As filed with the U.S. Securities and Exchange Commission on October 30, 2018
1933 Act File No. 333-[ ]
1940 Act File No. 811-22003
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-2
(Check appropriate box or boxes)
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 |
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Pre-Effective Amendment No. | ☐ | |
Post-Effective Amendment No. | ☐ | |
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REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 |
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Amendment No. 3 | ☒ |
Nuveen Core Equity Alpha Fund
Exact Name of Registrant as Specified in Declaration of Trust
333 West Wacker Drive, Chicago, Illinois 60606
Address of Principal Executive Offices
(Number, Street, City, State, Zip Code)
(800) 257-8787
Registrants Telephone Number, including Area Code
Gifford R. Zimmerman
Vice President and Secretary
333 West Wacker Drive
Chicago, Illinois 60606
Name and Address (Number, Street, City, State, Zip Code) of Agent for Service
Copies of Communications to:
Thomas S. Harman
Morgan, Lewis & Bockius LLP
1111 Pennsylvania Avenue NW
Washington, DC 20004
Approximate Date of Proposed Public Offering: As soon as practicable after the effective date of this Registration Statement
If any of the securities being registered on this form are offered on a delayed or continuous basis in reliance on Rule 415 under the Securities Act of 1933, other than securities offered in connection with a dividend reinvestment plan, check the following box. ☒
It is proposed that this filing will become effective (check appropriate box)
☒ |
when declared effective pursuant to section 8(c) |
CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
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Title of Securities Being Registered |
Amount
Being Registered |
Proposed
Maximum Offering Price Per Unit(1) |
Proposed
Maximum Aggregate Offering Price(1) |
Amount of
Registration Fee |
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Common Shares, $0.01 par value | 1,000 Shares | $13.51 | $13,510 | $1.64 | ||||
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(1) |
Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(c) under the Securities Act of 1933 based on the average of the high and low sales prices of the shares of beneficial interest on October 25, 2018, as reported on the NYSE. |
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment that specifically states this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such dates as the Commission, acting pursuant to said Section 8(a), may determine.
SUBJECT TO COMPLETION, DATED OCTOBER 30, 2018
The information in this Prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the U.S. Securities and Exchange Commission is effective. This Prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
PROSPECTUS
[ ] Common Shares
Nuveen Core Equity Alpha Fund
Nuveen Core Equity Alpha Fund (the Fund) is a diversified, closed-end management investment company. The Funds investment objective is to provide an attractive level of total return. The Fund cannot assure you that it will achieve its investment objective.
Investing in the Funds common shares (Common Shares) involves certain risks that are described in the Risk Factors section of this prospectus (the Prospectus).
Neither the U.S. Securities and Exchange Commission (the SEC) nor any state securities commission has approved or disapproved of these securities or determined if this Prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
You should read this Prospectus, which contains important information about the Fund, before deciding whether to invest, and retain it for future reference. A Statement of Additional Information, dated [ ], 2018 (the SAI), containing additional information about the Fund, has been filed with the SEC and is incorporated by reference in its entirety into this Prospectus. You may request a free copy of the SAI, the table of contents of which is on the last page of this Prospectus, annual and semi-annual reports to shareholders and other information about the Fund, and make shareholder inquiries by calling (800) 257-8787, by writing to the Fund or from the Funds website (http://www.nuveen.com). The information contained in, or that can be accessed through, the Funds website is not part of this Prospectus. You also may obtain a copy of the SAI (and other information regarding the Fund) from the SECs web site (http://www.sec.gov).
The Funds Common Shares do not represent a deposit or obligation of, and are not guaranteed or endorsed by, any bank or other insured depository institution, and are not federally insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other governmental agency.
Portfolio Contents. The Fund seeks to achieve its investment objective primarily through long-term capital appreciation and secondarily through income and gains. The Fund invests in a portfolio of common stocks selected from among the stocks comprising the S&P 500 ® Index (the Index) by employing a proprietary mathematical process that seeks to produce risk-adjusted excess returns over the Index over extended periods of time with an equal or lesser amount of relative investment risk compared to the Index (the Equity Portfolio). In addition, to seek to enhance the Funds risk-adjusted returns through a meaningful reduction in the volatility of the Funds returns relative to the returns of the Index over extended periods of time, the Fund, to a limited extent, writes (sells) index call options and call options on customs baskets of securities (the Option Strategy). Under normal market circumstances, the Fund generally expects to invest approximately 95% of its Managed Assets (as defined on page [ ] of the Summary Prospectus) in the Equity Portfolio. Under normal market circumstances, the Fund will invest at least 80% of its Assets (as defined on page [ ] of the Summary Prospectus) in the Equity Portfolio. Under normal market circumstances, the notional value of the call options written by the Fund may be up to 50% of the value of the Funds Managed Assets.
No Leverage. As a non-fundamental policy, the Fund will not leverage its capital structure by issuing senior securities such as preferred shares or debt instruments. However, the Fund may borrow for temporary or emergency purposes as permitted by the Investment Company Act of 1940, as amended, and may enter into certain derivatives transactions that have the economic effect of leverage.
Adviser and Sub-Advisers. Nuveen Fund Advisors, LLC, the Funds investment adviser, is responsible for determining the Funds overall investment strategies and their implementation. Intech Investment Management LLC (Intech) and Nuveen Asset Management, LLC (Nuveen Asset Management) are the Funds sub-advisers. Intech manages the Equity Portfolio, while Nuveen Asset Management manages the Option Strategy.
The minimum price on any day at which Common Shares may be sold will not be less than the current net asset value per share plus the per share amount of the commission to be paid to the Funds distributor, Nuveen Securities, LLC (Nuveen Securities). The Fund, Nuveen Securities, and [ ] will suspend the sale of Common Shares if the per share price of the shares is less than the minimum price. The Fund currently intends to distribute the shares offered pursuant to this Prospectus through at-the-market transactions, although from time to time it may also distribute shares through an underwriting syndicate or a privately negotiated transaction. To the extent shares are distributed other than through at-the-market transactions, the Fund will file a supplement to this Prospectus describing such transactions. For information on how Common Shares may be sold, see the Plan of Distribution section of this Prospectus.
Common Shares are listed on the New York Stock Exchange (the NYSE). The trading or ticker symbol of the Fund is JCE. The Funds closing price on the NYSE on October 12, 2018 was $13.76.
The date of this Prospectus is [ ], 2018.
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Table of Contents for the Statement of Additional Information |
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You should rely only on the information contained or incorporated by reference in this Prospectus. The Fund has not authorized anyone to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. The Fund is not making an offer of these securities in any state where the offer is not permitted. You should not assume that the information contained in this Prospectus is accurate as of any date other than the date on the front of this Prospectus. The Funds business, financial condition, and prospects may have changed since that date. The Fund will update this Prospectus to reflect any material changes to the disclosures herein.
This is only a summary. You should review the more detailed information contained elsewhere in this Prospectus and in the Statement of Additional Information (the SAI) prior to making an investment in the Fund. See Risks.
The Fund |
Nuveen Core Equity Alpha Fund (the Fund) is a diversified, closed-end investment management company. See The Fund. The Funds common shares, $0.01 par value (Common Shares), are traded on the New York Stock Exchange (NYSE) under the symbol JCE. See Description of SharesCommon Shares. As of September 30, 2018, the Fund had 16,021,686 Common Shares outstanding and net assets applicable to Common Shares of $244,174,462. |
Investment Objective and Policies |
The Funds investment objective is to provide an attractive level of total return. The Funds investment objective and certain investment policies are considered fundamental and may not be changed without shareholder approval. The Fund cannot assure you that it will attain its investment objective. See The Funds Investments and Risks. The Fund seeks to achieve its investment objective primarily through long-term capital appreciation and secondarily through income and gains. |
The Fund invests in a portfolio of common stocks selected by employing a proprietary mathematical process designed by Intech Investment Management LLC (Intech), a sub-adviser to the Fund, that seeks to provide, over time, risk-adjusted excess returns (alpha) above the S&P 500 ® Index (the Index) with an equal or lesser amount of relative investment risk. In constructing the Funds Equity Portfolio (as defined below under Equity Portfolio Strategy), Intech employs its U.S. Large Cap Core strategy, which it has used in client portfolios since July 2001. |
In addition, to seek to enhance the Funds risk-adjusted returns through a meaningful reduction in the volatility of the Funds returns relative to the returns of the Index (beta) over extended periods of time, the Fund writes (sells) index call options and call options on customs baskets of securities (as defined below, the Option Strategy). Nuveen Asset Management, LLC (Nuveen Asset Management), a sub-adviser to the Fund, is responsible for managing the Funds Option Strategy. |
Equity Portfolio Strategy |
The Fund invests in a portfolio of common stocks from among the stocks comprising the Index as selected by Intech (the Equity Portfolio). Intech constructs and manages the Equity Portfolio by employing its proprietary mathematical process that seeks to produce risk-adjusted excess returns over the Index over extended periods of time with an equal or lesser amount of relative investment risk compared to the Index. Under normal market circumstances, the Fund generally expects to invest approximately 95% of its Managed Assets in the Equity Portfolio. Under normal market circumstances, the Fund will invest at least 80% of its Assets in the Equity Portfolio. |
Assets means net assets of the Fund plus the amount of any borrowings for investment purposes. Managed Assets means the total assets of the Fund, minus the sum of its accrued liabilities (other than Fund liabilities incurred for the express purpose of creating leverage). Total assets for this |
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purpose shall include assets attributable to the Funds use of leverage (whether or not those assets are reflected in the Funds financial statements for purposes of generally accepted accounting principles), and derivatives will be valued at their market value. |
In constructing the Equity Portfolio, Intech employs its U.S. Large Cap Core strategy. Intechs mathematical process seeks to capitalize on the natural volatility of the market by searching for common stocks that have high relative volatility (providing the potential for risk-adjusted excess returns) but that essentially move in opposite directions or have low correlation to each other (providing the potential for lower relative risk). By constructing the Equity Portfolio in this manner and through regular rebalancing of the portfolio, Intechs mathematical process seeks to create an Equity Portfolio with potentially more efficient weightings than are typically present in the market capitalization weighted Index, thereby producing the opportunity for returns in excess of the Index, with an equal or lesser amount of relative risk, over time. Intechs process is based on mathematical principles and Intech does not engage in fundamental research. Under normal market circumstances, the Equity Portfolio will consist of a diversified portfolio of approximately 150 to 450 common stocks included in the Index. |
For purposes of analyzing and comparing investment returns of a portfolio relative to the returns of a benchmark (in the case of the Fund, the Index), assuming the overall volatility of the portfolio returns relative to the benchmark (beta) is approximately equal to or less than the volatility of the benchmark returns, the total return of a portfolio that outperforms the benchmark may be described as consisting of the sum of (i) the market return measured by the benchmark and (ii) the risk-adjusted excess returns generated by the portfolio over the benchmark returns (alpha). |
The Index is an unmanaged index of 500 companies that is market-capitalization weighted and is generally representative of the performance of larger companies in the U.S. It is not possible to invest directly in the Index. The total return on the Equity Portfolio may be more or less than the total return of the Index. There can be no assurance that the Equity Portfolio will attain returns in excess of the Index. |
Option Strategy |
To seek to enhance the Funds risk-adjusted returns through a meaningful reduction in the volatility of the Funds returns relative to the returns of the Index over extended periods of time, the Fund, to a limited extent, writes (sells) index call options and call options on customs baskets of securities (the Option Strategy). Nuveen Asset Management is responsible for managing the Funds Option Strategy. Under normal market circumstances, the notional value of the call options written by the Fund may be up to 50% of the value of the Funds Managed Assets. |
In applying the Option Strategy, Nuveen Asset Management is responsible for determining the notional value, timing, type and terms of the options strategies used by the Fund. Nuveen Asset Management actively manages the Funds options positions. In Nuveen Asset Managements discretion, the Fund may purchase back call options or allow them to expire. To determine the options strategies used, Nuveen Asset Management considers market factors, such as current market levels and volatility, and option-specific factors, including but not limited to premium/cost, exercise price |
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and expiration. Nuveen Asset Management typically seeks to invest in call options that, based on the current market conditions and market expectations, provide an opportunity to deliver enhanced risk-adjusted returns. This will often lead to a portfolio that has exposure to multiple strike prices and expiration dates in any investment period. |
Due to U.S. federal income tax considerations, the Fund intends to limit the overlap between the stocks held in the Equity Portfolio and the stocks underlying the Funds call options to less than 70% (generally based on the value of such components) on an ongoing basis. |
Other Policies |
During temporary defensive periods, the Fund may deviate from its investment objective and invest all or a portion of its assets in investment grade debt securities, including obligations issued or guaranteed by the U.S. government, its agencies and instrumentalities. There can be no assurance that such investment techniques will be successful. For a more complete discussion of the Funds portfolio composition, see The Funds Investments. |
Use of Leverage |
As a non-fundamental policy, the Fund will not leverage its capital structure by issuing senior securities such as preferred shares or debt instruments. The Fund may, however, borrow up to 7.5% of its Managed Assets for cash management purposes, although it does not currently do so. In addition, the Fund may borrow for temporary or emergency purposes and may enter into certain derivatives transactions that have the economic effect of leverage by creating additional investment exposure. |
Investment Adviser and Sub-Advisers |
Nuveen Fund Advisors, LLC (Nuveen Fund Advisors or the Adviser), the Funds investment adviser, is responsible for overseeing the Funds overall investment strategy and its implementation. Nuveen Fund Advisors offers advisory and investment management services to a broad range of investment company clients. Nuveen Fund Advisors has overall responsibility for management of the Fund, oversees the management of the Funds portfolio, manages the Funds business affairs and provides certain clerical, bookkeeping and other administrative services. Nuveen Fund Advisors is located at 333 West Wacker Drive, Chicago, Illinois 60606. Nuveen Fund Advisors is a subsidiary of Nuveen, LLC (Nuveen), the investment management arm of Teachers Insurance and Annuity Association of America (TIAA). TIAA is a life insurance company founded in 1918 by the Carnegie Foundation for the Advancement of Teaching and is the companion organization of College Retirement Equities Fund. As of September 30, 2018, Nuveen managed approximately $988 billion in assets, of which approximately $142 billion was managed by Nuveen Fund Advisors. |
The Adviser has entered into sub-advisory agreements with Intech Investment Management LLC, an independently managed indirect subsidiary of Janus Henderson Group plc., and Nuveen Asset Management, LLC, a subsidiary of Nuveen Fund Advisors (each a Sub-Adviser and together, the Sub-Advisers). Intech manages the Equity Portfolio, while Nuveen Asset Management manages the Option Strategy. |
Nuveen Securities, LLC (Nuveen Securities), a registered broker-dealer affiliate of Nuveen Fund Advisors and Nuveen Asset Management, is involved in the offering of the Funds Common Shares. See Plan of DistributionDistribution Through At-The-Market Transactions. |
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Offering Methods |
The Fund may offer Common Shares using one or more of the following methods: (i) at-the-market transactions conducted through one or more broker-dealers that have entered into a selected dealer agreement with Nuveen Securities, one of the Funds underwriters; (ii) through an underwriting syndicate; and (iii) through privately negotiated transactions between the Fund and specific investors. See Plan of Distribution. |
Distribution Through At-The-Market Transactions . The Fund, from time to time, may issue and sell its Common Shares through Nuveen Securities to certain broker-dealers that have entered into selected dealer agreements with Nuveen Securities. Currently, Nuveen Securities has entered into a selected dealer agreement with [ ] pursuant to which [ ]will act as Nuveen Securities sub-placement agent with respect to at-the-market offerings of Common Shares. Common Shares will only be sold on such days as shall be agreed to by the Fund, Nuveen Securities, and [ ]. Common Shares will be sold at prevailing market prices through the National Market System, subject to a minimum price to be established each day by Nuveen Securities. The minimum price on any day will not be less than the current net asset value (NAV) per share plus the per share amount of the commission to be paid to Nuveen Securities. The Fund, Nuveen Securities, and [ ] will suspend the sale of Common Shares if the per share price of the shares is less than the minimum price. |
The Fund will compensate Nuveen Securities with respect to sales of the Common Shares at a commission rate of up to 1.0% of the gross proceeds of the sale of Common Shares. Nuveen Securities will compensate sub-placement agents or other broker-dealers participating in the offering at a rate of up to 0.8% of the gross sales proceeds of the sale of Common Shares sold by that sub-placement agent or broker-dealer. |
Settlements of Common Share sales will occur on the second business day following the date of sale. In connection with the sale of Common Shares on behalf of the Fund, Nuveen Securities may be deemed to be an underwriter within the meaning of the Securities Act of 1933, as amended (the 1933 Act), and the compensation of Nuveen Securities may be deemed to be underwriting commissions or discounts. Unless otherwise indicated in a further Prospectus supplement, Nuveen Securities will act as underwriter on a reasonable efforts basis. |
The offering of Common Shares pursuant to the Distribution Agreement (defined below under Plan of DistributionDistribution Through At-The-Market Transactions) will terminate upon the earlier of (i) the sale of all Common Shares subject thereto or (ii) termination of the Distribution Agreement. The Fund and Nuveen Securities each have the right to terminate the Distribution Agreement in its discretion at any time. See Plan of DistributionDistribution Through At-The-Market Transactions. The Fund currently intends to distribute the shares offered pursuant to this Prospectus through at-the-market transactions, although from time to time it may also distribute shares through an underwriting syndicate or a privately negotiated transaction. To the extent shares are distributed other than through at-the-market transactions, the Fund will file a supplement to this Prospectus describing such transactions. |
The Funds closing price on the NYSE on October 12, 2018, was $13.76. |
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Distribution Through Underwriting Syndicates . The Fund, from time to time, may issue additional Common Shares through a syndicated secondary offering. In order to limit the impact on the market price of the Funds Common Shares, underwriters will market and price the offering on an expedited basis ( e.g., overnight or similarly abbreviated offering period). The Fund will launch a syndicated offering on a day, and upon terms, mutually agreed upon between the Fund, Nuveen Securities and the underwriting syndicate. |
The Fund will offer its shares at a price equal to a specified discount of up to 5% from the closing market price of the Funds Common Shares on the day prior to the offering date. The applicable discount will be negotiated by the Fund and Nuveen Securities in consultation with the underwriting syndicate on a transaction-by-transaction basis. The Fund will compensate the underwriting syndicate out of the proceeds of the offering based upon a sales load of up to 4% of the gross proceeds of the sale of Common Shares. |
The minimum net proceeds per share to the Fund will not be less than the greater of (i) the Funds latest NAV per share of Common Shares or (ii) 91% of the closing market price of the Funds Common Shares on the day prior to the offering date. See Plan of DistributionDistribution Through Underwriting Syndicates. |
Distribution Through Privately Negotiated Transactions . The Fund from time to time may sell directly to, and solicit offers from, institutional and other sophisticated investors, who may be deemed to be underwriters as defined in the 1933 Act for any resale of Common Shares. |
The terms of such privately negotiated transactions will be subject to the discretion of the management of the Fund. In determining whether to sell Common Shares through a privately negotiated transaction, the Fund will consider relevant factors including, but not limited to, the attractiveness of obtaining additional funds through the sale of Common Shares, the purchase price to apply to any such sale of Common Shares and the investor seeking to purchase the Common Shares. |
Common Shares issued by the Fund through privately negotiated transactions will be issued at a price equal to the greater of (i) the NAV per share of the Funds Common Shares or (ii) at a discount ranging from 0% to 5% of the average daily closing market price of the Funds Common Shares at the close of business on the ten business days preceding the date upon which Common Shares are sold pursuant to the privately negotiated transaction. The applicable discount will be determined by the Fund on a transaction-by-transaction basis. See Plan of DistributionDistribution Through Privately Negotiated Transactions. |
The principal business address of Nuveen Securities is 333 West Wacker Drive, Suite 3300, Chicago, Illinois 60606. |
Distributions |
The Fund will pay quarterly distributions stated in terms of a fixed cents per Common Share dividend rate that would be composed of supplemental amounts generally representing realized capital gains or, possibly, returns of capital representing unrealized capital gains. Quarterly distributions, including such supplemental amounts, are sometimes referred to as managed distributions. The Fund will seek to establish a distribution rate |
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that roughly corresponds to Nuveen Fund Advisors projections of the total return that could reasonably be expected to be generated by the Fund over an extended period of time, although the distribution rate will not be solely dependent on the amount of income earned or capital gains realized by the Fund. Nuveen Fund Advisors, in making such projections, may consider long-term historical returns and a variety of other factors. |
Distributions can only be made after paying any interest and required principal payments on borrowings, if any, and any accrued dividends to preferred shareholders, if any. The distribution policy recognizes that many investors are willing to accept the potentially higher asset value volatility of the Funds equity investments compared to fixed-income investments, preferring that a consistent level of cash distributions be available each quarter for reinvestment or other purposes of their choosing. |
If, for any quarterly distribution, net investment income and net realized capital gains were less than the amount of the distribution, the difference would be distributed from the Funds assets. In addition, in order to make such distributions, the Fund might have to sell a portion of its investment portfolio at a time when independent investment judgment might not dictate such action. The Funds final distribution for each calendar year would include any remaining net investment income and net realized capital gains undistributed during the year. The Funds actual financial performance will likely vary significantly from month-to-month and from year-to-year, and there may be extended periods of up to several years, when the distribution rate will exceed the Funds actual total returns. The Funds projected or actual distribution rate is not a prediction of what the Funds actual total returns will be over any specific future period. |
As portfolio and market conditions change, the rate of distributions on the Common Shares and the Funds distribution policy could change. To the extent that the total return of the Funds overall strategy exceeds the distribution rate for an extended period, the Fund may be in a position to increase the distribution rate or distribute supplemental amounts to shareholders. Conversely, if the total return of the Funds overall strategy is less than the distribution rate for an extended period of time, the Fund will effectively be drawing upon its NAV to meet payments prescribed by its distribution policy. Similarly, for tax purposes such distributions by the Fund may consist in part of a return of capital to Common Shareholders. The exact tax characteristics of the Funds distributions will not be known until after the Funds fiscal year-end. Common Shareholders should not confuse a return of capital distribution with dividend yield or total return. See Distributions for additional information. |
At the same time that it pays a quarterly distribution, the Fund will post on its website (www.nuveen.com/cef), and make available in written form to holders of its Common Shares a notice of the estimated sources and tax characteristics of the Funds distributions ( i.e ., what percentage of the distributions is estimated to constitute ordinary income, short-term capital gains, long-term capital gains, and/or a non-taxable return of capital) on a year-to-date basis, in compliance with a federal securities law requirement that any fund paying a distribution from sources other than net investment income disclose to shareholders the respective portion attributable to such other sources. These estimates may be based on certain assumptions about |
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the Funds expected investment returns and the realization of net gains, if any, over the remaining course of the year. These estimates may, and likely will, vary over time based on the activities of the Fund and changes in the value of portfolio investments. The Fund expects that it will provide this type of information primarily on a tax basis, instead of on a generally accepted accounting principles (GAAP) basis, because experience has shown that fund shareholders are most concerned about the tax character of their distributions, and because the Fund expects that the distributions tax characteristics will fairly reflect the economic basis of the Funds distributions and returns. The final determination of the source and tax characteristics of all distributions will be made after December 31 in each year, and reported to Common Shareholders on Form 1099-DIV early the following year. |
As explained more fully below in Tax Matters, the Fund intends to distribute to Common Shareholders any net capital gain (which is the excess of net long-term capital gain over net short-term capital loss) for each taxable year through its managed distributions or, alternatively, to retain all or a portion of the years net capital gain and pay federal income tax on the retained gain. Each Common Shareholder of record as of the end of the Funds taxable year will include in income for federal income tax purposes, as long-term capital gain, his or her share of any retained gain, will be deemed to have paid his or her proportionate share of the tax paid by the Fund on such retained gain, and will be entitled to an income tax credit or refund for that share of the tax. The Fund may treat any retained capital gain amount as a substitute for equivalent cash distributions. In addition, the Fund may make total distributions during a given calendar year in an amount that exceeds the Funds net investment income and net realized long-term capital gains for that calendar year, in which case the excess will generally be treated by shareholders as return of capital for tax purposes. A return of capital reduces a shareholders tax basis, which could result in more taxable gain when the shareholder sells his or her shares. This may cause the shareholder to pay taxes even if he or she sells shares for less than the original price. |
The Fund reserves the right to change its distribution policy and the basis for establishing the rate of its quarterly distributions at any time, subject to a finding by the Funds Board of Trustees (the Board or the Trustees) that such change is in the best interests of the Fund and its Common Shareholders. |
Custodian and Transfer Agent |
State Street Bank and Trust Company serves as custodian of the Funds assets. Computershare Inc. and Computershare Trust Company, N.A. serve as the Funds transfer agent. See Custodian and Transfer Agent. |
Special Risk Considerations |
Investment in the Fund involves special risk considerations, which are summarized below. The Fund is designed as a long-term investment and not as a trading vehicle. The Fund is not intended to be a complete investment program. See Risks for a more complete discussion of the special risk considerations of an investment in the Fund. |
Investment and Market Risk . An investment in the Funds Common Shares is subject to investment risk, including the possible loss of the entire principal amount that you invest. Your investment in Common Shares |
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represents an indirect investment in the securities owned by the Fund. Your Common Shares at any point in time may be worth less than your original investment, even after taking into account the reinvestment of Fund dividends and distributions. See RisksInvestment and Market Risk. |
Market Discount from Net Asset Value . Shares of closed-end investment companies like the Fund have during some periods traded at prices higher than NAV and have during other periods traded at prices lower than NAV. The Fund cannot predict whether Common Shares will trade at, above or below NAV. This characteristic is a risk separate and distinct from the risk that the Funds NAV could decrease as a result of investment activities. Investors bear a risk of loss to the extent that the price at which they sell their shares is lower in relation to the Funds NAV than at the time of purchase, assuming a stable NAV. Proceeds from the sale of Common Shares in this offering will be reduced by shareholder transaction costs (if applicable, which vary depending on the offering method used). The NAV per Common Share will be reduced by costs associated with any future issuances of Common Shares. Depending on the premium of Common Shares at the time of any offering of Common Shares hereunder, the Funds NAV may be reduced by an amount up to the offering costs (estimated to be an additional 0.75% of the offering price assuming a Common Share offering price of $13.76 (the Funds closing price on the NYSE on October 12, 2018)). Common Shares are designed primarily for long-term investors, and you should not view the Fund as a vehicle for trading purposes. See RisksMarket Discount from Net Asset Value. |
Recent Market Conditions . Since the financial crisis that started in 2008, the U.S. and many foreign economies continue to experience its after-effects, which have resulted, and may continue to result, in certain instruments experiencing unusual liquidity issues, increased price volatility and, in some cases, credit downgrades and increased likelihood of default. These events have reduced the willingness and ability of some lenders to extend credit, and have made it more difficult for some borrowers to obtain financing on attractive terms, if at all. In addition, global economies and financial markets are becoming increasingly interconnected, which increases the possibilities that conditions in one country or region might adversely impact issuers in a different country or region. A rise in protectionist trade policies, and the possibility of changes to some international trade agreements, could affect the economies of many nations in ways that cannot necessarily be foreseen at the present time. The severity or duration of adverse economic conditions may also be affected by policy changes made by governments or quasi-governmental organizations. |
In addition, political events within the U.S. and abroad may affect investor and consumer confidence and may adversely impact financial markets and the broader economy, perhaps suddenly and to a significant degree. The U.S. government has recently reduced federal corporate income tax rates, and future legislative, regulatory and policy changes may result in more restrictions on international trade, less stringent prudential regulation of certain players in the financial markets, and significant new investments in infrastructure and national defense. Interest rates have been unusually low in recent years in the U.S. and abroad. Because there is little precedent for this situation, it is difficult to predict the impact on various markets of a |
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significant rate increase, whether brought about by U.S. policy makers or by dislocations in world markets. In addition, there is a risk that the prices of goods and services in the U.S. and many foreign economies may decline over time, known as deflation (the opposite of inflation). Deflation may have an adverse effect on stock prices and creditworthiness and may make defaults on debt more likely. To the extent the Fund focuses its investments in a region enduring geopolitical market disruption, it will face higher risks of loss. Thus, investors should closely monitor current market conditions to determine whether the Fund meets their individual financial needs and tolerance for risk. |
Legislation and Regulatory Risk . At any time after the date of this Prospectus, legislation or additional regulations may be enacted that could negatively affect the assets of the Fund, securities held by the Fund or the issuers of such securities. Fund shareholders may incur increased costs resulting from such legislation or additional regulation. There can be no assurance that future legislation, regulation or deregulation will not have a material adverse effect on the Fund or will not impair the ability of the Fund to achieve its investment objective. |
Equity Portfolio Risks |
Common Stock Risk. Common stocks generally represent an ownership interest in an issuer, without preference over any other class of securities, including such issuers debt securities, preferred stock and other senior equity securities. Although common stocks historically have generated higher average returns than fixed-income securities, common stocks also have experienced significantly more volatility in those returns. An adverse event, such as an unfavorable earnings report, may depress the value of a particular common stock held by the Fund. Also, prices of common stocks are sensitive to general movements in the stock market and a drop in the stock market may depress the prices of common stocks held by the Fund or to which it has exposure. |
Dividend Income Risk. A portion of the net investment income paid by the Fund to its Common Shareholders is derived from dividends it receives from the common stocks held in the Funds Equity Portfolio. Dividends paid on securities held by the Fund can vary significantly over the short-term and long-term. Dividends on common stocks are not fixed, but are declared at the discretion of an issuers board of directors. There is no guarantee that the issuers of common stocks in which the Fund invests will declare dividends in the future or that if declared they will remain at current levels or increase over time. |
Investment Process Risk. Because Intech utilizes a proprietary mathematical process, there is a risk that Intech, and thus the Equity Portfolio, will not achieve its targeted results over the Index. Intechs method of identifying common stocks with high volatility relative to the Index and low correlation to one another (moving essentially in opposite directions) may not result in a combination of stocks that will produce the expected results and therefore the Equity Portfolio may not outperform, and may underperform, the Index. In addition, the rebalancing technique employed by Intech is likely to result in a higher portfolio turnover rate and related expenses compared to a buy and hold fund strategy, which |
9
higher expenses will reduce the Funds total return. A higher portfolio turnover rate increases the likelihood of higher net taxable gains or losses compared to a buy and hold strategy for an investor in the Fund. |
Option Strategy Risks |
Call Option Risk. As the writer of a call option, the Fund foregoes, during the options life, the opportunity to profit from increases in the market value of the security underlying the call option above the sum of the premium and the strike price of the option, but will retain the risk of loss should the market value of the security underlying the call option decline. The purchaser of the call option has the right to any appreciation in the value of the underlying security over the exercise price upon the exercise of the call option or the expiration date. As the Fund increases the option overlay percentage, its ability to benefit from capital appreciation becomes more limited and the risk of NAV erosion increases. If the Fund experiences NAV erosion, which itself may have a negative effect on the market price of the Funds shares, the Fund will have a reduced asset base over which to write call options, which may eventually lead to reduced distributions to shareholders. |
In addition, because the exercise of index options is settled in cash, sellers of index call options, such as the Fund, cannot provide in advance for their potential settlement obligations by acquiring and holding the underlying securities. The Fund bears a risk that the value of the securities held by the Fund will vary from the value of the Index and relative to the written index call option positions. Accordingly, the Fund may incur losses on the index call options that it has sold that exceed gains on the Funds equity portfolio. The value of index options written by the Fund, which will be priced daily, will be affected by changes in the value of and dividend rates of the underlying common stocks in the index, changes in the actual or perceived volatility of the stock market and the remaining time to the options expiration. The value of the index options also may be adversely affected if the market for the index options becomes less liquid or smaller. |
Option Strategy Risk. In employing the Option Strategy, Nuveen Asset Management seeks to enhance the Funds risk-adjusted returns through a meaningful reduction in the volatility of the Funds returns relative to the returns of the Index over extended periods of time. This strategy may not protect against market declines, may limit the Funds participation in market gains, particularly during periods when market values are increasing and volatility is high, may increase the Funds portfolio transaction costs, which could result in losses or reduce gains, and may not be successful. |
Tax Risk. The tax treatment and characterization of the Funds distributions may vary significantly from time to time because of the varied nature of the Funds investments. The ultimate tax characterization of the Funds distributions made in a calendar year may not finally be determined until after the end of that calendar year. In addition, there is a possibility that the Fund may make total distributions during a calendar year in an amount that exceeds the Funds net investment income and net realized capital gains for that calendar year. For example, because of the nature of the Funds investments, the Fund may distribute net short-term capital gains early in the calendar year, but incur net short-term capital losses later in the year, thereby offsetting the short-term net capital gains for which |
10
distributions have already been made by the Fund. In such a situation, the amount by which the Funds total distributions exceed net investment income and net realized capital gains would generally be treated as a tax-free return of capital up to the amount of the Common Shareholders tax basis in his Common Shares, with any amounts exceeding such basis treated as gain from the sale of his Common Shares. While a portion of the Funds income distributions may be classified as qualified dividend income, which is generally taxable to individual investors who meet holding period and other requirements at a lower rate, there can be no assurance as to the percentage of the Funds income distributions that will be qualified dividend income. The writing of call options by the Fund may significantly reduce or eliminate its ability to make distributions eligible to be treated as qualified dividend income. Covered call options may also be subject to federal tax rules applicable to straddles under the Internal Revenue Code of 1986, as amended (the Code). If two or more positions constitute a straddle, recognition of a realized loss from one position must generally be deferred to the extent of unrecognized gain in an offsetting position. In addition, long-term capital gain may be recharacterized as short-term capital gain, or short-term capital loss as long-term capital loss. Interest and other carrying charges allocable to personal property that is part of a straddle are not currently deductible but must instead be capitalized. Similarly, wash sale rules apply to defer the recognition of loss by the Fund from the disposition of stock or securities at a loss in a case in which identical or substantially identical stock or securities (or an option to acquire such property) is or has been acquired within a prescribed period. The Fund intends to avoid being subject to the straddle rules under federal income tax law by limiting the overlap between the stocks held in the Equity Portfolio and the stocks underlying the Funds call options to less than 70% (generally based on the value of such components) on an ongoing basis. See RisksTax Risk. |
Illiquid Securities Risk . Illiquid securities are not readily marketable and may include some restricted securities. Illiquid securities involve the risk that the securities will not be able to be sold at the time desired by the Fund or at prices approximating the value at which the Fund is carrying the securities on its books. |
Other Investment Companies Risk . The Fund may, subject to the limitations of the Investment Company Act of 1940, as amended, (the 1940 Act) and exemptive orders issued by the SEC, invest in the securities of other investment companies including open-end and closed-end funds and exchange-traded funds (ETFs). Such securities may be leveraged. As a result, the Fund may be indirectly exposed to leverage through an investment in such securities, which would magnify the Funds leverage risk. The Fund, as a holder of the securities of other investment companies, will bear its pro rata portion of the other investment companies expenses, including advisory fees. These expenses are in addition to the direct expenses of the Funds own operations. An ETF that is based on a specific index, whether stock or otherwise, may not be able to replicate and maintain exactly the composition and relative weighting of securities in the index. An ETF also incurs certain expenses not incurred by its applicable index. The market value of shares of ETFs and closed-end funds may differ from their NAV. |
11
Derivatives Risk, Including the Risk of Swaps . The Funds use of derivatives involves risks different from, and possibly greater than, the risks associated with investing directly in the investments underlying the derivatives. Whether the Funds use of derivatives is successful will depend on, among other things, if Nuveen Fund Advisors and Nuveen Asset Management correctly forecast market values, interest rates and other applicable factors. If Nuveen Fund Advisors and Nuveen Asset Management incorrectly forecast these and other factors, the investment performance of the Fund will be unfavorably affected. In addition, the derivatives market is largely unregulated. It is possible that developments in the derivatives market could adversely affect the Funds ability to successfully use derivative instruments. |
The Fund may enter into various types of derivatives transactions, including futures contracts, forward contracts and swap agreements and other derivative instruments consistent with the Funds investment objective and policies. The use of derivatives is a highly specialized activity that involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. In addition, the use of derivatives requires an understanding by Nuveen Asset Management not only of the referenced asset, rate or index, but also of the derivative contract itself and the markets in which they trade. Successful implementation of most hedging strategies would generate taxable income. The derivatives market is subject to a changing regulatory environment. It is possible that regulatory or other developments in the derivatives market could adversely affect the Funds ability to successfully use derivative instruments. See RisksDerivatives Risk, Including the Risk of Swaps and RisksCounterparty Risk. |
Management Risk . The Fund is subject to management risk because it is an actively managed portfolio. Nuveen Fund Advisors and Nuveen Asset Management will apply investment techniques and risk analyses in making investment decisions for the Fund, but there can be no guarantee that these will produce the desired results. |
Potential Conflicts of Interest Risk . Nuveen Fund Advisors, Intech, and Nuveen Asset Management each provide a wide array of portfolio management and other asset management services to a mix of clients and may engage in ordinary course activities in which their respective interests or those of their clients may compete or conflict with those of the Fund. For example, Nuveen Fund Advisors, Intech, and Nuveen Asset Management may provide investment management services to other funds and accounts that follow investment objectives similar to those of the Fund. In certain circumstances, and subject to its fiduciary obligations under the Investment Advisers Act of 1940, Nuveen Fund Advisors, Intech, or Nuveen Asset Management may have to allocate a limited investment opportunity among its clients, which include closed-end funds, open-end funds and other commingled funds. Nuveen Fund Advisors, Intech, and Nuveen Asset Management have each adopted policies and procedures designed to address such situations and other potential conflicts of interests. For additional information about potential conflicts of interest, and the way in which Nuveen Fund Advisors, Intech, and Nuveen Asset Management address such conflicts, please see the SAI. |
12
Anti-Takeover Provisions . The Funds Declaration of Trust (the Declaration) includes provisions that could limit the ability of other entities or persons to acquire control of the Fund or convert the Fund to open-end status. These provisions could have the effect of depriving the Common Shareholders of opportunities to sell their Common Shares at a premium over the then current market price of the Common Shares. See Certain Provisions in the Declaration of Trust and RisksAnti-Takeover Provisions. |
In addition, an investment in the Funds Common Shares raises other risks, which are more fully disclosed in the Risks section of this Prospectus. |
Voting Rights |
All Common Shares have equal non-cumulative voting rights. |
13
The purpose of the table below and the Examples below are to help you understand all fees and expenses that you, as a Common Shareholder, would bear directly or indirectly. The table shows the expenses of the Fund as a percentage of the average net assets applicable to Common Shares, and not as a percentage of total assets or Managed Assets.
(1) |
Assuming a Common Share offering price of $13.76 (the Funds closing price on the NYSE on October 12, 2018). |
(2) |
You will be charged a $2.50 service charge and pay brokerage charges if you direct Computershare Inc. and Computershare Trust Company, N.A., as agent for the Common Shareholders (the Plan Agent), to sell your Common Shares held in a dividend reinvestment account. |
(3) |
Stated as annualized percentages of average net assets attributable to Common Shares for the six months ended June 30, 2018 (Unaudited). |
(4) |
Other Expenses is based on estimated amounts for the current fiscal year. Expenses attributable to the Funds investments, if any, in other investment companies are currently estimated not to exceed 0.01%. See Portfolio CompositionOther Investment Companies below. |
See Management of the FundInvestment Adviser, Sub-Advisers, and Portfolio Managers.
Examples
The following examples illustrate the expenses, including the applicable transaction fees (referred to as the Maximum Sales Charge in the fee table above), if any, and estimated offering costs of $7.50 that a Common Shareholder would pay on a $1,000 investment that is held for the time periods provided in the table. Each example assumes that all dividends and other distributions are reinvested in the Fund and that the Funds Annual Expenses, as provided above, remain the same. The examples also assume a 5% annual return. (1)
Example # 1 (At-the-Market Transaction)
The following example assumes a transaction fee of 1.00%, as a percentage of the offering price.
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$28 | $50 | $73 | $141 |
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Example # 2 (Underwriting Syndicate Transaction)
The following example assumes a transaction fee of 4.00%, as a percentage of the offering price.
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$58 | $79 | $102 | $167 |
Example # 3 (Privately Negotiated Transaction)
The following example assumes there is no transaction fee.
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$18 | $40 | $64 | $132 |
The examples should not be considered a representation of future expenses. Actual expenses may be greater or less than those shown above.
(1) |
The examples assume that all dividends and distributions are reinvested at Common Share NAV. Actual expenses may be greater or less than those assumed. Moreover, the Funds actual rate of return may be greater or less than the hypothetical 5% return shown in the example. |
15
The following Financial Highlights table is intended to help a prospective investor understand the Funds financial performance for the periods shown. Certain information reflects financial results for a single Common Share of the Fund. The total returns in the table represent the rate an investor would have earned or lost on an investment in Common Shares of the Fund (assuming reinvestment of all dividends). The Funds annual financial statements as of and for the fiscal years ended December 31, 2017 through December 31, 2008, including the financial highlights for the fiscal years then ended, have been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm. PricewaterhouseCoopers LLP has not reviewed or examined any records, transactions or events after the date of such reports. The information with respect to the six months ended June 30, 2018 is unaudited and is included in the Funds 2018 Semi-Annual Report which is incorporated herein by reference. A copy of the Annual Report and Semi-Annual Report may be obtained from www.sec.gov or by visiting www.nuveen.com. The information contained in, or that can be accessed through, the Funds website is not part of this Prospectus. Past results are not indicative of future performance.
The following per share data and ratios have been derived from information provided in the financial statements.
Selected data for a share outstanding throughout each period:
Period Ended
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PER SHARE OPERATING PERFORMANCE |
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Beginning Common Share Net Asset Value (NAV) |
$ | 14.76 | $ | 14.27 | $ | 14.93 | $ | 17.49 | $ | 17.91 | $ | 14.76 | $ | 13.88 | $ | 14.05 | $ | 13.18 | $ | 11.74 | $ | 18.72 | ||||||||||||||||||||||
Investment Operations: |
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Net Investment Income (Loss)(a) |
0.03 | 0.18 | 0.13 | 0.09 | 0.16 | 0.13 | 0.17 | 0.10 | 0.10 | 0.14 | 0.16 | |||||||||||||||||||||||||||||||||
Net Realized/ Unrealized Gain (Loss) |
0.40 | 2.84 | 0.35 | 0.10 | 1.93 | 4.47 | 1.79 | 0.81 | 1.87 | 2.38 | (5.65 | ) | ||||||||||||||||||||||||||||||||
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Total |
0.43 | 3.02 | 0.48 | 0.19 | 2.09 | 4.60 | 1.96 | 0.91 | 1.97 | 2.52 | (5.49 | ) | ||||||||||||||||||||||||||||||||
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Less Distributions: |
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From Net Investment Income |
(0.56 | )** | (0.17 | ) | (0.13 | ) | (0.10 | ) | (0.16 | ) | (0.13 | ) | (1.08 | ) | (1.08 | ) | (0.92 | ) | (0.15 | ) | (0.16 | ) | ||||||||||||||||||||||
From Accumulated Net Realized Gains |
| (2.36 | ) | (0.44 | ) | (2.65 | ) | (2.35 | ) | (1.32 | ) | | | | | | ||||||||||||||||||||||||||||
Return of Capital |
| | (0.57 | ) | | | | | | (0.18 | ) | (0.95 | ) | (1.34 | ) | |||||||||||||||||||||||||||||
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Total |
(0.56 | ) | (2.53 | ) | (1.14 | ) | (2.75 | ) | (2.51 | ) | (1.45 | ) | (1.08 | ) | (1.08 | ) | (1.10 | ) | (1.10 | ) | (1.50 | ) | ||||||||||||||||||||||
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Discount from Shares Repurchased and Retired |
| | | | | | | | * | | * | 0.02 | 0.01 | |||||||||||||||||||||||||||||||
Offering Costs |
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Ending NAV |
$ | 14.63 | $ | 14.76 | $ | 14.27 | $ | 14.93 | $ | 17.49 | $ | 17.91 | $ | 14.76 | $ | 13.88 | $ | 14.05 | $ | 13.18 | $ | 11.74 | ||||||||||||||||||||||
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Ending Share Price |
$ | 14.63 | $ | 14.60 | $ | 13.08 | $ | 14.27 | $ | 17.47 | $ | 16.98 | $ | 13.35 | $ | 12.47 | $ | 13.12 | $ | 12.21 | $ | 9.61 | ||||||||||||||||||||||
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Total Returns: |
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Based on NAV(b) |
2.95 | % | 21.72 | % | 3.25 | % | 1.64 | % | 12.08 | % | 31.97 | % | 14.28 | % | 6.70 | % | 15.82 | % | 23.16 | % | (30.84 | )% | ||||||||||||||||||||||
Based on Share Price(b) |
4.07 | % | 31.85 | % | (0.41 | )% | (1.70 | )% | 18.31 | % | 39.08 | % | 15.81 | % | 3.11 | % | 17.25 | % | 41.27 | % | (34.06 | )% |
16
Period Ended
June 30 |
Year Ended December 31,
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RATIOS/SUPPLEMENTAL DATA |
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Ending Net Assets (000) |
$ | 234,396 | $ | 236,475 | $ | 228,600 | $ | 239,280 | $ | 280,261 | $ | 286,972 | $ | 236,438 | $ | 222,461 | $ | 225,187 | $ | 211,367 | $ | 191,180 | ||||||||||||||||||||||
Ratios to Average Net Assets |
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Expenses |
1.03 | %*** | 1.02 | % | 1.03 | % | 1.03 | % | 1.03 | % | 1.04 | % | 1.05 | % | 1.05 | % | 1.11 | % | 1.15 | % | 1.11 | % | ||||||||||||||||||||||
Net Investment Income (Loss) |
0.37 | %*** | 1.18 | % | 0.87 | % | 0.54 | % | 0.87 | % | 0.77 | % | 1.14 | % | 0.69 | % | 0.73 | % | 1.20 | % | 1.04 | % | ||||||||||||||||||||||
Portfolio Turnover
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72 | % | 159 | % | 110 | % | 93 | % | 111 | % | 65 | % | 77 | % | 67 | % | 131 | % | 112 | % | 51 | % |
(a) |
Per share Net Investment Income (Loss) is calculated using the average daily shares method. |
(b) |
Total Return Based on NAV is the combination of changes in NAV, reinvested dividend income at NAV and reinvested capital gains distributions at NAV, if any. The last dividend declared in the period, which is typically paid on the first business day of the following month, is assumed to be reinvested at the ending NAV. The actual reinvest price for the last dividend declared in the period may often be based on the Funds market price (and not its NAV), and therefore may be different from the price used in the calculation. Total returns are not annualized. |
Total Return Based on Share Price is the combination of changes in the market price per share and the effect of reinvested dividend income and reinvested capital gains distributions, if any, at the average price paid per share at the time of reinvestment. The last dividend declared in the period, which is typically paid on the first business day of the following month, is assumed to be reinvested at the ending market price. The actual reinvestment for the last dividend declared in the period may take place over several days, and in some instances may not be based on the market price, so the actual reinvestment price may be different from the price used in the calculation. Total returns are not annualized. |
(c) |
Portfolio Turnover Rate is calculated based on the lesser of long-term purchases or sales divided by the average long-term market value during the period. |
(d) |
For the six months ended June 30, 2018 (Unaudited). |
* |
Rounds to less than $.01 per share. |
** |
Represents distributions paid From and in excess of net investment income for the six months ended June 30, 2018. |
*** |
Annualized. |
17
TRADING AND NET ASSET VALUE INFORMATION
The following table shows for the periods indicated: (i) the high and low sales prices for the Common Shares reported as of the end of the day on the NYSE, (ii) the high and low net asset values of the Common Shares, and (iii) the high and low of the premium/(discount) to NAV (expressed as a percentage) of the Common Shares.
