on the form.
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E:
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For Equity, Bond or Warrant deals etc, you should now only complete Sections A and C. Once you have completed these sections, the pre-clearance form must be submitted to the e-mail
*UK- Compliance Personal Share
Dealing
- Compliance will review the prospective transaction and revert to you by e-mail.
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F.
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If approved, and once you have received a confirmation e-mail from Compliance you are free to deal. However, the trade must be completed by the end of the next business day from the date of confirmation.
If dealing
is not completed in this time frame, then additional pre-clearance MUST be sought via the same process.
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NB
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Permission to deal will not be granted retrospectively. Deals undertaken without permission will be brought to the Compliance Officer’s attention, by a review of the personal share dealing register, for
discussion with the person concerned, in addition to appropriate escalation, and/or HR.
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Page 23 of 31
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2014 Code of Ethics (EMEA-ex UK)
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Appendix C
Personal Account Dealing Guidance Overview
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Investment / transaction
type
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60 day
holding
period
*
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Pre-
Clearance
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Post-
event
Reporting
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Exempt
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Not
Allowed
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ANY deliberate transactions (buys or sells) in investments of any type including: Equities, Options, Fixed Income, Venture
Capital Funds, IVZ shares**, ETFs etc.
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x
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x
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IVZ funds/products including ETFs*
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x
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x
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Privately issued investment securities/hedge funds
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x
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x
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Non-Executive Directors: Personal Investment Transactions in IVZ Ltd. shares & products.
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x
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x
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Government and local authority debt (non-OECD country)
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x
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x
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Non-Executive Directors: Personal Investment Transactions in non- IVZ shares & funds
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x
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x
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Undirected/Automatic transactions or movements
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x
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x
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Non-IVZ Collective Investment Schemes (excluding ETFs)
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x
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OECD debt (e.g. US treasury bills)
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x
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Financial Spread betting ***
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x
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Initial Public Offerings***
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x
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Futures/Short Sales
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x
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Note: in all cases, unless exempt, contract notes confirming the trades must be provided to the Compliance Department
within 14 days of the trade. Pre-trade approval is valid until close of business the following day.
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*
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An exemption might be granted but if so, profits cannot be retained
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**
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May be subject to a close period
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***
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Apply for an exemption within the pre-trade authorisation process
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Page 24 of 31
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2014 Code of Ethics (EMEA-ex UK)
|
Appendix D
Employees EMEA ex UK
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Page 25 of 31
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2014 Code of Ethics (EMEA-ex UK)
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Appendix E
ACKNOWLEDGMENT OF RECEIPT
Only complete
this version of the Annual Acknowledgement where you are unable to complete the electronic version.
I acknowledge that I have received the Invesco
Code of Ethics dated 1 July 2014, and represent that:
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1.
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In accordance with Section 7 of the Code of Ethics, I will fully disclose the Securities holdings in Covered Accounts*
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2.
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In accordance with Section 3 of the Code of Ethics, I will obtain prior authorisation for all Securities Transactions in each of my Covered Accounts except for transactions exempt from pre-clearance under
Section 3 of the Code of Ethics*
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3.
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In accordance with section 7 of the Code of Ethics, I will report all Securities Transactions in each of my Covered Accounts except for transactions exempt from reporting under Section 3 of the Code of Ethics.
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4.
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I will comply with the Code of Ethics in all other respects.
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Date:
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*
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Representations Nos: 1 and 2 do not apply to Independent Fund Directors
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Page 26 of 31
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2014 Code of Ethics (EMEA-ex UK)
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APPENDIX F
ANNUAL CERTIFICATION OF COMPLIANCE WITH THE INVESCO CODE OF ETHICS
To be completed by all Employees following the end of each calendar year—
only complete this version of the Annual Certification where you are
unable to complete the electronic version.
I hereby certify that, with respect to the calendar year ending on 31 December, 2013 (the ‘Calendar
Year), I have reported to Invesco all Securities Transactions in respect of each of my Covered Account(s). I further certify that I have reviewed the attachments hereto and confirm that:
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a)
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Sections A & B contain a complete list of Covered Account(s) as well as a complete list of my directorships, advisory board memberships and similar positions; and
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b)
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Section C contains a complete list of trades, other than Exempt Investments, in my Covered Account(s) during the Calendar Year for which contract notes/confirmations have not been forwarded;
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c)
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Sections D & E contain details of any potential Conflicts of Interest and Treating Customers Fairly issues identified during the year but not yet reported.
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I further certify that:
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a)
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For any of my Covered Accounts which have been approved by the Compliance Department as a Discretionary Account(s) (which have been identified on Schedule A with an ‘E’ prefix), that I have not exercised
investment discretion or influenced any investment decisions and that I will not exercise investment discretion or influence any potential investment decisions with such Discretionary Account(s);
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b)
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As appropriate, I have identified on Schedule A hereto those Covered Accounts which contain open-ended Collective Investment Schemes/Investment Companies shares only but for which account statements and confirms are not
and have not been provided and hereby confirm that all securities transactions in these accounts are and will be limited exclusively to transactions in shares of open-ended Collective Investment Schemes;
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c)
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For any privately-issued security held by me or my Covered Account(s), I will inform the Compliance Department upon learning that any issuer has either changed its name or has issued or proposed to issue any class of
security to the public;
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d)
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I have complied with the requirements of the Conflicts of Interest Policy, the Gifts, Benefits and Entertainment (Inducements) Policy, the Anti-Bribery Policy, the Market Abuse Policy, Fraud Policy, Insider Trading
Policy and the Treating Customers Fairly Policy;
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e)
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I have not used personal hedging strategies or remuneration or liability related insurance contracts to undermine any risk alignment effects embedded in my remuneration arrangements;
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f)
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I have read and understand my department’s procedures;
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g)
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I have admitted to and reported any errors at the time they occurred or as soon as I became aware of them; and
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h)
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I have received a copy of and understand the Code in its entirety and acknowledge that I am subject to its provisions. I also certify that I have complied and will comply with its requirements;
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To the extent that any of the attached Schedules contain inaccurate or incomplete information, I have noted and initialled the change directly on the Schedule
and returned this certification along with all Schedules to the Compliance Department. Capitalised terms used herein without definition shall have the meanings given to them in the Code.