Market Price
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Fiscal Quarter Ended |
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September 2018 |
$ | 16.47 | $ | 14.40 | $ | 15.53 | $ | 14.56 | 8.07% | (2.61)% | ||||||||||||||
June 2018 |
$ | 15.44 | $ | 14.39 | $ | 15.55 | $ | 14.39 | 1.59% | (1.93)% | ||||||||||||||
March 2018 |
$ | 15.58 | $ | 14.17 | $ | 15.85 | $ | 14.30 | (0.14)% | (3.20)% | ||||||||||||||
December 2017 |
$ | 16.14 | $ | 14.39 | $ | 16.57 | $ | 14.74 | (0.93)% | (4.62)% | ||||||||||||||
September 2017 |
$ | 15.61 | $ | 14.74 | $ | 16.11 | $ | 15.33 | (0.64)% | (4.64)% | ||||||||||||||
June 2017 |
$ | 14.99 | $ | 13.78 | $ | 15.79 | $ | 14.69 | (4.37)% | (7.51)% | ||||||||||||||
March 2017 |
$ | 14.22 | $ | 13.18 | $ | 15.36 | $ | 14.34 | (6.57)% | (8.52)% | ||||||||||||||
December 2016 |
$ | 13.67 | $ | 12.70 | $ | 14.59 | $ | 14.00 | (5.84)% | (9.50)% | ||||||||||||||
September 2016 |
$ | 14.68 | $ | 13.44 | $ | 15.01 | $ | 14.16 | (1.28)% | (7.05)% | ||||||||||||||
June 2016 |
$ | 13.98 | $ | 13.22 | $ | 14.76 | $ | 14.04 | (4.87)% | (8.13)% | ||||||||||||||
March 2016 |
$ | 14.02 | $ | 12.09 | $ | 14.75 | $ | 13.31 | (4.03)% | (9.51)% |
The NAV per share, the market price and percentage of premium/(discount) to NAV per Common Share on October 12, 2018 was $14.27, $13.76 and (3.57)%, respectively. As of September 30, 2018, the Fund had 16,021,686 Common Shares outstanding and net assets applicable to Common Shares of $244,174,462. See Repurchase of Fund Shares; Conversion to Open-End Fund.
18
The Fund is a diversified, closed-end management investment company registered under the 1940 Act. The Fund was organized as a Massachusetts business trust on January 9, 2007, pursuant to the Declaration, which is governed by the laws of The Commonwealth of Massachusetts. The Funds Common Shares are listed on the NYSE under the symbol JCE.
The Funds principal office is located at 333 West Wacker Drive, Chicago, Illinois 60606, and its telephone number is (800) 257-8787.
The following provides information about the Funds outstanding Common Shares as of September 30, 2018:
Title of Class |
Amount
Authorized |
Amount Held
by the Fund or for its Account |
Amount
Outstanding |
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Common |
unlimited | [ | ] | 16,021,686 |
5% Shareholders
The following table sets forth the percentage ownership of each person who, as of September 30, 2018, owned of record, or was known by the Fund to own of record or beneficially, 5% or more of any class of the Funds equity securities: *
Name of Equity Security |
Name and Address of Owner |
% of Beneficial Ownership |
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Common Shares |
Advisors Asset Management, Inc. 18952 Base Camp Road Monument, Colorado 80132 |
6.66 | % | |||
First Trust Portfolios L.P. 120 East Liberty Drive, Suite 400 Wheaton, Illinois 60187
First Trust Advisors L.P. 120 East Liberty Drive, Suite 400 Wheaton, Illinois 60187
The Charger Corporation 120 East Liberty Drive, Suite 400 Wheaton, Illinois 60187 |
19.03 | % |
* |
The information contained in this table is based on Schedule 13G filings made January 12, 2018 and February 2, 2018, respectively. |
The net proceeds from the issuance of Common Shares hereunder will be invested in accordance with the Funds investment objective and policies as stated below. Pending investment, the timing of which may vary depending on the size of the investment but in no case is expected to exceed 30 days, it is anticipated that the proceeds will be invested in short-term or long-term securities issued by the U.S. Government or its agencies or instrumentalities or in high-quality, short-term money market instruments.
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Investment Strategies and Rationale
The Fund invests in a portfolio of common stocks included in the S&P 500 ® Index (the Index) by employing a proprietary mathematical process designed by Intech that seeks to provide, over time, risk-adjusted excess returns above the Index (alpha) with an equal or lesser amount of relative investment risk. In constructing the Funds Equity Portfolio, Intech employs its U.S. Large Cap Core strategy, which it has used in client portfolios since July 2001.
In addition, to seek to enhance the Funds risk-adjusted returns through a meaningful reduction in the volatility of the Funds returns relative to the returns of the Index (beta) over extended periods of time, the Fund employs the Option Strategy by writing (selling) call options. Nuveen Asset Management is responsible for managing the Funds Option Strategy.
Investment Objective and Policies
The Funds investment objective is to provide an attractive level of total return. The Fund seeks to achieve its investment objective primarily through long-term capital appreciation and secondarily through income and gains.
Equity Portfolio Strategy
The Fund invests in a portfolio of common stocks from among the stocks comprising the Index as selected by Intech. Intech constructs and manages the Equity Portfolio employing its proprietary mathematical process that seeks to produce risk-adjusted excess returns over the Index over extended periods of time with an equal or lesser amount of risk. The proprietary mathematical process is designed to construct and manage a portfolio of common stocks from among the stocks comprising the Index, and seeks to generate risk-adjusted excess returns over time with a comparable or lesser level of investment risk as the Index over time. Under normal market circumstances, the Fund generally expects to invest approximately 95% of its Managed Assets in the Equity Portfolio. Under normal market circumstances, the Fund will invest at least 80% of its Assets in the Equity Portfolio.
In constructing the Equity Portfolio, Intech employs its U.S. Large Cap Core strategy. Intechs mathematical process seeks to capitalize on the natural volatility of the market by searching for common stocks that have high relative volatility (providing the potential for risk-adjusted excess returns) but that essentially move in opposite directions or have low correlation to each other (providing the potential for lower relative risk). By constructing the Equity Portfolio in this manner and through periodic rebalancing of the portfolio, Intechs mathematical process seeks to create an Equity Portfolio with potentially more efficient weightings than are typically present in the market capitalization weighted Index, thereby producing the opportunity for returns in excess of the Index, with an equal or lesser amount of relative risk, over time. Intechs process is based on mathematical principles and Intech does not engage in fundamental research. Under normal market circumstances, the Equity Portfolio will consist of a diversified portfolio of approximately 150 to 450 common stocks included in the Index. There can be no assurance that the Equity Portfolio will attain returns in excess of the Index.
Option Strategy
Nuveen Asset Management is responsible for managing the Funds Option Strategy. To seek to enhance the Funds risk-adjusted returns through a meaningful reduction in the volatility of the Funds returns relative to the returns of the Index over extended periods of time, the Fund writes (sells) index call options and call options on customs baskets of securities. Under normal market circumstances, the notional value of the call options written by the Fund may be up to 50% of the Funds Managed Assets.
In applying the Option Strategy, Nuveen Asset Management is responsible for determining the notional value, timing, type and terms of the options strategies used by the Fund. Nuveen Asset Management actively
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manages the Funds options positions. In Nuveen Asset Managements discretion, the Fund may purchase back call options or allow them to expire. To determine the options strategies used, Nuveen Asset Management considers market factors, such as current market levels and volatility, and option-specific factors, including but not limited to premium/cost, exercise price and expiration. Nuveen Asset Management typically seeks to invest in call options that, based on the current market conditions and market expectations, provide an opportunity to deliver enhanced risk-adjusted returns. This will often lead to a portfolio that has exposure to multiple strike prices and expiration dates in any investment period.
Due to U.S. federal income tax considerations, the Fund intends to limit the overlap between the stocks held in the Equity Portfolio and the stocks underlying the Funds call options to less than 70% (generally based on the value of such components) on an ongoing basis.
The Funds policy of investing at least 80% of its Assets in the Equity Portfolio under normal market circumstances is not considered to be fundamental by the Fund and can be changed without a vote of the Common Shareholders. However, this policy may only be changed by the Funds Board following the provision of 60 days prior written notice to Common Shareholders.
The Fund cannot change its investment objective without the approval of the holders of a majority of the outstanding Common Shares and, if applicable, preferred shares voting together as a single class, and of the holders of a majority of the outstanding preferred shares voting as a separate class. When used with respect to particular shares of the Fund, a majority of the outstanding shares means (i) 67% or more of the shares present at a meeting, if the holders of more than 50% of the shares are present or represented by proxy or (ii) more than 50% of the shares, whichever is less. See Description of SharesPreferred SharesVoting Rights and the SAI under Description of SharesPreferred SharesVoting Rights for additional information with respect to the voting rights of holders of preferred shares. See also Management of the Fund.
Overall Fund Management
Nuveen Fund Advisors is the Funds investment adviser, managing the Funds overall strategy and operations and overseeing Nuveen Asset Managements and Intechs implementation of their investment processes on behalf of the Fund. This oversight includes ongoing evaluation of Nuveen Asset Managements and Intechs investment performance, quality of investment process and personnel, compliance with Fund regulatory guidelines, trade allocation and execution and other factors.
Intechs Investment Philosophy and Process
Intechs active, mathematical portfolio strategies are based upon research conducted by Intechs founder, Dr. Robert Fernholz, and first published in his 1982 paper, Stochastic Portfolio Theory and Stock Market Equilibrium. These proprietary strategies attempt to capitalize on the random nature of stock price movement in the market regardless of the valuations of specific stocks and trends in the overall equity markets.
Intech systematically evaluates the relative volatility of stocks within a universe defined by a reference index (in this case, the Index). The process, which Intech refers to as volatility capture, selects target weights for stocks based on volatility and correlation characteristics attempting to combine stocks in a manner that will produce long term returns in excess of the benchmark index with a level of risk that is less than or equal to the benchmark. The general criterion of the mathematical model is to select the combination of stocks with high volatility relative to the index and low correlation to each other in an effort to produce both risk-adjusted excess returns and style consistency. The process determines the weightings for equity securities held in the portfolio, and by utilizing a specific mathematical investment process, regularly updates the target weights and rebalances the portfolio in order to attempt to create an Equity Portfolio with potentially more efficient weightings than are typically present in the market capitalization weighted Index.
The goal of the investment process is to construct potentially more efficient portfolios in an effort to improve risk-adjusted returns. All of the research performed by Intech is mathematical in nature as opposed to
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fundamental or quantitative. Intech does not manage portfolios based on value or growth premises, by exploiting inefficiencies in the market or by attempting to predict trends or potential stock appreciation. In managing the Equity Portfolio, Intech employs its U.S. Large Cap Core strategy which it has employed in client portfolios since July 31, 2001.
Intech believes that mathematical, risk-controlled stock selection and portfolio management processes based on an analysis of relative stock price volatility and correlation can add value because the process:
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is precise, leading to quantifiable and manageable relative risk; |
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is designed to achieve a potentially more efficient portfolio than the Index; |
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utilizes state of the art technology and techniques; |
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results in a diversified, fully invested portfolio that attempts to limit individual company risk; |
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benefits from one of the longest continuous track records among mathematically-based investment managers; |
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utilizes an efficient stock-trading platform that is focused on reducing costs; and |
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two Ph.D.s continually refine and enhance the process. |
Portfolio Construction
The U.S. Large Cap Core strategy investment process begins with designating the investments universe, which for the Funds investments include all common stocks in the Index. Intech then runs a bankruptcy and liquidity screen, which is expected to exclude approximately 2% or less of the market capitalization of the common stocks within the Index. The next step of portfolio construction involves quantification and analysis of the historical relative volatility and correlation data for the remaining pool of stocks. Portfolio construction also includes incorporating target risk-adjusted excess returns and risk control constraints with respect to diversification and exposure limits for each stock. The next step in portfolio construction is the optimization process, which identifies target weights for stocks designed to produce a targeted risk-adjusted excess return with a minimum amount of tracking error.
Portfolio Rebalancing
Once the initial target weights are determined and the portfolio is constructed and invested Intech begins its rigorous ongoing management process. The portfolio is re-optimized periodically and the stocks are rebalanced to new target weights. The resulting portfolio is estimated to contain between 150 and 450 stocks. The turnover in the portfolio (measured in terms of total dollar volume of stock trading) is estimated to range between 50% and 105% per year.
Risk Control Measures
Intech analyzes risk using a variety of internal measures. Intech measures risk using tracking error and information ratio. Tracking error is measured as the standard deviation (a statistical measure of the extent to which returns of a portfolio vary from its average) of the risk-adjusted excess returns of a portfolio relative to the Index. The information ratio is the ratio of relative return to relative risk (tracking error) that measures the consistency with which a manager outperforms a benchmark on a risk-adjusted basis. Intechs investment process is built to attempt to generate high information ratio portfolios. Intech attempts to achieve a targeted level of risk-adjusted excess return while controlling tracking error. The optimization process attempts to manage the level of risk by minimizing tracking error of the portfolio within a risk-adjusted excess return target given certain parameters. The market risk of the Equity Portfolio is also constrained to be less than or equal to the market risk of the Index. All of these constraints attempt to control the relative risk of the strategy to the Index.
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Nuveen Asset Managements Investment Philosophy and Process
Nuveen Asset Management employs an option strategy consisting of writing (selling) index call options and call options on custom baskets of securities. The Funds overwrite level is determined based on the portfolio managers assessment of market conditions.
Nuveen Asset Management actively manages its option positions, purchasing back the call options and/or selling additional contracts based on relative value and risk/return analysis. To determine which options to utilize, Nuveen Asset Management considers market factors, such as current market levels and volatility, and option-specific factors (including but not limited to premium/cost, exercise price and expiration). Nuveen Asset Management typically seeks to invest in call options that, based on current market conditions and market expectations, provide an opportunity to deliver enhanced risk-adjusted returns. This will often lead to a portfolio that has exposure to multiple strike prices and expiration dates in any investment period.
Portfolio Composition and Other Information
The Funds portfolio will be composed principally of the following investments. More detailed information about certain of the Funds portfolio investments is contained in the SAI.
Common Stocks
Common stock generally represents an equity ownership interest in an issuer. Although common stocks have historically generated higher average total returns than fixed-income securities over the long term, common stocks also have experienced significantly more volatility in those returns and may under-perform relative to fixed-income securities during certain periods. An adverse event, such as an unfavorable earnings report, may depress the value of a particular common stock held by the Fund. Also, prices of common stocks are sensitive to general movements in the stock market and a drop in the stock market may depress the price of common stocks to which the Fund has exposure. Common stock prices fluctuate for several reasons including changes in investors perceptions of the financial condition of an issuer or the general condition of the relevant stock market, or the occurrence of political or economic events which effect the issuers. In addition, common stock prices may be particularly sensitive to rising interest rates, which increases borrowing costs and the costs of capital.
Call Options
The Fund implements the Option Strategy by writing (selling) index call options and call options on custom baskets of securities.
The Fund writes index call options on broad-based indices and may, if Nuveen Asset Management deems conditions appropriate, write call options on a variety of other equity market indices. As the seller of an index call option, the Fund receives a premium from the purchaser. The purchaser of the index call option has the right to any appreciation in the value of the index over the exercise price upon the exercise of the call option or the expiration date. If, at expiration, the purchaser exercises the index option sold by the Fund, the Fund will pay the purchaser the difference between the cash value of the index and the exercise price of the index option. The premium, the exercise price and the market value of the index determine the gain or loss realized by the Fund as the seller of the index call option.
A custom basket call option is an over-the-counter (OTC) option whose value is linked to the market value of the portfolio of securities underlying the call option. The contract settlement for custom basket call options generally will be European style, meaning that the options only may be exercised on their expiration date. The premium, the exercise price and the market value of the basket or security underlying the option at expiration or contract termination determine the gain or loss realized by the Fund as the seller of the call option.
As the seller of a call option, the Fund creates the potential for a liability to the extent the asset(s) underlying the option appreciates to a level above the strike price.
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Temporary Defensive Position; Hedging
During temporary defensive periods, the Fund may deviate from its investment objective and invest all or a portion of its assets in investment grade debt securities, including obligations issued or guaranteed by the U.S. government, its agencies and instrumentalities.
In addition, upon Nuveen Fund Advisors and Nuveen Asset Managements recommendation that a change would be in the best interests of the Fund and its shareholders, and subject to the approval by the Funds Board and shareholder notification of material changes, Nuveen Fund Advisors and Nuveen Asset Management may deviate from the Funds investment guidelines discussed herein by implementing a hedging strategy using derivatives and other instruments, including options, futures contracts, index futures and total return swaps. See the SAI for more information.
Other Investments
In order to keep the Funds cash fully invested or for hedging purposes, the Fund may invest in other securities as described below:
Exchange-traded funds . The Fund may invest in ETFs, which are investment companies that aim to track or replicate a desired index, such as a sector, market or global segment. ETFs are passively managed and their shares are traded on a national exchange or The Nasdaq Stock Market, LLC (Nasdaq). ETFs do not sell individual shares directly to investors and only issue their shares in large blocks known as creation units. The investor purchasing a creation unit may sell the individual shares on a secondary market. Therefore, the liquidity of ETFs depends on the adequacy of the secondary market. There can be no assurance that an ETFs investment objective will be achieved, as ETFs based on an index may not replicate and maintain exactly the composition and relative weightings of securities in the index. ETFs are subject to the risks of investing in the underlying securities. The Fund, as a holder of the securities of the ETF, will bear its pro rata portion of the ETFs expenses, including advisory fees. These expenses are in addition to the direct expenses of the Funds own operations. See also Other investment companies.
Stock futures and forward contracts. Stock futures contracts are agreements in which one party agrees to deliver to the other an amount of cash equal to a specific dollar amount times the difference between the value of a specific security or index at the close of the last trading day of the contract and the price at which the agreement is made. No physical delivery of securities is made. Forward contracts are agreements to purchase or sell a specified security at a specified future date (or within a specified time period) and price set at the time of the contract. Forward contracts are usually entered into with banks, foreign exchange dealers or broker-dealers and are usually for less than one year, but may be renewed. Forward contracts are generally purchased or sold in OTC transactions.
Total return swaps. The Fund may invest in total return swaps for hedging purposes. The Fund will enter into swap agreements only with counterparts that meet certain standards of creditworthiness. In a total return swap, the Fund exchanges with another party their respective commitments to pay or receive the total return of an underlying asset and the floating LIBOR (London Interbank Offered Rate) rate. The Fund usually will enter into total return swaps on a net basis ( i.e., the two payment streams are netted out with the Fund receiving or paying, as the case may be, only the net amount of the two payments). The net amount of the excess, if any, of the Funds obligations over its entitlements with respect to each interest rate swap will be accrued on a daily basis, and an amount of cash or liquid securities having an aggregate NAV at least equal to the accrued excess will be segregated by the Fund. The Fund has no current intention to invest in total return swaps.
Repurchase agreements. The Fund may enter into repurchase agreements (the purchase of a security coupled with an agreement to resell that security at a higher price) with respect to its permitted investments. The Funds repurchase agreements will provide that the value of the collateral underlying the repurchase agreement will always be at least equal to the repurchase price, including any accrued interest earned on the agreement, and will be marked-to-market daily.
Derivatives . The Fund may invest in certain derivative instruments in pursuit of its investment objective. Such instruments include futures contracts, forward contracts and swap agreements and other derivative
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instruments consistent with the Funds investment objective and policies. Credit default swaps may require initial premium (discount) payments as well as periodic payments (receipts) related to the interest leg of the swap or to the default of a reference obligation. If the Fund is a seller of a contract, the Fund would be required to pay the par (or other agreed upon) value of a referenced debt obligation to the counterparty in the event of a default or other credit event by the reference issuer, such as a U.S. or foreign corporate issuer, with respect to such debt obligations. In return, the Fund would receive from the counterparty a periodic stream of payments over the term of the contract provided that no event of default has occurred. If no default occurs, the Fund would keep the stream of payments and would have no payment obligations. As the seller, the Fund would be subject to investment exposure on the notional amount of the swap. If the Fund is a buyer of a contract, the Fund would have the right to deliver a referenced debt obligation and receive the par (or other agreed-upon) value of such debt obligation from the counterparty in the event of a default or other credit event (such as a credit downgrade) by the reference issuer, such as a U.S. or foreign corporation, with respect to its debt obligations. In return, the Fund would pay the counterparty a periodic stream of payments over the term of the contract provided that no event of default has occurred. If no default occurs, the counterparty would keep the stream of payments and would have no further obligations to the Fund. Interest rate swaps involve the exchange by the Fund with a counterparty of their respective commitments to pay or receive interest, such as an exchange of fixed-rate payments for floating rate payments. The Fund will usually enter into interest rate swaps on a net basis; that is, the two payment streams will be netted out in a cash settlement on the payment date or dates specified in the instrument, with the Fund receiving or paying, as the case may be, only the net amount of the two payments.
See Hedging Strategies and Other Uses of Derivatives and Segregation of Assets in the SAI.
The requirements for qualification as a regulated investment company (RIC) under Subchapter M of the Code also may limit the extent to which the Fund may employ futures, options on futures or swaps.
There is no assurance that these derivative strategies will be available at any time or that Nuveen Fund Advisors and Nuveen Asset Management will determine to use them for the Fund or, if used, that the strategies will be successful.
Swap Transactions . The Fund may enter into total return, interest rate and credit default swap agreements and interest rate caps, floors and collars. The Fund may also enter into options on the foregoing types of swap agreements (swap options).
The Fund may enter into swap transactions for any purpose consistent with its investment objective and strategies, such as for the purpose of attempting to obtain or preserve a particular return or spread at a lower cost than obtaining a return or spread through purchases and/or sales of instruments in other markets, as a duration management technique, to reduce risk arising from the ownership of a particular instrument, or to gain exposure to certain sectors or markets in the most economical way possible.
Swap agreements are two party contracts entered into primarily by institutional investors for a specified period of time. In a standard swap transaction, two parties agree to exchange the returns (or differentials in rates of return) earned or realized on a particular predetermined asset, reference rate or index. The gross returns to be exchanged or swapped between the parties are generally calculated with respect to a notional amount, e.g., the return on or increase in value of a particular dollar amount invested at a particular interest rate or in a basket of securities representing a particular index. The notional amount of the swap agreement generally is only used as a basis upon which to calculate the obligations that the parties to the swap agreement have agreed to exchange. See Segregation of Assets below.
Interest Rate Swaps, Caps, Collars and Floors . Interest rate swaps are bilateral contracts in which each party agrees to make periodic payments to the other party based on different referenced interest rates ( e.g., a fixed rate and a floating rate) applied to a specified notional amount. The purchase of an interest rate floor entitles the purchaser, to the extent that a specified index falls below a predetermined interest rate, to receive payments of interest on a notional principal amount from the party selling such interest rate floor. The purchase
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of an interest rate cap entitles the purchaser, to the extent that a specified index rises above a predetermined interest rate, to receive payments of interest on a notional principal amount from the party selling such interest rate cap. Interest rate collars involve selling a cap and purchasing a floor or vice versa to protect the Fund against interest rate movements exceeding given minimum or maximum levels.
The use of interest rate transactions, such as interest rate swaps and caps, is a highly specialized activity that involves investment techniques and risks different from those associated with ordinary portfolio security transactions. Depending on the state of interest rates in general, the Funds use of interest rate swaps or caps could enhance or harm the overall performance of the Funds Common Shares. To the extent there is a decline in interest rates, the value of the interest rate swap or cap could decline, and could result in a decline in the NAV of the Common Shares. In addition, if short-term interest rates are lower than the Funds fixed rate of payment on the interest rate swap, the swap will reduce common share net earnings. If, on the other hand, short-term interest rates are higher than the fixed rate of payment on the interest rate swap, the swap will enhance Common Share net earnings. Buying interest rate caps could enhance the performance of the Common Shares by providing a maximum leverage expense. Buying interest rate caps could also decrease the net earnings of the common shares in the event that the premium paid by the Fund to the counterparty exceeds the additional amount such Fund would have been required to pay had it not entered into the cap agreement.
Total Return Swaps . In a total return swap, one party agrees to pay the other the total return of a defined underlying asset during a specified period, in return for periodic payments based on a fixed or variable interest rate or the total return from other underlying assets. A total return swap may be applied to any underlying asset but is most commonly used with equity indices, single stocks, bonds and defined baskets of loans and mortgages. The Fund might enter into a total return swap involving an underlying index or basket of securities to create exposure to a potentially widely diversified range of securities in a single trade. An index total return swap can be used by the portfolio managers to assume risk, without the complications of buying the component securities from what may not always be the most liquid of markets. In connection with the Funds position in a swap contract, the Fund will segregate liquid assets or will otherwise cover its position in accordance with applicable SEC requirements. See Segregation of Assets below.
Credit Default Swaps . A credit default swap is a bilateral contract that enables an investor to buy or sell protection against a defined-issuer credit event. The Fund may enter into credit default swap agreements either as a buyer or a seller. The Fund may buy protection to attempt to mitigate the risk of default or credit quality deterioration in an individual security or a segment of the fixed income securities market to which it has exposure, or to take a short position in individual bonds or market segments which it does not own. The Fund may sell protection in an attempt to gain exposure to the credit quality characteristics of particular bonds or market segments without investing directly in those bonds or market segments. As the buyer of protection in a credit default swap, the Fund would pay a premium (by means of an upfront payment or a periodic stream of payments over the term of the agreement) in return for the right to deliver a referenced bond or group of bonds to the protection seller and receive the full notional or par value (or other agreed upon value) upon a default (or similar event) by the issuer(s) of the underlying referenced obligation(s). If no default occurs, the protection seller would keep the stream of payments and would have no further obligation to the Fund. Thus, the cost to the Fund would be the premium paid with respect to the agreement. If a credit event occurs, however, the Fund may elect to receive the full notional value of the swap in exchange for an equal face amount of deliverable obligations of the reference entity that may have little or no value. The Fund bears the risk that the protection seller may fail to satisfy its payment obligations.
If the Fund is a seller of protection in a credit default swap and no credit event occurs, the Fund would generally receive an up-front payment or a periodic stream of payments over the term of the swap. If a credit event occurs, however, generally the Fund would have to pay the buyer the full notional value of the swap in exchange for an equal face amount of deliverable obligations of the reference entity that may have little or no value. As the protection seller, the Fund effectively adds economic leverage to its portfolio because, in addition to being subject to investment exposure on its total net assets, the Fund is subject to investment exposure on the
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notional amount of the swap. Thus, the Fund bears the same risk as it would by buying the reference obligations directly, plus the additional risks related to obtaining investment exposure through a derivative instrument discussed below under Risks Associated with Swap Transactions.
Swap Options . A swap option is a contract that gives a counterparty the right (but not the obligation), in return for payment of a premium, to enter into a new swap agreement or to shorten, extend, cancel, or otherwise modify an existing swap agreement at some designated future time on specified terms. A cash-settled option on a swap gives the purchaser the right, in return for the premium paid, to receive an amount of cash equal to the value of the underlying swap as of the exercise date. The Fund may write (sell) and purchase put and call swap options. Depending on the terms of the particular option agreement, the Fund generally would incur a greater degree of risk when it writes a swap option than when it purchases a swap option. When the Fund purchases a swap option, it risks losing only the amount of the premium it has paid should it decide to let the option expire unexercised. However, when the Fund writes a swap option, upon exercise of the option the Fund would become obligated according to the terms of the underlying agreement.
Risks Associated with Swap Transactions . The use of swap transactions is a highly specialized activity which involves strategies and risks different from those associated with ordinary portfolio security transactions. If Nuveen Fund Advisors and/or Nuveen Asset Management is incorrect in its forecasts of default risks, market spreads or other applicable factors or events, the investment performance of the Fund would diminish compared with what it would have been if these techniques were not used. As the protection seller in a credit default swap, the Fund effectively adds economic leverage to its portfolio because, in addition to being subject to investment exposure on its total net assets, the Fund is subject to investment exposure on the notional amount of the swap. The Fund generally may only close out a swap, cap, floor, collar or other two-party contract with its particular counterparty, and generally may only transfer a position with the consent of that counterparty. In addition, the price at which the Fund may close out such a two party contract may not correlate with the price change in the underlying reference asset. If the counterparty defaults, the Fund will have contractual remedies, but there can be no assurance that the counterparty will be able to meet its contractual obligations or that the Fund will succeed in enforcing its rights. It also is possible that developments in the derivatives market, including potential government regulation, could adversely affect the Funds ability to terminate existing swap or other agreements or to realize amounts to be received under such agreements.
Futures and Options on Futures Generally . A futures contract is an agreement between two parties to buy and sell a security, index or interest rate (each a financial instrument) for a set price on a future date. Certain futures contracts, such as futures contracts relating to individual securities, call for making or taking delivery of the underlying financial instrument. However, these contracts generally are closed out before delivery by entering into an offsetting purchase or sale of a matching futures contract (same exchange, underlying financial instrument, and delivery month). Other futures contracts, such as futures contracts on interest rates and indices, do not call for making or taking delivery of the underlying financial instrument, but rather are agreements pursuant to which two parties agree to take or make delivery of an amount of cash equal to the difference between the value of the financial instrument at the close of the last trading day of the contract and the price at which the contract was originally written. These contracts also may be settled by entering into an offsetting futures contract. Unlike when the Fund purchases or sells a security, no price is paid or received by the Fund upon the purchase or sale of a futures contract. Initially, the Fund will be required to deposit with the futures broker, known as a FCM, an amount of cash or securities equal to a varying specified percentage of the contract amount. This amount is known as initial margin. The margin deposit is intended to ensure completion of the contract. Minimum initial margin requirements are established by the futures exchanges and may be revised. In addition, FCMs may establish margin deposit requirements that are higher than the exchange minimums. Cash held in the margin account generally is not income producing. However, coupon bearing securities, such as Treasury securities, held in margin accounts generally will earn income. Subsequent payments to and from the FCM, called variation margin, will be made on a daily basis as the price of the underlying financial instrument fluctuates, making the futures contract more or less valuable, a process known as marking the contract to market. Changes in variation margin are recorded by the Fund as unrealized gains or losses. At any time prior to
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expiration of the futures contract, the Fund may elect to close the position by taking an opposite position that will operate to terminate its position in the futures contract. A final determination of variation margin is then made, additional cash is required to be paid by or released to the Fund, and the Fund realizes a gain or loss. In the event of the bankruptcy or insolvency of an FCM that holds margin on behalf of the Fund, the Fund may be entitled to the return of margin owed to it only in proportion to the amount received by the FCMs other customers, potentially resulting in losses to the Fund. Futures transactions also involve brokerage costs and the Fund may have to segregate additional liquid assets in accordance with applicable SEC requirements. See Segregation of Assets below.
A futures option gives the purchaser of such option the right, in return for the premium paid, to assume a long position (call) or short position (put) in a futures contract at a specified exercise price at any time during the period of the option. Upon exercise of a call option, the purchaser acquires a long position in the futures contract and the writer is assigned the opposite short position. Upon the exercise of a put option, the opposite is true.
Segregation of Assets . As a closed-end investment company registered with the SEC, the Fund is subject to the federal securities laws, including the 1940 Act, the rules thereunder, and various interpretive positions of the SEC and its staff. In accordance with these laws, rules and positions, the Fund must maintain liquid assets (often referred to as asset segregation), or engage in other SEC staff-approved measures, to cover open positions with respect to certain kinds of derivative instruments and financial agreements (such as reverse repurchase agreements). Generally, the Fund will maintain an amount of liquid assets with its custodian in an amount at least equal to the current amount of its obligations, including the value of unpaid past and future payment obligations, under derivative instruments and financial agreements, in accordance with SEC guidance. However, the Fund also may cover such obligations by other means such as through ownership of the underlying security or financial instrument. The Fund also may enter into offsetting transactions so that its combined position, coupled with any liquid assets maintained by its custodian, equals its net outstanding obligation in related derivatives or financial agreements. If the Fund will write credit default swaps, it will segregate the full notional amount of the payment obligation under the credit default swap that must be paid upon the occurrence of a credit event.
The Fund reserves the right to modify its policies in the future to comply with any changes in the positions from time to time articulated by the SEC or its staff, such as the SECs proposed rules governing the use of derivatives by registered investment companies, regarding asset segregation.
To the extent the Fund uses its assets to cover its obligations as required by the 1940 Act, the rules thereunder, and applicable positions of the SEC and its staff, such assets may not be used for other operational purposes. Nuveen Fund Advisors and/or Nuveen Asset Management will monitor the Funds use of derivatives and will take action as necessary for the purpose of complying with the asset segregation policy stated above. Such actions may include the sale of the Funds portfolio investments.
Limitations on the Use of Futures, Futures Options and Swaps . If futures are used for hedging purposes, there can be no guarantee that there will be a correlation between price movements in the futures contract and in the underlying financial instruments that are being hedged. This could result from differences between the financial instruments being hedged and the financial instruments underlying the standard contracts available for trading ( e.g ., differences in interest rate levels, maturities and the creditworthiness of issuers) among other factors. In addition, price movements of futures contracts may not correlate perfectly with price movements of the financial instruments underlying the futures contracts due to certain market distortions.
Successful use of futures by the Fund also is subject to Nuveen Asset Managements ability to predict correctly movements in the direction of the relevant market. For example, if the Fund uses futures to hedge against the possibility of a decline in the market value of securities held in its portfolio and the prices of such securities increase instead, the Fund will lose part or all of the benefit of the increased value of the securities which it has hedged because it will have offsetting losses in its futures positions. Furthermore, if in such
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circumstances the Fund has insufficient cash, it may have to sell securities to meet daily variation margin requirements. The Fund may have to sell such securities at a time when it may be disadvantageous to do so.
There can be no assurance that a liquid market will exist at a time when the Fund seeks to close out a derivatives or futures or a futures option position, and the Fund would remain obligated to meet margin requirements until the position is closed. Futures exchanges may limit the amount of fluctuation permitted in certain futures contract prices during a single trading day. The daily limit establishes the maximum amount that the price of a futures contract may vary either up or down from the previous days settlement price at the end of the current trading session. Once the daily limit has been reached in a futures contract subject to the limit, no more trades may be made on that day at a price beyond that limit. The daily limit governs only price movements during a particular trading day and therefore does not limit potential losses because the limit may work to prevent the liquidation of unfavorable positions. For example, futures prices have occasionally moved to the daily limit for several consecutive trading days with little or no trading, thereby preventing prompt liquidation of positions and subjecting some holders of futures contracts to substantial losses.
Illiquid Securities
The Fund may invest in securities that, at the time of investment, are illiquid ( i.e. , securities that are not readily marketable). The Funds Equity Portfolio will be invested in liquid equity securities selected from the Index. However, certain OTC options that the Fund may sell may be deemed to be illiquid. For this purpose, illiquid securities may include, but are not limited to, restricted securities (securities the disposition of which is restricted under the federal securities laws), securities that may only be resold pursuant to Rule 144A under the 1933 Act, that are deemed to be illiquid, and certain repurchase agreements.
The Board or its delegate has the ultimate authority to determine which securities are liquid or illiquid. The Board has delegated to Nuveen Fund Advisors, Nuveen Asset Management, and Intech the day-to-day determination of the illiquidity of any security held by the Fund, although it has retained oversight and ultimate responsibility for such determinations. No definitive liquidity criteria are used. The Board has directed Nuveen Fund Advisors, Nuveen Asset Management, and Intech when making liquidity determinations to look for such factors as (i) the nature of the market for a security (including the institutional private resale market; the frequency of trades and quotes for the security; the number of dealers willing to purchase or sell the security; the amount of time normally needed to dispose of the security; and the method of soliciting offers and the mechanics of transfer), (ii) the terms of certain securities or other instruments allowing for the disposition to a third party or the issuer thereof ( e.g., certain repurchase obligations and demand instruments), and (iii) other relevant factors.
Restricted securities may be sold only in privately negotiated transactions or in a public offering with respect to which a registration statement is in effect under the 1933 Act. Where registration is required, the Fund may be obligated to pay all or part of the registration expenses and a considerable period may elapse between the time of the decision to sell and the time the Fund may be permitted to sell a security under an effective registration statement. If, during such a period, adverse market conditions were to develop, the Fund might obtain a less favorable price than that which prevailed when it decided to sell. Illiquid securities will be priced at fair value as determined in good faith by the Board or its delegate.
When-Issued and Delayed Delivery Transactions
The Fund may buy and sell securities on a when-issued or delayed delivery basis, making payment or taking delivery at a later date, normally within 15 to 45 days of the trade date. This type of transaction may involve an element of risk because no interest accrues on the securities prior to settlement and, because securities are subject to market fluctuations, the value of the securities at time of delivery may be less (or more) than their cost. A separate account of the Fund will be established with its custodian consisting of cash equivalents or liquid securities having a market value at all times at least equal to the amount of any delayed payment commitment.
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Other Investment Companies
The Fund may invest up to 10% of its Managed Assets in securities of other open- or closed-end investment companies (including ETFs) that invest primarily in securities of the types in which the Fund may invest directly and that have a similar investment objective and strategy. The Fund generally expects that it may invest in other investment companies during periods when it has large amounts of uninvested cash, such as during periods when there is a shortage of attractive securities of the types in which the Fund may invest directly available in the market. As an investor in an investment company, the Fund will bear its ratable share of that investment companys expenses, and would remain subject to payment of the Funds advisory and administrative fees with respect to assets so invested. Common Shareholders would therefore be subject to duplicative expenses to the extent the Fund invests in other investment companies. Nuveen Asset Management will take expenses into account when evaluating the investment merits of an investment in an investment company relative to available securities of the types in which the Fund may invest directly. In addition, the securities of other investment companies may be leveraged and therefore will be subject to leverage risks.
Inter-Fund Borrowing and Lending . The SEC has granted an exemptive order permitting registered open-end and closed-end Nuveen funds, including the Fund, to participate in an inter-fund lending facility whereby the Nuveen funds may directly lend to and borrow money from each other for temporary purposes ( e.g., to satisfy redemption requests or when a sale of securities fails, resulting in an unanticipated cash shortfall) (the Inter-Fund Program). The Fund will participate only as a lender, and not as a borrower, in the Inter-Fund Program. The Inter-Fund Program is subject to a number of conditions, including, among other things, the requirements that (1) no fund may borrow or lend money through the Inter-Fund Program unless it receives a more favorable interest rate than is typically available from a bank or other financial institution for a comparable transaction; (2) no fund may borrow on an unsecured basis through the Inter-Fund Program unless the Funds outstanding borrowings from all sources immediately after the inter-fund borrowing total 10% or less of its total assets; provided that if the borrowing fund has a secured borrowing outstanding from any other lender, including but not limited to another fund, the inter-fund loan must be secured on at least an equal priority basis with at least an equivalent percentage of collateral to loan value; (3) if a funds total outstanding borrowings immediately after an inter-fund borrowing would be greater than 10% of its total assets, the Fund may borrow through the inter-fund loan on a secured basis only; (4) no fund may lend money if the loan would cause its aggregate outstanding loans through the Inter-Fund Program to exceed 15% of its net assets at the time of the loan; (5) a funds inter-fund loans to any one fund shall not exceed 5% of the lending funds net assets; (6) the duration of inter-fund loans will be limited to the time required to receive payment for securities sold, but in no event more than seven days; and (7) each inter-fund loan may be called on one business days notice by a lending fund and may be repaid on any day by a borrowing fund. In addition, a Nuveen fund may participate in the Inter-Fund Program only if and to the extent that such participation is consistent with the Funds investment objective and investment policies. The Board is responsible for overseeing the Inter-Fund Program.
The limitations detailed above and the other conditions of the SEC exemptive order permitting the Inter-Fund Program are designed to minimize the risks associated with Inter-Fund Program for both the lending fund and the borrowing fund. However, no borrowing or lending activity is without risk. When a fund borrows money from another fund, there is a risk that the loan could be called on one days notice or not renewed, in which case the borrowing fund may have to borrow from a bank at a higher rate or take other actions to payoff such loan if an inter-fund loan is not available from another fund. When a fund lends money to another fund, any delay in repayment to the lending fund could result in a lost investment opportunity or additional borrowing costs.
In May 2017, the Board approved the Nuveen funds (including the Funds) participation in the Inter-Fund Program. During the fiscal year ended December 31, 2017, the Fund did not enter into any inter-fund loan activity.
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Portfolio Turnover
The rebalancing technique employed by Intech is likely to result in a higher portfolio turnover rate and related expenses compared to a buy and hold fund strategy. For the fiscal year ended December 31, 2017, the Funds portfolio turnover rate was 159%. For the six months ended June 30, 2018, the Funds portfolio turnover rate was 72%. However, there are no limits on the rate of portfolio turnover, and investments may be sold without regard to length of time held when investment considerations warrant such action. A higher portfolio turnover rate results in correspondingly greater brokerage commissions and other transactional expenses. High portfolio turnover may result in the realization of net short-term capital gains by the Fund, which, when distributed to shareholders, will be taxable as ordinary income. See Tax matters.
As a non-fundamental policy, the Fund will not leverage its capital structure by issuing senior securities such as preferred shares or debt instruments. However, the Fund may borrow for temporary or emergency purposes and may enter into certain derivatives transactions that have the economic effect of leverage by creating additional investment exposure.
The Fund is a diversified, closed-end management investment company designed primarily as a long-term investment and not as a trading vehicle. The Fund is not intended to be a complete investment program and, due to the uncertainty inherent in all investments, there can be no assurance that the Fund will achieve its investment objective. Your Common Shares at any point in time may be worth less than your original investment, even after taking into account the reinvestment of Fund dividends and distributions.
Investment and Market Risk
An investment in the Funds Common Shares is subject to investment risk, including the possible loss of the entire principal amount that you invest. Your investment in Common Shares represents an indirect investment in the securities owned by the Fund. Your Common Shares at any point in time may be worth less than your original investment, even after taking into account the reinvestment of Fund dividends and distributions.
Market Discount from Net Asset Value
Shares of closed-end investment companies like the Fund have during some periods traded at prices higher than NAV and have during other periods traded at prices lower than NAV. The Fund cannot predict whether Common Shares will trade at, above or below NAV. This characteristic is a risk separate and distinct from the risk that the Funds NAV could decrease as a result of investment activities. Investors bear a risk of loss to the extent that the price at which they sell their shares is lower in relation to the Funds NAV than at the time of purchase, assuming a stable NAV. Proceeds from the sale of Common Shares in this offering will be reduced by transaction costs (if applicable, which vary depending on the offering method used). The NAV per Common Share will be reduced by an amount up to the offering costs. The NAV per Common Share will be reduced by costs associated with any future offerings of Common Shares. Depending on the premium of Common Shares at the time of any offering of Common Shares hereunder, the Funds NAV may be reduced by an amount up to the offering costs (estimated to be an additional 0.75% of the offering price assuming a Common Share offering price of $13.76 (the Funds closing price on the NYSE on October 12, 2018)). The Common Shares are designed primarily for long-term investors, and you should not view the Fund as a vehicle for trading purposes.
Recent Market Circumstances
Since the financial crisis that started in 2008, the U.S. and many foreign economies continue to experience its after-effects. Conditions in the U.S. and many foreign economies have resulted, and may continue to result, in
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certain instruments experiencing unusual liquidity issues, increased price volatility and, in some cases, credit downgrades and increased likelihood of default. These events have reduced the willingness and ability of some lenders to extend credit, and have made it more difficult for some borrowers to obtain financing on attractive terms, if at all. In some cases, traditional market participants have been less willing to make a market in some types of debt instruments, which has affected the liquidity of those instruments. During times of market turmoil, investors tend to look to the safety of securities issued or backed by the U.S. Treasury, causing the prices of these securities to rise and the yields to decline. Reduced liquidity in fixed income and credit markets may negatively affect many issuers worldwide. In addition, global economies and financial markets are becoming increasingly interconnected, which increases the possibilities that conditions in one country or region might adversely impact issuers in a different country or region. A rise in protectionist trade policies, and the possibility of changes to some international trade agreements, could affect the economies of many nations in ways that cannot necessarily be foreseen at the present time.
In response to the financial crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets. In some countries where economic conditions are recovering, such countries are nevertheless perceived as still fragile. Withdrawal of government support, failure of efforts in response to the crisis, or investor perception that such efforts are not succeeding, could adversely impact the value and liquidity of certain securities. The severity or duration of adverse economic conditions may also be affected by policy changes made by governments or quasi-governmental organizations, including changes in tax laws. The impact of new financial regulation legislation on the markets and the practical implications for market participants may not be fully known for some time. Regulatory changes are causing some financial services companies to exit long-standing lines of business, resulting in dislocations for other market participants. In addition, the contentious domestic political environment, as well as political and diplomatic events within the United States and abroad, such as the U.S. governments inability at times to agree on a long-term budget and deficit reduction plan, the threat of a federal government shutdown and threats not to increase the federal governments debt limit, may affect investor and consumer confidence and may adversely impact financial markets and the broader economy, perhaps suddenly and to a significant degree. The U.S. government has recently reduced federal corporate income tax rates, and future legislative, regulatory and policy changes may result in more restrictions on international trade, less stringent prudential regulation of certain players in the financial markets, and significant new investments in infrastructure and national defense. Markets may react strongly to expectations about the changes in these policies, which could increase volatility, especially if the markets expectations for changes in government policies are not borne out.
Changes in market conditions will not have the same impact on all types of securities. Interest rates have been unusually low in recent years in the United States and abroad. Because there is little precedent for this situation, it is difficult to predict the impact of a significant rate increase on various markets. For example, because investors may buy securities or other investments with borrowed money, a significant increase in interest rates may cause a decline in the markets for those investments. Because of the sharp decline in the worldwide price of oil, there is a concern that oil producing nations may withdraw significant assets now held in U.S. Treasuries, which could force a substantial increase in interest rates. Regulators have expressed concern that rate increases may cause investors to sell fixed income securities faster than the market can absorb them, contributing to price volatility. In addition, there is a risk that the prices of goods and services in the U.S. and many foreign economies may decline over time, known as deflation (the opposite of inflation). Deflation may have an adverse effect on stock prices and creditworthiness and may make defaults on debt more likely. If a countrys economy slips into a deflationary pattern, it could last for a prolonged period and may be difficult to reverse. The precise details and the resulting impact of the United Kingdoms vote to leave the European Union (EU), commonly referred to as Brexit, are not yet known. The effect on the United Kingdoms economy will likely depend on the nature of trade relations with the EU and other major economies following its exit, which are matters to be negotiated. The outcomes may cause increased volatility and have a significant adverse impact on world financial markets, other international trade agreements, and the United Kingdom and European economies, as well as the broader global economy for some time.
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The impact of these developments in the near- and long-term is unknown and could have additional adverse effects on economies, financial markets and asset valuations around the world.
Market Disruption and Geopolitical Risk
The occurrence of events similar to those in recent years, such as the aftermath of the war in Iraq, instability in Afghanistan, Pakistan, Egypt, Libya, Syria, Russia, Ukraine and other parts of the Middle East, the outbreak of infectious diseases such as Ebola or the Zika Virus, terrorist attacks in the U.S. and around the world, social and political discord, debt crises (such as the recent Greek crisis), sovereign debt downgrades, or the exit or potential exit of one or more countries from the EU, among others, may result in market volatility, may have long-term effects on the U.S. and worldwide financial markets, and may cause further economic uncertainties in the U.S. and worldwide. The Fund does not know how long the securities markets may be affected by these events and cannot predict the effects of these and similar events in the future on the U.S. economy and securities markets. The Fund may be adversely affected by abrogation of international agreements and national laws which have created the market instruments in which the Fund may invest, failure of the designated national and international authorities to enforce compliance with the same laws and agreements, failure of local, national and international organization to carry out the duties prescribed to them under the relevant agreements, revisions of these laws and agreements which dilute their effectiveness or conflicting interpretation of provisions of the same laws and agreements. The Fund may be adversely affected by uncertainties such as terrorism, international political developments, and changes in government policies, taxation, restrictions on foreign investment and currency repatriation, currency fluctuations and other developments in the laws and regulations of the countries in which it is invested.
Legislation and Regulatory Risk
At any time after the date of this Prospectus, legislation or additional regulations may be enacted that could negatively affect the assets of the Fund, securities held by the Fund or the issuers of such securities. Changing approaches to regulation may have a negative impact on the entities and/or securities in which the Fund invests. Legislation or regulation may also change the way in which the Fund itself is regulated. Fund shareholders may incur increased costs resulting from such legislation or additional regulation. There can be no assurance that future legislation, regulation or deregulation will not have a material adverse effect on the Fund or will not impair the ability of the Fund to achieve its investment objective.
For example, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act) is designed to impose stringent regulation on the OTC derivatives market in an attempt to increase transparency and accountability and provides for, among other things, new clearing, execution, margin, reporting, recordkeeping, business conduct, disclosure, position limit, minimum net capital and registration requirements. Although the Commodity Futures Trading Commission (CFTC) has released final rules under the Dodd-Frank Act, many of the provisions are subject to further final rulemaking, and thus the Dodd-Frank Acts ultimate impact remains unclear.
The SEC has proposed rules governing the use of derivatives by registered investment companies, which could affect the nature and extent of derivatives use by the Fund. The proposed rules have not yet been adopted and therefore the full impact of such rules is uncertain at this time. It is possible that such rules, if adopted, could limit the implementation of the Funds use of derivatives, which could have an adverse effect on the Fund.