Date:
Upon your full review and execution, please return immediately to Compliance Ireland
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Page 27 of 31
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2014 Code of Ethics (EMEA-ex UK)
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APPENDIX F
Annual Certificate of Compliance with
THE INVESCO CODE OF ETHICS
Section A — COVERED ACCOUNTS
The following
is a list of Covered Accounts subject to the Invesco Code of Ethics:
Section B - Directorships, Advisory Board Memberships and Similar Positions
held
The following is a list of directorships, advisory board memberships and similar positions that I hold:
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Page 28 of 31
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2014 Code of Ethics (EMEA-ex UK)
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Annual Certificate of Compliance with THE INVESCO CODE OF ETHICS
Section C — Trades
The following is a list of
trades undertaken during the period for which contract notes/confirmations have not been forwarded
:
Section D — Conflicts of Interest
The following is a list of potential conflicts of interest I have identified during the course of the year and not already reported to the Compliance
Department:
Section E — Treating Customers Fairly (TCF)
The following is a list of potential TCF issues I have identified during the course of the year and not already reported via the TCF Scorecards:
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Page 29 of 31
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2014 Code of Ethics (EMEA-ex UK)
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Appendix G: Pre-Clearance Guide
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Type of Transaction in IVZ
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Pre
Clearance
|
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Basis for Approval
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Quarterly Reporting of
Transactions
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Annual Report of
Holdings
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- Open market purchases & sales
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Yes
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Not permitted in
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Yes
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Yes
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- Transactions in pension plan
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blackout periods.
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Local
compliance
|
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Local
compliance
|
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Local
compliance
|
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|
officer
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|
officer
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|
officer
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Exercise of Employee Stock Options
when same day sale
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Yes
|
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Not permitted in
closed periods for
|
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Yes
|
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n/a
|
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• Rec’d when merged w/ Invesco
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IVZ Company
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those in the
|
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Local compliance
|
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• Options for Stock Grants
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Secretarial
|
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‘Blackout Group’.
|
|
officer
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• Options for Global Stock Plans
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• Options for Restricted StkAwards
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Option holding
period must be
satisfied.
|
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|
Sale of Stocks Exercised and held
until later date.
|
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Yes
|
|
Not permitted in
|
|
Yes
|
|
Yes
|
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Options Exercised will have been received as follows:
|
|
Local
|
|
closed periods for
those in the
|
|
Local compliance
|
|
Local compliance
|
|
• Rec’d when merged w/ Invesco
|
|
compliance
|
|
‘Blackout Group’.
|
|
officer
|
|
officer
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• Options for Stock Grants
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|
officer
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• Options for Global Stock Plans
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Stock holding
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• Options for Restricted StkAwards
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period must be
satisfied.
|
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Sale of Stock Purchased through
Sharesave
|
|
Yes
Local compliance
officer
|
|
Not permitted in
closed periods for
those in the
‘Blackout
Group’.
|
|
Yes
Local compliance
officer
|
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Yes
Local compliance
officer
|
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Page 30 of 31
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2014 Code of Ethics (EMEA-ex UK)
|
1) Open market purchases/sales
- Pre-clearance to deal is required from Compliance, no dealing is
permitted during close periods for those in the ‘Blackout Group’. Details of closed periods are posted to the intranet site by Company Secretarial.
2) Employee Stock Options (a) exercise/same day sale -
authorisation of the Option is granted by Company
Secretarial Department and signed by Trustees of the Scheme.
3) Employee Stock Options (b) exercise/take possession/subsequent day sale -
same as above, except that individual would pay for the shares and pay
tax. The stock would then be lodged in the employee share service arrangement — then if subsequent disposal was sought the normal pre-clearance process would apply (pre-clearance from Compliance — no dealing during closed periods for
‘Blackout Group’ members).
4) Stock Grants (Global Stock Plans) -
Awards made yearly, stock would be purchased through Company
Secretarial and held for three years. After three years elect to keep the shares or distribute — stock would be transferred to employee share service arrangement with normal pre-clearance/closed period requirements.
5) Employees who receive IVZ stock when their company is purchased by IVZ -
stock distribution as part of the transaction to buy the Company concerned.
Stock would be issued to the individual concerned and, depending on the terms of the deal, may be required to be held for a period. Stock would be transferred into the employee share service, and subject to terms of the Company deal would then
follow normal pre-clearance/close period guidelines.
6) Restricted Stock Awards -
similar to stock grants as above — except tax not paid
initially — pre-clearance from Compliance and closed period restrictions apply.
7) Transactions in IVZ stock via a pension plan -
Transaction
no different to open market purchases — pre-clearance required, dealing in closed periods no allowed.
8) Sharesave -
If share save is
exercised then stock would be placed into employee share service arrangement. Then if individual sells they go through normal pre-clearance and closed period process. Special rules may be brought in at share save anniversary dates. These will be
communicated as appropriate.
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Page 31 of 31
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2014 Code of Ethics (EMEA-ex UK)
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Invesco Senior Secured Management, Inc.
Policies and Procedures
Code of Ethics Policy
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Policy Owner:
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Compliance, Management
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Policy Approver:
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Compliance
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Version:
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1.14
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Last Review Date:
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March 4, 2014
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Next Review Date:
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March 4, 2015
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Review Frequency:
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Annual and as needed
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Applicable Authority:
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Rule 204A-1 of the Investment Advisers Act of 1940
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Policy Cross References:
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Invesco Ltd. Code of Conduct, Invesco Insider Trading Policies; Invesco Advisers, Inc. Code of Ethics, Invesco Advisers, Inc. Political
Contributions Policy;
ISSM Advertising and Marketing Policy, Information Wall and Material Non-Public Information Policy, Political Contributions Policy,
and Gifts and Entertainment Policy
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Overview
In our
efforts to ensure that Invesco Senior Secured Management, Inc. (“ISSM”) develops and maintains a reputation for integrity and high ethical standards, it is essential not only that ISSM and its employees comply with relevant federal and
state securities laws, but also that we maintain high standards of personal and professional conduct. The ISSM Code of Ethics (the “Code”) is designed to help ensure that we conduct our business consistent with these high standards.
The policies and procedures set forth in the Code apply to all employees of the firm. Failure to comply with the Code may result in disciplinary action,
including termination of employment.
ISSM holds to the following principles:
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We are fiduciaries. Our duty is at all times to place the interests of our Clients first.
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All personal securities transactions will be conducted in such a manner as to be consistent with the Code and to avoid any actual or potential conflict of interest or any abuse of an employee’s position of trust
and responsibility.
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No employee should take inappropriate advantage of their position.
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The fiduciary principle that information concerning the identity of security holdings and financial circumstances of any Client is confidential.
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This policy is the property of Invesco
Senior Secured Management, Inc. and may not be provided to any
external party without express prior consent from Compliance or
Legal.
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Standards of Business Conduct
In adherence to Invesco’s Code of Conduct, all Invesco employees must comply with all applicable federal and state securities laws. Employees are not
permitted, in connection with the purchase or sale, directly or indirectly, of a security held or to be acquired by a Client:
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To defraud such Client in any manner;
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To engage in any act, practice or course of conduct which operates or would operate as a fraud or deceit upon such a Client;
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To engage in any manipulative practice with respect to such Client; or
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To engage in any manipulative practice with respect to securities, including price manipulation.
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Conflicts of Interest
As a fiduciary, ISSM has an
affirmative duty of care, loyalty, honesty, and good faith to act in the best interests of its Clients. Compliance with this duty can be achieved by avoiding conflicts of interest and by fully disclosing all material facts concerning any conflict
that does arise with respect to any Client. Employees should try to avoid any situation that has even the appearance of conflict or impropriety.
Personal Securities Transactions
All access
persons are required to comply with Invesco’s policies and procedures regarding personal securities transactions. Information concerning the identity of security holdings and all material nonpublic information related to the holdings of Clients
is confidential. Employees are prohibited from disclosing to persons outside the firm any material nonpublic information about any Client, the investments made by the firm on behalf of Clients, and information regarding the firm’s trading
strategies, except as required to effectuate securities transactions on behalf of a client or for other legitimate business purposes.
Refer to
ISSM’s Information Wall and Material Non-Public Information Policy
and
Invesco Advisers, Inc.’s Code of Ethics
for specific requirements.
Gifts and Entertainment
A conflict of interest
occurs when the personal interests of employees interfere or could potentially interfere with their responsibilities to the firm and its clients. The overriding principle is that supervised persons should not accept inappropriate gifts, favors,
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This policy is the property of Invesco
Senior Secured Management, Inc. and must not be provided to any
external party without express prior consent from Compliance or
Legal.
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Page 2
entertainment, special accommodations, or other things of material value that could influence their decision-making or make them feel beholden to a person or firm. Similarly, supervised persons
should not offer gifts, favors, entertainment or other things of value that could be viewed as overly generous or aimed at influencing decision-making or making a client feel beholden to the firm or the supervised person.
Refer to the
ISSM Gifts and Entertainment Policy
for more detailed guidelines.
Political Contributions
ISSM recognizes that
various laws and regulations impact the ability of ISSM and its employees to make political contributions in certain circumstances. ISSM seeks to comply with the prohibitions of Rule 206(4)-5 under the Advisers Act (the “SEC Pay to Play
Rule”). ISSM also seeks to comply with all other laws that may restrict or prohibit ISSM or its employees from making certain political contributions.
Refer to the
Invesco Advisers, Inc. Political Contributions Policy
for more detailed guidelines.
Board of Directors
Because of the high potential
for conflicts of interest and insider trading problems, investment personnel may not serve on the boards of directors of any public companies without previous approval from the Houston Code of Ethics Compliance team. If the outside business activity
is approved, the employee must recuse himself or herself from making Client investment decisions concerning the particular company or issuer as appropriate, provided that this recusal requirement shall not apply with respect to certain employees
that serve on corporate boards as a result of, or in connection with, Client investments made in those companies.
Marketing and Promotional
Activities
All oral and written statements, including those made to clients, prospective clients, their representatives, or the media must be
professional, accurate, balanced, and not misleading in any way. Any promotional materials must be pre-approved.
Refer to the
ISSM
Advertising and Marketing Policy
for specific guidelines.
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This policy is the property of Invesco
Senior Secured Management, Inc. and must not be provided to any
external party without express prior consent from Compliance or
Legal.
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Page 3
Other Outside Activities
Employees are prohibited from engaging in outside business or investment activities that may interfere with their duties with the firm. Outside business
affiliations, including directorships of private companies, consulting engagements, or public/charitable positions must be approved in writing by the Chief Compliance Officer (“CCO”).
Fiduciary Appointments
Approval must be obtained
from the CCO before accepting an executorships, trusteeship, or power of attorney, other than with respect to a family member. Fiduciary appointments on behalf of family members must be disclosed at the inception of the relationship.
Disclosure
Employees should disclose any personal
interest that might present a conflict of interest or harm the reputation of the firm.
Reporting Violations
ISSM appointed Lisa L. Gray as its CCO. All references to the CCO in this policy or other ISSM policies refer to Lisa L. Gray. All employees are required to
report any material violation of the firm’s Code promptly to the CCO.
Confidentiality
All reports of potential Code breaches will be treated confidentially to the extent permitted by law and investigated promptly and appropriately. Reports may
not be submitted anonymously.
Sanctions
Any
violations of this ISSM and the broader Invesco Code of Ethics will result in disciplinary action that a designated person deems appropriate, including but not limited to, a warning, fines, disgorgement, suspension, demotion, or termination of
employment. In addition to sanctions, violations may result in referral to civil or criminal authorities where appropriate.
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This policy is the property of Invesco
Senior Secured Management, Inc. and must not be provided to any
external party without express prior consent from Compliance or
Legal.
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Definitions
Access Person -
an access person is any one that may have access to client information.
Supervised Person
- includes directors, officers, and partners of the firm, employees of the firm, and any other person who provides advice on
behalf of the adviser and is subject to the adviser’s supervision and control.
Covered Securities -
Any stock, bond,
future, investment contract or any other instrument that is considered a “security” under the Investment Advisers Act. Covered securities do not include:
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Direct obligations of the US Government (e.g., treasury securities);
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Bankers’ acceptances, bank certificates of deposit, commercial paper, and high quality short-term debt obligations, including repurchase agreements;
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Shares issued by money market funds;
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Shares of open-end mutual funds that are not advised or sub-advised by Invesco Ltd. or any of its affiliates;
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Shares issued by unit investment trusts.
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This policy is the property of Invesco
Senior Secured Management, Inc. and must not be provided to any
external party without express prior consent from Compliance or
Legal.
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Page 5
Invesco Advisers, Inc.
CODE OF ETHICS
January 1, 2015
TABLE OF CONTENTS
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Section
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Item
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Page
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I.
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Introduction
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3
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II.
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Statement of Fiduciary Principles
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3
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III.
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Compliance with Laws, Rules and Regulations; Reporting of Violations
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4
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IV.
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Limits on Personal Investing
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4
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A. Personal Investing
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4
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1
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Pre-clearance of Personal Securities Transactions
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4
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2
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Blackout Period
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6
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De Minimis
Exemptions
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6
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3
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Prohibition of Short-Term Trading Profits
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7
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4
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Initial Public Offerings
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7
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5
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Prohibition of Short Sales by Investment Personnel
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7
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6
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Restricted List Securities
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8
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7
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Other Criteria Considered in Pre-clearance
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8
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8
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Brokerage Accounts
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8
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9
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Private Securities Transactions
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10
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Limited Investment Opportunity
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9
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Excessive Short-Term Trading in Funds
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B. Invesco Ltd. Securities
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C. Limitations on Other Personal Activities
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10
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1
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Outside Business Activities
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10
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2
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Gifts and Entertainment
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10
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Gifts
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10
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Entertainment
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3
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U.S. Department of Labor Reporting
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11
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D. Parallel Investing Permitted
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11
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V.
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Reporting Requirements
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11
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a.
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Initial Holdings Reports
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11
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b.
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Quarterly Transaction Reports
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12
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c.
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Annual Holdings Reports
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13
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d.
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Gifts and Entertainment Reporting
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13
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e.
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Certification of Compliance
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VI.
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Reporting of Potential Compliance Issues
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VII.
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Administration of the Code of Ethics
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VIII.
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Sanctions
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14
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IX.
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Exceptions to the Code
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14
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X.
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Definitions
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XI.
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Invesco Ltd. Policies and Procedures
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XII.
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Code of Ethics Contacts
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Invesco Advisers, Inc.