Additionally, the Fund is operated by persons who have claimed an exclusion, granted to operators of registered investment companies like the Fund, from registration as a commodity pool operator under Rule 4.5 promulgated by the CFTC pursuant to its authority under the Commodity Exchange Act and, therefore, is not subject to registration or regulation as a commodity pool operator. As a result, the Fund is limited in its ability to use commodity futures (which include futures on broad-based securities indexes and interest rate futures) or options on commodity futures, engage in swaps transactions or make certain other investments (whether directly or indirectly through investments in other investment vehicles) for purposes other than bona fide hedging. With respect to transactions other than for bona fide hedging purposes, either: (1) the aggregate initial margin and premiums required to establish the Funds positions in such investments may not exceed 5% of the liquidation
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value of the Funds portfolio (after accounting for unrealized profits and unrealized losses on any such investments); or (2) the aggregate net notional value of such instruments, determined at the time the most recent position was established, may not exceed 100% of the liquidation value of the Funds portfolio (after accounting for unrealized profits and unrealized losses on any such positions). In addition to meeting one of the foregoing trading limitations, the Fund may not market itself as a commodity pool or otherwise as a vehicle for trading in the futures, options or swaps markets. If the Fund does not continue to claim the exclusion, it would likely become subject to registration and regulation as a commodity pool operator. The Fund may incur additional expenses as a result of the CFTCs registration and regulatory requirements.
Impact of Offering Methods Risk
The issuance of Common Shares through the various methods described in the Prospectus may have an adverse effect on prices in the secondary market for the Funds Common Shares by increasing the number of Common Shares available for sale. In addition, the Common Shares may be issued at a discount to the market price for such shares, which may put downward pressure on the market price for Common Shares of the Fund.
Equity Portfolio Strategy Risks
Common Stock Risk
Common stock generally represents an equity ownership interest in an issuer. Although common stocks have historically generated higher average total returns than fixed-income securities over the long term, common stocks also have experienced significantly more volatility in those returns and may under-perform relative to fixed-income securities during certain periods. An adverse event, such as an unfavorable earnings report, may depress the value of a particular common stock held by the Fund. Also, prices of common stocks are sensitive to general movements in the stock market and a drop in the stock market may depress the price of common stocks to which the Fund has exposure. Common stock prices fluctuate for several reasons including changes in investors perceptions of the financial condition of an issuer or the general condition of the relevant stock market, or the occurrence of political or economic events which effect the issuers. In addition, common stock prices may be particularly sensitive to rising interest rates, which increases borrowing costs and the costs of capital.
Dividend Income Risk
A portion of the Funds net investment income paid by the Fund to its Common Shareholders is derived from dividends it receives from common stocks held in the Funds Equity Portfolio. Dividends paid on the securities held by the Fund can vary significantly over the short-term and long-term. Dividends on common stocks are not fixed but are declared at the discretion of an issuers board of directors. There is no guarantee that the issuers of common stocks in which the Fund invests will declare dividends in the future or that if declared they will remain at current levels or increase over time.
Investment Process Risk
Because Intech utilizes a proprietary mathematical process, there is a risk that Intech, and thus the Equity Portfolio, will not achieve its targeted results over the Index. Intechs method of identifying common stocks with high volatility relative to the Index and low correlation to one another (moving essentially in opposite directions), may not result in a combination of stocks that will produce the expected results and therefore the Equity Portfolio may not outperform, and may underperform, the Index. In addition, the rebalancing technique employed by Intech is likely to result in a higher portfolio turnover rate and related expenses compared to a buy and hold fund strategy, which higher expenses will reduce the Funds total return. A higher portfolio turnover rate increases the likelihood of higher net taxable gains or losses compared to a buy and hold strategy for an investor in the Fund.
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Option Strategy Risks
Call Option Risk
As the writer of a call option, the Fund foregoes, during the options life, the opportunity to profit from increases in the market value of the security underlying the call option above the sum of the premium and the strike price of the option, but will retain the risk of loss should the market value of the security underlying the call option decline. The purchaser of the call option has the right to any appreciation in the value of the underlying security over the exercise price upon the exercise of the call option or the expiration date. As the Fund increases the option overlay percentage, its ability to benefit from capital appreciation becomes more limited and the risk of NAV erosion increases. If the Fund experiences NAV erosion, which itself may have a negative effect on the market price of the Funds shares, the Fund will have a reduced asset base over which to write call options, which may eventually lead to reduced distributions to shareholders.
In addition, because the exercise of index options is settled in cash, sellers of index call options, such as the Fund, cannot provide in advance for their potential settlement obligations by acquiring and holding the underlying securities. The Fund bears a risk that the value of the securities held by the Fund will vary from the value of the Index and relative to the written index call option positions. Accordingly, the Fund may incur losses on the index call options that it has sold that exceed gains on the Funds equity portfolio. The value of index options written by the Fund, which will be priced daily, will be affected by changes in the value of and dividend rates of the underlying common stocks in the index, changes in the actual or perceived volatility of the stock market and the remaining time to the options expiration. The value of the index options also may be adversely affected if the market for the index options becomes less liquid or smaller.
Option Strategy Risk
In employing the Option Strategy, Nuveen Asset Management seeks to enhance the Funds risk-adjusted returns through a meaningful reduction in the volatility of the Funds returns relative to the returns of the Index over extended periods of time. This strategy may not protect against market declines, may limit the Funds participation in market gains, particularly during periods when market values are increasing and volatility is high, may increase the Funds portfolio transaction costs, which could result in losses or reduce gains, and may not be successful. The success of the Option Strategy will be subject to Nuveen Asset Managements ability to correctly assess the degree of correlation between the performance of the Index and the metrics used by Nuveen Asset Management to measure market volatility. Because the characteristics of many securities change as markets change or time passes, the success of the Option Strategy also will be subject to Nuveen Asset Managements ability to continually recalculate, readjust, and execute volatility management techniques in an efficient manner. In addition, market conditions change, sometimes rapidly and unpredictably, and Nuveen Asset Management may be unable to execute the volatility management strategy in a timely manner or at all. Moreover, volatility management strategies may increase portfolio transaction costs, which could cause or increase losses or reduce gains. For a variety of reasons, Nuveen Asset Management may not seek to establish a perfect correlation between the relevant market index and the metrics that Nuveen Asset Management uses to measure market volatility. In addition, it is not possible to manage volatility fully or perfectly. Any one or more of these factors may prevent the Fund from achieving the intended volatility management or could cause the Fund to underperform or experience losses (some of which may be sudden) or volatility for any particular period that may be higher or lower. In addition, the use of volatility management techniques may not protect against market declines and may limit the Funds participation in market gains, even during periods when the market is rising. Volatility management techniques, when implemented effectively to reduce the overall risk of investing in the Fund, may result in underperformance by the Fund. The Funds performance may be lower than the performance of similar funds where volatility management techniques are not used.
Tax Risk
The tax treatment and characterization of the Funds distributions may vary significantly from time to time because of the varied nature of the Funds investments. The ultimate tax characterization of the Funds
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distributions made in a calendar year may not finally be determined until after the end of that calendar year. In addition, there is a possibility that the Fund may make total distributions during a calendar year in an amount that exceeds the Funds net investment income and net realized capital gains for that calendar year. For example, because of the nature of the Funds investments, the Fund may distribute net short-term capital gains early in the calendar year, but incur net short-term capital losses later in the year, thereby offsetting the short-term net capital gains for which distributions have already been made by the Fund. In such a situation, the amount by which the Funds total distributions exceed net investment income and net realized capital gains would generally be treated as a tax-free return of capital up to the amount of the Common Shareholders tax basis in his Common Shares, with any amounts exceeding such basis treated as gain from the sale of his Common Shares. While a portion of the Funds income distributions may be classified as qualified dividend income, which is generally taxable to individual investors who meet certain holding period and other requirements at a lower rate, there can be no assurance as to the percentage of the Funds income distributions that will be qualified dividend income. The writing of call options by the Fund may significantly reduce or eliminate its ability to make distributions eligible to be treated as qualified dividend income. Covered call options may also be subject to the federal tax rules applicable to straddles under the Code. If positions held by the Fund were treated as straddles for federal income tax purposes, dividends on such positions would not constitute qualified dividend income subject to favorable income tax treatment. In addition, generally, straddles are subject to certain rules that may affect the amount, character and timing of the Funds gains and losses with respect to straddle positions by requiring, among other things, that: (1) any loss realized on disposition of one position of a straddle may not be recognized to the extent that the Fund has unrealized gains with respect to the other position in such straddle; (2) the Funds holding period in straddle positions be suspended while the straddle exists (possibly resulting in a gain being treated as short-term capital gain rather than long-term capital gain); (3) the losses recognized with respect to certain straddle positions that are part of a mixed straddle and that are non-Section 1256 contracts be treated as 60% long-term and 40% short-term capital loss; (4) losses recognized with respect to certain straddle positions that would otherwise constitute short-term capital losses be treated as long-term capital losses; and (5) the deduction of interest and carrying charges attributable to certain straddle positions may be deferred. The Fund intends to manage the Equity Portfolio generally in order to avoid being subject to the straddle rules under federal income tax law. The Fund expects that positions held under this strategy will not be considered straddles because the Equity Portfolio will not have substantial overlap with the stocks underlying the Funds call options. Accordingly, based on current law, the Fund intends to maintain an overlap of less than 70% between the stocks held in the Equity Portfolio and the stocks underlying the Funds call options. Under certain circumstances, however, the Fund may enter into option transactions or certain other investments that may constitute positions in a straddle.
Use of Derivatives and Hedging Risks
The Fund may use derivatives or other instruments in order to keep the Funds cash fully invested or for purposes of hedging the Equity Portfolio against declining equity markets. There may be an imperfect correlation between the Equity Portfolios holdings and such derivatives, which may prevent the Fund from achieving the intended consequences of the applicable transaction or expose the Fund to risk of loss. Further, the Funds use of derivatives or other instruments for hedging purposes involves costs and will be subject to Nuveen Asset Managements ability to predict correctly changes in the relationships of such hedging instruments to the Equity Portfolio or other factors. No assurance can be given that Nuveen Asset Managements judgment in this respect will be correct. Consequently, the use of hedging transactions might result in a poorer overall performance for the Fund, whether or not adjusted for risk, than if the Fund had not hedged the Equity Portfolio. In addition, no assurance can be given that the Fund will enter into hedging transactions at times or under circumstances in which it would be advisable to do so.
Borrowing Risk
The Fund may borrow up to 7.5% of its Managed Assets from banks pursuant to a line of credit in order to meet liquidity needs. Borrowing may exaggerate changes in the NAV of the Funds shares and may affect the
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Funds net income. When the Fund borrows money, it must pay interest and other fees, which will reduce the Funds returns if such costs exceed the returns on the portfolio securities purchased or retained with such borrowings. Any such borrowings are intended to be temporary. However, under certain market circumstances, such borrowings might be outstanding for longer periods of time.
Illiquid Securities Risk
The Fund may invest in securities and other instruments that, at the time of investment, are illiquid. Illiquid securities are securities that are not readily marketable and may include some restricted securities, which are securities that may not be resold to the public without an effective registration statement under the 1933 Act or, if they are unregistered, may be sold only in a privately negotiated transaction or pursuant to an exemption from registration. Illiquid securities involve the risk that the securities will not be able to be sold at the time desired by the Fund or at prices approximating the value at which the Fund is carrying the securities on its books.
Counterparty Risk
Changes in the credit quality of the companies that serve as the Funds counterparties with respect to OTC options, derivatives or other transactions supported by another partys credit may affect the value of those instruments. Certain entities that have served as counterparties to these transactions in the past have incurred significant losses and financial hardships, including bankruptcy, as a result of significant exposure to credit investments that have experienced defaults or otherwise suffered extreme credit deterioration. Such hardships reduced these entities capital and called into question their continued ability to perform their obligations. There can be no assurance that the counterparties to the Funds OTC options or other derivative instruments will not suffer similar financial hardships in the future. By using OTC options, derivatives or other transactions supported by a counterpartys credit, the Fund assumes the risk that the counterparty could experience similar financial hardships. In the event of the insolvency of a counterparty, the Fund may sustain losses or be unable to liquidate a derivatives position.
Repurchase Agreement Risk
With respect to repurchase agreements, if the party agreeing to repurchase specific securities should default, the Fund may seek to sell the securities that it holds. This could involve transaction costs or delays in addition to a loss on the securities if their value should fall below their repurchase price. Repurchase agreements maturing in more than seven days are considered to be illiquid securities.
Inflation Risk
Inflation risk is the risk that the value of assets or income from investment will be worth less in the future as inflation decreases the value of money. As inflation increases, the real value of the Common Shares and distributions thereon can decline.
Deflation Risk
Deflation risk is the risk that prices throughout the economy decline over time, which may have an adverse effect on the market valuation of companies, their assets and revenues. In addition, deflation may have an adverse effect on the creditworthiness of issuers and may make issuer default more likely, which may result in a decline in the value of the Funds portfolio.
Certain Affiliations
Certain broker-dealers may be considered to be affiliated persons of the Fund, Nuveen Fund Advisors, TIAA, and/or Nuveen Investments. Absent an exemption from the SEC or other regulatory relief, the Fund is
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generally precluded from effecting certain principal transactions with affiliated brokers, and its ability to purchase securities being underwritten by an affiliated broker or a syndicate including an affiliated broker, or to utilize affiliated brokers for agency transactions, is subject to restrictions. This could limit the Funds ability to engage in securities transactions and take advantage of market opportunities. See also Management of the FundInvestment Adviser, Sub-Advisers, and Portfolio Managers.
Cybersecurity Risk
Technology, such as the internet, has become more prevalent in the course of business, and as such, the Fund and its service providers are susceptible to operational and information security risk resulting from cyber incidents. Cyber incidents refer to both intentional attacks and unintentional events including: processing errors, human errors, technical errors including computer glitches and system malfunctions, inadequate or failed internal or external processes, market-wide technical-related disruptions, unauthorized access to digital systems (through hacking or malicious software coding), computer viruses, and cyber-attacks which shut down, disable, slow or otherwise disrupt operations, business processes or website access or functionality (including denial of service attacks). Cyber incidents could adversely impact the Fund and cause the Fund to incur financial loss and expense, as well as face exposure to regulatory penalties, reputational damage, and additional compliance costs associated with corrective measures. Cyber incidents may cause a Fund or its service providers to lose proprietary information, suffer data corruption, lose operational capacity or fail to comply with applicable privacy and other laws. Among other potentially harmful effects, cyber incidents also may result in theft, unauthorized monitoring and failures in the physical infrastructure or operating systems that support the Fund and its service providers. In addition, substantial costs may be incurred in order to prevent any cyber incidents in the future. While the Funds service providers have established business continuity plans in the event of, and risk management systems to prevent, such cyber incidents, there are inherent limitations in such plans and systems including the possibility that certain risks have not been identified. Furthermore, the Fund cannot control the cybersecurity plans and systems put in place by its service providers or any other third parties whose operations may affect the Fund.
Other Investment Companies Risk
The Fund may invest in the securities of other investment companies. Such securities may be leveraged. As a result, the Fund may be indirectly exposed to leverage through an investment in such securities and therefore magnify the Funds leverage risk. Utilization of leverage is a speculative investment technique and involves certain risks. An investment in securities of other investment companies that are leveraged may expose the Fund to higher volatility in the market value of such securities and the possibility that the Funds long-term returns on such securities (and, indirectly, the long-term returns of the Common Shares) will be diminished.
Derivatives Risk, Including the Risk of Swaps
The Funds use of derivatives involves risks different from, and possibly greater than, the risks associated with investing directly in the investments underlying the derivatives. Whether the Funds use of derivatives is successful will depend on, among other things, if Nuveen Fund Advisors and Nuveen Asset Management correctly forecast market values, interest rates and other applicable factors. If Nuveen Fund Advisors and Nuveen Asset Management incorrectly forecast these and other factors, the investment performance of the Fund will be unfavorably affected. In addition, the derivatives market is largely unregulated. It is possible that developments in the derivatives market could adversely affect the Funds ability to successfully use derivative instruments.
The Fund may enter into debt-related derivatives instruments including credit default swap contracts and interest rate swaps. Like most derivative instruments, the use of swaps is a highly specialized activity that involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. In addition, the use of swaps requires an understanding by Nuveen Asset Management not only of the referenced asset, rate or index, but also of the swap itself. Because they are two-party contracts and because they may have terms of greater than seven days, swap agreements may be considered to be illiquid. Moreover,
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the Fund bears the risk of loss of the amount expected to be received under a swap agreement in the event of the default or bankruptcy of a swap agreement counterparty. It is possible that developments in the swaps market, including potential government regulation, could adversely affect the Funds ability to terminate existing swap agreements or to realize amounts to be received under such agreements. The derivatives market is subject to a changing regulatory environment. It is possible that regulatory or other developments in the derivatives market could adversely affect the Funds ability to successfully use derivative instruments. See also, Counterparty Risk.
Management Risk
The Fund is subject to management risk because it is an actively managed portfolio. Nuveen Fund Advisors, Nuveen Asset Management, and Intech will apply investment techniques and risk analyses in making investment decisions for the Fund, but there can be no guarantee that these will produce the desired results.
Potential Conflicts of Interest Risk
Nuveen Fund Advisors, Nuveen Asset Management, and Intech each provide a wide array of portfolio management and other asset management services to a mix of clients and may engage in ordinary course activities in which their respective interests or those of their clients may compete or conflict with those of the Fund. For example, Nuveen Fund Advisors, Nuveen Asset Management, and Intech may provide investment management services to other funds and accounts that follow investment objectives similar to those of the Fund. In certain circumstances, and subject to its fiduciary obligations under the Investment Advisers Act of 1940, Nuveen Fund Advisors, Nuveen Asset Management, and Intech may have to allocate a limited investment opportunity among its clients, which include closed-end funds, open-end funds and other commingled funds. Nuveen Fund Advisors, Nuveen Asset Management, and Intech have each adopted policies and procedures designed to address such situations and other potential conflicts of interests.
Anti-Takeover Provisions
The Declaration and By-laws include provisions that could limit the ability of other entities or persons to acquire control of the Fund or convert the Fund to open-end status. These provisions could have the effect of depriving the Common Shareholders of opportunities to sell their Common Shares at a premium over the then current market price of the Common Shares. See Certain Provisions in the Declaration of Trust and By-Laws.
Trustees and Officers
The Board is responsible for the Funds management, including supervision of the duties performed by Nuveen Fund Advisors, Nuveen Asset Management, and Intech. The names and business addresses of the Funds trustees and officers and their principal occupations and other affiliations during the past five years are set forth under Management of the Fund in the SAI.
Investment Adviser, Sub-Advisers, and Portfolio Managers
Nuveen Fund Advisors . Nuveen Fund Advisors, LLC, the Funds investment adviser, is responsible for overseeing the Funds overall investment strategy and its implementation. Nuveen Fund Advisors offers advisory and investment management services to a broad range of investment company clients. Nuveen Fund Advisors has overall responsibility for management of the Fund, oversees the management of the Funds portfolio, manages the Funds business affairs and provides certain clerical, bookkeeping and other administrative services. Nuveen Fund Advisors is located at 333 West Wacker Drive, Chicago, Illinois 60606. Nuveen Fund Advisors is a
39
subsidiary of Nuveen, the investment management arm of TIAA. TIAA is a life insurance company founded in 1918 by the Carnegie Foundation for the Advancement of Teaching and is the companion organization of College Retirement Equities Fund. As of September 30, 2018, Nuveen managed approximately $988 billion in assets, of which approximately $142 billion was managed by Nuveen Fund Advisors.
Nuveen Asset Management, LLC . Nuveen Asset Management, LLC, 333 West Wacker Drive, Chicago, Illinois 60606, serves as a sub-adviser to the Fund pursuant to a sub-advisory agreement between Nuveen Fund Advisors and Nuveen Asset Management (the Nuveen Asset Management Sub-Advisory Agreement). Nuveen Asset Management is responsible for implementing the Option Strategy, subject to the supervision of Nuveen Fund Advisors and the Board. Nuveen Asset Management is a registered investment adviser and a wholly-owned subsidiary of Nuveen Fund Advisors. Pursuant to the Nuveen Asset Management Sub-Advisory Agreement, Nuveen Asset Management is compensated for the services it provides to the Fund with a portion of the management fee Nuveen Fund Advisors receives from the Fund. Nuveen Fund Advisors and Nuveen Asset Management retain the right to reallocate investment advisory responsibilities and fees between themselves in the future.
David Friar, Senior Vice President and Portfolio Manager of Nuveen Asset Management since January 2011, entered the financial services industry in 1998. He joined Nuveen Asset Management in January 2011 following the firms acquisition of a portion of the asset management business of FAF Advisors. Mr. Friar previously served in various positions with FAF Advisors since 1999 where he served as a member of FAFs Performance Measurement group. Mr. Friar has been a portfolio manager of the Fund since [ ].
Jody Hrazanek joined Nuveen in May 2018 from Voya Investment Management where she was head of Strategy Design and Implementation from 2005 to 2018. In this role, she was portfolio manager for a number of multi-asset strategies including target date, portable alpha and option overlay strategies. Prior to Voya, Ms. Hrazanek worked at Advent Capital Management from 2003 to 2005 as a convertible bond trader for both long-only and hedge fund portfolios. Ms. Hrazanek has been a portfolio manager of the Fund since September 1, 2018.
Intech Investment Management LLC. Intech serves as a sub-adviser to the Fund pursuant to a sub-advisory agreement between Nuveen Fund Advisors and Intech (the Intech Sub-Advisory Agreement and together with the Nuveen Asset Management Sub-Advisory Agreement, the Sub Advisory Agreements). Intech is responsible for managing the Funds Equity Portfolio, subject to the oversight of Nuveen Fund Advisors and the Board. Intech is organized as a Delaware limited liability company and is an independently managed direct wholly-owned subsidiary of Janus Capital Management LLC and an indirect subsidiary of Janus. Intech is a global asset manager with one of the industrys longest continuous performance records of mathematical equity investment strategies for institutional investors and $50.2 billion in assets under management as of June 30, 2018. Intechs global headquarters is located in West Palm Beach, Florida, with its research headquarters in Princeton, New Jersey, and an international headquarters in London. The business address of Intech is 525 Okeechobee Blvd., Suite 1800, West Palm Beach, Florida 33401. The business address of Janus Capital Management LLC and Janus is 151 Detroit Street, Denver, Colorado 80206. Pursuant to the Intech Sub-Advisory Agreement, Intech is compensated for the services it provides to the Fund with a portion of the management fee Nuveen Fund Advisors receives from the Fund. Nuveen Fund Advisors and Intech retain the right to reallocate investment advisory responsibilities and fees between themselves in the future.
A team of investment professionals consisting of Dr. Adrian Banner, Dr. Vassilios Papathanakos, and Joseph Runnels works to implement the mathematical portfolio management process. No one person of the investment team is primarily responsible for implementing the investment strategy of the portion of the Fund allocated to Intech.
Adrian Banner, Ph.D., is chief executive officer and chief investment officer of Intech. Dr. Banner was named chief executive officer in November 2012 and concurrently is the firms chief investment officer, a
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position he has held since January 2012. Previously, Dr. Banner was co-chief investment officer beginning January 2009, senior investment officer from September 2007 to January 2009, and joined Intech in August 2002 as director of research. Since that time, Dr. Banner has been an integral part of the firms Princeton-based research team. Dr. Banner has extensive knowledge of Intechs trading systems, optimization programs and research initiatives, both on an operational and theoretical basis. Dr. Banner supervises the implementation of the portfolio optimization, management, and trading processes. He conducts mathematical research on the investment process and reviews and recommends improvements. Dr. Banner earned his Ph.D. in mathematics from Princeton University and his M.Sc. and B.Sc., also in mathematics, from the University of New South Wales, Australia. Mr. Banner has been a portfolio manager of the Fund since December 31, 2008.
Vassilios Papathanakos, Ph.D., is executive vice president and deputy chief investment officer of Intech. He was named executive vice president in January 2014 and deputy chief investment officer in November 2012. Prior to that, he was the firms director of research since July 2007, and joined Intech in October 2006 as associate director of research. Dr. Papathanakos is jointly responsible, with Dr. Banner, for the day-to-day implementation of Intechs investment process and trading operations. Dr. Papathanakos received his Ph.D. in Physics from Princeton University in November 2006 and earned a B.S. in Physics from the University of Ioannina, Greece, in July 2001. Dr. Papathanakos has also accumulated a long teaching experience, instructing courses in all undergraduate and graduate levels, assisting in the development of new courses and coaching new teaching assistants. Mr. Papathanakos has been a portfolio manager of the Fund since December 31, 2011.
Joseph W. Runnels, CFA, has been vice president of portfolio management at Intech since March 2003 and joined the firm in 1998. Mr. Runnels holds a B.S. in Business Administration from Murray State University. Mr. Runnels has been a portfolio manager of the Fund since [ ].
Additional information about each portfolio managers compensation, other accounts managed by each portfolio manager and each portfolio managers ownership of securities in the Fund is provided in the SAI. The SAI is available free of charge by calling (800) 257-8787 or by visiting the Funds website at www.nuveen.com. The information contained in, or that can be accessed through, the Funds website is not part of this Prospectus or the SAI.
Investment Management and Sub-Advisory Agreements
Investment Management Agreement . Pursuant to an investment management agreement between Nuveen Fund Advisors and the Fund (the Investment Management Agreement), the Fund has agreed to pay an annual management fee for the services and facilities provided by Nuveen Fund Advisors, payable on a monthly basis, based on the sum of a fund-level fee and a complex-level fee, as described below.
Fund-Level Fee. The annual fund-level fee for the Fund, payable monthly, is calculated according to the following schedule:
Average Daily Managed Assets* |
Fund-Level
Fee Rate |
|||
For the first $500 million |
0.7500 | % | ||
For the next $500 million |
0.7250 | % | ||
For the next $500 million |
0.7000 | % | ||
For the next $500 million |
0.6750 | % | ||
For managed assets over $2 billion |
0.6500 | % |
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Complex-Level Fee. The annual complex-level fee for the Fund, payable monthly, is calculated by multiplying the current complex-wide fee rate, determined according to the following schedule, by the Funds daily managed assets:
Complex-Level Eligible Asset Breakpoint Level* |
Effective
Complex-Level Fee Rate at Breakpoint Level |
|||
$55 billion |
0.2000 | % | ||
$56 billion |
0.1996 | % | ||
$57 billion |
0.1989 | % | ||
$60 billion |
0.1961 | % | ||
$63 billion |
0.1931 | % | ||
$66 billion |
0.1900 | % | ||
$71 billion |
0.1851 | % | ||
$76 billion |
0.1806 | % | ||
$80 billion |
0.1773 | % | ||
$91 billion |
0.1691 | % | ||
$125 billion |
0.1599 | % | ||
$200 billion |
0.1505 | % | ||
$250 billion |
0.1469 | % | ||
$300 billion |
0.1445 | % |
* |
For the complex-level fees, managed assets include closed-end fund assets managed by the Adviser that are attributable to certain types of leverage. For these purposes, leverage includes the funds use of preferred stock and borrowings and certain investments in the residual interest certificates (also called inverse floating rate securities) in tender option bond (TOB) trusts, including the portion of assets held by a TOB trust that has been effectively financed by the trusts issuance of floating rate securities, subject to an agreement by the Adviser as to certain funds to limit the amount of such assets for determining managed assets in certain circumstances. The complex-level fee is calculated based upon the aggregate daily managed assets of all Nuveen open-end and closed-end funds that constitute eligible assets. Eligible assets do not include assets attributable to investments in other Nuveen funds or assets in excess of a determined amount (originally $2 billion) added to the Nuveen fund complex in connection with the Advisers assumption of the management of the former First American Funds effective January 1, 2011. As of June 30, 2018, the complex-level fee for the Fund was 0.1591%. |
A discussion regarding the basis for the Boards most recent approval of the Investment Management Agreement for the Fund may be found in the Funds semi-annual report to shareholders dated June 30 of each year.
In addition to the fee of Nuveen Fund Advisors, the Fund pays all other costs and expenses of its operations, including compensation of its Trustees (other than those affiliated with Nuveen Fund Advisors and Nuveen Asset Management), custodian, transfer agency and dividend disbursing expenses, legal fees, expenses of independent auditors, expenses of repurchasing shares, expenses associated with any borrowings, expenses of issuing any preferred shares, expenses of preparing, printing and distributing shareholder reports, notices, proxy statements and reports to governmental agencies, and taxes, if any. All fees and expenses are accrued daily and deducted before payment of dividends to investors.
Sub-Advisory Agreements.
Pursuant to the Nuveen Asset Management Sub-Advisory Agreement, Nuveen Asset Management receives from Nuveen Fund Advisors a management fee equal to 10.5263% of the net management fee paid by the Fund to Nuveen Fund Advisors.
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Pursuant to the Intech Sub-Advisory Agreement, Intech will receive from Nuveen Fund Advisors a management fee based on the Funds average daily Managed Assets managed by Intech, payable on a monthly basis:
Average Daily Managed Assets |
Management
Fee Rate |
|||
Up to $100 million |
0.4000 | % | ||
$100 million to $250 million |
0.3250 | % | ||
$250 million to $500 million |
0.2750 | % | ||
$500 million to $1 billion |
0.2500 | % | ||
Over $1 billion |
0.2000 | % |
A discussion regarding the basis for the Boards most recent approval of the Sub-Advisory Agreements for the Fund may be found in the Funds semi-annual report to shareholders dated June 30 of each year.
The Funds net asset value per share is determined as of the close of regular session trading (normally 4:00 p.m., Eastern Time) on each day the NYSE is open for business. Net asset value is computed by dividing the value of all assets of the Fund (including accrued interest and dividends), less all liabilities (including accrued expenses and dividends declared but unpaid), by the total number of shares outstanding. In determining net asset value, expenses are accrued and applied daily and securities and other assets for which market quotations are available are valued at market value. Exchange-traded equity securities are generally valued at the last sales price on the securities exchange on which such securities are primarily traded. Exchange-traded equity securities traded on a securities exchange for which there are no transactions on a given day or securities not listed on a securities exchange are valued at the closing bid prices. Securities reported on NASDAQ are valued at the NASDAQ Official Closing Price. Exchange-traded futures contracts and options on futures contracts are generally valued at the final settlement price or official closing price on the exchange such futures contracts and options on futures contracts are primarily traded. Temporary investments in securities that have variable rate and demand features qualifying them as short-term investments are valued at amortized cost, which approximates market value.
The Funds securities are valued in accordance with procedures approved by the Board. Under the procedures, equity securities and certain derivative instruments that are traded on an exchange are generally valued at the last sale price or, if that price is unavailable or deemed not representative of market value, the closing bid price. Where a security is traded on more than one exchange, the security is generally valued at the price on the exchange considered to be the primary exchange. In the case of securities not traded on an exchange, or if exchange prices are not otherwise available, the prices are typically determined by independent third party pricing services that use a variety of techniques and methodologies.
The valuations for fixed income securities and certain derivative instruments are typically the prices supplied by independent third party pricing services, which may use market prices or broker/dealer quotations or a variety of fair valuation techniques and methodologies. If independent third party pricing services are unable to supply prices for a portfolio investment, or if the prices supplied are deemed to be unreliable, the market price may be determined by using quotations from one or more broker/dealers. When such prices or quotations are not available, or when believed to be unreliable, securities may be priced using fair value procedures approved by the Board. These procedures permit, among other things, the use of a matrix, formula or other method that takes into consideration market indexes, yield curves and other specific adjustments to determine fair value. The Fund may also use fair value procedures if it is determined that a significant event has occurred between the time at which a market price is determined and the time at which the funds net asset value is calculated. The effect of using fair value pricing is that the Common Share net asset value will be subject to the judgment of the Board or its designee instead of being determined by the market.
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The Fund pays quarterly distributions stated in terms of a fixed cents per Common Share dividend rate that will be composed of supplemental amounts generally representing realized capital gains or, possibly, returns of capital representing unrealized capital gains or a return of your original investment. In addition, the Fund intends to distribute any net long-term capital gains to Common Shareholders as long-term capital gain dividends as frequently as quarterly. Quarterly distributions, including such supplemental amounts, are sometimes referred to as managed distributions.
The Fund will seek to establish a distribution rate that roughly corresponds to Nuveen Fund Advisors projections of the total return that could reasonably be expected to be generated by the Fund over an extended period of time, although the distribution rate will not be solely dependent on the amount of income earned or capital gains realized by the Fund. Nuveen Fund Advisors, in making such projections, may consider long-term historical returns and a variety of other factors. Distributions can only be made after paying accrued dividends to preferred shareholders, if any, and interest and required principal payments on borrowings, if any. The distribution policy recognizes that many investors are willing to accept the potentially higher asset volatility of the Funds equity investments compared to fixed-income investments, but they prefer a consistent level of cash distributions be available each quarter for reinvestment or for other purposes of their choosing.
If, for any quarterly distribution, net investment income and net realized capital gains were less than the amount of the distribution, the difference would be distributed from the Funds assets. In addition, in order to make such distributions, the Fund might have to sell a portion of its investment portfolio at a time when independent investment judgment might not dictate such action. The Funds final distribution for each calendar year will include any remaining net investment income undistributed during the year and may include any remaining net realized capital gains undistributed during the year. The Funds actual financial performance will likely vary significantly from quarter-to-quarter and from year-to-year, and there may be extended periods of up to several years when the distribution rate will exceed the Funds actual total returns. The Funds projected or actual distribution rate is not a prediction of what the Funds actual total returns will be over any specific future period.
As portfolio and market conditions change, the rate of distributions on the Common Shares and the Funds distribution policy could change. To the extent that the total return of the Funds overall strategy exceeds the distribution rate for an extended period, the Fund may be in a position to increase the distribution rate or distribute supplemental amounts to shareholders. Conversely, if the total return of the Funds overall strategy is less than the distribution rate for an extended period of time, the Fund will effectively be drawing upon its net assets to meet payments prescribed by its distribution policy. Similarly, for tax purposes such distributions by the Fund may consist in part of a return of capital to Common Shareholders. The exact tax characteristics of the Funds distributions will not be known until after the Funds fiscal year-end. Common Shareholders should not confuse a return of capital distribution with dividend yield or total return. There is no assurance that the Fund will continue to make quarterly distributions of net long-term capital gains. Under the terms of an exemptive order from the SEC, the Funds Board is required to determine whether to continue the quarterly distribution of net long-term capital gains if: (i) the Common Shares have traded at an average premium to NAV equal to or greater than 10%, as determined on the basis of the average of the discount or premium to the NAV of the Common Shares as of the close of each trading day over a 12-week rolling period, and (ii) the Funds distribution rate for that 12-week rolling period, expressed as a percentage of NAV as of the ending date of the 12-week rolling period, is greater than the Funds average annual total return in relation to the change in NAV over the 2-year period ending on the last day of the 12-week rolling period.
At the same time that it pays a quarterly distribution, the Fund will post on its website (www.nuveen.com/etf), and make available in written form to Common Shareholders, a written notice of the estimated sources and tax characteristics of the Funds distributions ( i.e ., what percentage of the distributions is estimated to constitute ordinary income, short-term capital gains, long-term capital gains, and/or a non-taxable return of capital) on a
44
year-to-date basis, in compliance with a federal securities law requirement that any fund paying a distribution from sources other than net investment income disclose to shareholders the respective portion attributable to such other sources. These estimates may be based on certain assumptions about the Funds expected investment returns and the realization of net gains, if any, over the remaining course of the year. These estimates may, and likely will, vary over time based on the activities of the Fund and changes in the value of portfolio investments. The Fund expects that it will provide this type of information primarily on a tax basis, instead of on a generally accepted accounting principles (GAAP) basis, because experience has shown that fund shareholders are most concerned about the tax character of their distributions, and because the Fund expects that the distributions tax characteristics will fairly reflect the economic basis of the Funds distributions and returns. The final determination of the source and tax characteristics of all distributions will be made after December 31 in each year, and reported to Common Shareholders on Form 1099-DIV early the following year.
As explained more fully below in Tax Matters, at least annually, the Fund intends to distribute to Common Shareholders any net capital gain (which is the excess of net long-term capital gain over net short-term capital loss) for each taxable year through its managed distributions after making interest and required principal payments on borrowings or paying any accrued dividends or making any redemption or liquidation payments to preferred shareholders or, alternatively, to retain all or a portion of the years net capital gain and pay U.S. federal income tax on the retained gain. Each Common Shareholder of record as of the end of the Funds taxable year will include in income for federal income tax purposes, as long-term capital gain, his or her share of any retained gain, will be deemed to have paid his or her proportionate share of the tax paid by the Fund on such retained gain, and will be entitled to an income tax credit or refund for that share of the tax. The Fund may treat any retained capital gain amount as a substitute for equivalent cash distributions. In addition, the Fund may make total distributions during a given calendar year in an amount that exceeds the Funds net investment income and net capital gain for that calendar year, in which case the excess will generally be treated by shareholders as return of capital for tax purposes. Distributions treated as return of capital will reduce a shareholders basis in his or her Common Shares, which will generally result in an increase in the amount of gain (or decrease in the amount of loss) that the shareholder will recognize on his or her sale or other disposition of such Common Shares.
Distributions will be reinvested in additional Common Shares under the Funds Dividend Reinvestment Plan unless a Common Shareholder elects to receive cash.
The Fund reserves the right to change its distribution policy and the basis for establishing the rate of its quarterly distributions at any time, subject to a finding by the Funds Board that such change is in the best interests of the Fund and its Common Shareholders.
If your Common Shares are registered directly with the Fund or if you hold your Common Shares with a brokerage firm that participates in the Funds Dividend Reinvestment Plan (the Plan) your distributions, including any capital gain distributions, will automatically be reinvested in additional Common Shares under the Plan unless you request otherwise. If you elect not to participate in the Plan, or are not eligible to participate because your brokerage firm does not participate in the Plan, you will receive all distributions in cash paid by check mailed directly to you or your brokerage firm by Computershare Trust Company, N.A. and Computershare Inc. (together, Computershare) as dividend paying agent (the Plan Agent). The tax consequences of a distribution are the same regardless of whether such distribution is reinvested or received in cash. See Tax Matters below.
Under the Plan, the number of Common Shares you will receive will be determined as follows:
(1) If the Common Shares are trading at or above NAV at the time of valuation, the Fund will issue new shares at a price equal to the greater of (i) NAV per Common Share on that date or (ii) 95% of the market price on that date.
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(2) If Common Shares are trading below NAV at the time of valuation, the Plan Agent will receive the dividend or distribution in cash and will purchase Common Shares in the open market, on the NYSE or elsewhere, for the participants accounts. It is possible that the market price for the Common Shares may increase before the Plan Agent has completed its purchases. Therefore, the average purchase price per share paid by the Plan Agent may exceed the market price at the time of valuation, resulting in the purchase of fewer shares than if the dividend or distribution had been paid in Common Shares issued by the Fund. The Plan Agent will use all dividends and distributions received in cash to purchase Common Shares in the open market within 30 days of the valuation date. Interest will not be paid on any uninvested cash payments. The Plan provides that if the Common Shares start trading at or above NAV before the Plan Agent has completed its purchases, the Plan Agent may cease purchasing Common Shares in the open market, and may invest the uninvested portion in new shares at a price equal to the greater of (i) NAV per Common Share determined on the last business day immediately prior to the purchase date or (ii) 95% of the market price on that date.
You may withdraw from the Plan at any time by giving written notice to the Plan Agent. If you withdraw or the Plan is terminated, you will receive whole shares in your account under the Plan and you will receive a cash payment for any fraction of a share in your account. If you wish, the Plan Agent will sell your shares and send you the proceeds, minus brokerage commissions and a $2.50 service fee.
The Plan Agent maintains all shareholders accounts in the Plan and gives written confirmation of all transactions in the accounts, including information you may need for tax records. Common Shares in your account will be held by the Plan Agent in non-certificated form. Any proxy you receive will include all Common Shares you have received under the Plan.
There is no brokerage charge for reinvestment of your dividends or distributions in Common Shares. However, all participants will pay a pro rata share of brokerage commissions incurred by the Plan Agent when it makes open market purchases.
Automatically reinvesting dividends and distributions does not mean that you do not have to pay income taxes due upon receiving dividends and distributions.
As noted above, if you hold your Common Shares with a brokerage firm that does not participate in the Plan, you will not be able to participate in the Plan and any dividend reinvestment may be effected on different terms than those described above. Consult your financial adviser for more information.
The Fund reserves the right to amend or terminate the Plan if in the judgment of the Board the change is warranted. There is no direct service charge to participants in the Plan; however, the Fund reserves the right to amend the Plan to include a service charge payable by the participants. Additional information about the Plan may be obtained from Computershare, P.O. Box 505000, Louisville, Kentucky, 40233-5000 (800) 257-8787.
The Fund may sell the Common Shares offered under this Prospectus through
|
at-the-market transactions; |
|
underwriting syndicates; and |
|
privately negotiated transactions. |
The Fund will bear the expenses of the offering, including but not limited to, the expenses of preparation of the Prospectus and SAI for the offering and the expense of counsel and auditors in connection with the offering.
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Distribution Through At-The-Market Transactions
The Fund has entered into a distribution agreement with Nuveen Securities (the Distribution Agreement), which has been filed as an exhibit to the Registration Statement of which this Prospectus is a part. Subject to the terms and conditions of the Distribution Agreement, the Fund may from time to time issue and sell its Common Shares through Nuveen Securities to certain broker-dealers which have entered into selected dealer agreements with Nuveen Securities. Currently, Nuveen Securities has entered into a selected dealer agreement (the Selected Dealer Agreement) with [ ] pursuant to which [ ] will be acting as Nuveen Securities sub-placement agent with respect to at-the-market offerings of Common Shares. The Selected Dealer Agreement has been filed as an exhibit to the Registration Statement of which this Prospectus forms a part.
Common Shares will only be sold on such days as shall be agreed to by the Fund and Nuveen Securities. Common Shares will be sold at prevailing market prices through the National Market System, subject to a minimum price to be established each day by Nuveen Securities. The minimum price on any day will not be less than the current NAV per Common Share plus the per share amount of the commission to be paid to Nuveen Securities. The Fund, Nuveen Securities, and [ ] will suspend the sale of Common Shares if the per share price of the shares is less than the minimum price.
The Fund will compensate Nuveen Securities with respect to sales of the Common Shares at a commission rate of up to 1.0% of the gross proceeds of the sale of Common Shares. Nuveen Securities will compensate sub-placement agents or other broker-dealers participating in the offering at a rate of up to 0.8% of the gross proceeds of the sale of Common Shares sold by that sub-placement agent or broker-dealer. Settlements of sales of Common Shares will occur on the second business day following the date on which any such sales are made. In connection with the sale of the Common Shares on behalf of the Fund, Nuveen Securities may be deemed to be an underwriter within the meaning of the 1933 Act, and the compensation of Nuveen Securities may be deemed to be underwriting commissions or discounts. Unless otherwise indicated in a further Prospectus supplement, Nuveen Securities will act as underwriter on a reasonable efforts basis.
The offering of Common Shares pursuant to the Distribution Agreement will terminate upon the earlier of (i) the sale of all Common Shares subject thereto or (ii) termination of the Distribution Agreement. The Fund and Nuveen Securities each have the right to terminate the Distribution Agreement in its discretion at any time. The Fund currently intends to distribute the shares offered pursuant to this Prospectus through at-the-market transactions, although from time to time it may also distribute shares through an underwriting syndicate or a privately negotiated transaction. To the extent shares are distributed other than through at-the-market transactions, the Fund will file a supplement to this Prospectus describing such transactions.
The Funds closing price on the NYSE on October 12, 2018 was $13.76.
Distribution Through Underwriting Syndicates
The Fund from time to time may issue additional Common Shares through a syndicated secondary offering. In order to limit the impact on the market price of the Funds Common Shares, underwriters will market and price the offering on an expedited basis ( e.g., overnight or similarly abbreviated offering period). The Fund will launch a syndicated offering on a day, and upon terms, mutually agreed upon between the Fund, Nuveen Securities, one of the Funds underwriters, and the underwriting syndicate.
The Fund will offer its shares at a price equal to a specified discount of up to 5% from the closing market price of the Funds Common Shares on the day prior to the offering date. The applicable discount will be negotiated by the Fund and Nuveen Securities in consultation with the underwriting syndicate on a transaction-by-transaction basis. The Fund will compensate the underwriting syndicate out of the proceeds of the offering based upon a sales load of up to 4% of the gross proceeds of the sale of Common Shares. The minimum net proceeds per share to the Fund will not be less than the greater of (i) the Funds latest NAV per share of Common Shares or (ii) 91% of the closing market price of the shares of the Funds Common Shares on the day prior to the offering date.
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Distribution Through Privately Negotiated Transactions
The Fund from time to time may sell directly to, and solicit offers from, institutional and other sophisticated investors, who may be deemed to be underwriters as defined in the 1933 Act for any resale of Common Shares.
The terms of such privately negotiated transactions will be subject to the discretion of the management of the Fund. In determining whether to sell Common Shares through a privately negotiated transaction, the Fund will consider relevant factors including, but not limited to, the attractiveness of obtaining additional funds through the sale of Common Shares, the purchase price to apply to any such sale of Common Shares and the person seeking to purchase the Common Shares.
Common Shares issued by the Fund through privately negotiated transactions will be issued at a price equal to the greater of (i) the NAV per share of the Funds Common Shares or (ii) at a discount ranging from 0% to 5% of the average daily closing market price of the Funds Common Shares at the close of business on the ten business days preceding the date upon which Common Shares are sold pursuant to the privately negotiated transaction. The applicable discount will be determined by the Fund on a transaction-by-transaction basis.
The principal business address of Nuveen Securities is 333 West Wacker Drive, Chicago, Illinois 60606.
Common Shares
The Declaration authorizes the issuance of an unlimited number of Common Shares. The Common Shares being offered have a par value of $0.01 per share and, subject to the rights of holders of preferred shares, if issued, and borrowings, if incurred, have equal rights to the payment of dividends and the distribution of assets upon liquidation of the Fund. The Common Shares being offered will, when issued, be fully paid and, subject to matters discussed in Certain Provisions in the Declaration of Trust and By-laws, non-assessable, and will have no preemptive or conversion rights or rights to cumulative voting. The Fund has no current intention of issuing preferred shares or incurring borrowings. However, if at some future time the Fund issues Preferred Shares and/or incurs borrowings, the Common Shareholders will not be entitled to receive any cash distributions from the Fund unless all accrued dividends on preferred shares and interest on borrowings have been paid, and (i) unless asset coverage (as defined in the 1940 Act) with respect to any borrowings would be at least 300% after giving effect to the distributions and (ii) unless asset coverage (again, as defined in the 1940 Act) with respect to preferred shares would be at least 200% after giving effect to the distributions. See Preferred Shares below.
The Common Shares are listed on the NYSE and trade under the ticker symbol JCE. The Fund intends to hold annual meetings of shareholders so long as the Common Shares are listed on a national securities exchange and such meetings are required as a condition to such listing. The Fund will not issue share certificates.
Unlike open-end funds, closed-end funds like the Fund do not provide daily redemptions. Rather, if a shareholder determines to buy additional Common Shares or sell shares already held, the shareholder may conveniently do so by trading on the exchange through a broker or otherwise. Shares of closed-end investment companies may frequently trade on an exchange at prices lower than NAV. Shares of closed-end investment companies like the Fund have, during some periods, traded at prices higher than NAV and, during other periods, have traded at prices lower than NAV. Because the market value of the Common Shares may be influenced by such factors as dividend levels (which are in turn affected by expenses), dividend stability, NAV, relative demand for and supply of such shares in the market, general market and economic conditions, and other factors beyond the control of the Fund, the Fund cannot guarantee you that Common Shares will trade at a price equal to or higher than NAV in the future. The Common Shares are designed primarily for long-term investors, and investors in the Common Shares should not view the Fund as a vehicle for trading purposes. See the SAI under Repurchase of Fund Shares; Conversion to Open-End Fund.
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Preferred Shares
As a non-fundamental policy, the Fund will not leverage its capital structure by issuing senior securities such as preferred shares or debt instruments. However, the Declaration authorizes the issuance of an unlimited number of preferred shares in one or more classes or series, with rights as determined by the Board, by action of the Board without the approval of the Common Shareholders. The terms of any preferred shares that may be issued by the Fund may be the same as, or different from, the terms described below, subject to applicable law and the Declaration.