CODE OF ETHICS
(Originally adopted February 29, 2008; Amended effective January 1, 2015)
I. Introduction
Invesco Advisers, Inc. has a fiduciary
relationship with respect to each portfolio under management. The interests of Clients and of the shareholders of investment company Clients take precedence over the personal interests of Covered Persons (defined below). Capitalized terms used
herein and not otherwise defined are defined at the end of this document.
This Code of Ethics (“the Code”) applies to Invesco Advisers, Inc.,
Invesco Advisers, Inc’s. affiliated Broker-dealers (Invesco Distributors, Inc. and Invesco Capital Markets, Inc.), all Invesco Affiliated Mutual Funds, and all of their Covered Persons. Covered Persons include:
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any director, officer, full or part time Employee of Invesco Advisers, Inc. or any full or part time Employee of any of Invesco Advisers, Inc.’s affiliates that, in connection with his or her regular functions or
duties: makes, participates in, or obtains any information concerning any Client’s purchase or sale of Covered Securities or who is involved in making investment recommendations, or obtains information concerning investment recommendations,
with respect to such purchase or sale of Covered Securities; or has access to non-public information concerning any Client’s purchase or sale of Covered Securities, access to non-public securities recommendations, or access to non-public
information concerning portfolio holdings of any portfolio advised or sub-advised by Invesco Advisers, Inc.;
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all Employees of Invesco Ltd. located in the United States who are not covered by the Code of Ethics of a registered investment advisory affiliate of Invesco Ltd.; and
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any other persons falling within the definitions of Access Person or Advisory Person under Rule 17j-1 of the Investment Company Act of 1940, as amended (the “Investment Company Act”) or Rule 204A-1 under the
Investment Advisers Act of 1940, as amended (the “Advisers Act”) and such other persons that may be deemed to be Covered Persons by Compliance.
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Invesco Funds have created a separate Code of Ethics for Trustees of the Affiliated Mutual Funds. Independent Trustees are not Covered Persons
under the Invesco Advisers, Inc. Code of Ethics. Trustees who are not Independent Trustees and are not Employees of Invesco are also not Covered Persons under the Invesco Advisers, Inc. Code of Ethics, but must report his or her securities holdings,
transactions, and accounts as required in the separate Code of Ethics for Trustees of the Affiliated Mutual funds.
II.
Statement of Fiduciary
Principles
The following fiduciary principles govern Covered Persons:
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the interests of Clients and shareholders of investment company Clients must be placed first at all times and Covered Persons must not take inappropriate advantage of his or her positions; and
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all personal securities transactions must be conducted consistent with this Code and in a manner to avoid any abuse of an individual’s position of trust and responsibility; and
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this Code is our effort to address conflicts of interest that may arise in the ordinary course of our business and does not attempt to identify all possible conflicts of interest. This Code does not necessarily shield
Covered Persons from liability for personal trading or other conduct that violates a fiduciary duty to Clients and shareholders of investment company Clients.
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III.
Compliance with Laws, Rules and Regulations; Reporting of Violations
All Covered Persons are required to comply with applicable state and federal securities laws, rules and regulations and this Code. Covered Persons shall
promptly report any violations of laws or regulations or any provision of this Code of which they become aware to Invesco Advisers, Inc.’s Chief Compliance Officer or his/her designee. Additional methods of reporting potential violations or
compliance issues are described in Section VI. of this Code under “Reporting of Potential Compliance Issues.”
IV.
Limits on Personal
Investing
A. Personal Investing
1.
Pre-clearance of Personal Security Transactions
. All Covered Persons must pre-clear with Compliance, using the automated review
system, all personal security transactions involving Covered Securities in which they have a Beneficial Interest. A Covered Person may be considered to have a Beneficial Interest in securities held by members of his or her immediate family sharing
the same household (i.e., a spouse or equivalent domestic partner, children, etc.) or by certain partnerships, trusts, corporations, or other arrangements.
Any approval granted to a Covered Person to execute a personal security transaction is valid for that business day only, except that if
approval is granted after the close of the trading day such approval is good through the next trading day
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If a Covered Person does not execute the proposed securities transaction prior to closing of the market immediately following the
approval, the Covered Person must resubmit the request on another day for approval.
Additionally, all Covered Persons must pre-clear
personal securities transactions involving Covered Securities over which they have discretion. For example, if a Covered Person is directing the transactions for a friend or family member (regardless of whether they share the same household) all
transactions in Covered Securities must be pre-cleared.
Covered Securities include, but are not limited to, all investments that can be
traded by an Invesco Advisers, Inc. entity for its Clients, including stocks, bonds, municipal bonds, exchange-traded funds (ETFs), closed-end mutual funds, and any of their derivatives such as options. All Invesco Affiliated Mutual Funds (including
both open-end and closed-end funds) and Invesco PowerShares ETFs are considered Covered Securities.
Requirements for Invesco Affiliated Mutual Funds:
Although Affiliated Mutual Funds are considered Covered Securities, those that are held by Employees at the Affiliated Mutual Funds’
transfer agent or in the Invesco Ltd. 401(k) or Money Purchase Plan (excluding the Personal Choice Retirement Account (PCRA)) do not need to be pre-cleared through the automated review system because compliance monitoring for these plans is done
through a separate process.
Affiliated Mutual Funds that are held in external brokerage accounts or in the PCRA
must
be pre-cleared
through the automated review system.
Requirements for Exchange Traded Funds (ETFs)
:
Employees are exempt from pre-clearing ETFs listed on the
Pre-clearance Exempt ETF List
, and any derivatives of these securities such as
options.
All Invesco PowerShares ETFs and ETFs not listed on the Pre-clearance Exempt ETF List must be pre-cleared.
ETFs are Covered Securities and are still subject to requirements and limits on personal investing as described in Section IV.
and V. of the Code, irrespective of whether pre-clearance is required.
Requirements for Invesco Ltd. Securities and Other Employer
Stock:
All transactions in Invesco Ltd. securities, including the Invesco Ltd. stock fund held in the Invesco 401(k) and Money
Purchase plan, must be pre-cleared. Please refer to section IV.B for additional guidelines on Invesco Ltd. securities. Any transaction in a previous employer’s company stock that is obtained through an employee benefit plan or company stock
fund held in an external retirement plan requires pre-clearance.
Exempted Securities:
Covered Securities do not include shares of money market funds, U.S. government securities, certificates of deposit or shares of open-end
mutual funds
not
advised by Invesco Advisers, Inc. Unit investment trusts, including those advised by Invesco Advisers, Inc., are not Covered Securities. However, this definition shall not apply to any series of the PowerShares QQQ Trust or
the BLDRS Index Fund Trust. (Please refer to the “Definitions” section of this Code for more information on the term, Covered Security.)
If you are unclear about whether a proposed transaction involves a Covered Security, contact Compliance via email at
codeofethicsnorthamerica@invesco.com
or by phone at 1-877-331- CODE [1-877-331-2633] prior to executing the transaction.
Compliance
will consider the following factors, among others, in determining whether or not pre-clearance approval will be provided. Please note that you must obtain pre-clearance even if you believe your transactions request satisfies the criteria below. The
automated review system will review personal trade requests from Covered Persons based on the following considerations:
2.
Blackout Period
. Invesco Advisers, Inc. does not permit Covered Persons to trade in a
Covered Security if there is conflicting activity in an Invesco Client account.
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Non-Investment Personnel.
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may not buy or sell a Covered Security within two trading days after a Client trades in that security.
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may not buy or sell a Covered Security if there is a Client order on that security currently with the trading desk.
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may not buy or sell a Covered Security within three trading days before or after a Client trades in that security.
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may not buy or sell a Covered Security if there is a Client order on that security currently with the trading desk.
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For practical purposes, an Employee without knowledge of investment activity of a Client account would not know of such activity in advance of
a Client trade. Therefore, for those Employees, trading with pre-clearance approval granted prior to a Client transaction will not be considered a violation of this Code of Ethics. Compliance will review personal securities transactions to identify
potential conflicts in which there is an appearance that such an Employee could have traded while he or she was aware of upcoming Client transactions. If a potential conflict exists, this would be considered a violation of the blackout period
required by this Code of Ethics.
De Minimis Exemptions
. Compliance will apply the following
de minimis
exemptions in
granting pre-clearance when a Client has recently traded or is trading in a security involved in a Covered Person’s proposed personal securities transaction:
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Equity de minimis exemptions
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If a Covered Person
does
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have knowledge of Client trading activity in a particular equity security, he or she may execute up to 500 shares of such security in a rolling 30-day period provided the
issuer of such security is included in the Russell 1000 Index or any of the main indices globally included on the De Minimis Indices List which can be accessed on the Invesco intranet using the following link:
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http://sharepoint/sites/Compliance-COE-
NA/Training/Documents/De%20Minimis%20Indices%20List.pdf
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If a Covered Person
does
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have knowledge of Client trading activity in a particular equity security, he or she may execute up to 500 shares of such security in a rolling 30 day period provided that
there is no conflicting Client activity in that security during the blackout period or on the trading desk that exceeds 500 shares per trading day.
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Fixed income de minimis exemption.
If a Covered Person
does
not
have knowledge of Client trading activity in a particular fixed income security he or she may execute up to $100,000 of par value of
such security in a rolling 30-day period.
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The automated review system will confirm that there is no activity currently on
the trading desk on the security involved in the proposed personal securities transaction and will verify that there have been no Client transactions for the requested security within the last two trading days for all Covered Persons except
Investment Personnel for whom the blackout period is the last three trading days. For Investments, Portfolio Administration and IT personnel, Compliance will also check the trading activity of affiliates with respect to which such personnel have
potential access to transactional information to verify that there have been no Client transactions in the requested security during the blackout period. Compliance will notify the Covered Person of the approval or denial of the proposed personal
securities transaction. Any approval granted to a Covered Person to execute a personal security transaction is valid for that business day only, except that if approval is granted after the close of the trading day such approval is good through the
next trading day. If a Covered Person does not execute the proposed securities transaction prior to closing of the market immediately following the approval, the Covered Person must resubmit the request on another day for approval.
Any failure to pre-clear transactions is a violation of the Code and will be subject to the following potential sanctions:
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A Letter of Education will be provided to any Covered Person whose failure to pre-clear is considered immaterial or inadvertent.
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Deliberate failures to pre-clear transactions, as well as repeat and/or material violations, may result in in-person training, probation, withdrawal of personal trading privileges or employment termination, depending on
the nature and severity of the violations.
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3.
Prohibition of Short-Term Trading Profits
. Covered Persons are
prohibited from engaging in the purchase and sale, or short sale and cover of the same Covered Security within 60 days at a profit. If a Covered Person trades a Covered Security within the 60 day time frame, any profit from the trade will be
disgorged to a charity of Invesco Advisers, Inc.’s choice and a letter of education may be issued to the Covered Person.
4.
Initial Public Offerings
. Covered Persons are prohibited from directly or indirectly acquiring Beneficial Interest of any security in an equity Initial Public Offering. Exceptions will only be granted in unusual circumstances and must be
recommended by Compliance and approved by the Chief Compliance Officer or General Counsel (or designee) and the Chief Investment Officer (or designee) of the Covered Person’s business unit.
5.
Prohibition of Short Sales by Investment Personnel
. Investment Personnel are prohibited from effecting short sales of Covered
Securities in his or her personal accounts if a Client of Invesco Advisers, Inc. for whose account they have investment management responsibility has a long position in those Covered Securities.
6.
Restricted List Securities
. Employees requesting pre-clearance to buy or sell a
security on the Restricted List may be restricted from executing the trade because of potential conflicts of interest.
7.
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.
8.
Brokerage Accounts.
a. Covered Persons may only maintain brokerage accounts with:
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full service broker-dealers,
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discount broker-dealers.
discount broker-dealer accounts are accounts in which all trading is completed online. These accounts must be held with firms that provide electronic feeds of confirmations
directly to Compliance as detailed below in Section d.
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Invesco Advisers, Inc’s. -affiliated Broker-dealers (Invesco Distributors, Inc. and Invesco Capital Markets, Inc.)
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b. Brokerage account requirements for Affiliated Mutual Funds.
Covered Persons may own shares of Affiliated Mutual Funds that are
held at a broker-dealer that is not affiliated with Invesco Advisers, Inc.
only
if the broker-dealer provides an electronic feed of all transactions and statements to Invesco Advisers, Inc.’s Compliance Department. All Covered Persons
must arrange for his or her broker-dealers to forward to Compliance on a timely basis duplicate confirmations of all personal securities transactions and copies of periodic statements for all brokerage accounts, in an electronic format if they
include holdings in Affiliated Mutual Funds and preferably in an electronic format for holdings other than Affiliated Mutual Funds.
c. Requirement to move accounts that do not meet Compliance requirement:
Every person who becomes a Covered Person under this
Code must move all of his or her brokerage accounts that do not comply with the above provision of the Code within thirty (30) days from the date the Covered Person becomes subject to this Code.
d. Firms that provide electronic feeds to Invesco’s Compliance Department:
Please refer to the following link on the Invesco intranet site for a list of broker-dealers that currently provide electronic transaction and
statement feeds to Invesco Advisers, Inc.:
http://sharepoint/sites/Compliance-COE-
NA/Training/Documents/Approved%20Discount%20Broker%20List.pdf
e. Discretionary Managed Accounts.