Limited Issuance of Preferred Shares. Under the 1940 Act, the Fund can issue preferred shares with an aggregate liquidation value of up to one-half of the value of the Funds total net assets, measured immediately after issuance of the preferred shares. Liquidation value means the original purchase price of the shares being liquidated plus any accrued and unpaid dividends. In addition, the Fund is not permitted to declare any cash dividend or other distribution on its Common Shares unless the liquidation value of the preferred shares is less than one-half of the value of the Funds total net assets (determined after deducting the amount of such dividend or distribution) immediately after the distribution.
Distribution Preference. The preferred shares would have complete priority over the Common Shares as to distribution of assets.
Liquidation Preference. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Fund, holders of preferred shares would be entitled to receive a preferential liquidating distribution (expected to equal the original purchase price per share plus accumulated and unpaid dividends thereon, whether or not earned or declared) before any distribution of assets is made to holders of Common Shares.
Voting Rights. Preferred shares are required to be voting shares and to have equal voting rights with Common Shares. Except as otherwise indicated in this Prospectus or the SAI and except as otherwise required by applicable law, holders of preferred shares would vote together with Common Shareholders as a single class.
Holders of preferred shares, voting as a separate class, would be entitled to elect two of the Funds trustees (following the establishment of the Fund by an initial trustee, the Declaration provides for a total of no less than two and no more than fifteen trustees). The remaining trustees would be elected by Common Shareholders and holders of preferred shares, voting together as a single class. In the unlikely event that two full years of accrued dividends are unpaid on the preferred shares, the holders of all outstanding preferred shares, voting as a separate class, would be entitled to elect a majority of the Funds trustees until all dividends in arrears have been paid or declared and set apart for payment. In order for the Fund to take certain actions or enter into certain transactions, a separate class vote of holders of preferred shares would be required, in addition to the single class vote of the holders of preferred shares and Common Shares. See Certain Provisions in the Declaration of Trust and By-Laws and the SAI under Description of SharesPreferred SharesVoting Rights.
Redemption, Purchase and Sale of Preferred Shares . The terms of the preferred shares may provide that they may be redeemed by the issuer at certain times, in whole or in part, at the original purchase price per share plus accumulated dividends. Any redemption or purchase of preferred shares by the Fund would reduce the leverage applicable to Common Shares, while any issuance of such shares by the Fund would increase such leverage.
In the event of any future issuance of preferred shares, the Fund likely would apply for ratings from an nationally recognized statistical rating organization (NRSRO). In such event, as long as preferred shares are outstanding, the composition of the Funds portfolio would reflect guidelines established by such NRSRO. Based on previous guidelines established by such NRSROs for the securities of other issuers, the Fund anticipates that the guidelines may impose asset coverage or portfolio composition requirements that are more stringent than
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those imposed on the Fund by the 1940 Act. However, at this time, no assurance can be given as to the nature or extent of the guidelines that may be imposed in connection with obtaining a rating of any preferred shares.
Borrowings
As a non-fundamental policy, the Fund will not leverage its capital structure by issuing senior securities such as preferred shares or debt instruments. However, the Declaration authorizes the Fund, without approval of the Common Shareholders, to borrow money. In this connection, the Fund may issue notes or other evidence of indebtedness (including bank borrowings or commercial paper) and may secure any such borrowings by mortgaging, pledging or otherwise subjecting as security the Funds assets. In connection with such borrowing, the Fund may be required to maintain minimum average balances with the lender or to pay a commitment or other fee to maintain a line of credit. Any such requirements would increase the cost of borrowing over the stated interest rate. Under the requirements of the 1940 Act, the Fund, immediately after any such borrowings, must have an asset coverage of at least 300%. With respect to any such borrowings, asset coverage means the ratio that the value of the total assets of the Fund, less all liabilities and indebtedness not represented by senior securities (as defined in the 1940 Act), bears to the aggregate amount of such borrowing represented by senior securities issued by the Fund. As with the issuance of preferred shares, certain types of borrowing may result in the Fund being subject to certain restrictions imposed by guidelines of one or more rating agencies that may issue ratings for commercial paper or notes issued by the Fund. Such restrictions may be more stringent than those imposed by the 1940 Act.
The rights of lenders to the Fund to receive interest on and repayment of principal of any such borrowings would be senior to those of the Common Shareholders, and the terms of any such borrowings may contain provisions that limit certain activities of the Fund, including the payment of dividends to Common Shareholders in certain circumstances. Further, the 1940 Act would (in certain circumstances) grant to the lenders to the Fund certain voting rights in the event of default in the payment of interest on or repayment of principal. In the event that such provisions would impair the Funds status as a RIC under the Code, the Fund would repay the borrowings. Any borrowing will likely be ranked senior or equal to all other existing and future borrowings of the Fund. The Fund may borrow up to 7.5% of its Managed Assets for cash management purposes. See Investment Restrictions in the SAI.
CERTAIN PROVISIONS IN THE DECLARATION OF TRUST AND BY-LAWS
Under Massachusetts law, shareholders could, under certain circumstances, be held personally liable for the obligations of the Fund. However, the Declaration contains an express disclaimer of shareholder liability for debts or obligations of the Fund and requires that notice of such limited liability be given in each agreement, obligation or instrument entered into or executed by the Fund or the trustees. The Declaration further provides for indemnification out of the assets and property of the Fund for all loss and expense of any shareholder held personally liable for the obligations of the Fund. Thus, the risk of a shareholder incurring financial loss on account of shareholder liability is limited to circumstances in which the Fund would be unable to meet its obligations. The Fund believes that the likelihood of such circumstances is remote.
The Declaration and By-laws include provisions that could limit the ability of other entities or persons to acquire control of the Fund or to convert the Fund to open-end status. Specifically, the Declaration requires a vote by holders of at least two-thirds of the Common Shares and, if issued, preferred shares, voting together as a single class, except as described below, to authorize (1) a conversion of the Fund from a closed-end to an open-end investment company, (2) a merger or consolidation of the Fund, or a series or class of the Fund, with any corporation, association, trust or other organization or a reorganization of the Fund, or a series or class of the Fund, (3) a sale, lease or transfer of all or substantially all of the Funds assets (other than in the regular course of the Funds investment activities), (4) in certain circumstances, a termination of the Fund, or a series or class of the Fund or (5) a removal of trustees by shareholders, and then only for cause, unless, with respect to (1) through
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(4), such transaction has already been authorized by the affirmative vote of two-thirds of the total number of trustees fixed in accordance with the Declaration or the By-laws, in which case the affirmative vote of the holders of at least a majority of the Funds Common Shares and, if issued, preferred shares outstanding at the time, voting together as a single class, would be required; provided, however, that where only a particular class or series is affected (or, in the case of removing a trustee, when the trustee has been elected by only one class), only the required vote by the applicable class or series would be required. Approval of shareholders would not be required, however, for any transaction, whether deemed a merger, consolidation, reorganization or otherwise whereby the Fund issues shares in connection with the acquisition of assets (including those subject to liabilities) from any other investment company or similar entity. In the case of the conversion of the Fund to an open-end investment company, or in the case of any of the foregoing transactions constituting a plan of reorganization that adversely affects the holders of any outstanding preferred shares, the action in question would also require the affirmative vote of the holders of at least two-thirds of the preferred shares outstanding at the time, voting as a separate class, or, if such action has been authorized by the affirmative vote of two-thirds of the total number of trustees fixed in accordance with the Declaration or the By-laws, the affirmative vote of the holders of at least a majority of the preferred shares outstanding at the time, voting as a separate class. None of the foregoing provisions may be amended except by the vote of at least two-thirds of the Common Shares and, if issued, preferred shares, voting together as a single class. The votes required to approve the conversion of the Fund from a closed-end to an open-end investment company or to approve transactions constituting a plan of reorganization that adversely affects the holders of any outstanding preferred shares are higher than those required by the 1940 Act. The Board believes that the provisions of the Declaration relating to such higher votes are in the best interest of the Fund and its shareholders. The Board is divided into three classes, with each class serving a different term. This staggered Board structure could delay for up to two years the replacement of a majority of the Board. See the SAI under Certain Provisions in the Declaration of Trust.
The Declaration provides that the obligations of the Fund are not binding upon the trustees of the Fund individually, but only upon the assets and property of the Fund, and that the trustees shall not be liable for errors of judgment or mistakes of fact or law. Nothing in the Declaration, however, protects a trustee against any liability 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.
The provisions of the Declaration and By-laws described above could have the effect of depriving the Common Shareholders of opportunities to sell their Common Shares at a premium over the then current market price of the Common Shares by discouraging a third party from seeking to obtain control of the Fund in a tender offer or similar transaction. The overall effect of these provisions is to render more difficult the accomplishment of a merger or the assumption of control by a third party. They provide, however, the advantage of potentially requiring persons seeking control of the Fund to negotiate with its management regarding the price to be paid and facilitating the continuity of the Funds investment objectives and policies. The Funds Board has considered the foregoing anti-takeover provisions and concluded that they are in the best interests of the Fund and its Common Shareholders.
Reference should be made to the Declaration and By-laws on file with the SEC for the full text of these provisions.
REPURCHASE OF FUND SHARES; CONVERSION TO OPEN-END FUND
The Fund is a closed-end investment company and as such its shareholders will not have the right to cause the Fund to redeem their shares. Instead, the Common Shares will trade in the open market at a price that will be a function of several factors, including distribution levels (which are in turn affected by expenses), NAV, distribution stability, relative demand for and supply of such shares in the market, general market and economic conditions and other factors. Because shares of closed-end investment companies may frequently trade at prices lower than NAV, the Funds Board has currently determined that, at least annually, it will consider action that
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might be taken to reduce or eliminate any material discount from NAV in respect of Common Shares, which may include the repurchase of such shares in the open market or in private transactions, the making of a tender offer for such shares at NAV, or the conversion of the Fund to an open-end investment company. The Fund cannot assure you that its Board will decide to take any of these actions, or that share repurchases or tender offers will actually reduce market discount. On August 7, 2018, the Funds Board renewed the Funds open market share repurchase program under which the Fund may repurchase up to 10% of its Common Shares. Since the inception of the Funds share repurchase program through October 12, 2018, the Fund has repurchased 449,800 Common Shares under the program.
If the Fund converted to an open-end investment company, it would be required to redeem all Preferred Shares then outstanding (requiring in turn that it liquidate a portion of its investment portfolio), and the Common Shares would no longer be listed on the NYSE or elsewhere. In contrast to a closed-end investment company, shareholders of an open-end investment company may require the company to redeem their shares at any time (except in certain circumstances as authorized by the 1940 Act or the rules thereunder) at their NAV, less any redemption charge that is in effect at the time of redemption. As a result, conversion to open-end status may require changes in the management of the Funds portfolio in order to meet the liquidity requirements applicable to open-end funds. Because portfolio securities may have to be liquidated to meet redemptions, conversion could affect the Funds ability to meet its investment objective or to use certain investment policies and techniques described above. If converted to an open-end fund, the Fund expects to pay all redemptions in cash, but intends to reserve the right to pay redemption requests in a combination of cash or securities. If such partial payment in securities were made, investors may incur brokerage costs in converting such securities to cash. If the Fund were converted to an open-end fund, it is likely that new Common Shares would be sold at NAV plus a sales load. See the SAI under Certain Provisions in the Declaration of Trust for a discussion of the voting requirements applicable to the conversion of the Fund to an open-end investment company.
Before deciding whether to take any action if the Common Shares trade below NAV, the Board would consider all relevant factors, including the extent and duration of the discount, the liquidity of the Funds portfolio, the impact of any action that might be taken on the Fund or its shareholders, and market considerations. Based on these considerations, even if the Funds shares should trade at a discount, the Board may determine that, in the interest of the Fund and its shareholders, no action should be taken. See the SAI under Repurchase of Fund Shares; Conversion to Open-End Fund for a further discussion of possible action to reduce or eliminate such discount to NAV.
The following is a general summary of certain U.S. federal income tax consequences that may be relevant to a shareholder that acquires, holds and/or disposes of shares of the Fund. This discussion only addresses U.S. federal income tax consequences to U.S. shareholders who hold their shares as capital assets and does not address all of the U.S. federal income tax consequences that may be relevant to particular shareholders in light of their individual circumstances. This discussion also does not address the tax consequences to shareholders who are subject to special rules, including, without limitation, shareholders with large positions in the Fund, financial institutions, insurance companies, dealers in securities or foreign currencies, foreign holders, persons who hold their shares as or in a hedge against currency risk, a constructive sale, or conversion transaction, holders who are subject to the federal alternative minimum tax, or tax-exempt or tax-deferred plans, accounts, or entities. In addition, the discussion does not address any state, local, or foreign tax consequences. The discussion reflects applicable tax laws of the United States as of the date of this Prospectus, which tax laws may be changed or subject to new interpretations by the courts or the IRS retroactively or prospectively. No attempt is made to present a detailed explanation of all U.S. federal income tax concerns affecting the Fund and its shareholders, and the discussion set forth herein does not constitute tax advice. Investors are urged to consult their own tax advisers to determine the specific tax consequences to them of investing in the Fund, including the applicable federal, state, local and foreign tax consequences to them and the effect of possible changes in tax laws.
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The recently enacted tax legislation commonly referred to as the Tax Cuts and Jobs Act (the Tax Act) makes significant changes to the U.S. federal income tax rules for taxation of individuals and corporations, generally effective for taxable years beginning after December 31, 2017. Many of the changes applicable to individuals are temporary and would apply only to taxable years beginning after December 31, 2017 and before January 1, 2026. There are only minor changes with respect to the specific rules only applicable to a RIC, such as the Fund. The Tax Act, however, makes numerous other changes to the tax rules that may affect shareholders and the Fund. You are urged to consult with your own tax advisor regarding how the Tax Act affects your investment in the Fund.
The Fund has elected to be treated, and intends to qualify each year as a RIC under Subchapter M of the Code. In order to qualify as a RIC, the Fund must satisfy certain requirements regarding the sources of its income, the diversification of its assets and the distribution of its income. As a RIC, the Fund is not expected to be subject to federal income tax on the income and gains it timely distributes to its shareholders.
The Fund invests primarily in equity securities. The Fund may distribute to its shareholders amounts that are treated as long-term capital gain or ordinary income (which may include short-term capital gains). These distributions may be subject to federal, state and local taxation, depending on a shareholders situation. If so, they are taxable whether or not such distributions are reinvested. Net capital gain distributions (the excess of net long-term capital gain over net short-term capital loss) are generally taxable at rates applicable to long-term capital gains regardless of how long a shareholder has held its shares. Long-term capital gains are currently taxable to non-corporate shareholders at a maximum federal income tax rate of 20%. In addition, certain individuals, estates and trusts are subject to a 3.8% Medicare tax on net investment income, including net capital gains and other taxable dividends. Corporate shareholders are taxed on capital gain at the same rates as apply to ordinary income, which the Tax Act has reduced to 21%. The Fund expects that a portion of its distributions to shareholders from its investments will qualify for the dividends-received deduction available to corporate shareholders and as qualified dividend income to non-corporate shareholders; provided certain holding period and other requirements are satisfied. Distributions in excess of the Funds current and accumulated earnings and profits will represent a return of capital for federal income tax purposes to the extent of the shareholders basis in the shares and thus will generally not be taxable to the shareholder. To the extent such distributions exceed the shareholders basis in the shares, they will be treated as gain from the sale of such shares and will be treated as capital gain (assuming the shares are held as a capital asset).
In order for some portion of the dividends received by a Fund shareholder to be qualified dividend income, the Fund must meet certain holding period and other requirements with respect to some portion of the dividend-paying stocks in its portfolio and the shareholder must meet the same holding period and other requirements with respect to the shareholders Fund shares. A dividend will not be treated as qualified dividend income (at either the Fund or shareholder level) (i) if the dividend is received with respect to any share of stock held (or treated as held) for fewer than 61 days during the 121-day period beginning on the date which is 60 days before the date on which such share becomes ex-dividend with respect to such dividend (or, in the case of certain preferred stock, 91 days during the 181-day period beginning 90 days before such date), (ii) to the extent that the recipient is under an obligation (whether pursuant to a short sale or otherwise) to make related payments with respect to positions in substantially similar or related property, (iii) if the recipient elects to have the dividend income treated as investment income for purposes of the limitation on deductibility of investment interest, or (iv) if the dividend is received from a foreign corporation that is (a) not eligible for the benefits of a comprehensive income tax treaty with the United States (with the exception of dividends paid on stock of such a foreign corporation that is readily tradable on an established securities market in the United States) or (b) treated as a passive foreign investment company.
In general, dividends of net investment income received by corporate shareholders of the Fund will qualify for the 50% dividends-received deduction generally available to corporations to the extent of the amount of eligible dividends received by the Fund from domestic corporations for the taxable year. A dividend received by the Fund will not be treated as a qualifying dividend (i) if it has been received with respect to any share of stock
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that the Fund has held (or is treated as holding) for less than 46 days (91 days in the case of certain preferred stock) during the 91-day period beginning on the date which is 45 days before the date on which such share becomes ex-dividend with respect to such dividend (during the 181-day period beginning 90 days before such date in the case of certain preferred stock) or (ii) to the extent that the Fund is under an obligation (pursuant to a short sale or otherwise) to make related payments with respect to positions in substantially similar or related property. Moreover, the dividends-received deduction may be disallowed or reduced (i) if a corporate shareholder fails to satisfy the foregoing requirements with respect to its shares of the Fund or (ii) by application of various provisions of the Code (for instance, the dividends-received deduction is reduced in the case of a dividend received on debt-financed portfolio stock (generally, stock acquired with borrowed funds)). For purposes of determining the holding period for stock on which a dividend is received, such holding period is reduced for any period the recipient has an option to sell, is under a contractual obligation to sell or has made (and not closed) a short sale of substantially identical stock or securities, and in certain other circumstances.
The straddle rules discussed below could cause distributions that would otherwise qualify for the dividends-received deduction or constitute qualified dividend income to fail to satisfy the applicable holding period requirements.
As a RIC, the Fund will not be subject to federal income tax in any taxable year provided that it meets certain distribution requirements. The Fund may retain for investment some (or all) of its net capital gain. If the Fund retains any net capital gain or investment company taxable income, it will be subject to tax at regular corporate rates on the amount retained. If the Fund retains any net capital gain, it may designate the retained amount as undistributed capital gains in a notice to its shareholders who, if subject to federal income tax on long-term capital gains, (i) will be required to include in income for federal income tax purposes, as long-term capital gain, their share of such undistributed amount; (ii) will be entitled to credit their proportionate shares of the federal income tax paid by the Fund on such undistributed amount against their federal income tax liabilities, if any; and (iii) may claim refunds to the extent the credit exceeds such liabilities. For federal income tax purposes, the basis of shares owned by a shareholder of the Fund will be increased by an amount equal to the difference between the amount of undistributed capital gains included in the shareholders gross income and the tax deemed paid by the shareholder under clause (ii) of the preceding sentence.
Distributions declared by the Fund to shareholders of record in October, November or December and paid during the following January will be treated as having been paid by the Fund and received by shareholders in the year the distributions were declared.
Amounts not distributed on a timely basis in accordance with a calendar year distribution requirement are subject to a nondeductible 4% federal excise tax. To prevent imposition of the excise tax, the Fund must distribute during each calendar year an amount at least equal to the sum of (i) 98% of its ordinary income (not taking into account any capital gains or losses) for the calendar year, (ii) 98.2% of its capital gains in excess of its capital losses (adjusted for certain ordinary losses) for the one-year period ending October 31 of the calendar year, and (iii) any ordinary taxable income and capital gains for previous years that were not distributed during those years and on which the Fund paid no U.S. federal income tax. To prevent application of the excise tax, the Fund intends to make distributions in accordance with the calendar year distribution requirement.
Each shareholder will receive an annual statement summarizing the shareholders distributions.
The Funds investments may be subject to special provisions of the Code that may, among other things, (i) disallow, suspend or otherwise limit the allowance of certain losses or deductions, (ii) convert lower taxed long-term capital gains into higher taxed short-term capital gains or ordinary income, (iii) convert an ordinary loss or a deduction into a capital loss, (iv) cause the Fund to recognize income or gain without a corresponding receipt of cash, (v) adversely alter the characterization of certain Fund investments or distributions and/or (vi) affect the Funds ability to qualify as a RIC.
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Some of the Funds index call options may be considered section 1256 contracts. Code section 1256 generally will require any gain or loss arising from the lapse, closing out or exercise of such positions to be treated as 60% long-term and 40% short-term capital gain or loss. In addition, the Fund generally will be required to mark to market ( i.e., treat as sold for fair market value) each outstanding index option position that is a section 1256 contract at the close of each taxable year (and on October 31 of each year for excise tax purposes). If a section 1256 contract held by the Fund at the end of a taxable year is sold in the following year, the amount of any gain or loss realized on such sale will be adjusted to reflect the gain or loss previously taken into account under the mark to market rules. In addition to most index call options, section 1256 contracts under the Code include certain other options contracts, certain regulated futures contracts, and certain other financial contracts.
The Funds index call options that do not qualify as section 1256 contracts under the Code generally will be treated as equity options governed by Code section 1234. Pursuant to Code section 1234, if a written option expires unexercised, the premium received is short-term capital gain to the Fund. If the Fund enters into a closing transaction, the difference between the premium received for writing the option, and the amount paid to close out its position generally is short-term capital gain or loss.
Offsetting positions held by the Fund involving certain derivative instruments, such as options, forward, and futures, as well as its long and short positions in portfolio securities, may be considered, for U.S. federal income tax purposes, to constitute straddles. Straddles are defined to include offsetting positions in actively traded personal property. For instance, a straddle can arise if the Fund writes a certain covered call option on a stock ( i.e., a call on a stock owned by the Fund), or writes a call option on a stock index to the extent the Funds stock holdings (and any subset thereof) and the index on which it has written a call overlap sufficiently to constitute a straddle under applicable Treasury Regulations. The tax treatment of straddles is governed by section 1092 of the Code which, in certain circumstances, overrides or modifies the provisions of section 1256 described above. If the Fund is treated as entering into a straddle and at least one (but not all) of the Funds positions in derivative contracts comprising a part of such straddle is a section 1256 contract, described above, then such straddle could be characterized as a mixed straddle. The Fund may make one or more elections with respect to mixed straddles. Depending upon which election is made, if any, the results with respect to the Fund may differ. Generally, to the extent the straddle rules apply to positions established by the Fund, losses realized by the Fund may be deferred to the extent of unrealized gain in any offsetting positions. Moreover, as a result of the straddle rules, short-term capital loss on straddle positions may be recharacterized as long-term capital loss, and long-term capital gain may be characterized as short-term capital gain. In addition, the existence of a straddle can cause the holding periods to be tolled on the offsetting positions. As a result, the straddle rules could cause distributions that would otherwise constitute qualified dividend income or qualify for the dividends-received deduction to fail to satisfy the applicable holding period requirements described above. Furthermore, the Fund may be required to capitalize, rather than deduct currently, any interest expense and carrying charges applicable to a position that is part of a straddle, including any interest on indebtedness incurred or continued to purchase or carry any positions that are part of a straddle. The application of the straddle rules to certain offsetting Fund positions can therefore affect the amount, timing and/or character of distributions to shareholders, and may result in significant differences from the amount, timing and/or character of distributions that would have been made by the Fund if it had not entered into offsetting positions in respect of certain of its portfolio securities.
If the Fund enters into a constructive sale of any appreciated financial position in its portfolio, the Fund will be treated as if it had sold and immediately repurchased the property and must recognize gain (but not loss) with respect to that position. A constructive sale of an appreciated financial position occurs when the Fund enters into certain offsetting transactions with respect to the same or substantially identical property, including, but not limited to: (i) a short sale; (ii) an offsetting notional principal contract; (iii) a futures or forward contract; or (iv) other transactions identified in future Treasury Regulations. The character of the gain from constructive sales will depend upon the Funds holding period in the appreciated financial position. Losses realized from a sale of a position that was previously the subject of a constructive sale will be recognized when the position is subsequently disposed of. The character of such losses will depend upon the Funds holding period in the position beginning with the date the constructive sale was deemed to have occurred and the application of various
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loss deferral provisions in the Code. Constructive sale treatment does not apply to certain closed transactions, including if such a transaction is closed on or before the 30th day after the close of the Funds taxable year and the Fund holds the appreciated financial position unhedged throughout the 60-day period beginning with the day such transaction was closed.
The redemption, sale or exchange of shares normally will result in capital gain or loss to shareholders who hold their shares as capital assets. Generally, a shareholders gain or loss will be long-term capital gain or loss if the shares have been held for more than one year. The gain or loss on shares held for one year or less will generally be treated as short-term capital gain or loss. Present law taxes both long-term and short-term capital gains of corporations at the same rates applicable to ordinary income. For non-corporate taxpayers, however, long-term capital gains are currently taxed at a maximum federal income tax rate of 20%, while short-term capital gains and other ordinary income are currently taxed at ordinary income rates. An additional 3.8% Medicare tax may also apply to certain individual, estate or trust shareholders capital gain from the sale or other disposition of their shares. Any loss on the sale or disposition of shares held for six months or less will be treated as a long-term capital loss to the extent of any net capital gain distributions received by the shareholder on such shares. Any loss realized on a sale or exchange of shares of the Fund will be disallowed to the extent those shares of the Fund are replaced by other substantially identical shares of the Fund or other substantially identical stock or securities (including through reinvestment of dividends) within a period of 61 days beginning 30 days before and ending 30 days after the date of disposition of the original shares. In that event, the basis of the replacement shares will be adjusted to reflect the disallowed loss. The deductibility of capital losses is subject to limitations.
The Fund may be required to withhold U.S. federal income tax at a rate of 24% from all distributions and redemption proceeds payable to a shareholder if the shareholder fails to provide the Fund with his, her or its correct taxpayer identification number or to make required certifications, or if the shareholder has been notified by the IRS (or the IRS notifies the Fund) that he, she or it is subject to backup withholding. Backup withholding is not an additional tax; rather, it is a way in which the IRS ensures it will collect taxes otherwise due. Any amounts withheld may be credited against a shareholders U.S. federal income tax liability.
The custodian of the Funds assets is State Street Bank and Trust Company, One Lincoln Street, Boston, Massachusetts 02111 (the Custodian). The Custodian performs custodial, fund accounting and portfolio accounting services. The Funds transfer, shareholder services and dividend paying agent is Computershare Inc. and Computershare Trust Company, N.A. (the Transfer Agent). The Transfer Agent is located at 250 Royall Street, Canton, Massachusetts 02021.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PricewaterhouseCoopers LLP, an independent registered public accounting firm, provides auditing services to the Fund. The principal business address of PricewaterhouseCoopers LLP is located at 1 North Wacker Drive, Chicago, Illinois, 60606.
Certain legal matters in connection with the Common Shares will be passed upon for the Fund by Morgan Lewis & Bockius LLP, Washington, DC.
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Standard & Poors ® , S&P ® , Standard & Poors 500, S&P 500 ® and 500 are trademarks of The McGraw-Hill Companies, Inc. and the Fund has the right to use such trademarks pursuant to a licensing agreement. The Fund is not sponsored, endorsed, sold or promoted by Standard & Poors, a division of the McGraw-Hill Companies, Inc. (S&P), and S&P makes no representation regarding the advisability of investing in the Fund.
The Fund is not sponsored, endorsed, sold or promoted by S&P. S&P makes no representation or warranty, express or implied, to the owners of the Fund or any member of the public regarding the advisability of investing in securities generally or in the Fund particularly or the ability of the Index to track general stock market performance. S&Ps only relationship to the Fund is the licensing of certain trademarks and trade names of S&P and of the Index which is determined, composed and calculated by S&P without regard to the Fund. S&P has no obligation to take the needs of the Fund or the owners of the Fund into consideration in determining, composing or calculating the Index. S&P is not responsible for and has not participated in the determination of the prices and amount of the Fund or the timing of the issuance or sale of the Fund or in the determination or calculation of the equation by which the Fund is to be converted into cash. S&P has no obligation or liability in connection with the administration, marketing or trading of the Product.
S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE INDEX OR ANY DATA INCLUDED THEREIN AND S&P SHALL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. S&P MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY LICENSEE, OWNERS OF THE FUND, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE INDEX OR ANY DATA INCLUDED THEREIN. S&P MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL S&P HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
The Fund is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the 1934 Act) and the 1940 Act and is required to file reports, proxy statements and other information with the SEC. Reports, proxy statements, and other information about the Fund can be inspected at the offices of the NYSE.
This Prospectus does not contain all of the information in the Funds Registration Statement, including amendments, exhibits, and schedules.
Additional information about the Fund and the Common Shares can be found in the Funds Registration Statement (including amendments, exhibits, and schedules) on Form N-2 filed with the SEC. The SEC maintains a web site (http://www.sec.gov) that contains the Funds Registration Statement, other documents incorporated by reference, and other information the Fund has filed electronically with the SEC, including proxy statements and reports file under the Exchange Act.
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STATEMENT OF ADDITIONAL INFORMATION
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[ ] Common Shares
Nuveen Core Equity Alpha Fund
PROSPECTUS
[ ], 2018
EPR-JCE-XXXX
SUBJECT TO COMPLETION, DATED OCTOBER 30, 2018
The information in this Statement of Additional Information is not complete and may be changed. We may not sell these securities until the registration statement filed with the U.S. Securities and Exchange Commission is effective. This Statement of Additional Information is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer and sale is not permitted.
[ ] COMMON SHARES
NUVEEN CORE EQUITY ALPHA FUND
STATEMENT OF ADDITIONAL INFORMATION
Nuveen Core Equity Alpha Fund (the Fund) is a diversified, closed-end management investment company.
This Statement of Additional Information (the SAI) relating to common shares of the Fund (Common Shares) does not constitute a prospectus, but should be read in conjunction with the Funds prospectus relating thereto dated [ ], 2018 (the Prospectus). This SAI does not include all information that a prospective investor should consider before purchasing Common Shares. Investors should obtain and read the Funds Prospectus prior to purchasing such shares. In addition, the Funds financial statements and the independent registered public accounting firms report therein included in the Funds annual report dated December 31, 2017, are incorporated herein by reference. The information with respect to the six months ended June 30, 2018 is unaudited and is included in the Funds 2018 Semi-Annual Report which also is incorporated herein by reference. A copy of the Funds Prospectus, Annual and Semi-Annual reports to shareholders, and other information about the Fund may be obtained without charge by calling (800) 257-8787, by writing to the Fund or from the Funds website (http://www.nuveen.com). You may also obtain a copy of the Funds Prospectus on the Securities and Exchange Commissions website (http://www.sec.gov). Capitalized terms used but not defined in this SAI have the meanings ascribed to them in the Prospectus.
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-i-
The net proceeds from the issuance of Common Shares hereunder will be invested in accordance with the Funds investment objective and policies as stated below. Pending investment, the timing of which may vary depending on the size of the investment but in no case is expected to exceed 30 days, it is anticipated that the proceeds will be invested in short-term or long-term securities issued by the U.S. Government or its agencies or instrumentalities or in high-quality, short-term money market instruments.
INVESTMENT OBJECTIVE AND POLICIES
The Funds investment objective is to provide an attractive level of total return. The Fund seeks to achieve its investment objective primarily through long-term capital appreciation and secondarily through income and gains. The Fund invests in a portfolio of common stocks selected from among the stocks comprising the S&P 500 ® Index (the Index) employing a proprietary mathematical process that seeks to produce risk-adjusted excess returns over the Index (commonly referred to as alpha) over extended periods of time with an equal or lesser amount of investment risk compared to the Index. In addition, to seek to enhance the Funds risk-adjusted returns through a meaningful reduction in the volatility of the Funds returns relative to the returns of the Index over extended periods of time, the Fund, to a limited extent, writes (sells) index call options and call options on customs baskets of securities.
A more complete description of the Funds investment objective and policies is set forth in the Funds Prospectus.
Except as described below, the Fund, as a fundamental policy, may not, without the approval of the holders of a majority of the outstanding Common Shares and, if applicable, preferred shares voting together as a single class, and of the holders of a majority of the outstanding preferred shares voting as a separate class, if applicable:
(1) Issue senior securities, as defined in the Investment Company Act of 1940, as amended (the 1940 Act), other than (i) preferred shares that immediately after issuance will have asset coverage of at least 200%, (ii) indebtedness that immediately after issuance will have asset coverage of at least 300% or (iii) the borrowings permitted by investment restriction (2) set forth below;
(2) Borrow money, except as permitted by the 1940 Act and exemptive orders granted under the 1940 Act;
(3) Act as underwriter of another issuers securities, except to the extent that the Fund may be deemed to be an underwriter within the meaning of the Securities Act of 1933, as amended (the 1933 Act), in connection with the purchase and sale of portfolio securities or acting as an agent or one of a group of co-agents in originating adjustable rate senior loans;
(4) Invest more than 25% of its total assets in securities of issuers in any one industry, provided, however, that such limitation shall not apply to obligations issued or guaranteed by the U.S. Government or by its agencies or instrumentalities, and provided further that for purposes of this limitation, the term issuer shall not include a lender selling a participation to the Fund together with any other person interpositioned between such lender and the Fund with respect to a participation;
(5) Purchase or sell real estate, except that this shall not prevent the Fund from investing in securities of companies that deal in real estate or are engaged in the real estate business, including real estate investment trusts, and securities secured by real estate or interests therein and the Fund may hold and sell real estate or mortgages on real estate acquired through default, liquidation or other distributions of an interest in real estate as a result of the Funds ownership of such securities;
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(6) Purchase or sell physical commodities unless acquired as a result of ownership of securities or other instruments except that this shall not prevent the Fund from purchasing or selling options, futures contracts or derivative instruments or from investing in securities or other instruments backed by physical commodities;
(7) Make loans, except as permitted by the 1940 Act and exemptive orders granted under the 1940 Act; and
(8) With respect to 75% of the value of the Funds total assets, purchase any securities (other than obligations issued or guaranteed by the U.S. Government or by its agencies or instrumentalities), if, as a result, more than 5% of the Funds total assets would then be invested in securities of a single issuer or if, as a result, the Fund would hold more than 10% of the outstanding voting securities of any single issuer.
For the purpose of applying the limitation set forth in subparagraph (8) above, a governmental issuer shall be deemed the single issuer of a security when its assets and revenues are separate from other governmental entities and its securities are backed only by its assets and revenues. Similarly, in the case of a non-governmental issuer, if the security is backed only by the assets and revenues of the non-governmental issuer, then such non-governmental issuer would be deemed to be the single issuer. Where a security is also backed by the enforceable obligation of a superior or unrelated governmental or other entity (other than a bond insurer), it shall also be included in the computation of securities owned that are issued by such governmental or other entity. Where a security is guaranteed by a governmental entity or some other facility, such as a bank guarantee or letter of credit, such a guarantee or letter of credit would be considered a separate security and would be treated as an issue of such government, other entity or bank.
Under the 1940 Act, the Fund may invest only up to 10% of its total assets in the aggregate in shares of other investment companies and only up to 5% of its total assets in any one investment company, provided the investment does not represent more than 3% of the voting stock of the acquired investment company at the time such shares are purchased. As a stockholder in any investment company, the Fund will bear its ratable share of that investment companys expenses, and will remain subject to payment of the Funds management, advisory and administrative fees with respect to assets so invested. Holders of Common Shares (Common Shareholders) would therefore be subject to duplicative expenses to the extent the Fund invests in other investment companies. In addition, the securities of other investment companies may be leveraged and therefore will be subject to the same leverage risks described herein. The Fund will consider the investments of underlying investment companies when determining compliance with Rule 35d-1 under the 1940 Act and when determining compliance with its own concentration policy, in each case to the extent the Fund has sufficient information about such investments after making a reasonable effort to obtain current information about the investments of underlying companies.
In addition to the foregoing fundamental investment policies, the Fund is also subject to the following non-fundamental restrictions and policies, which may be changed by the Funds Board (the Board or the Trustees). The Fund may not:
(1) sell securities short, except that the Fund may make short sales of securities if, at all times when a short position is open, the Fund owns at least an equal amount of such securities or securities convertible into or exchangeable for, without payment of any further consideration, securities of the same issuer as, and equal in amount to, the securities sold short, and provided that transactions in options, futures contracts, options on futures contracts, or other derivative instruments are not deemed to constitute selling securities short.
(2) purchase securities of open-end or closed-end investment companies except in compliance with the 1940 Act or any exemptive relief obtained thereunder.
(3) purchase securities of companies for the purpose of exercising control.
The restrictions and other limitations set forth above will apply only at the time of purchase of securities and will not be considered violated unless an excess or deficiency occurs or exists immediately after and as a result of an acquisition of securities.
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Although the Fund has no current intention to issue preferred shares or incur borrowings, the Fund may be subject to certain restrictions imposed by either guidelines of one or more nationally recognized statistical rating organizations (NRSROs) that may issue ratings for preferred shares, if any, commercial paper or notes, or, if the Fund borrows from a lender, by the lender. These guidelines may impose asset coverage or portfolio composition requirements that are more stringent than those imposed on the Fund by the 1940 Act. If these restrictions were to apply, it is not anticipated that these covenants or guidelines would impede Nuveen Fund Advisors, LLC (Nuveen Fund Advisors or the Adviser) Nuveen Asset Management, LLC (Nuveen Asset Management), or Intech Investment Management LLC (Intech) and together with Nuveen Asset Management, LLC, the Sub-Advisers), as applicable, from managing the Funds portfolio in accordance with the Funds investment objective and policies.
In addition to the investments and securities described in the Funds Prospectus section The Funds investmentsPortfolio composition and other information, the Fund may invest in other securities as described below:
U.S. Government Debt Securities . The Fund may invest in U.S. Government debt securities, U.S. local government debt securities and U.S. Government Agency securities of any maturity, including U.S. Government mortgage-backed securities. U.S. Government securities are debt securities issued and/or guaranteed as to principal and interest by the U.S. Government that are supported by the full faith and credit of the United States. U.S. Government Agency securities, as used herein, include debt securities issued and/or guaranteed as to principal and interest by U.S. Government Agencies, U.S. Government-sponsored enterprises and U.S. Government instrumentalities that are not direct obligations of the United States. These securities may not be backed by the full faith and credit of the United States. U.S. Government-sponsored enterprises and instrumentalities are not agencies of the U.S. Government. Government sponsored enterprises are private corporations sponsored by the federal government. U.S. Government agency securities include securities issued by (a) the Federal Housing Administration, Farmers Home Administration, Export-Import Bank of the United States, Small Business Administration and the Government National Mortgage Association, whose securities are supported by the full faith and credit of the United States; (b) the Federal Home Loan Banks, Federal Intermediate Credit Banks, and the Tennessee Valley Authority, whose securities are supported by the right of the agency to borrow from the U.S. Treasury; (c) the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation, whose securities are supported by the discretionary authority of the U.S. Government to purchase certain obligations of the agency or instrumentality; and (d) the Student Loan Marketing Association, whose securities are supported only by its credit. While the U.S. Government provides financial support to such U.S. Government-sponsored agencies or instrumentalities, no assurance can be given that it always will do so since it is not so obligated by law. Securities issued by these entities are generally not supported by the full faith and credit of the United States. Because the U.S. Government is not obligated to provide support to its instrumentalities, the Fund will invest in obligations issued by these instrumentalities only where the Fund is satisfied that the credit risk with respect to the issuers is minimal. The U.S. Government, its agencies, and instrumentalities do not guarantee the market value of their securities. Consequently, the value of such securities may fluctuate.
Certificates of Deposit issued against funds deposited in a bank or a savings and loan association. Such certificates are for a definite period of time, earn a specified rate of return, and are normally negotiable. The issuer of a certificate of deposit agrees to pay the amount deposited plus interest to the bearer of the certificate on the date specified thereon. Under current Federal Deposit Insurance Corporation regulations, the maximum insurance payable as to any one certificate of deposit is $250,000; therefore, certificates of deposit purchased by the Fund may not be fully insured.
Total Return Swaps. The Fund may invest in total return swaps for hedging purposes. The Fund will enter into swap agreements only with counterparties that meet certain standards of creditworthiness.
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In a total return swap, the Fund exchanges with another party their respective commitments to pay or receive the total return of an underlying asset and a floating LIBOR (London Interbank Offered Rate) rate. The Fund usually will enter into total return swaps on a net basis ( i.e. , the two payment streams are netted out with the Fund receiving or paying, as the case may be, only the net amount of the two payments). The net amount of the excess, if any, of the Funds obligations over its entitlements with respect to each interest rate swap will be accrued on a daily basis, and an amount of cash or liquid securities having an aggregate net asset value (NAV) at least equal to the accrued excess will be segregated by the Fund.
The use of swaps is a highly specialized activity that involves investment techniques and risks different from those associated with ordinary portfolio securities transactions, including the risk that the counterparty may be unable to fulfill the transaction. If there is a default by the other party to such a transaction, the Fund will have contractual remedies pursuant to the agreements related to the transaction. If Nuveen Asset Management is incorrect in their forecasts of market values, interest rates and other applicable factors, the investment performance of the Fund would be unfavorably affected.
Repurchase agreements. At the time the Fund purchases securities pursuant to a repurchase agreement, it simultaneously agrees to resell and redeliver such securities to the seller, who also simultaneously agrees to purchase back the securities at a fixed price and time. This assures a predetermined yield for the Fund during its holding period, since the resale price is always greater than the purchase price and reflects an agreed-upon market rate. Such actions afford an opportunity for the Fund to invest temporarily available cash. The Fund may enter into repurchase agreements only with respect to obligations of the U.S. Government, its agencies or instrumentalities; certificates of deposit; or bankers acceptances in which the Fund may invest. The Fund will only enter into repurchase agreements with registered securities dealers or domestic banks that, in Nuveen Asset Managements opinion, present minimal credit risk. Repurchase agreements may be considered loans to the seller, collateralized by the underlying securities. The risk to the Fund is limited to the ability of the seller to pay the agreed-upon sum on the repurchase date; in the event of default, the repurchase agreement provides that the Fund is entitled to sell the underlying collateral. If the seller defaults under a repurchase agreement when the value of the underlying collateral is less than the repurchase price, the Fund could incur a loss of both principal and interest. The Funds repurchase agreements will provide that the value of the collateral underlying the repurchase agreement will always be at least equal to the repurchase price, including any accrued interest earned on the agreement, and will be marked-to-market daily. Nuveen Asset Management monitors the value of the collateral at the time the action is entered into and at all times during the term of the repurchase agreement. Nuveen Asset Management does so in an effort to determine that the value of the collateral always equals or exceeds the agreed-upon repurchase price to be paid to the Fund. In the event the value of the collateral declines below the repurchase price, Nuveen Asset Management will demand additional collateral from the issuer to increase the collateral to at least that of the repurchase price, including interest. If the seller were to be subject to a federal bankruptcy proceeding, the ability of the Fund to liquidate the collateral could be delayed or impaired because of certain provisions of the bankruptcy laws.
Illiquid Securities . The Fund may invest in equity securities that, at the time of investment, are illiquid ( i.e. , securities that are not readily marketable). The Funds Equity Portfolio will be invested in liquid equity securities selected from the Index. However, certain over-the-counter (OTC) options that the Fund may sell may be deemed to be illiquid. For this purpose, illiquid securities may include, but are not limited to, restricted securities (securities the disposition of which is restricted under the federal securities laws), securities that may only be resold pursuant to Rule 144A under the 1933 Act, that are deemed to be illiquid and certain repurchase agreements. The Board or its delegate has the ultimate authority to determine which securities are liquid or illiquid. The Board has delegated to Nuveen Asset Management the day-to-day determination of the illiquidity of any security held by the Fund, although it has retained oversight and ultimate responsibility for such determinations. No definitive liquidity criteria are used. The Board has directed Nuveen Asset Management when making liquidity determinations to look for such factors as (i) the nature of the market for a security (including the institutional private resale market; the frequency of trades and quotes for the security; the number of dealers willing to purchase or sell the security; the amount of time normally needed to dispose of the security;
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and the method of soliciting offers and the mechanics of transfer), (ii) the terms of certain securities or other instruments allowing for the disposition to a third party or the issuer thereof ( e.g. , certain repurchase obligations and demand instruments) and (iii) other relevant factors.
Restricted securities may be sold only in privately negotiated transactions or in a public offering with respect to which a registration statement is in effect under the 1933 Act. Where registration is required, the Fund may be obligated to pay all or part of the registration expenses and a considerable period may elapse between the time of the decision to sell and the time the Fund may be permitted to sell a security under an effective registration statement. If, during such a period, adverse market conditions were to develop, the Fund might obtain a less favorable price than that which prevailed when it decided to sell. Illiquid securities will be priced at fair value as determined in good faith by the Board or its delegate.
When-Issued And Delayed Delivery Transactions . The Fund may purchase and sell securities on a when-issued or delayed delivery basis, making payment or taking delivery at a later date, normally within 15 to 45 days of the trade date. On such transactions the payment obligation and the interest rate are fixed at the time the purchaser enters into the commitment. Beginning on the date the Fund enters into a commitment to purchase securities on a when-issued or delayed delivery basis, the Fund is required under rules of the U.S. Securities and Exchange Commission (the SEC) to maintain in a separate account liquid assets, consisting of cash, cash equivalents or liquid securities having a market value at all times of at least equal to the amount of any delayed payment commitment. Income generated by any such assets that provide taxable income for U.S. federal income tax purposes is includable in the taxable income of the Fund. The Fund may enter into contracts to purchase securities on a forward basis ( i.e. , where settlement will occur more than 60 days from the date of the transaction) only to the extent that the Fund specifically collateralizes such obligations with a security that is expected to be called or mature within 60 days before or after the settlement date of the forward transaction. The commitment to purchase securities on a when-issued, delayed delivery or forward basis may involve an element of risk because no interest accrues on the bonds prior to settlement and at the time of delivery the market value may be less than their cost.
Preferred Stocks . Preferred stocks with predominantly equity investment characteristics, like common stocks, represent an equity ownership in an issuer. Generally, preferred stocks have a priority of claim over common stocks in dividend payments and upon liquidation of the issuer. Unlike common stocks, preferred stocks do not usually have voting rights. Preferred stocks in some instances are convertible into common stock. Although they are equity securities, preferred stocks have certain characteristics of both debt securities and common stocks. They are debt-like in that their promised income is contractually fixed. They are common stock-like in that they do not have rights to precipitate bankruptcy proceedings or collection activities in the event of missed payments. Furthermore, they have many of the key characteristics of equity due to their subordinated position in an issuers capital structure and because their quality and value are heavily dependent on the profitability of the issuer rather than on any legal claims to specific assets or cash flows.
In order to be payable, dividends on preferred stock must be declared by the issuers board of directors or trustees. In addition, distributions on preferred stock may be subject to deferral and thus may not be automatically payable. Income payments on some preferred stocks are cumulative, causing dividends and distributions to accrue even if not declared by the board of directors or trustees or otherwise made payable. Other preferred stocks are non-cumulative, meaning that skipped dividends and distributions do not continue to accrue. There is no assurance that dividends on preferred stocks in which the Fund invests will be declared or otherwise made payable. The Fund may invest in non-cumulative preferred stock, although Nuveen Asset Management would consider, among other factors, their non-cumulative nature in making any decision to purchase or sell such securities.
Shares of preferred stock have a liquidation value that generally equals their original purchase price at the date of issuance. The market values of preferred stocks may be affected by favorable and unfavorable changes impacting the issuers industries or sectors. They also may be affected by actual and anticipated changes or
5
ambiguities in the tax status of the security and by actual and anticipated changes or ambiguities in tax laws, such as changes in corporate and individual income tax rates or the characterization of dividends as tax-advantaged.
Because the claim on an issuers earnings represented by preferred stock may become disproportionately large when interest rates fall below the rate payable on the stock or for other reasons, the issuer may redeem preferred stock, generally after an initial period of call protection in which the stock is not redeemable. Thus, in declining interest rate environments in particular, the Funds holdings of higher dividend-paying preferred stocks may be reduced and the Fund may be unable to acquire securities paying comparable rates with the redemption proceeds.
Preferred stocks that have predominantly fixed-income characteristics are typically issued by corporations or by an affiliated business trust of a corporation. The market for these preferred stocks consists of both fixed and adjustable coupon rate securities that are either perpetual in nature or have stated maturity dates. These preferred stocks are typically junior and fully subordinated liabilities of an issuer or the beneficiary of a guarantee that is junior and fully subordinated to the other liabilities of the guarantor. In addition, these types of preferred stocks typically permit an issuer to defer the payment of income for eighteen months or more without triggering an event of default. Generally, the deferral period is five years or more. In certain instances, a final maturity date may be extended and/or the final payment of principal may be deferred at the issuers option for a specified time without any adverse consequence to the issuer. No redemption can typically take place unless all cumulative payment obligations have been met, although issuers may be able to engage in open-market repurchases without regard to any cumulative dividends payable.