In order to establish a discretionary managed
account, a Covered Person must grant the manager complete investment discretion over a Covered Persons account. Pre-clearance is not required for trades in this account; however, a Covered Person may not participate, directly or indirectly, in
individual investment decisions or be aware of such decisions before transactions are executed. This restriction does not preclude a Covered Person from establishing investment guidelines for the manager, such as indicating industries in which a
Covered Person desires to invest, the types of securities a Covered Person wants to purchase or a Covered Persons overall investment objectives. However, those guidelines may not be changed so frequently as to give the appearance that a Coverd
Person is actually directing account investments. Covered Persons must receive approval from Compliance to establish and maintain such an account and must provide written evidence that complete investment discretion over the account has been turned
over to a professional money manager or other third party. Covered Persons are not required to pre-clear or list transactions for such managed accounts in the automated review system; however, Covered Persons with these types of accounts must
provide an annual certification that they do not exercise direct or indirect control over the managed accounts.
9.
Private Securities
Transactions
. Covered Persons may not engage in a Private Securities Transaction without first (a) giving Compliance a detailed written notification describing the transaction and indicating whether or not they will receive compensation and
(b) obtaining prior written permission from Compliance. Investment Personnel who have been approved to acquire securities of an issuer in a Private Securities Transaction must disclose that investment to Compliance and the Chief Investment
Officer of the Investment Personnel’s business unit when they are involved in a Client’s subsequent consideration of an investment in the same issuer. The business unit’s decision to purchase such securities on behalf of Client
account must be independently reviewed by Investment Personnel with no personal interest in that issuer.
10.
Limited Investment
Opportunity (e.g. private placements, hedge funds, etc.)
. Covered Persons may not engage in a limited investment opportunity without first (a) giving Compliance a detailed written notification describing the transaction and
(b) obtaining prior written permission from Compliance.
11.
Excessive Short Term Trading in Funds
. Employees are prohibited
from excessive short term trading of any mutual fund advised or sub-advised by Invesco Advisers, Inc. and are subject to various limitations outlined in the respective prospectus and other fund disclosure documents.
B. Invesco Ltd. Securities
1. No Employee may effect short sales of Invesco Ltd. securities.
2. No Employee may engage in transactions in publicly traded options, such as puts, calls and other derivative securities relating to the
Invesco Ltd’s securities, on an exchange or any other organized market.
3. For all Covered Persons, transactions, including transfers
by gift, in Invesco Ltd. securities are subject to pre-clearance regardless of the size of the transaction, and are subject to “black-
out” periods established by Invesco Ltd. and holding periods prescribed under the terms of the agreement or program under which the securities were received.
4. Holdings of Invesco Ltd. securities in Covered Persons’ accounts are subject to the reporting requirements specified in Section IV.A.8
of this Code.
C. Limitations on Other Personal Activities
1.
Outside Business Activities
. Employees may not engage in any outside business activity, regardless of whether or not he or she
receives compensation, without prior approval from Compliance. Absent prior written approval of Compliance, Employees may not serve as directors, officers, or employees of unaffiliated public or private companies, whether for profit or non-profit.
If the outside business activity is approved, the Employee must recuse himself or herself from making Client investment decisions concerning the particular company or issuer as appropriate, provided that this recusal requirement shall not apply with
respect to certain Invesco Advisers, Inc.’s Employees, who may serve on corporate boards as a result of, or in connection with, Client investments made in those companies. Employees must always comply with all applicable Invesco Ltd. policies
and procedures, including those prohibiting the use of material non-public information in Client or employee personal securities transactions.
2.
Gift and Entertainment
. Employees may not give or accept Gifts or Entertainment that may be considered excessive either in dollar
value or frequency to avoid the appearance of any potential conflict of interest. The Invesco Ltd. Gifts and Entertainment Policy includes specific conditions under which Employees may accept or give Gifts or Entertainment. Where there are conflicts
between a minimal standard established by a policy of Invesco Ltd. and the standards established by a policy of Invesco Advisers, Inc., including this Code, the latter shall control.
Under no circumstances may an Employee give or accept cash or any possible cash equivalent from a broker or vendor.
An Employee may not provide or receive any Gift or Entertainment that is conditioned upon Invesco Advisers, Inc., its parents or affiliates
doing business with the other entity or person involved.
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Gifts.
Employees are prohibited from accepting or giving the following: a single Gift valued in excess of $100 in any calendar year; or Gifts from one person or firm valued in excess of $100 in the
aggregate during a calendar year period.
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Entertainment.
Employees may not reimburse Business Partners for the cost of tickets that would be considered excessive or for travel related expenses without approval of Compliance.
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Examples of Entertainment that may be considered excessive in value include Super Bowls, All-Star games, Kentucky Derby, hunting trips, ski
trips, etc. An occasional sporting event, golf outing or concert when accompanied by the Business Partner may not be excessive.
3.
U.S. Department of Labor Reporting
: Under current U.S. Department of Labor (DOL)
Regulations, Invesco Advisers, Inc. is required to disclose to the DOL certain specified financial dealings with a union or officer, agent, shop steward, employee, or other representative of a union (collectively referred to as “union
officials”). Under the Regulations, practically any gift or entertainment furnished by Invesco Advisers, Inc.’s Employees to a union or union official is considered a payment reportable to the DOL.
Although the Regulations provide for a
de minimis
exemption from the reporting requirements for payments made to a union or union
official that do not exceed $250 a year, that threshold applies to all of Invesco Advisers, Inc.’s Employees in the aggregate with respect to each union or union official. Therefore, it is Invesco Advisers, Inc.’s policy to require that
ALL Gifts or Entertainment furnished by an Employee be reported to Invesco Advisers, Inc. using the Invesco Advisers, Inc. Finance Department’s expense tracking application, Oracle E-Business Suite or any other application deployed for that
purpose which has the capability to capture all the required details of the payment. Such details include the name of the recipient, union affiliation, address, amount of payment, date of payment, purpose and circumstance of payment, including the
terms of any oral agreement or understanding pursuant to which the payment was made.
Invesco Advisers, Inc. is obligated to report on an
annual basis all payments, subject to the
de minimis
exemption, to the DOL on Form LM-10 Employer Report.
If you have any question
whether a payment to a union or union official is reportable, please contact Compliance. A failure to report a payment required to be disclosed will be considered a material violation of this Code. The DOL also requires all unions and union
officials to report payments they
receive
from entities such as Invesco Advisers, Inc. and their Employees.
D.
Parallel Investing Permitted
Subject to the provisions of this Code, Employees may invest in or own the same securities as those
acquired or sold by Invesco Advisers, Inc. for its Clients.
V.
Reporting Requirements
a.
Initial Holdings Reports
. Within 10 calendar days of becoming a Covered Person, each Covered Person must complete an Initial
Holdings Report by inputting into the automated pre-clearance system, Star Compliance, the following information (the information must be current within 45 days of the date the person becomes a Covered Person):
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A list of all security holdings, including the security name, the number of shares (for equities) and the principal amount (for debt securities) in which the Covered Person has direct or indirect Beneficial Interest. A
Covered Person may have a Beneficial Interest in securities held by members of his or her immediate family sharing the same household (i.e., a spouse or equivalent domestic partner, children, etc.) or by certain partnerships, trusts, corporations,
or other arrangements;
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The security identifier for each Covered Security (CUSIP, symbol, etc.);
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The name of any broker-dealer or bank with which the Covered Person maintains an account in which any securities are held for the direct or indirect benefit of the Covered Person; and
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The date that the report is submitted by the Covered Person to Compliance.