Convertible Securities . Convertible securities are bonds, debentures, notes, preferred securities or other securities that may be converted or exchanged (by the holder or the issuer) into shares of the underlying common stock (or cash or securities of equivalent value) at a stated exchange ratio or predetermined price (the conversion price). Convertible securities have general characteristics similar to both debt securities and common stocks. The interest paid on convertible securities may be fixed or floating rate. Although to a lesser extent than with debt securities, the market value of convertible securities tends to decline as interest rates increase and, conversely, tends to increase as interest rates decline. In addition, because of the conversion feature, the market value of convertible securities tends to vary with fluctuations in the market value of the underlying common stocks and, therefore, will also react to the variations in the general market for common stocks. Depending upon the relationship of the conversion price to the market value of the underlying common stock, a convertible security may trade more like a common stock than a debt instrument.
Warrants . A warrant is a certificate that gives the holder of the warrant the right to buy, at a specified time or specified times, from the issuer of the warrant, the common stock of the issuer at a specified price.
Depositary ReceiptsADRs, EDRs, and GDRs . The Fund may purchase depositary receipts such as American Depositary Receipts (ADRs), European Depositary Receipts (EDRs) and Global Depositary Receipts (GDRs). ADRs, EDRs and GDRs are certificates evidencing ownership of shares of foreign issuers and are alternatives to purchasing directly the underlying foreign securities in their national markets and currencies.
Real Estate Investment Trusts (REITs) . REITs are companies that own and manage real estate, including apartment buildings, offices, shopping centers, industrial buildings and hotels. By investing in REITs, the Fund may gain exposure to the real estate market with greater liquidity and diversification than through direct ownership of property, which can be costly and require ongoing management and maintenance, and which can be difficult to convert into cash when needed.
Corporate Bonds . Corporate bonds generally are used by corporations to borrow money from investors. The issuer pays the investor a fixed or variable rate of interest and normally must repay the amount borrowed on or before maturity. Certain bonds are perpetual in that they have no maturity date.
6
Structured Notes . The Fund may utilize structured notes and similar instruments for investment purposes and also for hedging purposes. Structured notes are privately negotiated debt obligations where the principal and/or interest is determined by reference to the performance of a benchmark asset, market or interest rate (embedded index), such as selected securities, an index of securities or specified interest rates or the differential performance of two assets or markets. The terms of such structured instruments normally provide that their principal and/or interest payments are to be adjusted upwards or downwards (but not ordinarily below zero) to reflect changes in the embedded index while the structured instruments are outstanding. As a result, the interest and/or principal payments that may be made on a structured product may vary widely, depending on a variety of factors, including the volatility of the embedded index and the effect of changes in the embedded index on principal and/or interest payments. The rate of return on structured notes may be determined by applying a multiplier to the performance or differential performance of the referenced index(es) of other asset(s). Application of a multiplier involves leverage that will serve to magnify the potential for gain and the risk of loss.
Swaptions . The Fund may enter into swaptions in order to enhance the Funds total return or for hedging purposes. A swaption is an OTC traded option that gives the seller the right, but not the obligation, to enter into an interest rate swap at a set rate on an agreed upon future date. Although the typical swaption is an option on an interest rate swap, a swaption could be an option on any type of swap. In return for this flexibility, the purchaser of the swaption pays a premium determined by taking into account the duration of the option period, the term and strike rate of the swap and the volatility of interest rates. If interest rates fall, the purchaser of the swaption will let the swaption expire and transact an interest rate swap at the prevailing market rate. Nuveen Asset Management believes that swaptions confer all the benefits of an interest rate swap as well as being a useful tool where there is uncertainty of outcome. There is currently a liquid swaption market on the LIBOR rates of all the worlds major currencies. There are three styles of swaptions: American, in which the holder is allowed to enter the swap on any day that falls within a range of two dates; Bermudian, in which the holder is allowed to enter the swap on a sequence of dates; and European, in which the holder is allowed to enter the swap on one specified date.
Commercial Paper . Commercial paper represents short-term unsecured promissory notes issued in bearer form by corporations such as banks or bank holding companies and finance companies. Commercial paper may include variable rate master demand notes issued by corporations to finance their current operations. Master demand notes are direct lending arrangements between the Fund and a corporation. There is no secondary market for such notes. However, they are redeemable by the Fund at any time. Nuveen Asset Management will consider the financial condition of the corporation ( e.g. , earning power, cash flow, and other liquidity measures) and will continuously monitor the corporations ability to meet all of its financial obligations, because the Funds liquidity might be impaired if the corporation were unable to pay principal and interest on demand. Investments in commercial paper will be limited to commercial paper rated in the highest categories by a NRSRO and that mature within one year of the date of purchase or carry a variable or floating rate of interest.
Options on Securities . The Fund may purchase put and call options on stock, bonds or other securities to hedge against adverse market shifts.
As a holder of a put option, the Fund will have the right to sell the securities underlying the option and as the holder of a call option, the Fund will have the right to purchase the securities underlying the option, in each case at their exercise price at any time during the option period prior to the options expiration date. The Fund may choose to exercise the options it holds, permit them to expire or terminate them prior to their expiration by entering into closing sale or purchase transactions. In entering into a closing sale or purchase transaction, the Fund would sell an option of the same series as the one it has purchased. The ability of the Fund to enter into a closing sale transaction with respect to options purchased and to enter into a closing purchase transaction with respect to options sold depends on the existence of a liquid secondary market.
7
In purchasing a put option, the Fund will seek to benefit from a decline in the market price of the underlying security, while in purchasing a call option, the Fund will seek to benefit from an increase in the market price of the underlying security. If an option purchased is not sold or exercised when it has remaining value, or if the market price of the underlying security remains equal to or greater than the exercise price, in the case of a put, or remains equal to or below the exercise price, in the case of a call, during the life of the option, the option will expire worthless. For the purchase of an option to be profitable, the market price of the underlying security must decline sufficiently below the exercise price, in the case of a put, and must increase sufficiently above the exercise price, in the case of a call, to cover the premium and transaction costs. Because option premiums paid by the Fund are small in relation to the market value of the instruments underlying the options, purchasing options can result in amounts of leverage to the Fund. The leverage caused by trading in options could cause the Funds NAV to be subject to more frequent and wider fluctuation than would be the case if the Fund did not invest in options.
The Fund will receive a premium when it writes put and call options, which increases the Funds return on the underlying security in the event the option expires unexercised or is closed out at a profit. By writing a call, the Fund will limit its opportunity to profit from an increase in the market value of the underlying security above the exercise price of the option for as long as the Funds obligation as the seller of the option continues. Upon the exercise of a put option written by the Fund, the Fund may suffer an economic loss equal to the difference between the price at which the Fund is required to purchase the underlying security and its market value at the time of the option exercise, less the premium received for writing the option. Upon the exercise of a call option written by the Fund, the Fund may suffer an economic loss equal to an amount not less than the excess of the securitys market value at the time of the option exercise over the Funds acquisition cost of the security, less the sum of the premium received for writing the option and the difference, if any, between the call price paid to the Fund and the Funds acquisition cost of the security. Thus, in some periods the Fund might receive less total return and in other periods greater total return from its hedged positions than it would have received from its underlying securities unhedged.
Options on Stock and Bond Indexes . The Fund may purchase put and call options on stock indexes and bond indexes to hedge against risks of market-wide price movements affecting its assets. In addition, the Fund may write covered put and call options on stock and bond indexes. The advisability of using stock or bond index options to hedge against the risk of market-wide movements will depend on the extent of diversification of the Funds investments and the sensitivity of its investments to factors influencing the underlying index. The effectiveness of purchasing or writing stock or bond index options as a hedging technique will depend upon the extent to which price movements in the Funds investments correlate with price movements in the stock or bond index selected. In addition, successful use by the Fund of options on stock or bond indexes will be subject to the ability of the adviser to predict correctly changes in the relationship of the underlying index to the Funds portfolio holdings. No assurance can be given that Nuveen Asset Managements judgment in this respect will be correct.
When the Fund writes an option on a stock or bond index, it will establish a segregated account with its custodian in which the Fund will deposit liquid securities in an amount equal to the market value of the option, and will maintain the account while the option is open.
Stock and Bond Index Futures Contracts . The Fund may purchase and sell stock or bond index futures as a hedge against movements in the equity or bond markets. Stock and bond index futures contracts are agreements in which one party agrees to deliver to the other an amount of cash equal to a specific dollar amount times the difference between the value of a specific stock or bond index at the close of the last trading day of the contract and the price at which the agreement is made. No physical delivery of securities is made.
For example, if Nuveen Asset Management expects general stock or bond market prices to decline, they might sell a futures contract on a particular stock or bond index. If that index does in fact decline, the value of some or all of the securities in the Funds portfolio may also be expected to decline, but that decrease would be
8
offset in part by the increase in the value of the Funds position in such futures contract. If, on the other hand, Nuveen Asset Management expects general stock or bond market prices to rise, they might purchase a stock or bond index futures contract as a hedge against an increase in prices of particular securities they want ultimately to purchase. If in fact the stock or bond index does rise, the price of the particular securities intended to be purchased may also increase, but that increase would be offset in part by the increase in the value of the Funds futures contract resulting from the increase in the index. The Fund may purchase futures contracts on a stock or bond index to enable Nuveen Asset Management to gain immediate exposure to the underlying securities market pending the investment in individual securities of the Funds portfolio.
Under regulations of the Commodity Futures Trading Commission (CFTC) currently in effect, which may change from time to time, with respect to futures contracts purchased by the Fund, the Fund will set aside in a segregated account liquid securities with a value at least equal to the value of instruments underlying such futures contracts less the amount of initial margin on deposit for such contracts. The current view of the staff of the SEC is that the Funds long and short positions in futures contracts must be collateralized with cash or certain liquid assets held in a segregated account or covered in order to counter the impact of any potential leveraging.
Parties to a futures contract must make initial margin deposits to secure performance of the contract. There are also requirements to make variation margin deposits from time to time as the value of the futures contract fluctuates.
The Fund and Nuveen Asset Management have claimed, respectively, an exclusion from registration as a commodity pool operator and as commodity trading advisors under the Commodity Exchange Act (the CEA) and, therefore, neither the Fund, Nuveen Asset Management, nor their officers and directors, are subject to the registration requirements of the CEA or regulation as a commodity pool operator or a commodity trading advisor under the CEA. The Fund reserves the right to engage in transactions involving futures and options thereon to the extent allowed by CFTC regulations in effect from time to time and in accordance with the Funds policies. In addition, certain provisions of the Internal Revenue Code of 1986, as amended (the Code) may limit the extent to which the Fund may enter into futures contracts or engage in options transactions. See Tax Matters.
The potential loss related to the purchase of an option on a futures contract is limited to the premium paid for the option (plus transaction costs).
With respect to options purchased by the Fund, there are no daily cash payments made by the Fund to reflect changes in the value of the underlying contract; however, the value of the option does change daily and that change would be reflected in the NAV of the Fund.
Other Futures Contracts and Options on Futures Contracts . The Funds use of derivative instruments also may include (i) U.S. Treasury security or U.S. Government Agency security futures contracts and (ii) options on U.S. Treasury security or U.S. Government Agency security futures contracts. All such futures contracts and options thereon must be traded and listed on an exchange. U.S. Treasury and U.S. Government Agency futures contracts are standardized contracts for the future delivery of a U.S. Treasury Bond or U.S. Treasury Note or a U.S. Government Agency security or their equivalent at a future date at a price set at the time of the contract. An option on a U.S. Treasury or U.S. Government Agency futures contract, as contrasted with the direct investment in such a contract, gives the purchaser of the option the right, in return for the premium paid, to assume a position in a U.S. Treasury or U.S. Government Agency futures contract at a specified exercise price at any time on or before the expiration date of the option. Upon exercise of an option, the delivery of the futures position by the seller of the option to the holder of the option will be accompanied by delivery of the accumulated balance in the sellers future margin account, which represents the amount by which the market price of the futures contract exceeds the exercise price of the option on the futures contract.
Risks Associated with Futures Contracts and Options on Futures Contracts . Futures prices are affected by many factors, such as current and anticipated short-term interest rates, changes in volatility of the underlying
9
instrument and the time remaining until expiration of the contract. A purchase or sale of a futures contract may result in losses in excess of the amount invested in the futures contract. While the Fund may enter into futures contracts and options on futures contracts for hedging purposes, the use of futures contracts and options on futures contracts might result in a poorer overall performance for the Fund than if it had not engaged in any such transactions. If, for example, the Fund had insufficient cash, it might have to sell a portion of its underlying portfolio of securities in order to meet daily variation margin requirements on its futures contracts or options on futures contracts at a time when it might be disadvantageous to do so. There may be an imperfect correlation between the Funds portfolio holdings and futures contracts or options on futures contracts entered into by the Fund, which may prevent the Fund from achieving the intended hedge or expose the Fund to risk of loss. The degree of imperfection of correlation depends on circumstances such as: variations in speculative market demand for futures, futures options and the related securities, including technical influences in futures and futures options trading and differences between the securities markets and the securities underlying the standard contracts available for trading. Futures prices are affected by many factors, such as current and anticipated short-term interest rates, changes in volatility of the underlying instrument and the time remaining until the expiration of the contract. Further, the Funds use of futures contracts and options on futures contracts to reduce risk involves costs and will be subject to Nuveen Asset Managements ability to predict correctly changes in interest rate relationships or other factors. A decision as to whether, when and how to use futures contracts involves the exercise of skill and judgment, and even a well-conceived transaction may be unsuccessful to some degree because of market behavior or unexpected stock price or interest rate trends. No assurance can be given that Nuveen Asset Managements judgment in this respect will be correct.
The Funds futures transactions will ordinarily be entered into for traditional hedging purposes. There is, however, no limit on the amount of the Funds assets that can be put at risk through the use of futures contracts and options thereon and the value of the Funds futures contracts and options thereon may equal or exceed 100% of the value of the Funds total assets.
Futures exchanges may limit the amount of fluctuation permitted in certain futures contract prices during a single trading day. The daily limit establishes the maximum amount that the price of a futures contract may vary either up or down from the previous days settlement price at the end of the current trading session. Once the daily limit has been reached in a futures contract subject to the limit, no more trades may be made on that day at a price beyond that limit. The daily limit governs only price movements during a particular trading day and therefore does not limit potential losses because the limit may work to prevent the liquidation of unfavorable positions. For example, futures prices have occasionally moved to the daily limit for several consecutive trading days with little or no trading, thereby preventing prompt liquidation of positions and subjecting some holders of futures contracts to substantial losses. Stock index futures contracts are not normally subject to such daily price change limitations.
The Fund may invest in other options . An option is an instrument that gives the holder of the instrument the right, but not the obligation, to purchase or sell a predetermined number of specific securities ( i.e., preferred stocks, common stocks or bonds) at a stated price within the expiration period of the instrument, which is generally less than 12 months from its issuance. If the right is not exercised after a specified period but prior to the expiration, the option expires. Both put and call options may be used by the Fund.
The Fund may purchase and sell various other kinds of financial futures contracts and options thereon. Futures contracts may be based on various debt securities and securities indexes (such as the Municipal Bond Index traded on the Chicago Board of Trade). Such transactions involve a risk of loss or depreciation due to unanticipated adverse changes in securities prices, which may exceed the Funds initial investment in these contracts. The Fund will only purchase or sell futures contracts or related options in compliance with the rules of the CFTC. These transactions involve transaction costs. There can be no assurance that the Funds use of futures will be advantageous to the Fund.
10
Credit-Linked Notes . The Fund may invest in credit-linked notes (CLN) for risk management purposes, including diversification. A CLN is a derivative instrument that is a synthetic obligation between two or more parties where the payment of principal and/or interest is based on the performance of some obligation (a reference obligation). In addition to credit risk of the reference obligation and interest rate risk, the purchaser/seller of the CLN is subject to counterparty risk.
Interest Rate Caps . The Fund may use an interest rate cap, which would require it to pay a premium to the cap counterparty and would entitle it, to the extent that a specified variable rate index exceeds a predetermined fixed rate, to receive from the counterparty payment of the difference based on the notional amount. The Fund would use interest rate caps only with the intent to reduce or eliminate the risk that an increase in short-term interest rates could have on Common Share net earnings as a result of leverage.
The Fund will usually enter into caps on a net basis; that is, the two payment streams will be netted out in a cash settlement on the payment date or dates specified in the instrument, with the Fund receiving or paying, as the case may be, only the net amount of the two payments.
Depending on the state of interest rates in general, the Funds use of interest rate caps could enhance or harm the overall performance on the Common Shares. To the extent there is a decline in interest rates, the value of the interest rate cap could decline, and could result in a decline in the NAV of the Common Shares. Purchasing interest rate caps could enhance the performance of the Common Shares by providing a maximum leverage expense. Purchasing interest rate caps could also decrease the net earnings of the Common Shares in the event that the premium paid by the Fund to the counterparty exceeds the additional amount the Fund would have been required to pay had it not entered into the cap agreement. The Fund has no current intention of selling an interest rate cap. The Fund will monitor its interest rate cap transactions with a view to insuring that it remains in compliance with all applicable tax requirements.
Interest rate caps do not involve the delivery of securities or other underlying assets or principal. Accordingly, the risk of loss with respect to interest rate caps is limited to the net amount of interest payments that the Fund is contractually obligated to make. The net amount of the excess, if any, of the Funds obligations over its entitlements will be maintained in a segregated account by the Funds custodian. If the counterparty defaults, the Fund would not be able to use the anticipated net receipts under the cap to offset the interest payments or dividend payments due. Depending on whether the Fund would be entitled to receive net payments from the counterparty on the cap, which in turn would depend on the general state of short-term interest rates at that point in time, such a default could negatively impact the performance of the Common Shares.
Although this will not guarantee that the counterparty does not default, the Fund will not enter into an interest rate cap transaction with any counterparty that Nuveen Asset Management believes does not have the financial resources to honor its obligation under the interest rate cap transaction. Further, Nuveen Asset Management will continually monitor the financial stability of a counterparty to an interest rate cap transaction in an effort to proactively protect the Funds investments.
In addition, at the time the interest rate cap transaction reaches its scheduled termination date, there is a risk that the Fund would not be able to obtain a replacement transaction or that the terms of the replacement would not be as favorable as on the expiring transaction. If this occurs, it could have a negative impact on the performance of the Common Shares.
The Fund may choose or be required to terminate early all or a portion of any cap transaction. An early termination of a cap could result in a termination payment to the Fund.
Other Hedging Transactions . The Fund may invest in relatively new instruments without a significant trading history for purposes of hedging the Funds portfolio risks. As a result, there can be no assurance that an active secondary market will develop or continue to exist.
11
Risks associated with hedging transactions . The Fund may use derivatives or other instruments for purposes of hedging the Equity Portfolio against declining equity markets. There may be an imperfect correlation between the Equity Portfolios holdings and such derivatives, which may prevent the Fund from achieving the intended consequences of the applicable hedging transaction or expose the Fund to risk of loss. Further, the Funds use of derivatives and other instruments to reduce risk involves costs and will be subject to Nuveen Asset Managements ability to predict correctly changes in the relationships of such hedging instruments to the Equity Portfolio or other factors. No assurance can be given that Nuveen Asset Managements judgment in this respect will be correct. Consequently, the use of hedging transactions might result in a poorer overall performance for the Fund, whether or not adjusted for risk, than if the Fund had not hedged the Equity Portfolio. In addition, no assurance can be given that the Fund will enter into hedging transactions at times or under circumstances in which it would be advisable to do so.
Portfolio Trading and Turnover Rate . Portfolio trading may be undertaken to accomplish the investment objective of the Fund. In addition, a security may be sold and another with similar characteristics purchased at approximately the same time to take advantage of what the Sub-Advisers believe to be a temporary price disparity between the two securities. Temporary price disparities between two comparable securities may result from supply and demand imbalances where, for example, a temporary oversupply of certain securities may cause a temporarily low price for such securities, as compared with other securities of like quality and characteristics. A security may also be sold when the Sub-Advisers anticipate a change in the price of such security, the Sub-Advisers believe the price of a security has reached or is near a realistic maximum, or there are other securities that the Sub-Advisers believe are more attractive given the Funds investment objective.
The Fund may engage in portfolio trading when considered appropriate, but short-term trading in the Funds equity portfolio will not be used as the primary means of achieving the Funds investment objective. While there can be no assurance thereof, the Fund anticipates that its annual portfolio turnover rate will generally not exceed 50% under normal circumstances. For the fiscal year ended December 31, 2017, the Funds portfolio turnover rate was 159%. For the six months ended June 30, 2018, the Funds portfolio turnover rate was 72%. However, there are no limits on the rate of portfolio turnover, and investments may be sold without regard to length of time held when, in the opinion of the Sub-Advisers, investment considerations warrant such action. Therefore, depending upon market conditions, the annual portfolio turnover rate of the Fund may exceed 50% in particular years. A higher portfolio turnover rate results in correspondingly greater brokerage commissions and other transactional expenses that are borne by the Fund. High portfolio turnover may result in the realization of net short-term capital gains by the Fund which, when distributed to shareholders, will be taxable as ordinary income for federal income tax purposes.
12
TRUSTEES AND OFFICERS
The management of the Fund, including general supervision of the duties performed for the Fund under the Investment Management Agreement (as defined under Investment Adviser, Sub-Advisers and Portfolio ManagersInvestment Management Agreement and Related Fees), is the responsibility of the Board. The number of trustees of the Fund is eleven, one of whom is an interested person (as the term interested person is defined in the 1940 Act) and ten of whom are not interested persons (referred to herein as independent trustees). None of the independent trustees has ever been a director, trustee or employee of, or consultant to, Nuveen LLC, Nuveen Fund Advisors, Nuveen Asset Management, Intech, or their affiliates. The Board is divided into three classes, Class I, Class II and Class III, the Class I trustees serving until the 2019 annual meeting, the Class II trustees serving until the 2020 annual meeting and the Class III trustees serving until the 2021 annual meeting, in each case until their respective successors are elected and qualified, as described below. Currently, William C. Hunter, Judith M. Stockdale, Carole E. Stone and Margaret L. Wolff are slated in Class I, John K. Nelson, Terence J. Toth and Robert L. Young are slated in Class II, and Margo L. Cook, Jack B. Evans, Albin F. Moschner and William J. Schneider are slated in Class III. If the Fund has Preferred Shares outstanding, two of the Funds trustees will be elected by the holders of such preferred shares, voting separately as a class. The remaining trustees of the Fund are elected by holders of Common Shares and Preferred Shares, voting separately as a class. In the event that the Fund fails to pay dividends on outstanding Preferred Shares for two years, holders of Preferred Shares are entitled to elect a majority of trustees of the Fund. The officers of the Fund serve annual terms through August of each year and are elected on an annual basis. The names, business addresses and years of birth of the trustees and officers of the Fund, their principal occupations and other affiliations during the past five years, the number of portfolios each oversees and other directorships they hold are set forth below. Except as noted in the table below, the trustees of the Fund are directors or trustees, as the case may be, of 166 Nuveen-sponsored registered investment companies (the Nuveen Funds), which includes 80 open-end mutual funds (the Nuveen Mutual Funds), 75 closed-end funds and 11 Nushares ETFs.
13
Name, Business Address and Year of Birth |
Position(s)
Held with Fund |
Term of Office
and Length of Time Served with Funds in the Fund Complex |
Principal Occupation(s)
|
Number of
Portfolios in Fund Complex Overseen By Trustee |
Other
|
|||||
Independent Trustees: |
||||||||||
Terence J. Toth 333 West Wacker Drive Chicago, IL 60606 (1959) |
Chairman
of the Board Trustee |
TermClass II
Length of Service Since 2008 |
Formerly, Co-Founding Partner, Promus Capital (2008-2017); Director of Fulcrum IT Service LLC (since 2010) and Quality Control Corporation (since 2012); formerly, Director, LogicMark LLC (2012-2016); formerly, Director, Legal & General Investment Management America, Inc. (2008-2013); formerly, CEO and President, Northern Trust Global Investments (2004-2007); Executive Vice President, Quantitative Management & Securities Lending (2000-2004); prior thereto, various positions with Northern Trust Company (since 1994); Member of Catalyst Schools of Chicago Board (since 2008) and Mather Foundation Board (since 2012) and is Chair of its Investment Committee; formerly, Member, Chicago Fellowship Board (2005-2016); formerly, Member, Northern Trust Mutual Funds Board (2005-2007), Northern Trust Global Investments Board (2004-2007), Northern Trust Japan Board (2004-2007), Northern Trust Securities Inc. Board (2003-2007) and Northern Trust Hong Kong Board (1997-2004). | 166 | None. |
14
Name, Business Address and Year of Birth |
Position(s)
Held with Fund |
Term of Office
and Length of Time Served with Funds in the Fund Complex |
Principal Occupation(s)
|
Number of
Portfolios in Fund Complex Overseen By Trustee |
Other
|
|||||
Jack B. Evans 333 West Wacker Drive Chicago, IL 60606 (1948) |
Trustee |
TermClass III
Length of Service Since 1999 |
President, The Hall- Perrine Foundation, a private philanthropic corporation (since 1996); Director, Public Member, American Board of Orthopaedic Surgery (since 2015); Life Trustee of Coe College and the Iowa College Foundation; formerly, Director, Federal Reserve Bank of Chicago; formerly, President and Chief Operating Officer, SCI Financial Group, Inc., a regional financial services firm; formerly, Member and President Pro Tem of the Board of Regents for the State of Iowa University System; formerly, Director, The Gazette Company. |
166 | Director and Chairman, United Fire Group, a publicly held company; formerly, Director, Alliant Energy. | |||||
William C. Hunter 333 West Wacker Drive Chicago, IL 60606 (1948) |
Trustee |
TermClass I
Length of Service Since 2003 |
Dean Emeritus, formerly, Dean (2006-2012), Tippie College of Business, University of Iowa; past Director (2005-2015) and past President (2010-2014) of Beta Gamma Sigma, Inc., The International Business Honor Society; formerly, Director (1997-2007), Credit Research Center at Georgetown University; formerly, Dean and Distinguished Professor of Finance (2003-2006), School of Business at the University of Connecticut; previously, Senior Vice President and Director of Research (1995-2003) at the Federal Reserve Bank of Chicago. | 166 | Director of Wellmark, Inc. (since 2009); Director of Xerox Corporation (2004-2018). |
15
Name, Business Address and Year of Birth |
Position(s)
Held with Fund |
Term of Office
and Length of Time Served with Funds in the Fund Complex |
Principal Occupation(s)
|
Number of
Portfolios in Fund Complex Overseen By Trustee |
Other
|
|||||
Albin F. Moschner 333 West Wacker Drive Chicago, IL 60606 (1952) |
Trustee |
TermClass III
Length of
|
Founder and Chief Executive Officer, Northcroft Partners, LLC, a management consulting firm (since 2012); previously, held positions at Leap Wireless International, Inc., including Consultant (2011-2012), Chief Operating Officer (2008-2011) and Chief Marketing Officer (2004-2008); formerly, President, Verizon Card Services division of Verizon Communications, Inc. (2000-2003); formerly, President, One Point Services at One Point Communications (1999-2000); formerly, Vice Chairman of the Board, Diba, Incorporated (1996-1997); formerly, various executive positions with Zenith Electronics Corporation (1991-1996). | 166 | Director, USA Technologies, Inc., a provider of solutions and services to facilitate electronic payment transactions (since 2012); formerly, Director, Wintrust Financial Corporation (1996-2016). |
16
Name, Business Address and Year of Birth |
Position(s)
Held with Fund |
Term of Office
and Length of Time Served with Funds in the Fund Complex |
Principal Occupation(s)
|
Number of
Portfolios in Fund Complex Overseen By Trustee |
Other
|
|||||
John K. Nelson 333 West Wacker Drive Chicago, IL 60606 (1962) |
Trustee |
TermClass II
Length of Service Since 2013 |
Member of Board of Directors of Core12 LLC (since 2008), a private firm which develops branding, marketing and communications strategies for clients; Director of The Curran Center for Catholic American Studies (since 2009) and The Presidents Council, Fordham University (since 2010); formerly, senior external advisor to the financial services practice of Deloitte Consulting LLP (2012- 2014); former Chairman of the Board of Trustees of Marian University (2010-2014 as trustee, 2011-2014 as Chairman); formerly, Chief Executive Officer of ABN AMRO N.V. North America, and Global Head of its Financial Markets Division (2007-2008); prior senior positions held at ABN AMRO include Corporate Executive Vice President and Head of Global Marketsthe Americas (2006-2007), CEO of Wholesale BankingNorth America and Global Head of Foreign Exchange and Futures Markets (2001-2006), and Regional Commercial Treasurer and Senior Vice President TradingNorth America (1996- 2001); formerly, Trustee at St. Edmund Preparatory School in New York City. | 166 | None. | |||||
William J. Schneider 333 West Wacker Drive Chicago, IL 60606 (1944) |
Trustee |
TermClass III
Length of
Since 1996 |
Chairman of Miller-Valentine Partners, a real estate investment company; Board Member, WDPR Public Radio; formerly, Senior Partner and Chief Operating Officer (retired 2004) of Miller-Valentine Group; formerly, Director Dayton Development Coalition; formerly, Board Member, Business Advisory Council, Cleveland Federal Reserve Bank and University or Dayton Business School Advisory Council. | 166 | None. |
17
Name, Business Address and Year of Birth |
Position(s)
Held with Fund |
Term of Office
and Length of Time Served with Funds in the Fund Complex |
Principal Occupation(s)
|
Number of
Portfolios in Fund Complex Overseen By Trustee |
Other Directorships
|
|||||
Judith M. Stockdale 333 West Wacker Drive Chicago, IL 60606 (1947) |
Trustee |
TermClass
I Length of Service Since 1997 |
Board Member of the U.S. Endowment for Forestry and Communities (since 2013); Board Member of the Land Trust Alliance; formerly, Executive Director (1994-2012), Gaylord and Dorothy Donnelley Foundation; prior thereto, Executive Director, Great Lakes Protection Fund (1990-1994). | 166 | None. | |||||
Carole E. Stone 333 West Wacker Drive Chicago, IL 60606 (1947) |
Trustee |
TermClass
I Length of Service Since 2007 |
Former Director, Chicago Board Options Exchange (2006-2017); and C2 Options Exchange, Incorporated (2009-2017); formerly, Commissioner, New York State Commission on Public Authority Reform (2005-2010). | 166 | Director, CBOE Global Markets, Inc., formerly, CBOE Holdings, Inc. (since 2010). | |||||
Margaret L. Wolff 333 West Wacker Drive Chicago, IL 60606 (1955) |
Trustee |
TermClass
I Length of Service Since 2016 |
Formerly, Of Counsel (2005-2014), Skadden, Arps, Slate, Meagher & Flom LLP (Mergers & Acquisitions Group); Member of the Board of Trustees of New York-Presbyterian Hospital (since 2005); Member (since 2004) and Chair (since 2015) of the Board of Trustees of The John A. Hartford Foundation (a philanthropy dedicated to improving the care of older adults); formerly, Member (2005-2015) and Vice Chair (2011- 2015) of the Board of Trustees of Mt. Holyoke College. | 166 | Formerly Member of the Board of Directors (2013-2017) of Travelers Insurance Company of Canada and The Dominion of Canada General Insurance Company (each, a part of Travelers Canada, the Canadian operation of The Travelers Companies, Inc.). |
18
Name, Business Address and Year of Birth |
Position(s)
Held with Fund |
Term of Office
and Length of Time Served with Funds in the Fund Complex |
Principal Occupation(s)
|
Number of
Portfolios in Fund Complex Overseen By Trustee |
Other
|
|||||
Robert L. Young * 333 West Wacker Drive Chicago, IL 60606 (1963) |
Trustee |
TermClass II
Length of Service Since 2017 |
Formerly, Chief Operating Officer and Director, J.P. Morgan Investment Management Inc. (2010-2016); formerly, President and Principal Executive Officer (2013-2016), and Senior Vice President and Chief Operating Officer (2005-2010), of J.P. Morgan Funds; formerly, Director and various officer positions for J.P. Morgan Investment Management Inc. (formerly, JPMorgan Funds Management, Inc. and formerly, One Group Administrative Services) and JPMorgan Distribution Services, Inc. (formerly, One Group Dealer Services, Inc.) (1999-2017). | 164 | None. | |||||
Interested Trustee: |
||||||||||
Margo L. Cook * * 333 West Wacker Drive Chicago, IL 60606 (1964) |
Trustee |
TermClass III
Length of
|
President (since 2017), formerly, Co-President (2016-2017), formerly, Senior Executive Vice President of Nuveen Investments, Inc.; Executive Vice President (since February 2017) of Nuveen, LLC; President (since August 2017), formerly, Co-President (October 2016-August 2017), formerly, Senior Executive Vice President (2015-2016), and formerly, Executive Vice President (2011-2015) of Nuveen Fund Advisors, LLC; President, Global Products and Solutions (since July 2017), and Co-Chief Executive Officer (since 2015), formerly, Co-President, and formerly, Executive Vice President (2013-2015), of Nuveen Securities, LLC; President (since 2017), Nuveen Alternative Investments, LLC; Chartered Financial Analyst. | 166 | None. |
* |
Effective July 1, 2017, Mr. Young was appointed as a director or trustee, as the case may be, of each of the Nuveen Funds except Nuveen Diversified Dividend and Income Fund and Nuveen Real Estate Income Fund. |
* * |
Ms. Cook is an interested person of the Fund, as defined in the 1940 Act, by reason of her positions with Nuveen, LLC and certain of its subsidiaries. |
19
OFFICERS OF THE FUND:
Name, Business Address and Year of Birth |
Position(s)
Held with Fund |
Term of Office
and Length of Time Served with Funds in the Fund Complex |
Principal Occupations Including Other Directorships During Past Five Years |
Number of
Portfolios in Fund Complex Overseen by Officer |
||||
Cedric H. Antosiewicz 333 West Wacker Drive Chicago, IL 60606 (1962) |
Chief
Administrative Officer |
TermUntil
August 2019
|
Senior Managing Director (since January 2017), formerly, Managing Director (2004-2017) of Nuveen Securities LLC; Senior Managing Director (since January 2017), formerly, Managing Director (2014-2017) of Nuveen Fund Advisors, LLC. | 75 | ||||
Stephen D. Foy 333 West Wacker Drive Chicago, IL 60606 (1954) |
Vice President
and Controller |
TermUntil
August 2019 Length of
Service
|
Managing Director (since 2014), formerly, Senior Vice President (2013-2014) and Vice President (2005-2013) of Nuveen Fund Advisors, LLC; Managing Director (since 2016) of Nuveen Securities, LLC; Managing Director (since 2016) of Nuveen Alternative Investments, LLC; Certified Public Accountant. | 166 | ||||
Nathaniel T. Jones 333 West Wacker Drive Chicago, IL 60606 (1979) |
Vice President
and Treasurer |
TermUntil
August 2019
Length of
|
Managing Director (since 2017), formerly, Senior Vice President (2016-2017), formerly, Vice President (2011-2016) of Nuveen; Chartered Financial Analyst. | 166 | ||||
Walter M. Kelly 333 West Wacker Drive Chicago, IL 60606 (1970) |
Vice President
and Chief Compliance Officer |
TermUntil
August 2019 Length of Service Since 2003 |
Managing Director (since 2017), formerly, Senior Vice President (2008-2017) of Nuveen. | 166 | ||||
David J. Lamb 333 West Wacker Drive Chicago, IL 60606 (1963) |
Vice President |
TermUntil
August 2019 Length of Service Since 2015 |
Managing Director (since 2017), formerly, Senior Vice President of Nuveen (2006-2017), Vice President prior to 2006. | 75 | ||||
Tina M. Lazar 333 West Wacker Drive Chicago, IL 60606 (1961) |
Vice President |
TermUntil
August 2019
|
Managing Director (since 2017), formerly, Senior Vice President (2014-2017) of Nuveen Securities, LLC. | 166 |
20
Name, Business Address and Year of Birth |
Position(s)
Held with Fund |
Term of Office
and Length of Time Served with Funds in the Fund Complex |
Principal Occupations Including Other Directorships During Past Five Years |
Number of
Portfolios in Fund Complex Overseen by Officer |
||||
Kevin J. McCarthy 333 West Wacker Drive Chicago, IL 60606 (1966) |
Vice President
and Assistant Secretary |
TermUntil
August 2019
|
Senior Managing Director (since 2017) and Secretary and General Counsel (since 2016) of Nuveen Investments, Inc., formerly, Executive Vice President (2016-2017) and Managing Director and Assistant Secretary (2008-2016); Senior Managing Director (since 2017) and Assistant Secretary (since 2008) of Nuveen Securities, LLC, formerly Executive Vice President (2016-2017) and Managing Director (2008-2016); Senior Managing Director (since 2017), Secretary (since 2016) and Co-General Counsel (since 2011) of Nuveen Fund Advisors, LLC, formerly, Executive Vice President (2016-2017), Managing Director, (2008-2016) and Assistant Secretary (2007-2016); Senior Managing Director (since 2017), Secretary (since 2016) and Associate General Counsel (since 2011) of Nuveen Asset Management, LLC, formerly Executive Vice President (2016-2017) and Managing Director and Assistant Secretary (2011-2016); Senior Managing Director (since 2017) and Secretary (since 2016) of Nuveen Investments Advisers, LLC, formerly Executive Vice President (2016-2017); Vice President (since 2007) and Secretary (since 2016), formerly, Assistant Secretary, of NWQ Investment Management Company, LLC, Symphony Asset Management LLC, Santa Barbara Asset Management, LLC and Winslow Capital Management, LLC (since 2010); Senior Managing Director (since 2017) and Secretary (since 2016) of Nuveen Alternative Investments, LLC. |
166
|
21
Name, Business Address and Year of Birth |
Position(s)
Held with Fund |
Term of Office
and Length of Time Served with Funds in the Fund Complex |
Principal Occupations Including Other Directorships During Past Five Years |
Number of
Portfolios in Fund Complex Overseen by Officer |
||||
William T. Meyers 333 West Wacker Drive Chicago, IL 60606 (1966) |
Vice President |
TermUntil
August 2019
Length of
Since 2018 |
Senior Managing Director (since 2017), formerly, Managing Director (2016-2017), Senior Vice President (2010-2016) of Nuveen Securities, LLC; Senior Managing Director (since 2017), formerly, Managing Director (2016-2017), Senior Vice President (2010-2016) of Nuveen, has held various positions with Nuveen since 1991. | 75 | ||||
Michael A. Perry 333 West Wacker Drive Chicago, IL 60606 (1967) |
Vice President |
TermUntil
August 2019
Length of
Since 2017 |
Executive Vice President (since 2017), previously, Managing Director (October 2016-2017), of Nuveen Fund Advisors, LLC; Executive Vice President (since 2017), formerly, Managing Director (2015-2017) of Nuveen Securities and Nuveen Alternative Investments, LLC; formerly, Managing Director (2010-2015) of UBS Securities LLC. | 75 | ||||
Christopher M. Rohrbacher 333 West Wacker Drive Chicago, IL 60606 (1971) |
Vice President
and Assistant Secretary |
TermUntil
August 2019 Length of Service Since 2008 |
Managing Director (since 2017), formerly, Senior Vice President and Assistant Secretary (since 2016) of Nuveen Fund Advisors, LLC; Managing Director (since 2017) of Nuveen Securities, LLC. | 166 | ||||
William A. Siffermann 333 West Wacker Drive Chicago, IL 60606 (1975) |
Vice President |
TermUntil
August 2019 Length of Service Since 2017 |
Managing Director (since 2017), formerly, Senior Vice President (2016-2017) and Vice President (2011-2016) of Nuveen. | 166 | ||||
Joel T. Slager 333 West Wacker Drive Chicago, IL 60606 (1978) |
Vice President
and Assistant Secretary |
TermUntil
August 2019 Length of Service Since 2013 |
Fund Tax Director for Nuveen Funds (since 2013); previously, Vice President of Morgan Stanley Investment Management, Inc., Assistant Treasurer of the Morgan Stanley Funds (2010-2013). | 166 |
22
Name, Business Address and Year of Birth |
Position(s)
Held with Fund |
Term of Office
and Length of Time Served with Funds in the Fund Complex |
Principal Occupations Including Other Directorships During Past Five Years |
Number of
Portfolios in Fund Complex Overseen by Officer |
||||
Mark L. Winget 333 West Wacker Drive Chicago, IL 60606 (1968) |
Vice President
and Assistant Secretary |
TermUntil
August 2019 Length of Service Since 2008 |
Vice President and Assistant Secretary of Nuveen Securities, LLC (since 2008); Vice President (since 2010) and Associate General Counsel (since 2008) of Nuveen. | 166 | ||||
Gifford R. Zimmerman 333 West Wacker Drive Chicago, IL 60606 (1956) |
Vice President
and Secretary |
TermUntil
August 2019 Length of Service Since 1988 |
Managing Director (since 2002) and Assistant Secretary of Nuveen Securities, LLC; Managing Director (since 2002), Assistant Secretary (since 1997) and Co-General Counsel (since 2011) of Nuveen Fund Advisors, LLC; Managing Director (since 2004) and Assistant Secretary (since 1994) of Nuveen Investments, Inc.; Managing Director, Assistant Secretary and Associate General Counsel of Nuveen Asset Management, LLC (since 2011); Vice President (since February 2017) Managing Director (2003-2017) and Assistant Secretary (since 2003) of Symphony Asset Management LLC; Managing Director and Assistant Secretary (since 2002) of Nuveen Investments Advisers, LLC; Vice President and Assistant Secretary of NWQ Investment Management Company, LLC, Santa Barbara Asset Management, LLC (since 2006) and of Winslow Capital Management, LLC (since 2010); Chartered Financial Analyst. | 166 |
Board Leadership Structure and Risk Oversight
The Board of Directors or the Board of Trustees (as the case may be, each is referred to hereafter as the Board and the trustees or directors of the Nuveen Funds, as applicable, are referred to herein as Trustees) oversees the operations and management of the Nuveen Fund (the Nuveen Funds), including the duties performed for the Nuveen Funds by Nuveen Fund Advisors and each Nuveen Funds sub-adviser(s), as applicable. The Board has adopted a unitary board structure. A unitary board consists of one group of trustees who serve on the board of every Nuveen Fund in the fund complex. In adopting a unitary board structure, the Trustees seek to provide effective governance through establishing a board, the overall composition of which, will, as a body, possess the appropriate skills, independence and experience to oversee the Nuveen Funds business. With this overall framework in mind, when the Board, through its Nominating and Governance
23
Committee discussed below, seeks nominees for the Board, the Trustees consider, not only the candidates particular background, skills and experience, among other things, but also whether such background, skills and experience enhance the Boards diversity and at the same time complement the Board given its current composition and the mix of skills and experiences of the incumbent Trustees.
The Board believes the unitary board structure enhances good and effective governance, particularly given the nature of the structure of the investment company complex. Funds in the same complex generally are served by the same service providers and personnel and are governed by the same regulatory scheme which raises common issues that must be addressed by the trustees across the fund complex (such as compliance, valuation, liquidity, brokerage, trade allocation or risk management). The Board believes it is more efficient to have a single board review and oversee common policies and procedures which increases the Boards knowledge and expertise with respect to the many aspects of fund operations that are complex-wide in nature. The unitary structure also enhances the Boards influence and oversight over Nuveen Fund Advisors and other service providers.
In an effort to enhance the independence of the Board, the Board also has a Chairman that is an independent trustee. The Board recognizes that a chairman can perform an important role in setting the agenda for the Board, establishing the boardroom culture, establishing a point person on behalf of the Board for fund management, and reinforcing the Boards focus on the long-term interests of shareholders. The Board recognizes that a chairman may be able to better perform these functions without any conflicts of interests arising from a position with fund management. Terence J. Toth currently serves as the Independent Chairman of the Board. Specific responsibilities of the Chairman include: (i) presiding at all meetings of the Board and of the shareholders; (ii) seeing that all orders and resolutions of the Trustees are carried into effect; and (iii) maintaining records of and, whenever necessary, certifying all proceedings of the Trustees and the shareholders.
Although the Board has direct responsibility over various matters (such as advisory contracts, underwriting contracts and Fund performance), the Board also exercises certain of its oversight responsibilities through several committees that it has established and which report back to the full Board. The Board believes that a committee structure is an effective means to permit Trustees to focus on particular operations or issues affecting the Nuveen Funds, including risk oversight. More specifically, with respect to risk oversight, the Board has delegated matters relating to valuation and compliance to certain committees (as summarized below) as well as certain aspects of investment risk. In addition, the Board believes that the periodic rotation of Trustees among the different committees allows the Trustees to gain additional and different perspectives of the Funds operations. The Board has established six standing committees: the Executive Committee, the Dividend Committee, the Closed-End Funds Committee, the Audit Committee, the Compliance, Risk Management and Regulatory Oversight Committee, and the Nominating and Governance Committee. The Board also may from time to time create ad hoc committees to focus on particular issues as the need arises. The membership and functions of the standing committees are summarized below.
The Executive Committee, which meets between regular meetings of the Board, is authorized to exercise all of the powers of the Board. The members of the Executive Committee are Terence J. Toth (Chair), Margo L. Cook and William J. Schneider. During the fiscal year ended December 31, 2017, the Executive Committee did not meet.
The Dividend Committee is authorized to declare distributions on each Nuveen Funds shares including, but not limited to, regular and special dividends, capital gains and ordinary income distributions. The members of the Dividend Committee are William C. Hunter (Chair), Albin F. Moschner, Margaret L. Wolff and Terence J. Toth. During the fiscal year ended December 31, 2017, the Dividend Committee met four (4) times.
The Compliance, Risk Management and Regulatory Oversight Committee (the Compliance Committee) is responsible for the oversight of compliance issues, risk management and other regulatory matters affecting the Nuveen Funds that are not otherwise the jurisdiction of the other committees. The Board has adopted and periodically reviews policies and procedures designed to address the Nuveen Funds compliance and risk matters.
24
As part of its duties, the Compliance Committee reviews the policies and procedures relating to compliance matters and recommends modifications thereto as necessary or appropriate to the full Board; develops new policies and procedures as new regulatory matters affecting the Nuveen Funds arise from time to time; evaluates or considers any comments or reports from examinations from regulatory authorities and responses thereto; and performs any special reviews, investigations or other oversight responsibilities relating to risk management, compliance and/or regulatory matters as requested by the Board.
In addition, the Compliance Committee is responsible for risk oversight, including, but not limited to, the oversight of risks related to investments and operations. Such risks include, among other things, exposures to particular issuers, market sectors, or types of securities; risks related to product structure elements, such as leverage; and techniques that may be used to address those risks, such as hedging and swaps. In assessing issues brought to the committees attention or in reviewing a particular policy, procedure, investment technique or strategy, the Compliance Committee evaluates the risks to the Nuveen Funds in adopting a particular approach or resolution compared to the anticipated benefits to the Nuveen Funds and their shareholders. In fulfilling its obligations, the Compliance Committee meets on a quarterly basis, and at least once a year in person. The Compliance Committee receives written and oral reports from the Nuveen Funds Chief Compliance Officer (CCO) and meets privately with the CCO at each of its quarterly meetings. The CCO also provides an annual report to the full Board regarding the operations of the Nuveen Funds and other service providers compliance programs as well as any recommendations for modifications thereto. The Compliance Committee also receives reports from the investment services group of Nuveen Investments regarding various investment risks. Notwithstanding the foregoing, the full Board also participates in discussions with management regarding certain matters relating to investment risk, such as the use of leverage and hedging. The investment services group therefore also reports to the full Board at its quarterly meetings regarding, among other things, Fund performance and the various drivers of such performance. Accordingly, the Board directly and/or in conjunction with the Compliance Committee oversees matters relating to investment risks. Matters not addressed at the committee level are addressed directly by the full Board. The committee operates under a written charter adopted and approved by the Board. The members of the Compliance Committee are Albin F. Moschner, John K. Nelson (Chair), Judith M. Stockdale, Margaret L. Wolff and Robert L. Young. During the fiscal year ended December 31, 2017, the Compliance Committee met eight (8) times.
The Audit Committee assists the Board in the oversight and monitoring of the accounting and reporting policies, processes and practices of the Nuveen Funds, and the audits of the financial statements of the Nuveen Funds; the quality and integrity of the financial statements of the Nuveen Funds; the Nuveen Funds compliance with legal and regulatory requirements relating to the Nuveen Funds financial statements; the independent auditors qualifications, performance and independence; and the pricing procedures of the Nuveen Funds and the internal valuation group of Nuveen. It is the responsibility of the Audit Committee to select, evaluate and replace any independent auditors (subject only to Board and, if applicable, shareholder ratification) and to determine their compensation. The Audit Committee is also responsible for, among other things, overseeing the valuation of securities comprising the Nuveen Funds portfolios. Subject to the Boards general supervision of such actions, the Audit Committee addresses any valuation issues, oversees the Nuveen Funds pricing procedures and actions taken by Nuveens internal valuation group which provides regular reports to the committee, reviews any issues relating to the valuation of the Nuveen Funds securities brought to its attention and considers the risks to the Nuveen Funds in assessing the possible resolutions to these matters. The Audit Committee also may consider any financial risk exposures for the Nuveen Funds in conjunction with performing its functions.
To fulfill its oversight duties, the Audit Committee receives annual and semi-annual reports and has regular meetings with the external auditors for the Nuveen Funds and Nuveen Fund Advisorss internal audit group at Nuveen Investments. The Audit Committee also may review in a general manner the processes the Board or other Board committees have in place with respect to risk assessment and risk management as well as compliance with legal and regulatory matters relating to the Nuveen Funds financial statements. The committee operates under a written charter adopted and approved by the Board. Members of the Audit Committee shall be independent (as set forth in the charter) and free of any relationship that, in the opinion of the trustees, would
25
interfere with their exercise of independent judgment as an Audit Committee member. The members of the Audit Committee are Jack B. Evans (Chair), William C. Hunter, John K. Nelson, Carole E. Stone and Terence J. Toth, each of whom is an Independent Trustee of the Nuveen Funds. During the fiscal year ended December 31, 2017, the Audit Committee met four (4) times.
The Nominating and Governance Committee is responsible for seeking, identifying and recommending to the Board qualified candidates for election or appointment to the Board. In addition, the Nominating and Governance Committee oversees matters of corporate governance, including the evaluation of Board performance and processes, the assignment and rotation of committee members, and the establishment of corporate governance guidelines and procedures, to the extent necessary or desirable, and matters related thereto. Although the unitary and committee structure has been developed over the years and the Nominating and Governance Committee believes the structure has provided efficient and effective governance, the committee recognizes that as demands on the Board evolve over time (such as through an increase in the number of funds overseen or an increase in the complexity of the issues raised), the committee must continue to evaluate the Board and committee structures and their processes and modify the foregoing as may be necessary or appropriate to continue to provide effective governance. Accordingly, the Nominating and Governance Committee has a separate meeting each year to, among other things, review the Board and committee structures, their performance and functions, and recommend any modifications thereto or alternative structures or processes that would enhance the Boards governance over the Nuveen Funds business.
In addition, the Nominating and Governance Committee, among other things, makes recommendations concerning the continuing education of trustees; monitors performance of legal counsel and other service providers; establishes and monitors a process by which security holders are able to communicate in writing with members of the Board; and periodically reviews and makes recommendations about any appropriate changes to Trustee compensation. In the event of a vacancy on the Board, the Nominating and Governance Committee receives suggestions from various sources, including suggestions from fund security holders, as to suitable candidates. Suggestions should be sent in writing to William Siffermann, Manager of Fund Board Relations, Nuveen LLC, 333 West Wacker Drive, Chicago, IL 60606. The Nominating and Governance Committee sets appropriate standards and requirements for nominations for new Trustees and reserves the right to interview any and all candidates and to make the final selection of any new Trustees. In considering a candidates qualifications, each candidate must meet certain basic requirements, including relevant skills and experience, time availability (including the time requirements for due diligence site visits to internal and external sub-advisers and service providers) and, if qualifying as an Independent Trustee candidate, independence from Nuveen Fund Advisor, subadvisors, underwriters or other service providers, including any affiliates of these entities. These skill and experience requirements may vary depending on the current composition of the Board, since the goal is to ensure an appropriate range of skills, diversity and experience, in the aggregate. Accordingly, the particular factors considered and weight given to these factors will depend on the composition of the Board and the skills and backgrounds of the incumbent Trustees at the time of consideration of the nominees. All candidates, however, must meet high expectations of personal integrity, independence, governance experience and professional competence. All candidates must be willing to be critical within the Board and with management and yet maintain a collegial and collaborative manner toward other Board members. The committee operates under a written charter adopted and approved by the Board. This committee is composed of the Independent Trustees of the Nuveen Funds. The members of the Nominating and Governance Committee are Terence J. Toth (Chair), Jack B. Evans, William C. Hunter, Albin F. Moschner, John K. Nelson, William J. Schneider, Judith M. Stockdale, Carole E. Stone, Margaret L. Wolff and Robert L. Young. During the fiscal year ended December 31, 2017, the Nominating and Governance Committee met five (5) times.
The Closed-End Funds Committee is responsible for assisting the Board in the oversight and monitoring of the Nuveen Funds that are registered as closed-end management investment companies (the Closed-End Funds). The committee may review and evaluate matters related to the formation and the initial presentation to the Board of new Closed-End Funds and may review and evaluate any matters relating to existing Closed-End Funds. The committee operates under a written charter adopted and approved by the Board. The members of the Closed-End Funds Committee are Carole E. Stone (Chair), Margo L. Cook, Jack B. Evans, Albin F. Moschner,
26
Terence J. Toth and Robert L. Young. During the fiscal year ended December 31, 2017, the Closed-End Funds Committee met four (4) times.
Board Diversification and Trustee Qualifications
In determining that a particular Trustee was qualified to serve on the Board, the Board has considered each Trustees background, skills, experience and other attributes in light of the composition of the Board with no particular factor controlling. The Board believes that Trustees need to have the ability to critically review, evaluate, question and discuss information provided to them, and to interact effectively with Fund management, service providers and counsel, in order to exercise effective business judgment in the performance of their duties, and the Board believes each trustee satisfies this standard. An effective trustee may achieve this ability through his or her educational background; business, professional training or practice; public service or academic positions; experience from service as a board member or executive of investment funds, public companies or significant private or not-for-profit entities or other organizations; and/or other life experiences. Accordingly, set forth below is a summary of the experiences, qualifications, attributes, and skills that led to the conclusion, as of the date of this document, that each Trustee should continue to serve in that capacity. References to the experiences, qualifications, attributes and skills of Trustees are pursuant to requirements of the SEC, do not constitute holding out of the Board or any Trustee as having any special expertise or experience and shall not impose any greater responsibility or liability on any such person or on the Board by reason thereof.
Margo L. Cook . Ms. Cook, an interested Trustee of the Nuveen Funds, is President (since 2017), formerly, Co-President of Nuveen Investments (2016-2017), prior to which she had been Senior Executive Vice President of Nuveen Investments since (2015-2016). Ms. Cook is a member of the Senior Leadership Team and Executive Vice President (since February 2017) of Nuveen, LLC, as well as co-chair of Nuveen Investments Management and Operating Committees. She is President (since August 2017), formerly, Co-president, prior to which she had been Senior Executive Vice President (2015-2016), of Nuveen Fund Advisors, LLC and President, and Co-Chief Executive Officer of Nuveen Securities, LLC (Nuveen Securities). Since joining in 2008, she has held various leadership roles at Nuveen Investments, including as Head of Investment Services, responsible for investment-related efforts across the firm. Ms. Cook also serves on the Board of Nuveen Global Fund Investors. Before joining Nuveen Investments, she was the Global Head of Bear Stearns Asset Managements institutional business. Prior to that, she spent over 20 years within BNY Mellons asset management business; including as Chief Investment Officer for Institutional Asset Management and Head of Institutional Fixed Income. Ms. Cook earned her bachelors degree in finance from the University of Rhode Island, her Executive MBA from Columbia University, and is a Chartered Financial Analyst. She serves as Vice Chair of The University of Rhode Island Foundation Board of Trustees and Chair of the All Stars Project of Chicago Board.
Jack B. Evans. Mr. Evans has served as President of the Hall-Perrine Foundation, a private philanthropic corporation, since 1996. Mr. Evans was formerly President and Chief Operating Officer of the SCI Financial Group, Inc., a regional financial services firm headquartered in Cedar Rapids, Iowa. He was a member of the Board of the Federal Reserve Bank of Chicago as well as a Director of Alliant Energy and President Pro Tem of the Board of Regents for the State of Iowa University System. Mr. Evans is Chairman of the Board of United Fire Group, sits on the Board as a Public Member of the American Board of Orthopaedic Surgery and is a Life Trustee of Coe College. He has a Bachelor of Arts from Coe College and a M.B.A. from the University of Iowa.
William C. Hunter. Mr. Hunter became Dean Emeritus of the Henry B. Tippie College of Business at the University of Iowa on June 30, 2012. He was appointed Dean of the College on July 1, 2006. He had been Dean and Distinguished Professor of Finance at the University of Connecticut School of Business since 2003-2006. From 1995 to 2003, he was the Senior Vice President and Director of Research at the Federal Reserve Bank of Chicago. While there he served as the Banks Chief Economist and was an Associate Economist on the Federal Reserve Systems Federal Open Market Committee (FOMC). In addition to serving as a Vice President in charge of financial markets and basic research at the Federal Reserve Bank in Atlanta, he held faculty positions at Emory University, Atlanta University, the University of Georgia and Northwestern University. A past Director of
27
the Credit Research Center at Georgetown University, SS&C Technologies, Inc. (2005) and past President of the Financial Management Association International, he has consulted with numerous foreign central banks and official agencies in Western Europe, Central and Eastern Europe, Asia, Central America and South America. From 1990 to 1995, he was a U.S. Treasury Advisor to Central and Eastern Europe. He has been a Director of Wellmark, Inc. since 2009 and was a Director of the Xerox Corporation from 2004-2018. He is a past Director and a past President of Beta Gamma Sigma, Inc., the International Business Honor Society.
Albin F. Moschner . Mr. Moschner is a consultant in the wireless industry and, in July 2012, founded Northcroft Partners, LLC, a management consulting firm that provides operational, management and governance solutions. Prior to founding Northcroft Partners, LLC, Mr. Moschner held various positions at Leap Wireless International, Inc., a provider of wireless services, where he was a consultant from February 2011 to July 2012, Chief Operating Officer from July 2008 to February 2011, and Chief Marketing Officer from August 2004 to June 2008. Before he joined Leap Wireless International, Inc., Mr. Moschner was President of the Verizon Card Services division of Verizon Communications, Inc. from 2000 to 2003, and President of One Point Services at One Point Communications from 1999 to 2000. Mr. Moschner also served at Zenith Electronics Corporation as Director, President and Chief Executive Officer from 1995 to 1996, and as Director, President and Chief Operating Officer from 1994 to 1995. Since 2012, Mr. Moschner has been a member of the Board of Directors of USA Technologies, Inc. and, from 1996 until 2016, he was a member of the Board of Directors of Wintrust Financial Corporation. In addition, he currently serves on the Advisory Boards of the Kellogg School of Management (since 1995) and the Archdiocese of Chicago Financial Council (since May 2012). Mr. Moschner received a Bachelor of Engineering degree in Electrical Engineering from The City College of New York in 1974 and a Master of Science degree in Electrical Engineering from Syracuse University in 1979.
John K. Nelson. Mr. Nelson is currently on the Board of Directors of Core12 LLC (since 2008), a private firm which develops branding, marketing, and communications strategies for clients. Mr. Nelson has served in several senior executive positions with ABN AMRO Holdings N.V. and its affiliated entities and predecessors, including LaSalle Bank Corporation from 1996 to 2008. From 2007 to 2008, Mr. Nelson was Chief Executive Officer of ABN AMRO N.V. North America, and Global Head of its Financial Markets Division. He was a member of the Foreign Exchange Committee of the Federal Reserve Bank of the United States, and during his tenure with ABN AMRO, served as the banks representative on various committees of the Bank of Canada, European Central Bank, and the Bank of England. At Fordham University, he currently serves as a director of The Curran Center for Catholic American Studies, and The Presidents Council. He is also a member of The Economic Club of Chicago. He was formerly a senior external advisor to the financial services practice of Deloitte Consulting LLP, formerly a member of the Hyde Park Angels, and was formerly a Trustee at St. Edmund Preparatory School in New York City. He formerly served as the Chairman of The Board of Trustees of Marian University. Mr. Nelson graduated and received his MBA from Fordham University.
William J. Schneider. Mr. Schneider is currently Chairman, formerly Senior Partner and Chief Operating Officer (retired, December 2004) of Miller-Valentine Partners, a real estate investment company. He is an owner in several other Miller-Valentine Group entities. He is currently a member of the board of WDPR Public radio station. He is formerly a Director and Past Chair of the Dayton Development Coalition. He was formerly a member of the Community Advisory Board of the National City Bank in Dayton as well as a former member of the Business Advisory Council of the Cleveland Federal Reserve Bank. Mr. Schneider was also a member of the Business Advisory Council for the University of Dayton College of Business. He also served as Chair of the Miami Valley Hospital and as Chair of the Finance Committee of its parent holding company. Mr. Schneider was an independent Trustee of the Flagship Funds, a group of municipal open-end funds. Mr. Schneider has a Bachelor of Science in Community Planning from the University of Cincinnati and a Masters of Public Administration from the University of Dayton.
Judith M. Stockdale. Ms. Stockdale retired in 2012 as Executive Director of the Gaylord and Dorothy Donnelley Foundation, a private foundation working in land conservation and artistic vitality in the Chicago region and the Low Country of South Carolina. She is currently a board member of the U.S. Endowment for
28
Forestry and Communities (since November 2013) and rejoined the board of the Land Trust Alliance in June 2013. Her previous positions include Executive Director of the Great Lakes Protection Fund, Executive Director of Openlands, and Senior Staff Associate at the Chicago Community Trust. She has served on the Advisory Councils of the National Zoological Park, the Governors Science Advisory Council (Illinois) and the Nancy Ryerson Ranney Leadership Grants Program. She has served on the boards of Brushwood Center and the Donors Forum. Ms. Stockdale, a native of the United Kingdom, has a Bachelor of Science degree in geography from the University of Durham (UK) and a Master of Forest Science degree from Yale University.
Carole E. Stone. Ms. Stone is currently on the Board of Directors of the CBOE Global Markets, Inc. (formerly, CBOE Holdings, Inc.), having previously served on the Boards of the Chicago Board Options Exchange, and C2 Options Exchange, Incorporated. Ms. Stone retired from the New York State Division of the Budget in 2004, having served as its Director for nearly five years and as Deputy Director from 1995 through 1999. She has also served as the Chair of the New York Racing Association Oversight Board, as a Commissioner on the New York State Commission on Public Authority Reform and as a member of the Boards of Directors of several New York State public authorities. Ms. Stone has a Bachelor of Arts from Skidmore College in Business Administration.
Terence J. Toth. Mr. Toth, the Nuveen Funds Independent Chairman, was a Co-Founding Partner of Promus Capital (2008-2017). From 2012 to 2016, he was a Director of LogicMark LLC. From 2008 to 2013, he was a Director of Legal & General Investment Management America, Inc. From 2004 to 2007, he was Chief Executive Officer and President of Northern Trust Global Investments, and Executive Vice President of Quantitative Management & Securities Lending from 2000 to 2004. He also formerly served on the Board of the Northern Trust Mutual Funds. He joined Northern Trust in 1994 after serving as Managing Director and Head of Global Securities Lending at Bankers Trust (1986 to 1994) and Head of Government Trading and Cash Collateral Investment at Northern Trust from 1982 to 1986. He currently serves on the Board of Fulcrum IT Service LLC (since 2010), Quality Control Corporation (since 2012) and Catalyst Schools of Chicago. He is on the Mather Foundation Board (since 2012) and is the Chair of its Investment Committee. Mr. Toth graduated with a Bachelor of Science degree from the University of Illinois, and received his M.B.A. from New York University. In 2005, he graduated from the CEO Perspectives Program at Northwestern University.
Margaret L. Wolff. Ms. Wolff retired from Skadden, Arps, Slate, Meagher & Flom LLP in 2014 after more than 30 years of providing client service in the Mergers & Acquisitions Group. During her legal career, Ms. Wolff devoted significant time to advising boards and senior management on U.S. and international corporate, securities, regulatory and strategic matters, including governance, shareholder, fiduciary, operational and management issues. Ms. Wolff has been a trustee of New York-Presbyterian Hospital since 2005 and, since 2004, she has served as a trustee of The John A. Hartford Foundation (a philanthropy dedicated to improving the care of older adults) where she currently is the Chair. From 2013-2017, she was a Board member of Travelers Insurance Company of Canada and The Dominion of Canada General Insurance Company (each of which is a part of Travelers Canada, the Canadian operation of The Travelers Companies, Inc.). From 2005 to 2015, she was a trustee of Mt. Holyoke College and served as Vice Chair of the Board from 2011 to 2015. Ms. Wolff received her Bachelor of Arts from Mt. Holyoke College and her Juris Doctor from Case Western Reserve University School of Law.
Robert L. Young. Mr. Young has more than 30 years of experience in the investment management industry. From 1997 to 2017, he held various positions with J.P. Morgan Investment Management Inc. (J.P. Morgan Investment) and its affiliates (collectively, J.P. Morgan). Most recently, he served as Chief Operating Officer and Director of J.P. Morgan Investment (from 2010 to 2016) and as President and Principal Executive Officer of the J.P. Morgan Funds (from 2013 to 2016). As Chief Operating Officer of J.P. Morgan Investment, Mr. Young led service, administration and business platform support activities for J.P. Morgans domestic retail mutual fund and institutional commingled and separate account businesses, and co-led these activities for J.P. Morgans global retail and institutional investment management businesses. As President of the J.P. Morgan Funds, Mr. Young interacted with various service providers to these funds, facilitated the relationship between such funds and their boards, and was directly involved in establishing board agendas, addressing regulatory matters,
29
and establishing policies and procedures. Before joining J.P. Morgan, Mr. Young, a former Certified Public Accountant (CPA), was a Senior Manager (Audit) with Deloitte & Touche LLP (formerly, Touche Ross LLP), where he was employed from 1985 to 1996. During his tenure there, he actively participated in creating, and ultimately led, the firms midwestern mutual fund practice. Mr. Young holds a Bachelor of Business Administration degree in Accounting from the University of Dayton and, from 2008 to 2011, he served on the Investment Committee of its Board of Trustees.
Independent Chairman
Terence J. Toth currently serves as the independent Chairman of the Board. Specific responsibilities of the Chairman include (a) presiding at all meetings of the Board and of the shareholders; (b) seeing that all orders and resolutions of the trustees are carried into effect; and (c) maintaining records of and, whenever necessary, certifying all proceedings of the trustees and the shareholders.
Class I Trustees will serve until the annual meeting of shareholders in 2019; Class II Trustees will serve until the annual meeting of shareholders in 2020; and Class III Trustees will serve until the annual meeting of shareholders in 2021. As each Trustees term expires, shareholders will be asked to elect trustees and such trustees shall be elected for a term expiring at the time of the third succeeding annual meeting subsequent to their election or thereafter in each case when their respective successors are duly elected and qualified. These provisions could delay for up to two years the replacement of a majority of the Board. See Certain Provisions in the Declaration of Trust in the Prospectus.
SHARE OWNERSHIP
The following table sets forth the dollar range of equity securities beneficially owned by each Trustee as of October 1, 2018:
Name of Trustee |
Dollar Range
of Equity Securities in the Fund |
Aggregate Dollar Range
of Equity Securities in All Registered Investment Companies Overseen by Trustee in Family of Investment Companies |
||||||
Margo L. Cook |
None | Over $ 100,000 | ||||||
Jack B. Evans |
$10,001-$50,000 | Over $ 100,000 | ||||||
William C. Hunter |
None | Over $ 100,000 | ||||||
Albin F. Moschner |
None | Over $ 100,000 | ||||||
John K. Nelson |
None | Over $ 100,000 | ||||||
William J. Schneider |
None | Over $ 100,000 | ||||||
Judith M. Stockdale |
None | Over $ 100,000 | ||||||
Carole E. Stone . |
None | Over $ 100,000 | ||||||
Terence J. Toth |
None | Over $ 100,000 | ||||||
Margaret L. Wolff |
None | Over $ 100,000 | ||||||
Robert L. Young |
None | Over $ 100,000 |
As of October 1, 2018, the officers and Trustees as a group beneficially owned less than 1% of any class of the Funds outstanding securities. As of October 1, 2018, none of the disinterested Trustees or their immediate family members owned, beneficially, or of record, any securities in (i) an investment adviser or principal underwriter of the Fund or (ii) a person (other than a registered investment company) directly or indirectly controlling, controlled by, or under common control with an investment adviser or principal underwriter of the Fund.
30
5% Shareholders
The following table sets forth the percentage ownership of each person who, as of September 30, 2018, owned of record, or was known by the Fund to own of record or beneficially, 5% or more of any class of the Funds equity securities: *
Name of Equity Security |
Name and Address of Owner |
% of Beneficial Ownership |
||||
Common Shares |
Advisors Asset Management, Inc. 18952 Base Camp Road Monument, Colorado 80132 |
6.66 | % | |||
First Trust Portfolios L.P. 120 East Liberty Drive, Suite 400 Wheaton, Illinois 60187
First Trust Advisors L.P. 120 East Liberty Drive, Suite 400 Wheaton, Illinois 60187
The Charger Corporation 120 East Liberty Drive, Suite 400 Wheaton, Illinois 60187 |
19.03 | % |
* |
The information contained in this table is based on Schedule 13G filings made January 12, 2018 and February 2, 2018, respectively. |
COMPENSATION
The following table shows, for each independent trustee, (1) the aggregate compensation paid to each Trustee by the Fund for its fiscal year ended December 31, 2017, (2) the amount of total compensation paid to each Trustee by the Fund that has been deferred, and (3) the total compensation paid to each Trustee by the Nuveen Funds during the calendar year ended December 31, 2017. The Fund does not have a retirement or pension plan. The officers and Trustees affiliated with Nuveen Investments serve without any compensation from the Fund. Certain of the Nuveen Funds have a deferred compensation plan (the Compensation Plan) that permits any Trustee who is not an interested person of certain funds to elect to defer receipt of all or a portion of his or her compensation as a Trustee. The deferred compensation of a participating trustee is credited to the book reserve account of a fund when the compensation would otherwise have been paid to the trustee. The value of the Trustees deferral account at any time is equal to the value that the account would have had if contributions to the account had been invested and reinvested in shares of one or more of the eligible Nuveen Funds. At the time for commencing distributions from a Trustees deferral account, the Trustee may elect to receive distributions in a lump sum or over a period of five years. The Fund will not be liable for any other funds obligations to make distributions under the Compensation Plan.
Aggregate
Compensation from Fund (1) |
Amount of
Total Compensation From the Fund That Has Been Deferred (2) |
Total Compensation from
Fund and Fund Complex (3) |
||||||||||
Jack B. Evans |
$ | 665 | $ | 63 | $ | 352,156 | ||||||
William C. Hunter |
632 | | 337,875 | |||||||||
Albin F. Moschner |
603 | | 318,125 | |||||||||
John K. Nelson |
692 | | 366,125 | |||||||||
William J. Schneider |
796 | 796 | 420,018 | |||||||||
Judith M. Stockdale |
621 | 61 | 329,708 | |||||||||
Carole E. Stone |
678 | 343 | 358,638 | |||||||||
Terence J. Toth |
662 | | 355,825 |
31
Aggregate
Compensation from Fund (1) |
Amount of
Total Compensation From the Fund That Has Been Deferred (2) |
Total Compensation from
Fund and Fund Complex (3) |
||||||||||
Margaret L. Wolff |
$ | 620 | $ | 212 | $ | 329,503 | ||||||
Robert L. Young (4) |
158 | 158 | 82,707 |
(1) |
The compensation paid, including deferred amounts, to the independent trustees for the fiscal year ended December 31, 2017 for services to the Fund. |
(2) |
Pursuant to a deferred compensation agreement with certain of the Nuveen Funds, deferred amounts are treated as though an equivalent dollar amount has been invested in shares of one or more eligible Nuveen Funds. Total deferred fees for the Fund (including the return from the assumed investment in the eligible Nuveen Funds) payable are stated above. |
(3) |
Based on the compensation paid (including any amounts deferred) for the calendar year ended December 31, 2017 for services to the Nuveen open-end and closed-end funds. 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. |
(4) |
Mr. Young was appointed to the Board effective July 1, 2017. |
Effective January 1, 2018, Independent Trustees recieve a $185,000 annual retainer, increased from $177,500 as of January 1, 2017, increased from $170,000 as of January 1, 2016, plus (a) a fee of $6,000 per day, which was increased from $5,750 per day as of January 1, 2017, for attendance in-person or by telephone at regularly scheduled meetings of the Board; (b) a fee of $3,000 per meeting for attendance in-person or by telephone at special, non-regularly scheduled Board Meetings where in-person attendance is required and $2,000 per meeting for attendance by telephone or in-person at such meetings where in-person attendance is not required; (c) a fee of $2,500 per meeting for attendance in-person or by telephone at Audit Committee meetings where in-person attendance is required and $2,000 per meeting for attendance by telephone or in-person at such meetings where in-person attendance is not required; (d) a fee of $2,500 per meeting for attendance in-person or by telephone at Compliance, Risk Management and Regulatory Oversight Committee meetings where in-person attendance is required and $2,000 per meeting for attendance by telephone or in-person at such meetings where in-person attendance is not required; (e) a fee of $1,000 per meeting for attendance in-person or by telephone at Dividend Committee meetings; (f) a fee of $500 per meeting for attendance in-person or by telephone at all other committee meetings ($1,000 for shareholder meetings) where in-person attendance is required and $250 per meeting for attendance by telephone or in-person at such committee meetings (excluding shareholder meetings) where in-person attendance is not required and $100 per meeting when the Executive Committee acts as pricing committee for IPOs, plus, in each case, expenses incurred in attending such meetings, provided that no fees are received for meetings held on days on which regularly scheduled Board meetings are held and (g) a fee of $2,500 per meeting for attendance in-person or by telephone at Closed-End Funds Committee meetings where in-person attendance is required and $2,000 per meeting for attendance by telephone or in-person at such meetings where in-person attendance is not required; provided that no fees are received for meetings held on days on which regularly scheduled Board meetings are held. In addition to the payments described above, the Chairman of the Board receives $90,000, increased from $80,000 as of January 1, 2017, and the chairpersons of the Audit Committee, the Dividend Committee, the Compliance, Risk Management and Regulatory Oversight Committee, the Nominating and Governance Committee and the Closed-End Funds Committee receive $12,500 each as additional retainers. Independent trustees also receive a fee of $3,000 per day for site visits to entities that provide services to the Nuveen Funds on days on which no Board Meeting is held. When ad hoc committees are organized, the Nominating and Governance Committee will at the time of formation determine compensation to be paid to the members of such committee; however, in general, such fees will be $1,000 per meeting for attendance in-person or by telephone at ad hoc committee meetings where in-person attendance is required and $500 per meeting for attendance by telephone or in-person at such meetings where in-person attendance is not required. The annual retainer, fees and expenses are allocated among the Nuveen Funds on the basis of relative net assets, although management may, in its discretion, establish a minimum amount to be allocated to each fund. In certain instances fees and expenses will be allocated only to those Nuveen Funds that are discussed at a given meeting.
32
The Fund has no employees. The officers of the Fund and the trustees of the Fund who are not independent trustees serve without any compensation from the Fund.
INVESTMENT ADVISER, SUB-ADVISERS AND PORTFOLIO MANAGERS
Nuveen Fund Advisors, LLC. Nuveen Fund Advisors, LLC, the Funds investment adviser, is responsible for overseeing the Funds overall investment strategy and its implementation. Nuveen Fund Advisors offers advisory and investment management services to a broad range of investment company clients. Nuveen Fund Advisors has overall responsibility for management of the Fund, oversees the management of the Funds portfolio, manages the Funds business affairs and provides certain clerical, bookkeeping and other administrative services. Nuveen Fund Advisors is located at 333 West Wacker Drive, Chicago, Illinois 60606. Nuveen Fund Advisors is an indirect subsidiary of Nuveen, LLC (Nuveen), the investment management arm of Teachers Insurance and Annuity Association of America (TIAA). TIAA is a life insurance company founded in 1918 by the Carnegie Foundation for the Advancement of Teaching and is the companion organization of College Retirement Equities Fund. As of September 30, 2018, Nuveen managed approximately $988 billion in assets, of which approximately $142 billion was managed by Nuveen Fund Advisors.
Investment Management Agreement and Related Fees. Pursuant to an investment management agreement between Nuveen Fund Advisors and the Fund (the Investment Management Agreement), the Fund has agreed to pay an annual management fee for the overall advisory and administrative services and general office facilities provided by Nuveen Fund Advisors. The Funds management fee is separated into two componentsa complex-level component, based on the aggregate amount of all fund assets managed by Nuveen Fund Advisors, and a specific fund-level component, based only on the amount of assets within the Fund. This pricing structure enables Nuveen fund shareholders to benefit from growth in the assets within each individual fund as well as from growth in the amount of complex-wide assets managed by Nuveen Fund Advisors.
Fund-Level Fee. The annual fund-level fee for the Fund, payable monthly, is calculated according to the following schedule:
Average Daily Managed Assets* |
Fund-Level
Fee Rate |
|||
For the first $500 million |
0.7500 | % | ||
For the next $500 million |
0.7250 | % | ||
For the next $500 million |
0.7000 | % | ||
For the next $500 million |
0.6750 | % | ||
For managed assets over $2 billion |
0.6500 | % |
Complex-Level Fee. The annual complex-level fee for the Fund, payable monthly, is calculated by multiplying the current complex-wide fee rate, determined according to the following schedule, by the Funds daily managed assets:
Complex-Level Eligible
|
Effective
Complex-Level Fee Rate at Breakpoint Level |
|||
$55 billion |
0.2000 | % | ||
$56 billion |
0.1996 | % | ||
$57 billion |
0.1989 | % | ||
$60 billion |
0.1961 | % | ||
$63 billion |
0.1931 | % | ||
$66 billion |
0.1900 | % | ||
$71 billion |
0.1851 | % | ||
$76 billion |
0.1806 | % |
33
Complex-Level Eligible
|
Effective
Complex-Level Fee Rate at Breakpoint Level |
|||
$80 billion |
0.1773 | % | ||
$91 billion |
0.1691 | % | ||
$125 billion |
0.1599 | % | ||
$200 billion |
0.1505 | % | ||
$250 billion |
0.1469 | % | ||
$300 billion |
0.1445 | % |
* |
For the complex-level fees, managed assets include closed-end fund assets managed by the Adviser that are attributable to certain types of leverage. For these purposes, leverage includes the funds use of preferred stock and borrowings and certain investments in the residual interest certificates (also called inverse floating rate securities) in tender option bond (TOB) trusts, including the portion of assets held by a TOB trust that has been effectively financed by the trusts issuance of floating rate securities, subject to an agreement by the Adviser as to certain funds to limit the amount of such assets for determining managed assets in certain circumstances. The complex level fee is calculated based upon the aggregate daily managed assets of all Nuveen open-end and closed-end funds that constitute eligible assets. Eligible assets do not include assets attributable to investments in other Nuveen funds or assets in excess of a determined amount (originally $2 billion) added to the Nuveen fund complex in connection with the Advisers assumption of the management of the former First American Funds effective January 1, 2011. As of June 30, 2018, the complex-level fee rate for the Fund was 0.1591%. |
The following table sets forth the management fee paid by the Fund for the last three fiscal years:
Management Fee Net of Expense
Reimbursement Paid for the Fiscal Year Ended |
Expense
Reimbursement for the Fiscal Year Ended |
|||||||
Fiscal year ended December 31, 2015 |
$ | 2,456,633 | $ | | ||||
Fiscal year ended December 31, 2016 |
$ | 2,114,930 | $ | | ||||
Fiscal year ended December 31, 2017 |
$ | 2,257,683 | $ | |
In addition to the fee of Nuveen Fund Advisors, the Fund pays all other costs and expenses of its operations, including compensation of its Trustees (other than those affiliated with Nuveen Fund Advisors and Nuveen Asset Management), custodian, transfer agency and dividend disbursing expenses, legal fees, expenses of independent auditors, expenses of repurchasing shares, expenses of issuing Preferred Shares (if any), expenses of preparing, printing and distributing shareholder reports, notices, proxy statements and reports to governmental agencies and taxes, if any. All fees and expenses are accrued daily and deducted before payment of dividends to investors.
A discussion regarding the Boards most recent decision to renew the Investment Management Agreement for the Fund may be found in the Funds semi-annual report to shareholders dated June 30 of each year.
Nuveen Asset Management, LLC. Nuveen Asset Management, LLC, 333 West Wacker Drive, Chicago, Illinois 60606, serves as a sub-adviser to the Fund pursuant to a sub-advisory agreement between Nuveen Fund Advisors and Nuveen Asset Management (the Nuveen Asset Management Sub-Advisory Agreement). Nuveen Asset Management is a registered investment adviser, and a wholly-owned subsidiary of Nuveen Fund Advisors. Nuveen Asset Management oversees day-to-day investment operations of and provides portfolio management to the Fund. Pursuant to the Nuveen Asset Management Sub-Advisory Agreement, Nuveen Asset Management will be compensated for the services it provides to the Fund with a portion of the management fee Nuveen Fund Advisors receives from the Fund. Nuveen Fund Advisors and Nuveen Asset Management retain the right to reallocate investment advisory responsibilities and fees between themselves in the future.
Pursuant to the Nuveen Asset Management Sub-Advisory Agreement, Nuveen Asset Management receives from Nuveen Fund Advisors a management fee equal to 10.5263% of the Funds average daily Managed Assets, payable on a monthly basis.
34
The following table sets forth the management fee paid by Nuveen Fund Advisors to Nuveen Asset Management for the last three fiscal years:
Sub-Advisory Fee Paid by
Nuveen Fund Advisors to Nuveen Asset Management |
|||||
Fiscal year ended December 31, 2015 |
$ | 258,593 | |||
Fiscal year ended December 31, 2016 |
$ | 222,624 | |||
Fiscal year ended December 31, 2017 |
$ | 237,650 |
A discussion regarding the Boards most recent decision to renew the Nuveen Asset Management Sub-Advisory Agreement for the Fund may be found in the Funds semi-annual report to shareholders for the period ended June 30 of each year.
Intech Investment Management LLC. Intech Investment Management LLC, Harbour Financial Center, 2401 PGA Blvd., Suite 100, Palm Beach Gardens, Florida 33410, serves as a sub-adviser to the Fund and is responsible for managing the Funds Equity Portfolio, subject to the oversight of Nuveen Fund Advisors and the Funds Board.
Founded in 1987, Intech specializes exclusively in providing highly disciplined, mathematical investment strategies designed to seek long term returns in excess of target benchmarks, such as the Index. Their proprietary approach to managing large cap stock portfolios reflects their belief that mathematical, risk controlled stock selection and ongoing portfolio management (focused on the analysis of stock price volatility) can systematically generate alpha for investorsrisk-adjusted excess return relative to specified benchmarks over time with lower levels of risk.
Intech is organized as a Delaware limited liability company and is an independently managed direct wholly-owned subsidiary of Janus Capital Management LLC and an indirect subsidiary of Janus. Intech is a global asset manager with one of the industrys longest continuous performance records of mathematical equity investment strategies for institutional investors and $50.2 billion in assets under management as of June 30, 2018. Intechs global headquarters is located in West Palm Beach, Florida, with its research headquarters in Princeton, New Jersey, and an international headquarters in London. The business address of Intech is 525 Okeechobee Blvd., Suite 1800, West Palm Beach, Florida 33401. The business address of Janus Capital Management LLC is 151 Detroit Street, Denver, Colorado 80206. The business address for Janus Henderson Group plc is 201 Bishopsgate, London EC2M 3AE UK.
Pursuant to a sub-advisory agreement between Nuveen Fund Advisors and Intech (the Intech Sub-Advisory Agreement), Intech receives from Nuveen Fund Advisors a management fee, payable on a monthly, basis, as follows:
Average Daily Managed Assets |
Management Fee Rate (1) | ||||
Up to $100 million |
0.4000 | % | |||
$100 million to $250 million |
0.3250 | % | |||
$250 million to $500 million |
0.2750 | % | |||
$500 million to $1 billion |
0.2500 | % | |||
$1 billion and over |
0.2000 | % |
(1) |
Fee calculated as a percentage of the Funds assets (including net assets attributable to Preferred Shares and the principal amount of any borrowings, if any) allocated to Intech. |
The following table sets forth the management fee paid by Nuveen Fund Advisors to Intech for the last three fiscal years:
Sub-Advisory Fee Paid by
Nuveen Fund Advisors to Intech |
|||||
Fiscal year ended December 31, 2015 |
$ | 937,895 | |||
Fiscal year ended December 31, 2016 |
$ | 824,953 | |||
Fiscal year ended December 31, 2017 |
$ | 873,288 |
35
A discussion regarding the Boards most recent decision to renew the Intech Sub-Advisory Agreement for the Fund may be found in the Funds semi-annual report to shareholders for the period ended June 30 of each year.
Portfolio Managers. Unless otherwise indicated, the information below is provided as of the date of this SAI.
Portfolio Managers . David Friar and Jody Hrazanek of Nuveen Asset Management oversee Nuveen Asset Managements implementation of the Funds Option Strategy. With respect to the Equity Portfolio, a team of investment professionals from Intech consisting of Dr. Adrian Banner, Dr. Vassilios Papathanakos, and Joseph Runnels works together to implement the mathematical portfolio management process. No one person of the investment team is primarily responsible for implementing the investment strategy of the portion of the Fund allocated to Intech. Nuveen Fund Advisors, as the Funds investment adviser, is responsible for managing the Funds overall strategy and operations and overseeing Nuveen Asset Managements implementation of the Option Strategy and Intechs management of the Equity Portfolio.
David Friar, Senior Vice President (since 2014) and Portfolio Manager (since 2011) of Nuveen Asset Management, entered the financial services industry in 1998. He joined Nuveen Asset Management in January 2011 following the firms acquisition of a portion of the asset management business of FAF Advisors. Mr. Friar previously served in various positions with FAF Advisors since 1999 where he served as a member of FAFs Performance Measurement group. Mr. Friar has been a portfolio manager of the Fund since [ ].
Jody Hrazanek joined Nuveen in May 2018 from Voya Investment Management where she was head of Strategy Design and Implementation from 2005 to 2018. In this role, she was portfolio manager for a number of multi-asset strategies including target date, portable alpha and option overlay strategies. Prior to Voya, Ms. Hrazanek worked at Advent Capital Management from 2003 to 2005 as a convertible bond trader for both long-only and hedge fund portfolios. Ms. Hrazanek has been a portfolio manager of the Fund since September 1, 2018.
Adrian Banner, Ph.D., is chief executive officer and chief investment officer of Intech. Dr. Banner was named chief executive officer in November 2012 and concurrently is the firms chief investment officer, a position he has held since January 2012. Previously, Dr. Banner was co-chief investment officer beginning January 2009, senior investment officer from September 2007 to January 2009, and joined Intech in August 2002 as director of research. Since that time, Dr. Banner has been an integral part of the firms Princeton-based research team. Dr. Banner has extensive knowledge of Intechs trading systems, optimization programs and research initiatives, both on an operational and theoretical basis. Dr. Banner supervises the implementation of the portfolio optimization, management, and trading processes. He conducts mathematical research on the investment process and reviews and recommends improvements. Dr. Banner earned his Ph.D. in mathematics from Princeton University and his M.Sc. and B.Sc., also in mathematics, from the University of New South Wales, Australia. Mr. Banner has been a portfolio manager of the Fund since December 31, 2008.
Vassilios Papathanakos, Ph.D., is executive vice president and deputy chief investment officer of Intech. He was named executive vice president in January 2014 and deputy chief investment officer in November 2012. Prior to that, he was the firms director of research since July 2007, and joined Intech in October 2006 as associate director of research. Dr. Papathanakos is jointly responsible, with Dr. Banner, for the day-to-day implementation of Intechs investment process and trading operations. Dr. Papathanakos received his Ph.D. in Physics from Princeton University in November 2006 and earned a B.S. in Physics from the University of Ioannina, Greece, in July 2001. Dr. Papathanakos has also accumulated a long teaching experience, instructing courses in all undergraduate and graduate levels, assisting in the development of new courses and coaching new teaching assistants. Mr. Papathanakos has been a portfolio manager of the Fund since December 31, 2011.
Joseph W. Runnels, CFA, has been vice president of portfolio management at Intech since March 2003 and joined the firm in 1998. Mr. Runnels holds a B.S. in Business Administration from Murray State University. Mr. Runnels has been a portfolio manager of the Fund since [ ].
36
Other Accounts . The Portfolio Managers also have responsibility for the day-to-day management of accounts other than the Fund. Information regarding these other accounts is set forth below.
Number of Other Accounts Managed and Assets by Account Type as of December 31, 2017 |
||||||||||||||||
Portfolio Manager |
Type of
|
Number
of Accounts |
Total Assets |
Number of
Accounts with Performance Based Fees |
Assets of
Accounts with Performance Based Fees |
|||||||||||
David Friar |
Registered Investment Companies | 6 | $2.20 billion | 0 | 0 | |||||||||||
Other Pooled Investment Vehicles | 0 | $0 | 0 | 0 | ||||||||||||
Other Accounts | 7 | $576 million | 0 | 0 | ||||||||||||
1 | ** | $150 million | ||||||||||||||
Jody Hrazanek * |
Registered Investment Companies | 4 | $2.32 billion | 0 | 0 | |||||||||||
Other Pooled Investment Vehicles | 0 |
$0 |
0 | 0 | ||||||||||||
Other Accounts | 0 |
$0 |
0 | 0 | ||||||||||||
Adrian Banner |
Registered Investment Companies | 8 | $3,747,584,605 | 0 | 0 | |||||||||||
Other Pooled Investment Vehicles*** | 40 | $10,241,515,507 | 0 | 0 | ||||||||||||
Other Accounts**** | 116 | $35,954,895,820 | 0 | 0 | ||||||||||||
Vassilios Papathanakos |
Registered Investment Companies | 8 | $3,747,584,605 | 0 | 0 | |||||||||||
Other Pooled Investment Vehicles*** | 40 | $10,241,515,507 | 0 | 0 | ||||||||||||
Other Accounts**** | 116 | $35,954,895,820 | 0 | 0 | ||||||||||||
Joseph W. Runnels |
Registered Investment Companies | 8 | $3,747,584,605 | 0 | 0 | |||||||||||
Other Pooled Investment Vehicles*** | 40 | $10,241,515,507 | 0 | 0 | ||||||||||||
Other Accounts**** | 116 | $35,954,895,820 | 0 | 0 |
* |
Information for Ms. Hrazanek is provided as of September 30, 2018. |
** |
Other Accounts-overlay strategiesThe portfolio manager is responsible for the management of overlay strategies employed by this account that use derivative instruments either to obtain, offset or substitute for certain portfolio exposures beyond those provided by the accounts underlying portfolios. |
*** |
5 of the accounts included in the total, consisting of 3,702,949,963 of the total assets in the category, have performance-based advisory fees. |
**** |
33 of the accounts included in the total, consisting of $14,436,142,734 of the total assets in the category, have performance-based advisory fees. |
The Portfolio Managers are responsible for managing the Fund and other accounts, including separate accounts and unregistered funds.
As shown in the above table, the Portfolio Managers may manage accounts in addition to the Fund. The potential for conflicts of interest exists when a portfolio manager manages other accounts with similar investment objectives and strategies to the Fund (Similar Accounts). Potential conflicts may include, for example, conflicts between investment strategies and conflicts in the allocation of investment opportunities.
37
Responsibility for managing Nuveen Fund Advisorss clients portfolios is organized according to investment strategies. Generally, client portfolios with similar strategies are managed using the same objectives, approach and philosophy. Therefore, portfolio holdings, relative position sizes and sector exposures tend to be similar across similar portfolios which minimizes the potential for conflicts of interest.
Nuveen Fund Advisors may receive more compensation with respect to certain Similar Accounts than that received with respect to the Fund or may receive compensation based in part on the performance of certain Similar Accounts. This may create a potential conflict of interest for the Portfolio Managers by providing an incentive to favor these Similar Accounts when, for example, placing securities transactions. Potential conflicts of interest may arise with both the aggregation and allocation of securities transactions and allocation of limited investment opportunities. Allocations of aggregated trades, particularly trade orders that were only partially completed due to limited availability, and allocation of investment opportunities generally, could raise a potential conflict of interest.
Nuveen Asset Management has policies and procedures designed to manage these conflicts described above such as allocation of investment opportunities to achieve fair and equitable allocation of investment opportunities among its clients over time. For example, orders for the same equity security are aggregated on a continual basis throughout each trading day consistent with Nuveen Asset Managements duty of best execution for its clients. If aggregated trades are fully executed, accounts participating in the trade will be allocated their pro rata share on an average price basis. Partially completed orders will be allocated among the participating accounts on a pro-rata average price basis as well.
Compensation . The Portfolio Managers compensation consists primarily of base pay, an annual cash bonus and long-term incentive payments.
Base Pay. Base pay is determined based upon an analysis of each Portfolio Managers general performance, experience, and market levels of base pay for such position.
Annual Cash Bonus. The Portfolio Managers are eligible for an annual cash bonus based on pre-tax investment performance, qualitative evaluation and financial performance of Nuveen Asset Management.
A portion of each Portfolio Managers annual cash bonus is based on the Funds investment performance, generally measured over the past one- and three or five-year periods unless the Portfolio Managers tenure is shorter. Investment performance for the Fund generally is determined by evaluating the Funds performance relative to its benchmark(s) and/or Lipper industry peer group.
A portion of the cash bonus is based on a qualitative evaluation made by each Portfolio Managers supervisor taking into consideration a number of factors, including the portfolio managers team collaboration, expense management, support of personnel responsible for asset growth, and his or her compliance with Nuveen Asset Managements policies and procedures.
The final factor influencing each Portfolio Managers cash bonus is the financial performance of Nuveen Asset Management based on its operating earnings.
Long-term incentive compensation . Certain key employees of Nuveen Asset Management, including certain portfolio managers, have received profits interests in Nuveen Asset Management which entitle their holders to participate in the firms growth over time.
Material 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 account. More specifically, portfolio managers who manage multiple accounts are presented a number of potential conflicts, including, among others, those discussed below.
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The management of multiple accounts may result in a portfolio manager devoting unequal time and attention to the management of each account. Nuveen Asset Management seeks to manage such competing interests for the time and attention of portfolio managers by having portfolio managers focus on a particular investment discipline. Most accounts managed by a portfolio manager in a particular investment strategy are managed using the same investment models.
If a portfolio manager identifies a limited investment opportunity which may be suitable for more than one account, an account may not be able to take full advantage of that opportunity due to an allocation of filled purchase or sale orders across all eligible accounts. To deal with these situations, Nuveen Asset Management has adopted procedures for allocating limited opportunities across multiple accounts.
With respect to many of its clients accounts, Nuveen Asset Management determines which broker to use to execute transaction orders, consistent with its duty to seek best execution of the transaction. However, with respect to certain other accounts, Nuveen Asset Management 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, Nuveen Asset Management may place separate, non-simultaneous, transactions for the Fund and other accounts which may temporarily affect the market price of the security or the execution of the transaction, or both, to the detriment of the Fund or the other accounts.
Some clients are subject to different regulations. As a consequence of this difference in regulatory requirements, some clients may not be permitted to engage in all the investment techniques or transactions or to engage in these transactions to the same extent as the other accounts managed by a portfolio manager. Finally, the appearance of a conflict of interest may arise where Nuveen Asset Management has an incentive, such as a performance-based management fee, which relates to the management of some accounts, with respect to which a portfolio manager has day-to-day management responsibilities.
Nuveen Asset Management has adopted certain compliance procedures which are designed to address these types of conflicts common among investment managers. However, there is no guarantee that such procedures will detect each and every situation in which a conflict arises.
Fund Shares Owned by the Portfolio Manager. As of December 31, 2017, the Portfolio Managers beneficially owned (as determined pursuant to Rule 16a-1(a)(2) under the Securities Exchange Act of 1934, as amended (the 1934 Act) shares of the Fund having values within the indicated dollar ranges.