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b.
Quarterly
Transaction Reports
. All Covered Persons must report, no later than 30 days after the end of each calendar quarter, the following information for all transactions during the quarter in a Covered Security in which a Covered Person has a
direct or indirect Beneficial Interest:
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The date of all transactions in that quarter, the security name, the number of shares (for equity securities); or the interest rate and maturity date (if applicable) and the principal amount (for debt securities) for
each Covered Security;
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The nature of the transaction (buy, sell, etc.);
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The security identifier (CUSIP, symbol, etc.);
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The price of the Covered Security at which the transaction was executed;
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The name of the broker-dealer or bank executing the transaction; and
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The date that the report is submitted by the Covered Person to Compliance.
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All Covered
Persons must submit a Quarterly Transaction Report regardless of whether they executed transactions during the quarter or not.
If a Covered Person did not execute transactions subject to reporting requirements during a quarter, the report must
include a representation to that effect. Covered Persons need not include transactions made through an Automatic Investment Plan/Dividend Reinvestment Plan or similar plans and transactions in Covered Securities held in the Invesco 401(k), Invesco
Money Purchase Plan (MPP), or accounts held directly with Invesco in the Quarterly Transaction Report.
Additionally, Covered Persons must
report information on any new brokerage account established by the Covered Person during the quarter for the direct or indirect benefit of the Covered Person (including Covered Securities held in a 401(k) or other retirement vehicle, including plans
sponsored by Invesco Advisers, Inc. or its affiliates). The report shall include:
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The date the account was established;
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The name of the broker-dealer or bank; and
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The date that the report is submitted by the Covered Person to Compliance.
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Compliance may
identify transactions by Covered Persons that technically comply with the Code for review based on any pattern of activity that has an appearance of a conflict of interest.
c.
Annual Holdings Reports
. All Covered Persons must report annually the following
information, which must be current within 45 days of the date the report is submitted to Compliance:
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A list of all security holdings, including the security name, the number of shares (for equities) or the interest rate and maturity date (if applicable) and principal amount (for debt securities) for each Covered
Security in which the Covered Person has any direct or indirect Beneficial Interest;
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The security identifier for each Covered Security (CUSIP, symbol, etc.);
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The name of the broker-dealer or bank with or through which the security is held; and
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The date that the report is submitted by the Covered Person to Compliance.
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d.
Gifts and
Entertainment Reporting.
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Reporting of Gifts and Entertainment given to an Invesco Employee by a Client or Business Partner
. All Gifts and Entertainment received by an Employee must be reported through the automated pre-clearance
system within thirty (30) calendar days after the receipt of the Gift or the attendance of the Entertainment event. The requirement to report Entertainment includes dinners or any other event with a business partner of Invesco Advisers, Inc. in
attendance.
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Reporting of Gifts and Entertainment given by an Invesco Employee to a Client or Business Partner
. All Gifts and Entertainment given by an Employee must be reported through the reporting requirements of
the Employee’s business unit. All Employee’s should contact his or her manager or Compliance if they are not sure how to report gifts they intend to give or have given to a Client or Business Partner.
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e.
Certification of Compliance.
All Covered Persons must certify annually in writing that they have read and understand the Code
and recognize that they are subject to the Code. In addition, all Covered Persons must certify in writing annually that they have complied with the requirements of the Code and that they have disclosed or reported all personal securities
transactions required to be disclosed or reported under the Code. If material changes are made to the Code during the year, these changes will also be reviewed and approved by Invesco Advisers, Inc. and the relevant funds’ boards. All Covered
Persons must certify in writing within 30 days of the effective date of the amended code that they have read and understand the Code and recognize that they are subject to the Code.
VI.
Reporting of Potential Compliance Issues
Invesco Advisers, Inc. has created several channels for Employees to raise compliance issues and concerns on a confidential basis. An Employee should first
discuss a compliance issue with his or her supervisor, department head or with Invesco Advisers, Inc.’s General Counsel or Chief Compliance Officer. Human Resources matters should be directed to the Human Resources Department, an additional
anonymous vehicle for reporting such concerns.
In the event that an Employee does not feel comfortable discussing compliance issues through normal channels, the
Employee may anonymously report suspected violations of law or Invesco policy, including this Code, by calling the toll-free Invesco Whistleblower Hotline at
1-855-234-9780.
This hotline is available to employees of multiple operating units
of Invesco Ltd. Employees may also report his or her concerns by visiting the Invesco Whistleblower Hotline website at:
www.invesco.ethicspoint.com
. To ensure your confidentiality, the phone line and website are provided by an independent
company and available 24 hours a day, 7 days a week. All submissions to the Invesco Whistleblower Hotline will be reviewed and handled in a prompt, fair and discreet manner. Employees are encouraged to report these questionable practices so that
Invesco has an opportunity to address and resolve these issues before they become more significant regulatory or legal issues.
VII.
Administration
of the Code of Ethics
Invesco Advisers, Inc. has used reasonable diligence to institute procedures reasonably necessary to prevent violations of
this Code.
No less frequently than annually, Invesco Advisers, Inc. will furnish to the Affiliated Mutual Funds’ Boards of Trustees a written report
that:
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describes significant issues arising under the Code since the last report to the funds’ board, including information about material violations of the Code and sanctions imposed in response to material violations;
and
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certifies that Invesco Advisers, Inc. has adopted procedures reasonably designed to prevent Covered Persons from violating the Code.
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VIII.
Sanctions
Compliance will issue a letter of
education to the Covered Persons involved in violations of the Code that are determined to be inadvertent or immaterial.
Invesco Advisers, Inc. may
impose additional sanctions in the event of repeated violations or violations that are determined to be material or not inadvertent, including disgorgement of profits (or the differential between the purchase or sale price of the personal security
transaction and the subsequent purchase or sale price by a relevant Client during the enumerated period), a letter of censure or suspension, or termination of employment.
IX.
Exceptions to the Code
Invesco Advisers,
Inc.’s Chief Compliance Officer (or designee) may grant an exception to any provision in this Code.
X.
Definitions
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“Affiliated Mutual Funds”
generally includes all open-end or closed-end mutual funds advised or sub-advised by Invesco Advisers, Inc.
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“Automatic Investment Plan/Dividend Reinvestment Plan”
means a program in which regular purchases or sales are made automatically in or from investment accounts in accordance with a predetermined
schedule and allocation, including dividend reinvestment plans.
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“Beneficial Interest”
has the same meaning as the ownership interest of a “beneficial owner” pursuant to Rule 16a-1(a)(2) under the Securities Exchange Act of 1934, as amended (“the
’34 Act”). To have a Beneficial Interest, Covered Persons must have directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, have or share a “direct or indirect pecuniary interest,”
which is the opportunity to profit directly or indirectly from a transaction in securities. Thus a Covered Person may have a Beneficial Interest in securities held by members of his or her immediate family sharing the same household (i.e. a spouse
or equivalent domestic partner, children, etc.) or by certain partnerships, trusts, corporations, or other arrangements.
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“Client”
means any account for which Invesco Advisers, Inc. is either the adviser or sub-adviser including Affiliated Mutual Funds.
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“Control”
has the same meaning as under Section 2(a)(9) of the Investment Company Act.
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“Covered Person”
means and includes:
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any director, officer, full or part time Employee of Invesco Advisers, Inc. or any full or part time Employee of any of Invesco Advisers, Inc.’s affiliates that, in connection with his or her regular functions or
duties: makes, participates in, or obtains any information concerning any Client’s purchase or sale of Covered Securities or who is involved in making investment recommendations, or obtains information concerning investment recommendations,
with respect to such purchase or sale of Covered Securities; or has access to non-public information concerning any Client’s purchase or sale of Covered Securities, access to non-public securities recommendations or access to non-public
information concerning portfolio holdings of any portfolio advised or sub-advised by Invesco Advisers, Inc.
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all Employees of Invesco Ltd. located in the United States who are not covered by the Code of Ethics of a registered investment advisory affiliate of Invesco Ltd.
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any other persons falling within the definition of Access Person under Rule 17j-1 of the Investment Company Act of 1940 , as amended (the “Investment Company Act”) or Rule 204A-1 under the Investment Advisers
Act of 1940, as amended (the “Advisers Act”) and such other persons that may be so deemed to be Covered Persons by Compliance.
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Invesco Funds have created a separate Code of Ethics for Trustees of the Affiliated Mutual Funds. Independent Trustees are not Covered Persons
under the Invesco Advisers, Inc. Code of Ethics. Trustees who are not Independent Trustees and are not Employees of Invesco are also not Covered Person under the Invesco Advisers, Inc. Code of Ethics, but must report his or her securities holdings,
transactions, and accounts as required in the separate Code of Ethics for Trustees of the Affiliated Mutual Funds.
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“Covered Security”
means a security as defined in Section 2(a)(36) of the Investment Company Act except that it does not include the following (Please note: exchange traded funds (ETFs) are
considered Covered Securities):
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Direct obligations of the Government of the United States or its agencies;
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Bankers’ acceptances, bank certificates of deposit, commercial paper and high quality short-term debt instruments, including repurchase agreements;
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Any open-end mutual fund not advised or sub-advised by Invesco Advisers, Inc. All Affiliated Mutual Funds shall be considered Covered Securities regardless of whether they are advised or sub-advised by Invesco Advisers,
Inc.;
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Any unit investment trust,
including
unit investment trusts advised or sub-advised by Invesco Advisers, Inc. However, this definition shall not apply to any series of the PowerShares QQQ Trust or the BLDRS Index
Fund Trust;
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Invesco Ltd. stock because it is subject to the provisions of Invesco Ltd.’s Code of Conduct. Notwithstanding this exception, transactions in Invesco Ltd. securities are subject to all the pre-clearance and
reporting requirements outlined in other provisions of this Code and any other corporate guidelines issued by Invesco Ltd.
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“Employee”
means and includes:
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Any full or part time Employee of Invesco Advisers, Inc. or any full or part time Employee of any Invesco Advisers, Inc.’s affiliates that, in connection with his or her regular functions or duties, makes or
participates in, or obtains any information concerning any Client’s purchase or sale of Covered Securities or who is involved in making or obtains information concerning investment recommendations with respect to such purchase or sales of
Covered Securities; or who has access to non-public information concerning any Client’s purchase or sale of Covered Securities, access to non-public securities recommendations or access to non-public information concerning portfolio holdings of
any portfolio advised or sub-advised by Invesco Advisers, Inc.
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All Employees of Invesco Ltd. located in the United States who are not covered by the Code of Ethics of a registered investment advisory affiliate of Invesco Ltd.
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Any other persons falling within the definitions of Access Person or Advisory Person under Rule 17j-1 of the Investment Company Act or Rule 204A-1 under the Advisers Act and such other persons that may be deemed to be
an Employee by Compliance.
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“Gifts”, “Entertainment” and “Business Partner”
have the same meaning as provided in the Invesco Ltd. Gifts and Entertainment Policy.
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“Independent Trustee”
means a Trustee who is not an interested person within the meaning of Section 2(a)(19) of the Investment Company Act.
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“Initial Public Offering”
means an offering of securities registered under the Securities Act of 1933, as amended, the issuer of which, immediately before the registration, was not subject to the
reporting requirements of Section 13 or 15(d) of the ’34 Act.
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“Invesco Advisers, Inc.’s -affiliated Broker-dealer”
means Invesco Distributors, Inc. or Invesco Capital Markets, Inc. or their successors.
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“Investment Personnel”
means any full or part time Employee of Invesco Advisers, Inc. or any full or part time Employee of any Invesco Advisers, Inc.’s affiliates who, in connection with his or her
regular functions or duties, makes or participates in making recommendations regarding the purchase or sale of Covered Securities by Clients or any natural person who Controls a Client or an investment adviser and who obtains information concerning
recommendations made to the Client regarding the purchase or sale of securities by the Client as defined in Rule 17j-1.
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“Non-Investment Personnel”
means any Employee that does not meet the definition of Investment Personnel as listed above.
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“Private Securities Transaction”
means any securities transaction relating to new offerings of securities which are not registered with the Securities and Exchange Commission, provided however that
transactions subject to the notification requirements of Rule 3050 of the Financial Industry Regulatory Authority’s (FINRA) Conduct Rules, transactions among immediate family members (as defined in the interpretation of the FINRA Board of
Governors on free-riding and withholding) for which no associated person receives any selling compensation, and personal securities transactions in investment company and variable annuity securities shall be excluded.
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“Restricted List Securities”
means the list of securities that are provided to the Compliance Department by Invesco Ltd. or investment departments, which include those securities that are restricted
from purchase or sale by Client or Employee accounts for various reasons (e.g., large concentrated ownership positions that may trigger reporting or other securities regulatory issues, or possession of material, non-public information, or existence
of corporate transaction in the issuer involving an Invesco Ltd. unit).
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“Trustee”
means any member of the Board of Trustees for an open-end or closed-end mutual fund advised or sub-advised by Invesco Advisers, Inc.
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XI.
Invesco Ltd. Policies and Procedures
All
Employees are subject to the policies and procedures established by Invesco Ltd., including the Code of Conduct, Insider Trading Policy, Political Contributions Policy and Gift and Entertainment Policy and must abide by all their requirements,
provided that where there is a conflict between a minimal standard established by an Invesco Ltd. policy and the standards established by an Invesco Advisers, Inc. policy, including this Code, the latter shall control.
XII.
Code of Ethics Contacts
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Telephone Hotline: 1-877-331-CODE [2633]
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E-Mail: codeofethicsnorthamerica@invesco.com
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Last Revised:
January 1, 2015