Portfolio Manager |
Dollar Range of Equity Securities
Beneficially Owned in the Fund |
|||
David Friar |
None | |||
Jody Hrazanek* |
None | |||
Adrian Banner |
None | |||
Vassilios Papathanakos |
None | |||
Joseph Runnels |
None |
* |
Information for Ms. Hrazanek is provided as of September 30, 2018. |
The Fund, Nuveen Fund Advisors, Nuveen Asset Management, Nuveen Securities and other related entities have adopted a combined code of ethics (the Code of Ethics) that essentially prohibits certain of their personnel, including the Funds Portfolio Managers, from engaging in personal investments that compete or interfere with, or attempt to take advantage of a clients, including the Funds, anticipated or actual portfolio transactions, and are designed to assure that the interests of clients, including Fund shareholders, are placed before the interests of personnel in connection with personal investment transactions. Personnel subject to the
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Code of Ethics may purchase shares of the Fund subject to the restrictions set forth in the Code of Ethics. Personnel subject to the Code of Ethics may generally invest in securities in which the Fund may also invest. A text-only version of the Code of Ethics of the Fund, can be viewed online or downloaded from the EDGAR Database on the SECs internet web site at www.sec.gov.
The Adviser has delegated to the Sub-Advisers the full responsibility for proxy voting on securities held in the Funds portfolio and related duties in accordance with the Sub-Advisers policies and procedures. The Adviser periodically monitors the Sub-Advisers voting to ensure that each Sub-Adviser is carrying out its duties. Nuveen Asset Managements proxy voting policies and procedures are attached to this filing as Appendix A.
Intech has engaged Institutional Shareholder Services Inc. (ISS), to vote Fund proxies in accordance with ISS Benchmark Proxy Voting Guidelines (ISS Recommendations). Intech has engaged the services of the its parent firm, Janus Henderson Group plcs Securities Operations Group to oversee ISS in the administration of its proxy voting. Intech has adopted procedures and controls to avoid conflicts of interest that may arise in connection with proxy voting. In light of such procedures and controls, it is not expected that any conflicts will arise in the proxy voting process. In the unusual circumstance that a particular proxy vote may present a potential conflict, the matter shall be referred to Intechs Proxy Review Group, which is composed of Intechs Chief Operating Officer & General Counsel, Chief Financial Officer and Chief Compliance Officer. To the extent that a conflict of interest is identified, Intech will vote the proxy according to the ISS recommendation unless otherwise determined by the Proxy Review Group and Intech will report the resolution of the vote to the Funds Proxy Voting Committee.
Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge, upon request, by calling (800) 257-8787 or from the Funds website at http://www.nuveen.com, and on the SECs website at http://www.sec.gov.
PORTFOLIO TRANSACTIONS AND BROKERAGE
Subject to the supervision of Nuveen Fund Advisors and the Funds Board, Intech, with respect to the Equity Portfolio, and Nuveen Asset Management, with respect to the Options Strategy, are responsible for decisions to purchase and sell securities for the Fund, the negotiation of the prices to be paid and the allocation of transactions among various dealer firms. Transactions on stock exchanges involve the payment by the Fund of brokerage commissions. There generally is no stated commission in the case of securities traded in the OTC market but the price paid by the Fund usually includes an undisclosed dealer commission or mark-up. Transactions in the OTC market can also be placed with broker-dealers who act as agents and charge brokerage commissions for effecting OTC transactions. The Fund may place its OTC transactions either directly with principal market makers, or with broker-dealers if that is consistent with Nuveen Asset Managements or Intechs, as applicable, obligation to obtain best qualitative execution. In certain instances, the Fund may make purchases of underwritten issues at prices that include underwriting fees.
Portfolio securities may be purchased directly from an underwriter or in the OTC market from the principal dealers in such securities, unless it appears that a better price or execution may be obtained through other means. Portfolio securities will not be purchased from Nuveen or its affiliates or affiliates of Intech except in compliance with the 1940 Act.
It is Nuveen Asset Managements and Intechs policy to seek the best execution under the circumstances of each trade. Nuveen Asset Management and Intech will evaluate price as the primary consideration, with the financial condition, reputation and responsiveness of the dealer considered secondary in determining best
40
execution. Given the best execution obtainable, it will be Nuveen Asset Managements practice to select dealers that, in addition, furnish research information (primarily credit analyses of issuers and general economic reports) and statistical and other services to Nuveen Asset Management. It is not possible to place a dollar value on information and statistical and other services received from dealers. Since it is only supplementary to Nuveen Asset Managements own research efforts, the receipt of research information is not expected to reduce significantly Nuveen Asset Managements expenses. Intech does not consider research services in selecting brokers. While Nuveen Asset Management and Intech will be primarily responsible for the placement of the business of the Fund, Nuveen Asset Managements and Intechs policies and practices in this regard must be consistent with the foregoing and will, at all times, be subject to review by the Board of the Fund.
Nuveen Asset Management and Intech may manage other investment accounts and investment companies for other clients that may invest in the same types of securities as the Fund and that may have investment objectives similar to those of the Fund. Nuveen Asset Management and Intech each seek to allocate portfolio transactions equitably whenever concurrent decisions are made to purchase or sell assets or securities by the Fund and another advisory account. If an aggregated order cannot be filled completely, allocations will generally be made on a pro rata basis. An order may not be allocated on a pro rata basis where, for example (i) consideration is given to portfolio managers who have been instrumental in developing or negotiating a particular investment; (ii) consideration is given to an account with specialized investment policies that coincide with the particulars of a specific investment; (iii) pro rata allocation would result in odd-lot or de minimis amounts being allocated to a portfolio or other client; or (iv) where Nuveen Asset Management or Intech reasonably determines that departure from a pro rata allocation is advisable. There may also be instances where the Fund will not participate at all in a transaction that is allocated among other accounts. While these allocation procedures could have a detrimental effect on the price or amount of the securities available to the Fund from time to time, it is the opinion of the Board that the benefits available from Nuveen Asset Managements or Intechs management outweigh any disadvantage that may arise from Nuveen Asset Managements or Intechs larger management activities and their need to allocate securities.
Substantially all of the Funds trades are effected on a principal basis. The following table sets forth the aggregate amount of brokerage commissions paid by the Fund for the last three fiscal years:
Brokerage Commissions Paid | ||||
Fiscal year ended December 31, 2015 |
$ | 271,623 | ||
Fiscal year ended December 31, 2016 |
$ | 250,108 | ||
Fiscal year ended December 31, 2017 |
$ | 338,925 |
During the fiscal year ended December 31, 2017, the Fund did not pay commissions to brokers in return for research services or hold any securities of its regular broker-dealers.
During the fiscal year ended December 31, 2017, the Fund acquired certain securities of its regular brokers or dealers, as defined in Rule 10b-1 under the 1940 Act, or of the parents of the brokers or dealers. The following table sets forth those brokers or dealers and states the value of the Funds aggregate holdings of the securities of each issuer as of close of the fiscal year ended December 31, 2017:
Broker/Dealer |
Issuer |
Aggregate Fund
Holdings of Broker/Dealer or Parent (as of December 31, 2017) |
||||
Morgan Stanley Co., Inc. |
Morgan Stanley | $ | 167,904 | |||
State Street Bank and Trust Company |
State Street Corporation | $ | 2,342,640 |
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The Funds net asset value per share is determined as of the close of regular session trading (normally 4:00 p.m., Eastern Time) on each day the NYSE is open for business. Net asset value is computed by dividing the value of all assets of the Fund (including accrued interest and dividends), less all liabilities (including accrued expenses and dividends declared but unpaid), by the total number of shares outstanding. In determining net asset value, expenses are accrued and applied daily and securities and other assets for which market quotations are available are valued at market value. Exchange-traded equity securities are generally valued at the last sales price on the securities exchange on which such securities are primarily traded. Exchange-traded equity securities traded on a securities exchange for which there are no transactions on a given day or securities not listed on a securities exchange are valued at the closing bid prices. Securities reported on NASDAQ are valued at the NASDAQ Official Closing Price. Exchange-traded futures contracts and options on futures contracts are generally valued at the final settlement price or official closing price on the exchange such futures contracts and options on futures contracts are primarily traded. Temporary investments in securities that have variable rate and demand features qualifying them as short-term investments are valued at amortized cost, which approximates market value.
The Funds securities are valued in accordance with procedures approved by the Board. Under the procedures, equity securities and certain derivative instruments that are traded on an exchange are generally valued at the last sale price or, if that price is unavailable or deemed not representative of market value, the closing bid price. Where a security is traded on more than one exchange, the security is generally valued at the price on the exchange considered to be the primary exchange. In the case of securities not traded on an exchange, or if exchange prices are not otherwise available, the prices are typically determined by independent third party pricing services that use a variety of techniques and methodologies.
The valuations for fixed income securities and certain derivative instruments are typically the prices supplied by independent third party pricing services, which may use market prices or broker/dealer quotations or a variety of fair valuation techniques and methodologies. If independent third party pricing services are unable to supply prices for a portfolio investment, or if the prices supplied are deemed to be unreliable, the market price may be determined by using quotations from one or more broker/dealers. When such prices or quotations are not available, or when believed to be unreliable, securities may be priced using fair value procedures approved by the Board. These procedures permit, among other things, the use of a matrix, formula or other method that takes into consideration market indexes, yield curves and other specific adjustments to determine fair value. The Fund may also use fair value procedures if it is determined that a significant event has occurred between the time at which a market price is determined and the time at which the funds net asset value is calculated. The effect of using fair value pricing is that the Common Share net asset value will be subject to the judgment of the Board or its designee instead of being determined by the market.
The Fund pays quarterly distributions stated in terms of a fixed cents per Common Share dividend rate that will be composed of supplemental amounts generally representing realized capital gains or, possibly, returns of capital representing unrealized capital gains or a return of your original investment. In addition, the Fund intends to distribute any net long-term capital gains to Common Shareholders as long-term capital gain dividends as frequently as quarterly. Quarterly distributions, including such supplemental amounts, are sometimes referred to as managed distributions.
The Fund will seek to establish a distribution rate that roughly corresponds to Nuveen Fund Advisors projections of the total return that could reasonably be expected to be generated by the Fund over an extended period of time, although the distribution rate will not be solely dependent on the amount of income earned or capital gains realized by the Fund. Nuveen Fund Advisors, in making such projections, may consider long-term
42
historical returns and a variety of other factors. Distributions can only be made after paying accrued dividends to preferred shareholders, if any, and interest and required principal payments on borrowings, if any. The distribution policy recognizes that many investors are willing to accept the potentially higher asset volatility of the Funds equity investments compared to fixed-income investments, but they prefer a consistent level of cash distributions be available each quarter for reinvestment or for other purposes of their choosing.
If, for any quarterly distribution, net investment income and net realized capital gains were less than the amount of the distribution, the difference would be distributed from the Funds assets. In addition, in order to make such distributions, the Fund might have to sell a portion of its investment portfolio at a time when independent investment judgment might not dictate such action. The Funds final distribution for each calendar year will include any remaining net investment income undistributed during the year and may include any remaining net realized capital gains undistributed during the year. The Funds actual financial performance will likely vary significantly from quarter-to-quarter and from year-to-year, and there may be extended periods of up to several years when the distribution rate will exceed the Funds actual total returns. The Funds projected or actual distribution rate is not a prediction of what the Funds actual total returns will be over any specific future period.
As portfolio and market conditions change, the rate of distributions on the Common Shares and the Funds distribution policy could change. To the extent that the total return of the Funds overall strategy exceeds the distribution rate for an extended period, the Fund may be in a position to increase the distribution rate or distribute supplemental amounts to shareholders. Conversely, if the total return of the Funds overall strategy is less than the distribution rate for an extended period of time, the Fund will effectively be drawing upon its net assets to meet payments prescribed by its distribution policy. Similarly, for tax purposes such distributions by the Fund may consist in part of a return of capital to Common Shareholders. The exact tax characteristics of the Funds distributions will not be known until after the Funds fiscal year-end. Common Shareholders should not confuse a return of capital distribution with dividend yield or total return. There is no assurance that the Fund will continue to make quarterly distributions of net long-term capital gains. Under the terms of an exemptive order from the SEC, the Funds Board is required to determine whether to continue the quarterly distribution of net long-term capital gains if: (i) the Common Shares have traded at an average premium to NAV equal to or greater than 10%, as determined on the basis of the average of the discount or premium to the NAV of the Common Shares as of the close of each trading day over a 12-week rolling period, and (ii) the Funds distribution rate for that 12-week rolling period, expressed as a percentage of NAV as of the ending date of the 12-week rolling period, is greater than the Funds average annual total return in relation to the change in NAV over the 2-year period ending on the last day of the 12-week rolling period.
At the same time that it pays a quarterly distribution, the Fund will post on its website (www.nuveen.com/etf), and make available in written form to Common Shareholders, a written notice of the estimated sources and tax characteristics of the Funds distributions (i.e., what percentage of the distributions is estimated to constitute ordinary income, short-term capital gains, long-term capital gains, and/or a non-taxable return of capital) on a year-to-date basis, in compliance with a federal securities law requirement that any fund paying a distribution from sources other than net investment income disclose to shareholders the respective portion attributable to such other sources. These estimates may be based on certain assumptions about the Funds expected investment returns and the realization of net gains, if any, over the remaining course of the year. These estimates may, and likely will, vary over time based on the activities of the Fund and changes in the value of portfolio investments. The Fund expects that it will provide this type of information primarily on a tax basis, instead of on a generally accepted accounting principles (GAAP) basis, because experience has shown that fund shareholders are most concerned about the tax character of their distributions, and because the Fund expects that the distributions tax characteristics will fairly reflect the economic basis of the Funds distributions and returns. The final determination of the source and tax characteristics of all distributions will be made after December 31 in each year, and reported to Common Shareholders on Form 1099-DIV early the following year.
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As explained more fully below in Tax Matters, at least annually, the Fund intends to distribute to Common Shareholders any net capital gain (which is the excess of net long-term capital gain over net short-term capital loss) for each taxable year through its managed distributions after making interest and required principal payments on Borrowings or paying any accrued dividends or making any redemption or liquidation payments to preferred shareholders or, alternatively, to retain all or a portion of the years net capital gain and pay U.S. federal income tax on the retained gain. Each Common Shareholder of record as of the end of the Funds taxable year will include in income for federal income tax purposes, as long-term capital gain, his or her share of any retained gain, will be deemed to have paid his or her proportionate share of the tax paid by the Fund on such retained gain, and will be entitled to an income tax credit or refund for that share of the tax. The Fund may treat any retained capital gain amount as a substitute for equivalent cash distributions. In addition, the Fund may make total distributions during a given calendar year in an amount that exceeds the Funds net investment income and net capital gain for that calendar year, in which case the excess will generally be treated by shareholders as return of capital for tax purposes. Distributions treated as return of capital will reduce a shareholders basis in his or her Common Shares, which will generally result in an increase in the amount of gain (or decrease in the amount of loss) that the shareholder will recognize on his or her sale or other disposition of such Common Shares.
Distributions will be reinvested in additional Common Shares under the Funds Dividend Reinvestment Plan unless a Common Shareholder elects to receive cash.
The Fund reserves the right to change its distribution policy and the basis for establishing the rate of its quarterly distributions at any time, subject to a finding by the Funds Board that such change is in the best interests of the Fund and its Common Shareholders.
If your Common Shares are registered directly with the Fund or if you hold your Common Shares with a brokerage firm that participates in the Funds Dividend Reinvestment Plan (the Plan) your distributions, including any capital gain distributions, will automatically be reinvested in additional Common Shares under the Plan unless you request otherwise. If you elect not to participate in the Plan, or are not eligible to participate because your brokerage firm does not participate in the Plan, you will receive all distributions in cash paid by check mailed directly to you or your brokerage firm by Computershare Trust Company, N.A. and Computershare Inc. (together, Computershare) as dividend paying agent (the Plan Agent). The tax consequences of a distribution are the same regardless of whether such distribution is reinvested or received in cash. See Tax Matters below.
Under the Plan, the number of Common Shares you will receive will be determined as follows:
(1) If the Common Shares are trading at or above NAV at the time of valuation, the Fund will issue new shares at a price equal to the greater of (i) NAV per Common Share on that date or (ii) 95% of the market price on that date.
(2) If Common Shares are trading below NAV at the time of valuation, the Plan Agent will receive the dividend or distribution in cash and will purchase Common Shares in the open market, on the NYSE or elsewhere, for the participants accounts. It is possible that the market price for the Common Shares may increase before the Plan Agent has completed its purchases. Therefore, the average purchase price per share paid by the Plan Agent may exceed the market price at the time of valuation, resulting in the purchase of fewer shares than if the dividend or distribution had been paid in Common Shares issued by the Fund. The Plan Agent will use all dividends and distributions received in cash to purchase Common Shares in the open market within 30 days of the valuation date. Interest will not be paid on any uninvested cash payments. The Plan provides that if the Common Shares start trading at or above NAV before the Plan Agent has completed its purchases, the Plan Agent may cease purchasing Common Shares in the open market, and may invest the uninvested portion in new shares at a price equal to the greater of (i) NAV per Common Share determined on the last business day immediately prior to the purchase date or (ii) 95% of the market price on that date.
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You may withdraw from the Plan at any time by giving written notice to the Plan Agent. If you withdraw or the Plan is terminated, you will receive whole shares in your account under the Plan and you will receive a cash payment for any fraction of a share in your account. If you wish, the Plan Agent will sell your shares and send you the proceeds, minus brokerage commissions and a $2.50 service fee.
The Plan Agent maintains all shareholders accounts in the Plan and gives written confirmation of all transactions in the accounts, including information you may need for tax records. Common Shares in your account will be held by the Plan Agent in non-certificated form. Any proxy you receive will include all Common Shares you have received under the Plan.
There is no brokerage charge for reinvestment of your dividends or distributions in Common Shares. However, all participants will pay a pro rata share of brokerage commissions incurred by the Plan Agent when it makes open market purchases.
Automatically reinvesting dividends and distributions does not mean that you do not have to pay income taxes due upon receiving dividends and distributions.
As noted above, if you hold your Common Shares with a brokerage firm that does not participate in the Plan, you will not be able to participate in the Plan and any dividend reinvestment may be effected on different terms than those described above. Consult your financial adviser for more information.
The Fund reserves the right to amend or terminate the Plan if in the judgment of the Board the change is warranted. There is no direct service charge to participants in the Plan; however, the Fund reserves the right to amend the Plan to include a service charge payable by the participants. Additional information about the Plan may be obtained from Computershare, P.O. Box 505000, Louisville, Kentucky, 40233-5000 (800) 257-8787.
The Fund may sell the Common Shares offered under this Prospectus through
|
at-the-market transactions; |
|
underwriting syndicates; and |
|
privately negotiated transactions. |
The Fund will bear the expenses of the offering, including but not limited to, the expenses of preparation of the Prospectus and SAI for the offering and the expense of counsel and auditors in connection with the offering.
Distribution Through At-The-Market Transactions
The Fund has entered into a distribution agreement with Nuveen Securities (the Distribution Agreement), which has been filed as an exhibit to the Registration Statement of which this Prospectus is a part. Subject to the terms and conditions of the Distribution Agreement, the Fund may from time to time issue and sell its Common Shares through Nuveen Securities to certain broker-dealers which have entered into selected dealer agreements with Nuveen Securities. Currently, Nuveen Securities has entered into a selected dealer agreement (the Selected Dealer Agreement) with [ ] pursuant to which [ ] will be acting as Nuveen Securities sub-placement agent with respect to at-the-market offerings of Common Shares. The Selected Dealer Agreement has been filed as an exhibit to the Registration Statement of which this Prospectus forms a part.
Common Shares will only be sold on such days as shall be agreed to by the Fund and Nuveen Securities. Common Shares will be sold at prevailing market prices through the National Market System, subject to a minimum price to be established each day by Nuveen Securities. The minimum price on any day will not be less
45
than the current NAV per Common Share plus the per share amount of the commission to be paid to Nuveen Securities. The Fund, Nuveen Securities, and [ ] will suspend the sale of Common Shares if the per share price of the shares is less than the minimum price.
The Fund will compensate Nuveen Securities with respect to sales of the Common Shares at a commission rate of up to 1.0% of the gross proceeds of the sale of Common Shares. Nuveen Securities will compensate sub-placement agents or other broker-dealers participating in the offering at a rate of up to 0.8% of the gross proceeds of the sale of Common Shares sold by that sub-placement agent or broker-dealer. Settlements of sales of Common Shares will occur on the second business day following the date on which any such sales are made. In connection with the sale of the Common Shares on behalf of the Fund, Nuveen Securities may be deemed to be an underwriter within the meaning of the 1933 Act, and the compensation of Nuveen Securities may be deemed to be underwriting commissions or discounts. Unless otherwise indicated in a further Prospectus supplement, Nuveen Securities will act as underwriter on a reasonable efforts basis.
The offering of Common Shares pursuant to the Distribution Agreement will terminate upon the earlier of (i) the sale of all Common Shares subject thereto or (ii) termination of the Distribution Agreement. The Fund and Nuveen Securities each have the right to terminate the Distribution Agreement in its discretion at any time. The Fund currently intends to distribute the shares offered pursuant to this Prospectus through at-the-market transactions, although from time to time it may also distribute shares through an underwriting syndicate or a privately negotiated transaction. To the extent shares are distributed other than through at-the-market transactions, the Fund will file a supplement to this Prospectus describing such transactions.
The Funds closing price on the NYSE on October 12, 2018 was $13.76.
Distribution Through Underwriting Syndicates
The Fund from time to time may issue additional Common Shares through a syndicated secondary offering. In order to limit the impact on the market price of the Funds Common Shares, underwriters will market and price the offering on an expedited basis (e.g., overnight or similarly abbreviated offering period). The Fund will launch a syndicated offering on a day, and upon terms, mutually agreed upon between the Fund, Nuveen Securities, one of the Funds underwriters, and the underwriting syndicate.
The Fund will offer its shares at a price equal to a specified discount of up to 5% from the closing market price of the Funds Common Shares on the day prior to the offering date. The applicable discount will be negotiated by the Fund and Nuveen Securities in consultation with the underwriting syndicate on a transaction-by-transaction basis. The Fund will compensate the underwriting syndicate out of the proceeds of the offering based upon a sales load of up to 4% of the gross proceeds of the sale of Common Shares. The minimum net proceeds per share to the Fund will not be less than the greater of (i) the Funds latest NAV per share of Common Shares or (ii) 91% of the closing market price of the shares of the Funds Common Shares on the day prior to the offering date.
Distribution Through Privately Negotiated Transactions
The Fund from time to time may sell directly to, and solicit offers from, institutional and other sophisticated investors, who may be deemed to be underwriters as defined in the 1933 Act for any resale of Common Shares.
The terms of such privately negotiated transactions will be subject to the discretion of the management of the Fund. In determining whether to sell Common Shares through a privately negotiated transaction, the Fund will consider relevant factors including, but not limited to, the attractiveness of obtaining additional funds through the sale of Common Shares, the purchase price to apply to any such sale of Common Shares and the person seeking to purchase the Common Shares.
Common Shares issued by the Fund through privately negotiated transactions will be issued at a price equal to the greater of (i) the NAV per share of the Funds Common Shares or (ii) at a discount ranging from 0% to 5%
46
of the average daily closing market price of the Funds Common Shares at the close of business on the ten business days preceding the date upon which Common Shares are sold pursuant to the privately negotiated transaction. The applicable discount will be determined by the Fund on a transaction-by-transaction basis.
The principal business address of Nuveen Securities is 333 West Wacker Drive, Chicago, Illinois 60606.
COMMON SHARES
For a description of the Funds Common Shares, See Description of SharesCommon Shares in the Funds Prospectus.
PREFERRED SHARES
As a non-fundamental policy, the Fund will not leverage its capital structure by issuing senior securities such as preferred shares or debt instruments. However, the Declaration of Trust (the Declaration) authorizes the issuance of an unlimited number of preferred shares in one or more classes or series, with rights as determined by the Board of the Fund by action of the Board without the approval of the Common Shareholders. The terms of any preferred shares that may be issued by the Fund may be the same as, or different from, the terms described below, subject to applicable law and the Declaration.
Limited Issuance of Preferred Shares. Under the 1940 Act, the Fund could issue preferred shares with an aggregate liquidation value of up to one-half of the value of the Funds total net assets, measured immediately after issuance of the preferred shares. Liquidation value means the original purchase price of the shares being liquidated plus any accrued and unpaid dividends. In addition, the Fund is not permitted to declare any cash dividend or other distribution on its Common Shares unless the liquidation value of the preferred shares is less than one-half of the value of the Funds total net assets (determined after deducting the amount of such dividend or distribution) immediately after the distribution.
Distribution Preference. The preferred shares would have complete priority over the Common Shares as to distribution of assets.
Liquidation Preference. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Fund, holders of preferred shares would be entitled to receive a preferential liquidating distribution (expected to equal the original purchase price per share plus accumulated and unpaid dividends thereon, whether or not earned or declared) before any distribution of assets is made to Common Shareholders. After payment of the full amount of the liquidating distribution to which they are entitled, holders of preferred shares will not be entitled to any further participation in any distribution of assets by the Fund. A consolidation or merger of the Fund with or into any Massachusetts business trust or corporation or a sale of all or substantially all of the assets of the Fund shall not be deemed to be a liquidation, dissolution or winding up of the Fund.
Voting Rights. In connection with any issuance of preferred shares, the Fund must comply with Section 18(i) of the 1940 Act, which requires, among other things, that preferred shares be voting shares and have equal voting rights with Common Shares. Except as otherwise indicated in this SAI and except as otherwise required by applicable law, holders of preferred shares would vote together with Common Shareholders as a single class.
In connection with the election of the Funds trustees, holders of preferred shares, voting as a separate class, would be entitled to elect two trustees, and the remaining class of trustees nominated for election would be elected by Common Shareholders and holders of preferred shares, voting together as a single class. In addition, if
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at any time dividends on the Funds outstanding preferred shares would be unpaid in an amount equal to two full years dividends thereon, the holders of all outstanding preferred shares, voting as a separate class, would be entitled to elect a majority of the Funds trustees until all dividends in arrears have been paid or declared and set apart for payment.
The affirmative vote of the holders of a majority of the Funds outstanding preferred shares of any class or series, as the case may be, voting as a separate class, would be required to, among other things, (1) take certain actions that would affect the preferences, rights or powers of such class or series or (2) authorize or issue any class or series ranking prior to the preferred shares. Except as may otherwise be required by law, (1) the affirmative vote of the holders of at least two-thirds of the preferred shares outstanding at the time, voting as a separate class, would be required to approve any conversion of the Fund from a closed-end to an open-end investment company and (2) the affirmative vote of the holders of at least two-thirds of the outstanding Preferred shares, voting as a separate class, would be required to approve any plan of reorganization (as such term is used in the 1940 Act) adversely affecting such shares; provided however, that such separate class vote would be a majority vote if the action in question has previously been approved, adopted or authorized by the affirmative vote of two-thirds of the total number of trustees fixed in accordance with the Declaration or the By-laws. The affirmative vote of the holders of a majority of the outstanding preferred shares, voting as a separate class, would be required to approve any action not described in the preceding sentence requiring a vote of security holders under Section 13(a) of the 1940 Act including, among other things, changes in the Funds investment objective or changes in the investment restrictions described as fundamental policies under Investment Restrictions. The class or series vote of holders of preferred shares described above would in each case be in addition to any separate vote of the requisite percentage of Common Shares and preferred shares necessary to authorize the action in question.
The foregoing voting provisions would not apply with respect to the preferred shares if, at or prior to the time when a vote was required, such shares would have been (1) redeemed or (2) called for redemption and sufficient funds would have been deposited in trust to effect such redemption.
Redemption, Purchase and Sale of Preferred Shares. The terms of the preferred shares may provide that they are redeemable by the Fund at certain times, in whole or in part, at the original purchase price per share plus accumulated dividends, that the Fund may tender for or purchase preferred shares and that the Fund may subsequently resell any shares so tendered for or purchased. Any redemption or purchase of preferred shares by the Fund would reduce the leverage applicable to Common Shares, while any resale of such shares by the Fund would increase such leverage.
In the event of any future issuance of preferred shares, the Fund likely would apply for ratings from an NRSRO. In such event, as long as preferred Shares are outstanding, the composition of the Funds portfolio would reflect guidelines established by such NRSRO. Based on previous guidelines established by such NRSROs for the securities of other issuers, the Fund anticipates that the guidelines may impose asset coverage or portfolio composition requirements that are more stringent than those imposed on the Fund by the 1940 Act. However, at this time, no assurance can be given as to the nature or extent of the guidelines that may be imposed in connection with obtaining a rating of any preferred shares.
BORROWINGS
As a non-fundamental policy, the Fund will not leverage its capital structure by issuing senior securities such as preferred shares or debt instruments. However, the Declaration authorizes the Fund, without approval of the Common Shareholders, to borrow money. Pursuant to this authorization, the Fund may issue notes or other evidence of indebtedness (including bank Borrowings or commercial paper) and may secure any such Borrowings by mortgaging, pledging or otherwise subjecting as security the Funds assets. In connection with such Borrowings, the Fund may be required to maintain minimum average balances with the lender or to pay a commitment or other fee to maintain a line of credit. Any such requirements would increase the cost of
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Borrowings over the stated interest rate. Under the requirements of the 1940 Act, the Fund, immediately after any Borrowings, must have an asset coverage of at least 300%. With respect to any such Borrowings, asset coverage means the ratio that the value of the total assets of the Fund, less all liabilities and indebtedness not represented by senior securities (as defined in the 1940 Act), bears to the aggregate amount of such Borrowings represented by senior securities issued by the Fund. Certain types of Borrowings may result in the Fund being subject to covenants in credit agreements relating to asset coverages or portfolio composition or otherwise. In addition, as with the issue of preferred shares, the Fund may be subject to certain restrictions imposed by guidelines of one or more ratings agencies that may issue ratings on commercial paper or notes issued by the Fund. Such restrictions may be more stringent than those imposed by the 1940 Act.
The rights of lenders to the Fund to receive interest on and repayment of principal of any such Borrowings would be senior to those of the Common Shareholders, and the terms of any such Borrowings may contain provisions that limit certain activities of the Fund, including the payment of dividends to Common Shareholders in certain circumstances. Further, the 1940 Act would (in certain circumstances) grant to the lenders to the Fund certain voting rights in the event of default in the payment of interest on or repayment of principal. In the event that such provisions would impair the Funds status as a regulated investment company (RIC) under the Code, the Fund would repay the Borrowings. Any Borrowings will likely be ranked senior or equal to all other existing and future Borrowings of the Fund. The Fund may borrow up to 7.5% of its Managed Assets for cash management purposes. The Fund also may borrow up to an additional 5% of its total assets for temporary purposes.
CERTAIN PROVISIONS IN THE DECLARATION OF TRUST AND BY-LAWS
Under Massachusetts law, shareholders could, under certain circumstances, be held personally liable for the obligations of the Fund. However, the Declaration contains an express disclaimer of shareholder liability for debts or obligations of the Fund and requires that notice of such limited liability be given in each agreement, obligation or instrument entered into or executed by the Fund or the trustees. The Declaration further provides for indemnification out of the assets and property of the Fund for all loss and expense of any shareholder held personally liable for the obligations of the Fund. Thus, the risk of a shareholder incurring financial loss on account of shareholder liability is limited to circumstances in which the Fund would be unable to meet its obligations. The Fund believes that the likelihood of such circumstances is remote.
The Declaration includes provisions that could limit the ability of other entities or persons to acquire control of the Fund or to convert the Fund to open-end status. Specifically, the Declaration requires a vote by holders of at least two-thirds of the Common Shares and, if issued, Preferred shares, voting together as a single class, except as described below, to authorize (1) a conversion of the Fund from a closed-end to an open-end investment company, (2) a merger or consolidation of the Fund, or a series or class of the Fund, with any corporation, association, trust or other organization or a reorganization of the Fund, or a series or class of the Fund, (3) a sale, lease or transfer of all or substantially all of the Funds assets (other than in the regular course of the Funds investment activities), (4) in certain circumstances, a termination of the Fund, or a series or class of the Fund or (5) a removal of trustees by shareholders, and then only for cause, unless, with respect to (1) through (4), such transaction has already been authorized by the affirmative vote of two-thirds of the total number of trustees fixed in accordance with the Declaration or the By-laws, in which case the affirmative vote of the holders of at least a majority of the Funds Common Shares and, if issued, Preferred shares outstanding at the time, voting together as a single class, would be required, provided, however, that where only a particular class or series is affected (or, in the case of removing a trustee, when the trustee has been elected by only one class), the required vote by only the applicable class or series would be required. Approval of shareholders would not be required, however, for any transaction, whether deemed a merger, consolidation, reorganization or otherwise whereby the Fund issues shares in connection with the acquisition of assets (including those subject to liabilities) from any other investment company or similar entity. In the case of the conversion of the Fund to an open-end investment company, or in the case of any of the foregoing transactions constituting a plan of reorganization that adversely affects the
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holders of any outstanding Preferred shares, the action in question would also require the affirmative vote of the holders of at least two-thirds of the Funds Preferred shares outstanding at the time, voting as a separate class, or, if such action has been authorized by the affirmative vote of two-thirds of the total number of trustees fixed in accordance with the Declaration or the Bylaws, the affirmative vote of the holders of at least a majority of the Funds Preferred shares outstanding at the time, voting as a separate class. None of the foregoing provisions may be amended except by the vote of at least two-thirds of the Common Shares and, if issued, Preferred shares, voting together as a single class. The votes required to approve the conversion of the Fund from a closed-end to an open-end investment company or to approve transactions constituting a plan of reorganization that adversely affects the holders of any outstanding Preferred shares are higher than those required by the 1940 Act. The Board believes that the provisions of the Declaration relating to such higher votes are in the best interest of the Fund and its shareholders. The Board is divided into three classes, with each class serving a different term. This staggered Board structure could delay for up to two years the replacement of a majority of the Board.
The Declaration provides that the obligations of the Fund are not binding upon the trustees of the Fund individually, but only upon the assets and property of the Fund, and that the trustees shall not be liable for errors of judgment or mistakes of fact or law. Nothing in the Declaration, however, protects a trustee against any liability 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.
The provisions of the Declaration described above could have the effect of depriving the Common Shareholders of opportunities to sell their Common Shares at a premium over market value by discouraging a third party from seeking to obtain control of the Fund in a tender offer or similar transaction. The overall effect of these provisions is to render more difficult the accomplishment of a merger or the assumption of control by a third party. They provide, however, the advantage of potentially requiring persons seeking control of the Fund to negotiate with its management regarding the price to be paid and facilitating the continuity of the Funds investment objective and policies. The Board of the Fund has considered the foregoing anti-takeover provisions and concluded that they are in the best interests of the Fund and its Common Shareholders.
Reference should be made to the Declaration on file with the SEC for the full text of these provisions.
REPURCHASE OF FUND SHARES; CONVERSION TO OPEN-END FUND
The Fund is a closed-end investment company and as such its shareholders will not have the right to cause the Fund to redeem their shares. Instead, the Common Shares will trade in the open market at a price that will be a function of several factors, including distribution levels (which are in turn affected by expenses), NAV, distribution stability, relative demand for and supply of such shares in the market, general market and economic conditions and other factors. Because shares of a closed-end investment company may frequently trade at prices lower than NAV, the Board has currently determined that, at least annually, it will consider action that might be taken to reduce or eliminate any material discount from NAV in respect of Common Shares, which may include the repurchase of such shares in the open market or in private transactions, the making of a tender offer for such shares at NAV, or the conversion of the Fund to an open-end investment company. There can be no assurance, however, that the Board will decide to take any of these actions, or that share repurchases or tender offers, if undertaken, will reduce market discount. On August 7, 2018, the Funds Board renewed the Funds open market share repurchase program under which the Fund may repurchase up to 10% of its Common Shares. Since the inception of the Funds share repurchase program through October 12, 2018, the Fund has repurchased 449,800 Common Shares under the program.
Notwithstanding the foregoing, at any time when the Funds preferred shares are outstanding, the Fund may not purchase, redeem or otherwise acquire any of its Common Shares unless (1) all accrued preferred shares dividends have been paid and (2) at the time of such purchase, redemption or acquisition, the NAV of the Funds portfolio (determined after deducting the acquisition price of the Common Shares) is at least 200% of the liquidation value of the outstanding preferred shares (expected to equal the original purchase price per share plus
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any accrued and unpaid dividends thereon). The staff of the SEC currently requires that any tender offer made by a closed-end investment company for its shares must be at a price equal to the NAV of such shares on the close of business on the last day of the tender offer. Any service fees incurred in connection with any tender offer made by the Fund will be borne by the Fund and will not reduce the stated consideration to be paid to tendering shareholders.
Subject to its investment limitations, the Fund may borrow to finance the repurchase of shares or to make a tender offer. Interest on any borrowings to finance share repurchase transactions or the accumulation of cash by the Fund in anticipation of share repurchases or tenders will reduce the Funds net income. Any share repurchase, tender offer or borrowings that might be approved by the Board would have to comply with the 1934 Act and the 1940 Act and the rules and regulations thereunder.
Although the decision to take action in response to a discount from NAV will be made by the Board at the time it considers such issue, it is the Boards present policy, which may be changed by the Board, not to authorize repurchases of Common Shares or a tender offer for such shares if (1) such transactions, if consummated, would (a) result in the delisting of the Common Shares from the NYSE or elsewhere or (b) impair the Funds status as a RIC under the Code (which would make the Fund a taxable entity, causing the Funds income to be taxed at the corporate level in addition to the taxation of shareholders who receive dividends from the Fund) or as a registered closed-end investment company under the 1940 Act; (2) the Fund would not be able to liquidate portfolio securities in an orderly manner and consistent with the Funds investment objectives and policies in order to repurchase shares; or (3) there is, in the Boards judgment, any (a) material legal action or proceeding instituted or threatened challenging such transactions or otherwise materially adversely affecting the Fund, (b) general suspension of or limitation on prices for trading securities on the NYSE or elsewhere, (c) declaration of a banking moratorium by federal or state authorities or any suspension of payment by United States or state banks in which the Fund invests, (d) material limitation affecting the Fund or the issuers of its portfolio securities by federal or state authorities on the extension of credit by lending institutions or on the exchange of non-U.S. currency, (e) commencement of war, armed hostilities or other international or national calamity directly or indirectly involving the United States or (f) other event or condition that would have a material adverse effect (including any adverse tax effect) on the Fund or its shareholders if shares were repurchased. The Board may in the future modify these conditions in light of experience.
Conversion to an open-end investment company would require the approval of the holders of at least two-thirds of the Common Shares and preferred shares outstanding at the time, voting together as a single class, and of the holders of at least two-thirds of the preferred shares outstanding at the time, voting as a separate class, provided however, that such separate class vote shall be a majority vote if the action in question has previously been approved, adopted or authorized by the affirmative vote of two-thirds of the total number of trustees fixed in accordance with the Declaration or By-laws. See the Funds Prospectus under Certain Provisions in the Declaration of Trust and By-laws for a discussion of voting requirements applicable to conversion of the Fund to an open-end investment company. If the Fund converted to an open-end investment company, it would be required to redeem all preferred shares then outstanding (requiring in turn that it liquidate a portion of its investment portfolio), and the Common Shares would no longer be listed on the NYSE or elsewhere. Shareholders of an open-end investment company may require the company to redeem their shares on any business day (except in certain circumstances as authorized by or under the 1940 Act or rules thereunder) at their NAV, less such redemption charge, if any, as might be in effect at the time of redemption. In order to avoid maintaining large cash positions or liquidating favorable investments to meet redemptions, open-end investment companies typically engage in a continuous offering of their shares. Open-end investment companies are thus subject to periodic asset in-flows and out-flows that can complicate portfolio management. As a result, conversion to open-end status may require changes in the management of the Funds portfolio in order to meet the liquidity requirements applicable to open-end funds. Because portfolio securities may have to be liquidated to meet redemptions, conversion could affect the Funds ability to meet its investment objective or to use certain investment policies and techniques described above. If converted to an open-end fund, the Fund expects to pay all redemptions in cash, but intends to reserve the right to pay redemption requests in a combination of cash or
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securities. If such partial payment in securities were made, investors may incur brokerage costs in converting such securities to cash. If the Fund were converted to an open-end fund, it is likely that new Common Shares would be sold at NAV plus a sales load. The Board of the Fund may at any time propose conversion of the Fund to an open-end investment company depending upon their judgment as to the advisability of such action in light of circumstances then prevailing.
The repurchase by the Fund of its shares at prices below NAV will result in an increase in the NAV of those shares that remain outstanding. However, there can be no assurance that share repurchases or tenders at or below NAV will result in the Funds shares trading at a price equal to their NAV. Nevertheless, the fact that the Funds shares may be the subject of repurchase or tender offers at NAV from time to time, or that the Fund may be converted to an open-end company, may reduce any spread between market price and NAV that might otherwise exist.
In addition, a purchase by the Fund of its Common Shares will decrease the Funds total assets, which would likely have the effect of increasing the Funds expense ratio. Any purchase by the Fund of its Common Shares at a time when preferred shares are outstanding will increase the leverage applicable to the outstanding Common Shares then remaining. See the Funds Prospectus under Risks-Leverage Risk.
Before deciding whether to take any action if the Common Shares trade below NAV, the Board would consider all relevant factors, including the extent and duration of the discount, the liquidity of the Funds portfolio, the impact of any action that might be taken on the Fund or its shareholders, and market considerations. Based on these considerations, even if the Funds shares should trade at a discount, the Board may determine that, in the interest of the Fund and its shareholders, no action should be taken.
FEDERAL INCOME TAX MATTERS
The following is a general summary of certain U.S. federal income tax consequences that may be relevant to a shareholder that acquires, holds and/or disposes of shares of a Fund. This discussion addresses only U.S. federal income tax consequences to U.S. shareholders who hold their shares as capital assets and does not address all of the U.S. federal income tax consequences that may be relevant to particular shareholders in light of their individual circumstances. This discussion also does not address the tax consequences to shareholders who are subject to special rules, including, without limitation, shareholders with large positions in the Fund, financial institutions, insurance companies, dealers in securities or foreign currencies, foreign holders, persons who hold their shares as or in a hedge against currency risk, a constructive sale, or conversion transaction, holders who are subject to the alternative minimum tax, or tax-exempt or tax-deferred plans, accounts, or entities. In addition, the discussion does not address any state, local, or foreign tax consequences. The discussion is based upon present provisions of the Code, the regulations promulgated thereunder, and judicial and administrative ruling authorities, all of which are subject to change, which change may be retroactive. We have not sought and will not seek any ruling from the Internal Revenue Service (the IRS) regarding any matters discussed herein. No assurance can be given that the IRS would not assert, or that a court would not sustain, a position contrary to those set forth below. No attempt is made to present a detailed explanation of all U.S. federal income tax concerns affecting a Fund and its shareholders, and the discussion set forth herein does not constitute tax advice. Investors are urged to consult their own tax advisers to determine the specific tax consequences to them of investing in a Fund, including the applicable federal, state, local and foreign tax consequences to them and the effect of possible changes in tax laws.
The recently enacted tax legislation commonly referred to as the Tax Cuts and Jobs Act (the Tax Act) makes significant changes to the U.S. federal income tax rules for taxation of individuals and corporations, generally effective for taxable years beginning after December 31, 2017. Many of the changes applicable to
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individuals are temporary and would apply only to taxable years beginning after December 31, 2017 and before January 1, 2026. There are only minor changes with respect to the specific rules only applicable to a RIC, such as the Fund. The Tax Act, however, makes numerous other changes to the tax rules that may affect shareholders and the Fund. You are urged to consult with your own tax advisor regarding how the Tax Act affects your investment in the Fund.
The Fund intends to elect to be treated, and the Fund intends to qualify each year, as a RIC under Subchapter M of the Code. To qualify for the favorable U.S. federal income tax treatment generally accorded to RICs, the Fund must, among other things, (a) derive in each taxable year at least 90% of its gross income from dividends, interest, payments with respect to securities loans, gains from the sale or other disposition of stock, securities or non-U.S. currencies, other income derived with respect to its business of investing in such stock, securities or currencies, and net income derived from interests in qualified publicly traded partnerships, as defined in the Code; (b) diversify its holdings so that, at the end of each quarter of each taxable year, (i) at least 50% of the value of the Funds assets is represented by cash and cash items (including receivables), U.S. government securities, the securities of other RICs and other securities, with such other securities of any one issuer limited for the purposes of this calculation to an amount not greater than 5% of the value of the Funds total assets and not greater than 10% of the outstanding voting securities of such issuer, and (ii) not more than 25% of the value of its total assets is invested, including through corporations in which the Fund owns a 20% or more voting stock interest, in the securities (other than U.S. government securities or the securities of other RICs) of a single issuer, or two or more issuers that the Fund controls and are engaged in the same, similar or related trades or businesses, or the securities of one or more qualified publicly traded partnerships; and (c) distribute each year an amount equal to or greater than the sum of 90% of its investment company taxable income (as that term is defined in the Code, but without regard to the deduction for dividends paid) and 90% of its net tax-exempt interest. The requirements for qualification as a RIC may significantly limit the extent to which a Fund may invest in some investments.
If the Fund failed to qualify as a RIC or failed to satisfy the 90% distribution requirement in any taxable year, and was unable to cure such failure the Fund would be taxed in the same manner as a regular corporation on its taxable income (even if such income were distributed to its shareholders) and distributions to shareholders would not be deductible by the Fund in computing its taxable income. Additionally, all distributions out of current and accumulated earnings and profits (including distributions from net capital gain and net tax-exempt interest) would be taxed to shareholders as ordinary dividend income. Such distributions generally would be eligible (i) to be treated as qualified dividend income, as discussed below in the case of non-corporate shareholders and (ii) for the dividends received deduction under Section 243 of the Code (the Dividends Received Deduction) in the case of corporate shareholders. In addition, in order to requalify for taxation as a RIC, the Fund could be required to recognize unrealized gains, pay substantial taxes and interest, and make certain distributions. In addition, the Fund could be required to recognize unrealized gains, pay substantial taxes and interest and make substantial distributions before requalifying as a RIC.
As a RIC, the Fund generally will not be subject to U.S. federal income tax on its investment company taxable income (determined without regard to the deduction for dividends paid) and net capital gain (the excess of net long-term capital gain over net short-term capital loss), if any, that it distributes to shareholders. The Fund may retain for investment its net capital gain. However, if the Fund retains any net capital gain or any investment company taxable income, it will be subject to tax at regular corporate rates on the amount retained. If the Fund retains any net capital gain, it may designate the retained amount as undistributed capital gains in a notice to its shareholders who, if subject to U.S. federal income tax on long-term capital gains, (i) will be required to include in income for U.S. federal income tax purposes, as long-term capital gain, their share of such undistributed amount, and (ii) will be entitled to credit their proportionate shares of the federal income tax paid by the Fund on such undistributed amount against their U.S. federal income tax liabilities, if any, and to claim refunds to the extent the credit exceeds such liabilities. For U.S. federal income tax purposes, the basis of shares owned by a shareholder of the Fund will be increased by an amount equal to the difference between the amount of undistributed capital gains included in the shareholders gross income and the federal income tax deemed paid by
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the shareholder under clause (ii) of the preceding sentence. The Fund intends to distribute to its shareholders, at least annually, substantially all of its investment company taxable income (determined without regard to the deduction for dividends paid) and the net capital gain not otherwise retained by the Fund.
Amounts not distributed on a timely basis in accordance with a calendar year distribution requirement are subject to a nondeductible 4% federal excise tax. To prevent imposition of the excise tax, the Fund must distribute during each calendar year an amount at least equal to the sum of (1) 98% of its ordinary taxable income (not taking into account any capital gains or losses) for the calendar year, (2) 98.2% of its capital gains in excess of its capital losses (adjusted for certain ordinary losses) for the one-year period ending October 31 of the calendar year, and (3) any ordinary taxable income and capital gains for previous years that were not distributed during those years and on which the Fund paid no U.S. federal income tax. To prevent application of the excise tax, the Fund intends to make its distributions in accordance with the calendar year distribution requirement.
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 Funds 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 in characterizing Fund distributions for any calendar year. A qualified late year loss generally includes net capital loss, net long-term capital loss, or net short-term capital loss incurred after October 31 of the current taxable year (commonly referred to as post-October losses) and certain other late-year losses.
The treatment of capital loss carryovers for the Fund is similar to the rules that apply to capital loss carryovers of individuals, which provide that such losses are carried over indefinitely. If the Fund has a net capital loss (that is, capital losses in excess of capital gains), for a taxable year beginning after December 22, 2010 (a Post-2010 Loss), the excess of the Funds 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 Funds next taxable year, and the excess (if any) of the Funds 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 Funds next taxable year. The Funds unused capital loss carryforwards that arose in taxable years that began on or before December 22, 2010 (Pre-2011 Losses) are available to be applied against future capital gains, if any, realized by the Fund prior to the expiration of those carryforwards, generally eight years after the year in which they arose. The Funds Post-2010 Losses must be fully utilized before the Fund will be permitted to utilize carryforwards of Pre-2011 Losses. In addition, the carryover of capital losses may be limited under the general loss limitation rules if the Fund experiences an ownership change as defined in the Code.
As of December 31, 2017, the Funds tax year end, the Fund had no unused capital loss carryforwards available for federal tax purposes to be applied against future capital gains.
Distributions
Except for distributions of qualified dividend income (discussed below), distributions to shareholders of net investment income received by a Fund and of net short-term capital gains realized by the Fund, if any, will be taxable to its shareholders as ordinary income. Distributions by the Fund of net capital gain ( i.e. , the excess of net long-term capital gain over net short-term capital loss), if any, are taxable as long-term capital gain, regardless of the length of time the shareholder has owned the shares with respect to which such distributions are made. Distributions, if any, in excess of the Funds earnings and profits will first reduce the adjusted tax basis of a shareholders shares and, after that basis has been reduced to zero, will constitute capital gain to the shareholder (assuming the shares are held as a capital asset).
Qualified dividend income received by non-corporate shareholders is taxed for federal income tax purpose at rates equivalent to long-term capital gain tax rates, which reach a maximum of 20%. Qualified dividend income generally includes dividends from domestic corporations and dividends from non-U.S. corporations that meet certain specified criteria. In order for some portion of the dividends received by a Fund shareholder to be
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qualified dividend income, the Fund must meet certain holding period and other requirements with respect to some portion of the dividend-paying stocks in its portfolio and the shareholder must meet the same holding period and other requirements with respect to the shareholders Fund shares. A dividend will not be treated as qualified dividend income (at either the Fund or shareholder level) (i) if the dividend is received with respect to any share of stock held (or treated as held) for fewer than 61 days during the 121-day period beginning on the date which is 60 days before the date on which such share becomes ex-dividend with respect to such dividend (or, in the case of certain preferred stock, 91 days during the 181-day period beginning 90 days before such date), (ii) to the extent that the recipient is under an obligation (whether pursuant to a short sale or otherwise) to make related payments with respect to positions in substantially similar or related property, (iii) if the recipient elects to have the dividend income treated as investment income for purposes of the limitation on deductibility of investment interest, or (iv) if the dividend is received from a foreign corporation that is (a) not eligible for the benefits of a comprehensive income tax treaty with the United States (with the exception of dividends paid on stock of such a foreign corporation that is readily tradable on an established securities market in the United States) or (b) treated as a passive foreign investment company.
In general, dividends of net investment income received by corporate shareholders of a Fund will qualify for the 50% Dividends Received Deduction generally available to corporations to the extent of the amount of eligible dividends received by the Fund from domestic corporations for the taxable year. A dividend received by the Fund will not be treated as a qualifying dividend (i) if it has been received with respect to any share of stock that the Fund has held (or is treated as holding) for less than 46 days (91 days in the case of certain preferred stock) during the 91-day period beginning on the date which is 45 days before the date on which such share becomes ex-dividend with respect to such dividend (during the 181-day period beginning 90 days before such date in the case of certain preferred stock) or (ii) to the extent that the Fund is under an obligation (pursuant to a short sale or otherwise) to make related payments with respect to positions in substantially similar or related property. Moreover, the Dividends Received Deduction may be disallowed or reduced (i) if a corporate shareholder fails to satisfy the foregoing requirements with respect to its shares of the Fund or (ii) by application of various provisions of the Code (for instance, the Dividends Received Deduction is reduced in the case of a dividend received on debt-financed portfolio stock (generally, stock acquired with borrowed funds)). For purposes of determining the holding period for stock on which a dividend is received, such holding period is reduced for any period the recipient has an option to sell, is under a contractual obligation to sell or has made (and not closed) a short sale of substantially identical stock or securities, and in certain other circumstances.
The straddle rules discussed below could cause distributions that would otherwise qualify for the Dividends Received Deduction or constitute qualified dividend income to fail to satisfy the applicable holding period requirements.
The tax character of dividends and distributions is the same for federal income tax purposes whether reinvested in additional shares of a Fund or paid in cash.
Although dividends generally will be treated as distributed when paid, dividends declared in October, November or December, payable to shareholders of record on a specified date in one of those months and paid during the following January, will be treated as having been distributed by a Fund (and received by the shareholders) on December 31 of the year declared.
Shareholders will be notified annually as to the U.S. federal tax status of distributions, and shareholders receiving distributions in the form of additional shares will receive a report as to the NAV of those shares.
A dividend or distribution received shortly after the purchase of shares reduces the NAV of the shares by the amount of the dividend or distribution and, although in effect a return of capital, will be taxable to the shareholder. If the NAV of shares were reduced below the shareholders cost by dividends or distributions representing gains realized on sales of securities, such dividends or distributions, although also in effect returns of capital, would be taxable to the shareholder in the same manner as other dividends or distributions. This is known as buying a dividend and should be avoided by taxable investors.
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Sale, Exchange or Liquidation of Fund Shares
The sale or exchange of shares of the Fund normally will result in capital gain or loss to shareholders who hold their shares as capital assets. Generally, a shareholders gain or loss will be long-term capital gain or loss if the shares have been held for more than one year. The gain or loss on shares held for one year or less will generally be treated as short-term capital gain or loss. Present law taxes both long-term and short-term capital gains of corporations at the same rates applicable to ordinary income. For non-corporate taxpayers, however, long-term capital gains are currently taxed at a maximum federal income tax rate of 20%, while short-term capital gains and other ordinary income are currently taxed at ordinary income rates. If a shareholder sells or otherwise disposes of shares before holding them for more than six months, any loss on the sale or disposition will be treated as a long-term capital loss to the extent of any net capital gain dividends received by the shareholder with respect to such shares. Any loss realized on a sale or exchange of shares of a Fund will be disallowed to the extent those shares of the Fund are replaced by other substantially identical shares of the Fund or other substantially identical stock or securities (including through reinvestment of dividends) within a period of 61 days beginning 30 days before and ending 30 days after the date of disposition of the original shares. In that event, the basis of the replacement stock or securities will be adjusted to reflect the disallowed loss. The ability to deduct capital losses may be subject to other limitations under the Code.
Medicare Tax
Certain non-corporate shareholders are subject to an additional 3.8% tax on some or all of their net investment income, which includes dividends and net capital gain distributions received from a Fund and net gains from taxable dispositions of Fund shares. This tax generally applies to the extent net investment income, when added to other modified adjusted gross income, exceeds $200,000 for an unmarried individual, $250,000 for a married taxpayer filing a joint return (or a surviving spouse), or $125,000 for a married individual filing a separate return. Shareholders should consult their tax advisers regarding the applicability of this tax in respect of their shares.
Nature of Funds Investments
The Funds investments may be subject to special provisions of the Code that may, among other things, (i) disallow, suspend or otherwise limit the allowance of certain losses or deductions, (ii) convert lower taxed long-term capital gains into higher taxed short-term capital gains or ordinary income, (iii) convert an ordinary loss or a deduction into a capital loss, (iv) cause the Fund to recognize income or gain without a corresponding receipt of cash, (v) adversely alter the characterization of certain Fund investments or distributions and/or (vi) affect the Funds ability to qualify as a RIC.
Some of the Funds index call options may be considered section 1256 contracts. Code section 1256 generally will require any gain or loss arising from the lapse, closing out or exercise of such positions to be treated as 60% long-term and 40% short-term capital gain or loss. In addition, the Fund generally will be required to mark to market ( i.e ., treat as sold for fair market value) each outstanding index option position that is a section 1256 contract at the close of each taxable year (and on October 31 of each year for excise tax purposes). If a section 1256 contract held by the Fund at the end of a taxable year is sold in the following year, the amount of any gain or loss realized on such sale will be adjusted to reflect the gain or loss previously taken into account under the mark to market rules. In addition to most index call options, section 1256 contracts under the Code include certain other options contracts, certain regulated futures contracts, and certain other financial contracts.
The Funds call options that do not qualify as section 1256 contracts under the Code generally will be governed by Code section 1234. Pursuant to Code section 1234, if a written option expires unexercised, the premium received is short-term capital gain to the Fund. If the Fund enters into a closing transaction, the difference between the premium received for writing the option, and the amount paid to close out its position generally is short-term capital gain or loss.
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Offsetting positions held by the Fund involving certain derivative instruments, such as options, forward, and futures, as well as its long and short positions in portfolio securities, may be considered, for U.S. federal income tax purposes, to constitute straddles. Straddles are defined to include offsetting positions in actively traded personal property. For instance, a straddle can arise if the Fund writes a covered call option on a stock ( i.e ., a call on a stock owned by the Fund), or writes a call option on a stock index to the extent the Funds stock holdings (and any subset thereof) and the index on which it has written a call overlap sufficiently to constitute a straddle under applicable Treasury Regulations. The tax treatment of straddles is governed by section 1092 of the Code which, in certain circumstances, overrides or modifies the provisions of section 1256 described above. If the Fund is treated as entering into a straddle and at least one (but not all) of the Funds positions in derivative contracts comprising a part of such straddle is a section 1256 contract, described above, then such straddle could be characterized as a mixed straddle. The Fund may make one or more elections with respect to mixed straddles. Depending upon which election is made, if any, the results with respect to the Fund may differ. Generally, to the extent the straddle rules apply to positions established by a Fund, losses realized by the Fund may be deferred to the extent of unrealized gain in any offsetting positions. Moreover, as a result of the straddle rules, short-term capital loss on straddle positions may be recharacterized as long-term capital loss, and long-term capital gain may be characterized as short-term capital gain. In addition, the existence of a straddle can cause the holding periods to be tolled on the offsetting positions. As a result, the straddle rules could cause distributions that would otherwise constitute qualified dividend income or qualify for the Dividends Received Deduction to fail to satisfy the applicable holding period requirements described below. Furthermore, the Fund may be required to capitalize, rather than deduct currently, any interest expense and carrying charges applicable to a position that is part of a straddle, including any interest on indebtedness incurred or continued to purchase or carry any positions that are part of a straddle. The application of the straddle rules to certain offsetting Fund positions can therefore affect the amount, timing and/or character of distributions to shareholders, and may result in significant differences from the amount, timing and/or character of distributions that would have been made by the Fund if it had not entered into offsetting positions in respect of certain of its portfolio securities.
The straddle rules described above do not apply if all the offsetting positions making up a straddle consist of one or more qualified covered call options and the stock to be purchased under the options and the straddle is not part of a larger straddle. A qualified covered call option is generally any option granted by the Fund to purchase stock it holds (or stock it acquires in connection with granting the option) if, among other things, (1) the option is traded on a national securities exchange that is registered with the SEC or other market the IRS determined has rules adequate to carry out the purposes of the applicable Code provision, (2) the option is granted more than 30 days before it expires, (3) the option is not a deep-in-the-money option, (4) such option is not granted by an options dealer in connection with his activity of dealing in options, and (5) gain or loss with respect to the option is not ordinary income or loss.
If the Fund enters into a constructive sale of any appreciated financial position in its portfolio, the Fund will be treated as if it had sold and immediately repurchased the property and must recognize gain (but not loss) with respect to that position. A constructive sale of an appreciated financial position occurs when a Fund enters into certain offsetting transactions with respect to the same or substantially identical property, including, but not limited to: (i) a short sale; (ii) an offsetting notional principal contract; (iii) a futures or forward contract; or (iv) other transactions identified in future Treasury Regulations. The character of the gain from constructive sales will depend upon the Funds holding period in the appreciated financial position. Losses realized from a sale of a position that was previously the subject of a constructive sale will be recognized when the position is subsequently disposed of. The character of such losses will depend upon the Funds holding period in the position beginning with the date the constructive sale was deemed to have occurred and the application of various loss deferral provisions in the Code. Constructive sale treatment does not apply to certain closed transactions, including if such a transaction is closed on or before the 30th day after the close of the Funds taxable year and the Fund holds the appreciated financial position unhedged throughout the 60-day period beginning with the day such transaction was closed.
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The Fund may acquire debt securities that are market discount bonds. A market discount bond is a security acquired in the secondary market at a price below its redemption value (or its adjusted issue price if it is also an original issue discount bond). If the Fund invests in a market discount bond, it will be required to treat any gain recognized on the disposition of such market discount bond as ordinary taxable income to the extent of the accrued market discount unless the Fund elects (or is otherwise required) to include the market discount in taxable income as it accrues.
The application of certain requirements for qualification as a RIC and the application of certain other federal income tax rules may be unclear in some respects in connection with investments in certain derivatives and other investments. As a result, the Fund may be required to limit the extent to which it invests in such investments and it is also possible that the IRS may not agree with a Funds treatment of such investments. In addition, the tax treatment of derivatives and certain other investments may be affected by future legislation, Treasury Regulations and guidance issued by the IRS (which could apply retroactively) that could affect the timing, character and amount of a Funds income and gains and distributions to shareholders, affect whether the Fund has made sufficient distributions and otherwise satisfied the requirements to maintain its qualification as a RIC and avoid federal income and excise taxes or limit the extent to which a Fund may invest in certain derivatives and other investments in the future.
Generally, the character of the income or gains that the Fund receives from another investment company will pass through to the Funds shareholders as long as the Fund and the other investment company each qualify as RICs. However, to the extent that another investment company that qualifies as a RIC realizes net losses on its investments for a given taxable year, the Fund will not be able to recognize its share of those losses until it disposes of shares of such investment company. Moreover, even when the Fund does make such a disposition, a portion of its loss may be recognized as a long-term capital loss, which will not be treated as favorably for federal income tax purposes as an ordinary deduction. In particular, the Fund will not be able to offset any capital losses from its dispositions of shares of other investment companies against its ordinary income. As a result of the foregoing rules, and certain other special rules, it is possible that the amounts of net investment income and net capital gains that the Fund will be required to distribute to shareholders will be greater than such amounts would have been had the Fund invested directly in the securities held by the investment companies in which it invests, rather than investing in shares of the investment companies. For similar reasons, the character of distributions from the Fund ( e.g ., long-term capital gain, qualified dividend income, etc.) will not necessarily be the same as it would have been had the Fund invested directly in the securities held by the investment companies in which it invests.
Foreign Taxes
Income received by the Fund from sources within foreign countries may be subject to withholding and other taxes imposed by such countries. Tax conventions between certain countries and the U.S. may reduce or eliminate such taxes. The Fund does not expect to be eligible to elect to pass through to the Funds shareholders the amount of eligible foreign income and similar taxes paid by the Fund.
Tax-Exempt Shareholders
Certain tax-exempt shareholders, including qualified pension plans, individual retirement accounts, salary deferral arrangements, 401(k)s, and other tax-exempt entities, generally are exempt from federal income taxation except with respect to their unrelated business taxable income (UBTI). Under the Tax Act, tax-exempt entities are not permitted to offset losses from one trade or business against the income or gain of another trade or business. Certain net losses incurred prior to January 1, 2018 are permitted to offset gain and income created by an unrelated trade or business, if otherwise available. Under current law, the Fund generally serves to block UBTI from being realized by their tax-exempt shareholders. However, notwithstanding the foregoing, the tax-exempt shareholder could realize UBTI by virtue of an investment in the Fund where, for example: (i) the Fund invests in residual interests of Real Estate Mortgage Investment Conduits (REMICs), (ii) the Fund invests in a REIT that is a taxable mortgage pool (TMP) or that has a subsidiary that is a TMP or that invests in
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the residual interest of a REMIC, or (iii) shares in the Fund constitute debt-financed property in the hands of the tax-exempt shareholder within the meaning of section 514(b) of the Code. Charitable remainder trusts are subject to special rules and should consult their tax advisor. The IRS has issued guidance with respect to these issues and prospective shareholders, especially charitable remainder trusts, are strongly encouraged to consult their tax advisors regarding these issues.
The Funds shares held in a tax-qualified retirement account will generally not be subject to federal taxation on income and capital gains distributions from the Fund until a shareholder begins receiving payments from their retirement account. Because each shareholders tax situation is different, shareholders should consult their tax advisor about the tax implications of an investment in the Fund.
Backup Withholding
The Fund may be required to withhold U.S. federal income tax from all distributions and redemption proceeds payable to shareholders who fail to provide the Fund with their correct taxpayer identification number or to make required certifications, or who have been notified by the IRS that they are subject to backup withholding. The backup withholding percentage is 24%. Corporate shareholders and certain other shareholders specified in the Code generally are exempt from such backup withholding. This withholding is not an additional tax. Any amounts withheld may be credited against the shareholders federal income tax liability, provided the required information is furnished to the IRS.
Foreign Shareholders
U.S. taxation of a shareholder who, as to the United States, is a nonresident alien individual, a foreign trust or estate, or a foreign corporation (foreign shareholder) depends on whether the income of the Fund is effectively connected with a U.S. trade or business carried on by the shareholder. If a partnership (including an entity treated as a partnership for U.S. federal income tax purposes) holds Fund shares, the tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership. A partner in a partnership holding Fund shares should consult its tax advisors with respect to the purchase, ownership and disposition of Fund shares.
Income not Effectively Connected
If the income from the Fund is not effectively connected with a U.S. trade or business carried on by the foreign shareholder, distributions of investment company taxable income will be subject to a U.S. tax of 30% (or lower treaty rate), which tax is generally withheld from such distributions. Distributions which are reported by the Fund as interest-related dividends or short-term capital gain dividends are exempt from the 30% withholding tax. Interest-related dividends and short-term capital gain dividends generally represent distributions of interest or short-term capital gains that would not have been subject to U.S. withholding tax at the source if they had been received directly by a foreign person and satisfy certain other requirements.
Distributions of capital gain dividends (including any amounts retained by the Fund which are reported as undistributed capital gains) and gains recognized on the sale or other disposition of our common stock will not be subject to U.S. tax at the rate of 30% (or lower treaty rate) unless the foreign shareholder is a nonresident alien individual and is physically present in the United States for more than 182 days during the taxable year and meets certain other requirements. However, this 30% tax on capital gains of nonresident alien individuals who are physically present in the United States for more than the 182 day period only applies in exceptional cases because any individual present in the United States for more than 182 days during the taxable year is generally treated as a resident for U.S. income tax purposes; in that case, he or she would be subject to U.S. income tax on his or her worldwide income at the graduated rates applicable to U.S. citizens, rather than the 30% U.S. tax. In the case of a foreign shareholder who is a nonresident alien individual, the Fund may be required to withhold U.S. income tax from distributions of net capital gain unless the foreign shareholder certifies his or her non-U.S. status under penalties of perjury or otherwise establishes an exemption. See Tax-MattersBackup Withholding.
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Income Effectively Connected
If the income from the Fund is effectively connected with a U.S. trade or business carried on by a foreign shareholder, then distributions of investment company taxable income and capital gain dividends, any amounts retained by the Fund which are reported as undistributed capital gains and any gains realized upon the sale or exchange of shares of the Fund will be subject to U.S. income tax at the graduated rates applicable to U.S. non-corporate citizens and residents or the 21% tax rate applicable to domestic corporations, as appropriate. Foreign corporate shareholders also may be subject to the branch profits tax imposed by the Code. Certain certification and disclosure requirements, including delivery of a properly executed IRS Form W-8ECI, must be satisfied for income effectively connected with a U.S. trade or business to be exempt from the 30% withholding described above under Foreign ShareholdersIncome not Effectively Connected.
The tax consequences to a foreign shareholder entitled to claim the benefits of an applicable tax treaty may differ from those described herein. Foreign shareholders are advised to consult their own tax advisers with respect to the particular tax consequences to them of an investment in the Fund.
FATCA Reporting and Withholding Requirements
Under legislation known as FATCA (the Foreign Account Tax Compliance Act), the Fund will be required to withhold 30% of the ordinary dividends it pays, and the gross proceeds of certain capital gain dividends it pays after December 31, 2018, to shareholders that fail to meet prescribed information reporting or certification requirements. In general, no such withholding will be required with respect to a U.S. person or foreign individual that timely provides the certifications required by the Fund or its agent on a valid IRS Form W-9, W-8BEN or W-8BEN-E, respectively. Shareholders potentially subject to withholding include foreign financial institutions (FFIs), such as foreign investment funds, and non-financial foreign entities (NFFEs). To avoid withholding under FATCA, an FFI generally must enter into an information sharing agreement with the IRS in which it agrees to report certain identifying information (including name, address, and taxpayer identification number) with respect to its U.S. account holders (which, in the case of an entity shareholder, may include its direct and indirect U.S. owners), and an NFFE generally must identify itself and may be required to provide other required information to the Fund or other withholding agent regarding its U.S. owners, if any. Such foreign shareholders also may fall into certain exempt, excepted or deemed compliant categories as established by regulations and other guidance. A non-U.S. entity that invests in the Fund will need to provide the Fund with documentation properly certifying the entitys status under FATCA in order to avoid FATCA withholding. A foreign shareholder resident or doing business in a country that has entered into an intergovernmental agreement with the U.S. to implement FATCA may be subject to different requirements provided that the shareholder and the applicable foreign government comply with the terms of such agreement. Foreign shareholders are encouraged to consult with their tax advisers regarding the possible implications of these requirements on their investment in Fund shares.
REGULATIONS ON REPORTABLE TRANSACTIONS
Under Treasury regulations, generally, if a shareholder recognizes a loss with respect to Common Shares of $2 million or more for an individual shareholder or $10 million or more for a corporate shareholder in any single taxable year (or a greater loss over a combination of years), the shareholder must file with the IRS a disclosure statement on Form 8886. Direct shareholders of portfolio securities are in many cases excepted from this reporting requirement, but under current guidance, shareholders of a RIC are not excepted. The fact that a loss is reportable under these regulations does not affect the legal determination of whether the taxpayers 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.
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OTHER TAX CONSIDERATIONS
Fund shareholders may be subject to state, local and foreign taxes on their Fund distributions. Shareholders are advised to consult their own tax advisors with respect to the particular tax consequences to them of an investment in the Fund.
The Financial Statements and the independent registered public accounting firms report thereon, appearing in the Funds annual shareholder report for the fiscal year ended December 31, 2017 is incorporated herein by reference in this SAI. The information with respect to the six months ended June 30, 2018 is unaudited and is included in the Funds 2018 Semi-Annual Report which is incorporated herein by reference. The Funds annual and semi-annual shareholder reports may be obtained without charge by calling (800) 257-8787.
The custodian of the assets of the Fund is State Street Bank and Trust Company, One Lincoln Street, Boston, Massachusetts 02111 (the Custodian). The custodian performs custodial, fund accounting and portfolio accounting services. The Funds transfer, shareholder services and dividend paying agent is Computershare Inc. and Computershare Trust Company, N.A. (the Transfer Agent). The Transfer Agent is located at 250 Royall Street, Canton, Massachusetts 02021.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PricewaterhouseCoopers LLP, an independent registered public accounting firm, provides auditing services to the Fund. The principal business address of PricewaterhouseCoopers LLP is located at 1 North Wacker Drive, Chicago, Illinois 60606.
Certain legal matters in connection with the Common Shares will be passed upon for the Fund by Morgan, Lewis & Bockius LLP, 1111 Pennsylvania Avenue NW, Washington, D.C. 20004.
The Fund is not sponsored, endorsed, sold or promoted by Standard & Poors, a division of The McGraw-Hill Companies, Inc. (S&P). S&P makes no representation or warranty, express or implied, to the owners of the Fund or any member of the public regarding the advisability of investing in securities generally or in the Fund particularly or the ability of the Index to track general stock market performance. S&Ps only relationship to Nuveen Asset Management is the licensing of certain trademarks and trade names of S&P and of the Index which is determined, composed and calculated by S&P without regard to Nuveen Asset Management or the Fund. S&P has no obligation to take the needs of Nuveen Asset Management or the owners of the Fund into consideration in determining, composing or calculating the Index. S&P is not responsible for and has not participated in the determination of the prices and amount of the Fund or the timing of the issuance or sale of the Fund or in the determination or calculation of the equation by which the Fund is to be converted into cash. S&P has no obligation or liability in connection with the administration, marketing or trading of the Fund.
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S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE INDEX OR ANY DATA INCLUDED THEREIN AND S&P SHALL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. S&P MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY NUVEEN ASSET MANAGEMENT, OWNERS OF THE FUND, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE INDEX OR ANY DATA INCLUDED THEREIN. S&P MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL S&P HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
A Registration Statement on Form N-2, including amendments thereto, relating to the shares of the Fund offered hereby, has been filed by the Fund with the SEC, Washington, D.C. The Funds Prospectus and this SAI do not contain all of the information set forth in the Registration Statement, including any exhibits and schedules thereto. For further information with respect to the Fund and the shares offered hereby, reference is made to the Funds Registration Statement. Copies of the Registration Statement may be inspected without charge at the SECs principal office in Washington, D.C., and copies of all or any part thereof may be obtained from the SEC upon the payment of certain fees prescribed by the SEC.
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Nuveen Asset Management, LLC
Proxy Voting Policies and Procedures
Effective Date: January 1, 2011, as last amended October 24, 2018
I. General Principles
A. |
Nuveen Asset Management, LLC (N AM ) is an investment sub-adviser for certain of the Nuveen Funds (the Funds ) and investment adviser for institutional and other separately managed accounts (collectively, with the Funds, Accounts ). As such, Accounts may confer upon NAM complete discretion to vote proxies. 1 |
B. |
When NAM has proxy voting authority, it is NAMs duty to vote proxies in the best interests of its clients (which may involve affirmatively deciding that voting the proxies may not be in the best interests of certain clients on certain matters). In voting proxies, NAM also seeks to enhance total investment return for its clients. |
C. |
If NAM contracts with another investment adviser to act as a sub-adviser for an Account, NAM may delegate proxy voting responsibility to the sub-adviser. Where NAM has delegated proxy voting responsibility, the sub-adviser will be responsible for developing and adhering to its own proxy voting policies, subject to oversight by NAM. |
D. |
NAMs Proxy Voting Committee (PVC) provides oversight of NAMs proxy voting policies and procedures, including (1) providing an administrative framework to facilitate and monitor the exercise of such proxy voting and to fulfill the obligations of reporting and recordkeeping under the federal securities laws; and (2) approving the proxy voting policies and procedures. |
II. Policies
The PVC after reviewing and concluding that such policies are reasonably designed to vote proxies in the best interests of clients, has approved and adopted the proxy voting policies (Policies) of Institutional Shareholder Services, Inc. ( ISS ), a leading national provider of proxy voting administrative and research services. i As a result, such Policies set forth NAMs positions on recurring proxy issues and criteria for addressing non-recurring issues. These Policies are reviewed periodically by ISS, and therefore are subject to change. Even though it has adopted the Policies as drafted by ISS, NAM maintains the fiduciary responsibility for all proxy voting decisions.
III. Procedures
A. |
Supervision of Proxy Voting. Day-to-day administration of proxy voting may be provided internally or by a third-party service provider, depending on client type, subject to the ultimate oversight of the PVC. The PVC shall supervise the relationships with NAMs proxy voting services, ISS. ISS apprises Nuveen Global Operations (NGO) of shareholder meeting dates, and casts the actual proxy votes. ISS also provides research on proxy proposals and voting recommendations. ISS serves as NAMs proxy voting record keepers and generate reports on how proxies were voted. NGO periodically |
1 |
NAM does not vote proxies where a client withholds proxy voting authority, and in certain non-discretionary and model programs NAM votes proxies in accordance with its Policies in effect from time to time. Clients may opt to vote proxies themselves, or to have proxies voted by an independent third party or other named fiduciary or agent, at the clients cost. i ISS has separate polices for Taft Hartley plans and it is NAMs policy to apply the Taft Hartley polices to accounts that are Taft Hartley plans and have requested the application of such policies. |
A-1
reviews communications from ISS to determine whether ISS voted the correct amount of proxies, whether the votes were cast in a timely manner, and whether the vote was in accordance with the Policies or NAMs specific instructions |
B. |
General Avoidance of Conflicts of Interest. |
1. |
NAM believe that most conflicts of interest faced by NAM in voting proxies can be avoided by voting in accordance with the Policies. Examples of such conflicts of interest are as follows: 2 |
a. |
The issuer or proxy proponent (e.g., a special interest group) is TIAA-CREF, the ultimate principal owner of NAM, or any of its affiliates. |
b. |
The issuer is an entity in which an executive officer of NAM or a spouse or domestic partner of any such executive officer is or was (within the past three years of the proxy vote) an executive officer or director. |
c. |
The issuer is a registered or unregistered fund or other client for which NAM or another affiliated adviser has a material relationship as investment adviser or sub-adviser (e.g., Nuveen Funds and TIAA Funds) or an institutional separate account. |
d. |
Any other circumstances that NAM is aware of where NAMs duty to serve its clients interests, typically referred to as its duty of loyalty, could be materially compromised. |
2. |
To further minimize this risk, Compliance will review ISS conflict avoidance policy at least annually to ensure that it adequately addresses both the actual and perceived conflicts of interest ISS may face. |
3. |
In the event that ISS faces a material conflict of interest with respect to a specific vote, the PVC shall direct ISS how to vote. The PVC shall receive voting direction from appropriate investment personnel. Before doing so, the PVC will consult with Legal to confirm that NAM faces no material conflicts of its own with respect to the specific proxy vote. |
4. |
Where ISS is determined to have a conflict of interest, or NAM determines to override the Policies and is determined to have a conflict, the PVC will recommend to NAMs Compliance Committee or designee a course of action designed to address the conflict. Such actions could include, but are not limited to: |
a. |
Obtaining instructions from the affected client(s) on how to vote the proxy; |
b. |
Disclosing the conflict to the affected client(s) and seeking their consent to permit NAM to vote the proxy; |
c. |
Voting in proportion to the other shareholders; |
e. |
Recusing the individual with the actual or potential conflict of interest from all discussion or consideration of the matter, if the material conflict is due to such persons actual or potential conflict of interest; or |
f. |
Following the recommendation of a different independent third party. |
5. |
In addition to all of the above-mentioned and other conflicts, the Head of Equity Research, NGO and any member of the PVC must notify NAMs Chief Compliance Officer (CCO) of any direct, indirect or perceived improper influence exerted by any employee, officer or director of |
2 |
A conflict of interest shall not be considered material for the purposes of these Policies and Procedures with respect to a specific vote or circumstance if the matter to be voted on relates to a restructuring of the terms of existing securities or the issuance of new securities or a similar matter arising out of the holding of securities, other than common equity, in the context of a bankruptcy or threatened bankruptcy of the issuer. |
A-2
TIAA or its subsidiaries with regard to how NAM should vote proxies. NAM Compliance will investigate any such allegations and will report the findings to the PVC and, if deemed appropriate, to NAMs Compliance Committee. If it is determined that improper influence was attempted, appropriate action shall be taken. Such appropriate action may include disciplinary action, notification of the appropriate senior managers, or notification of the appropriate regulatory authorities. In all cases, NAM will not consider any improper influence in determining how to vote proxies, and will vote in the best interests of clients. |
C. |
Proxy Vote Override. From time to time, a portfolio manager of an account (a Portfolio Manager ) may initiate action to override the Policies recommendation for a particular vote. Any such override by a NAM Portfolio Manager (but not a sub-adviser Portfolio Manager) shall be reviewed by NAMs Legal Department for material conflicts. If the Legal Department determines that no material conflicts exist, the approval of one member of the PVC shall authorize the override. If a material conflict exists, the conflict and, ultimately, the override recommendation will be rejected and will revert to the original Policies recommendation or will be addressed pursuant to the procedures described above under Conflicts of Interest. |
In addition, the PVC may determine from time to time that a particular recommendation in the Policies should be overridden based on a determination that the recommendation is inappropriate and not in the best interests of shareholders. Any such determination shall be reflected in the minutes of a meeting of the PVC at which such decision is made.
D. |
Securities Lending. |
1. |
In order to generate incremental revenue, some clients may participate in a securities lending program. If a client has elected to participate in the lending program then it will not have the right to vote the proxies of any securities that are on loan as of the shareholder meeting record date. A client, or a Portfolio Manager, may place restrictions on loaning securities and/or recall a security on loan at any time. Such actions must be affected prior to the record date for a meeting if the purpose for the restriction or recall is to secure the vote. |
2. |
Portfolio Managers and/or analysts who become aware of upcoming proxy issues relating to any securities in portfolios they manage, or issuers they follow, will consider the desirability of recalling the affected securities that are on loan or restricting the affected securities prior to the record date for the matter. If the proxy issue is determined to be material, and the determination is made prior to the shareholder meeting record date the Portfolio Manager(s) will contact the Securities Lending Agent to recall securities on loan or restrict the loaning of any security held in any portfolio they manage, if they determine that it is in the best interest of shareholders to do so. |
E. |
Proxy Voting Records. As required by Rule 204-2 of the Investment Advisers Act of 1940, NAM shall make and retain five types of records relating to proxy voting; (1) NAMs Policies; (2) proxy statements received for securities in client accounts; (3) records of proxy votes cast by NAM on behalf of clients accounts; (4) records of written requests from clients about how NAM voted their proxies, and written responses from NAM to either a written or oral request by clients; and (5) any documents prepared by the adviser that were material to making a proxy voting decision or that memorialized the basis for the decision. NAM relies on ISS to make and retain on NAMs behalf certain records pertaining to Rule 204-2. |
F. |
Fund of Funds Provision . In instances where NAM provides investment advice to a fund of funds that acquires shares of affiliated funds or three percent or more of the outstanding voting securities of an unaffiliated fund, the acquiring fund shall vote the shares in the same proportion as the vote of all other shareholders of the acquired fund. If compliance with this procedure results in a vote of any shares in a manner different than the Policies recommendation, such vote will not require compliance with the Proxy Vote Override procedures set forth above. |
A-3
G. |
Legacy Securities. To the extent that NAM receives proxies for securities that are transferred into an accounts portfolio that were not recommended or selected by it and are sold or expected to be sold promptly in an orderly manner (legacy securities), NAM will generally refrain from voting such proxies. In such circumstances, since legacy securities are expected to be sold promptly, voting proxies on such securities would not further NAMs interest in maximizing the value of client investments. NAM may agree to an accounts special request to vote a legacy security proxy, and would vote such proxy in accordance with the Policies. |
H. |
Terminated Accounts. Proxies received after the termination date of an account generally will not be voted. An exception will be made if the record date is for a period in which an account was under NAMs discretionary management or if a separately managed account (SMA) custodian failed to remove the accounts holdings from its aggregated voting list. |
I. |
Non-votes. NGO shall be responsible for obtaining reasonable assurance from ISS that it voted proxies on NAMs behalf, and that any special instructions from NAM about a given proxy or proxies are submitted to ISS in a timely manner. It should not be considered a breach of this responsibility if NGO or NAM does not receive a proxy from ISS or a custodian with adequate time to analyze and direct to vote or vote a proxy by the required voting deadline. |
NAM may determine not to vote proxies associated with the securities of any issuer if as a result of voting such proxies, subsequent purchases or sales of such securities would be blocked. However, NAM may decide, on an individual security basis that it is in the best interests of its clients to vote the proxy associated with such a security, taking into account the loss of liquidity. In addition, NAM may determine not to vote proxies where the voting would in NAMs judgment result in some other financial, legal, regulatory disability or burden to the client (such as imputing control with respect to the issuer) or to NAM or its affiliates.
NAM may determine not to vote securities held by SMAs where voting would require the transfer of the security to another custodian designated by the issuer. Such transfer is generally outside the scope of NAMs authority and may result in significant operational limitations on NAMs ability to conduct transactions relating to the securities during the period of transfer. From time to time, situations may arise (operational or otherwise) that prevent NAM from voting proxies after reasonable attempts have been made.
J. |
Review and Reports. |
1. |
The PVC shall maintain a review schedule. The schedule shall include reviews of the Policies and the policies of any Sub-adviser engaged by NAM, the proxy voting record, account maintenance, and other reviews as deemed appropriate by the PVC. The PVC shall review the schedule at least annually. |
2. |
The PVC will report to NAMs Compliance Committee with respect to all identified conflicts and how they were addressed. These reports will include all accounts, including those that are sub-advised. NAM also shall provide the Funds that it sub-advises with information necessary for preparing Form N-PX. |
K. |
Vote Disclosure to Clients. NAMs institutional and SMA clients can contact their relationship manager for more information on NAMs Policies and the proxy voting record for their account. The information available includes name of issuer, ticker/CUSIP, shareholder meeting date, description of item and NAMs vote. |
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IV. Responsible Parties
PVC
NGO
NAM Compliance
Legal Department
Nuveen Fund Advisors, LLC, f/k/a Nuveen Fund Advisors, Inc. (NFALLC) is the registrants investment adviser (NFALLC is also referred to as the Adviser.) NFALLC is responsible for the selection and on-going monitoring of the Funds investment portfolio, managing the Funds business affairs and providing certain clerical, bookkeeping and administrative services. The Adviser has engaged Intech Investment Management LLC (Intech) and Nuveen Asset Management, LLC (Nuveen Asset Management) (Intech and Nuveen Asset Management are also collectively referred to as Sub-Advisers), as Sub-Advisers to provide discretionary investment advisory services. As part of these services, the Adviser has also delegated to the Sub-Adviser the full responsibility for proxy voting on securities held in its portfolio and related duties in accordance with the Sub-Advisers policy and procedures. The Adviser periodically will monitor the Sub-Advisers voting to ensure that it is carrying out its duties. The Advisers and the Sub-Advisers proxy voting policies and procedures are summarized as follows:
Intech |
|
The Fund is responsible for voting proxies on securities held in its portfolio. When the Fund receives a proxy, the decision regarding how to vote such proxy will be made by Intech in accordance with its proxy voting procedures.
Intech has engaged Institutional Shareholder Services Inc. (ISS), to vote all Fund proxies in accordance with ISS Benchmark Proxy Voting Guidelines (ISS Recommendations). Intech has engaged the services of its parent firm, Janus Henderson Group plcs Securities Operations Group to oversee ISS in the administration of its proxy voting. Intech has adopted procedures and controls to avoid conflicts of interest that may arise in connection with proxy voting.
In light of such procedures and controls, it is not expected that any conflicts will arise in the proxy voting process. In the unusual circumstance that a particular proxy vote may present a potential conflict, the matter shall be referred to Intechs Proxy Review Group, which is composed of Intechs Chief Operating Officer & General Counsel, Chief Financial Officer and Chief Compliance Officer. To the extent that a conflict of interest is identified, Intech will vote the proxy according to the ISS recommendation unless otherwise determined by the Proxy Review Group and Intech will report the resolution of the vote to the Funds Proxy Voting Committee.
A-5
Nuveen Core Equity Alpha Fund
[ ] Common Shares
STATEMENT OF ADDITIONAL INFORMATION
[ ], 2018
PART COTHER INFORMATION
Item 25: Financial Statements and Exhibits
1. | Financial Statements: | |
Contained in Part A: | ||
Financial Highlights of the Nuveen Core Equity Alpha Fund (the Registrant or the Fund) for the fiscal period ended June 30, 2018 (unaudited) and fiscal years ended December 31, 2017, 2016, 2015, 2014, 2013, 2012, 2011, 2010, 2009 and 2008 (audited). | ||
Contained in Part B: | ||
Financial Statements are incorporated in Part B by reference to the Registrants June 30, 2018 Semi-Annual Report (unaudited) on Form N-CSR as filed with the U.S. Securities and Exchange Commission (the SEC) via EDGAR Accession No. 0001193125-18-267991 on September 6, 2018 and Registrants December 31, 2017 Annual Report (audited) on Form N-CSR as filed with the SEC via EDGAR Accession No. 0001193125-18-075143 on March 8, 2018. | ||
2. | Exhibits: | |
a. | Declaration of Trust dated January 9, 2007 is incorporated herein by reference to Exhibit (a) to the Registrants Registration Statement on Form N-2 (File No. 333-139962) as filed with the SEC via EDGAR Accession No. 0001193125-07-006046 on January 12, 2007. | |
b. | Registrants By-laws (Amended and Restated as of November 18, 2009) are filed herewith. | |
c. | None. | |
d. | Not Applicable. | |
e. | Terms and Conditions of the Automatic Dividend Reinvestment Plan is filed herewith. | |
f. | None. | |
g.1 | Investment Management Agreement between the Registrant and Nuveen Fund Advisors, LLC dated October 1, 2014 is filed herewith. | |
g.2 | Renewal of Investment Management Agreements between the Nuveen Closed-End Funds and Nuveen Fund Advisors, LLC dated July 24, 2018 is filed herewith. | |
g.3 | Investment Sub-Advisory Agreement dated October 1, 2014 between Nuveen Fund Advisors, LLC and Nuveen Asset Management is filed herewith. | |
g.4 | Investment Sub-Advisory Agreement dated May 30, 2017 between Nuveen Fund Advisors, LLC and Intech Investment Management LLC is filed herewith. | |
h.1 | Form of Distribution Agreement relating to At-the-Market Offerings between the Registrant and Nuveen Securities, LLC is filed herewith. | |
h.2 | Form of Dealer Agreement relating to At-the-Market Offerings between Nuveen Securities, LLC and [ ] is filed herewith. | |
i. | Nuveen Open-End and Closed-End Funds Deferred Compensation Plan for Independent Directors and Trustees (Restated effective April 27, 2017) is filed herewith. | |
j.1 | Amended and Restated Master Custodian Agreement dated July 15, 2015 between the Registrant and State Street Bank and Trust Company is filed herewith. | |
j.2 | Appendix A, updated as of August 1, 2017, to the Amended and Restated Master Custodian Agreement dated July 15, 2015 between the Registrant and State Street Bank and Trust Company is filed herewith. | |
k.1 | Transfer Agency and Service Agreement dated June 15, 2017 between the Registrant and Computershare Inc. and Computershare Trust Company, N.A. is filed herewith. |
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k.2 | First Amendment and updated Schedule A, dated September 7, 2017, to the Transfer Agency and Service Agreement dated June 15, 2017 between the Registrant and Computershare Inc. and Computershare Trust Company, N.A. is filed herewith. | |
l.1 | Opinion of Morgan, Lewis & Bockius LLP to be filed by amendment. | |
1.2 | Consent of Morgan, Lewis & Bockius LLP to be filed by amendment. | |
m. | None. | |
n. | Consent of PricewaterhouseCoopers LLP is filed herewith. | |
o. | None. | |
p. | Subscription Agreement by and between the Registrant and Nuveen Asset Management (now, Nuveen Fund Advisors, LLC) dated March 7, 2007 is incorporated herein by reference to Exhibit (p) to the Registrants Registration Statement on Form N-2 (File No. 333-139962) as filed with the SEC via EDGAR Accession No. 0001193125-07-064370 on March 26, 2007. | |
q. | None. | |
r.1 | Code of Ethics and Reporting Requirements of Nuveen (including affiliated entities) and the Nuveen Funds, as amended July 1, 2018, is filed herewith. | |
r.2 | Code of Ethics for the Independent Trustees of Nuveen Funds is filed herewith. | |
r.3 | Code of Ethics for Janus Henderson Group plc (the parent company of Intech Investment Management LLC) is filed herewith. | |
s. | Powers of Attorney dated October 11, 2018 are filed herewith. |
Item 26: Marketing Arrangements
See relevant Sections of the Form of Distribution Agreement and Form of Dealer Agreement filed as Exhibits (h)(1) and (h)(2), respectively, to this Registration Statement.
Item 27: Other Expenses of Issuance and Distribution
Printing and Engraving Fees | $ | 60,000 | ||
Legal Fees | $ | 75,000 | ||
Accounting Fees | $ | 6,500 | ||
Financial Industry Regulatory Authority Fees | $ | 3,802 | ||
Stock Exchange Listing Fees | $ | 5,600 | ||
Securities and Exchange Commission Registration Fees | $ | 2,668 | ||
Miscellaneous Fees | $ | 11,430 | ||
|
|
|||
$ | 165,000 | |||
|
|
Item 28: Persons Controlled by or under Common Control with Registrant
Not applicable.
Item 29: Number of Holders of Securities
As of September 30, 2018:
Title of Class |
Number of Record Holders | |
Common Shares, $0.01 par value | 8,890 |
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Item 30: Indemnification
Section 4 of Article XII of the Registrants Declaration of Trust provides as follows:
Subject to the exceptions and limitations contained in this Section 4, every person who is, or has been, a Trustee, officer, employee or agent of the Trust, including persons who serve at the request of the Trust as directors, trustees, officers, employees or agents of another organization in which the Trust has an interest as a shareholder, creditor or otherwise (hereinafter referred to as a Covered Person), shall be indemnified by the Trust to the fullest extent permitted by law against liability and against all expenses reasonably incurred or paid by him in connection with any claim, action, suit or proceeding in which he becomes involved as a party or otherwise by virtue of his being or having been such a Trustee, director, officer, employee or agent and against amounts paid or incurred by him in settlement thereof.
No indemnification shall be provided hereunder to a Covered Person:
(a) |
against any liability to the Trust or its Shareholders by reason of a final adjudication by the court or other body before which the proceeding was brought that he engaged in willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office; |
(b) |
with respect to any matter as to which he shall have been finally adjudicated not to have acted in good faith in the reasonable belief that his action was in the best interests of the Trust; or |
(c) |
in the event of a settlement or other disposition not involving a final adjudication (as provided in paragraph (a) or (b)) and resulting in a payment by a Covered Person, unless there has been either a determination that such Covered Person did not engage in willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office by the court or other body approving the settlement or other disposition or a reasonable determination, based on a review of readily available facts (as opposed to a full trial-type inquiry), that he did not engage in such conduct: |
(i) by a vote of a majority of the Disinterested Trustees acting on the matter (provided that a majority of the Disinterested Trustees then in office act on the matter); or
(ii) by written opinion of independent legal counsel.
The rights of indemnification herein provided may be insured against by policies maintained by the Trust, shall be severable, shall not affect any other rights to which any Covered Person may now or hereafter be entitled, shall continue as to a person who has ceased to be such a Covered Person and shall inure to the benefit of the heirs, executors and administrators of such a person. Nothing contained herein shall affect any rights to indemnification to which Trust personnel other than Covered Persons may be entitled by contract or otherwise under law.
Expenses of preparation and presentation of a defense to any claim, action, suit or proceeding subject to a claim for indemnification under this Section 4 shall be advanced by the Trust prior to final disposition thereof upon receipt of an undertaking by or on behalf of the recipient to repay such amount if it is ultimately determined that he is not entitled to indemnification under this Section 4, provided that either:
(a) such undertaking is secured by a surety bond or some other appropriate security or the Trust shall be insured against losses arising out of any such advances; or
(b) a majority of the Disinterested Trustees acting on the matter (provided that a majority of the Disinterested Trustees then in office act on the matter) or independent legal counsel in a written opinion shall determine, based upon a review of the readily available facts (as opposed to a full trial-type inquiry), that there is reason to believe that the recipient ultimately will be found entitled to indemnification.
As used in this Section 4, a Disinterested Trustee is one (x) who is not an Interested Person of the Trust (including anyone, as such Disinterested Trustee, who has been exempted from being an Interested Person by any rule, regulation or order of the Commission), and (y) against whom none of such actions, suits or other proceedings or another action, suit or other proceeding on the same or similar grounds is then or has been pending.
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As used in this Section 4, the words claim, action, suit or proceeding shall apply to all claims, actions, suits, proceedings (civil, criminal, administrative or other, including appeals), actual or threatened; and the words liability and expenses shall include without limitation, attorneys fees, costs, judgments, amounts paid in settlement, fines, penalties and other liabilities.
The trustees and officers of the Registrant are covered by Mutual Fund Professional Liability policies in the aggregate amount of $70,000,000 against liability and expenses of claims of wrongful acts arising out of their position with the Registrant, except for matters that involve willful acts, bad faith, gross negligence and willful disregard of duty (i.e., where the insured did not act in good faith for a purpose he or she reasonably believed to be in the best interest of the Registrant or where he or she had reasonable cause to believe this conduct was unlawful). The policy has a $1,000,000 deductible for operational failures and $1,000,000 deductible for all other claims.
Section 9 of the Form of Underwriting Agreement to be filed as Exhibit h.1 to this Registration Statement provides for each of the parties thereto, including the Registrant and the Underwriters, to indemnify the others, their trustees, directors, certain of their officers, trustees, directors and persons who control them against certain liabilities in connection with the offering described herein, including liabilities under the federal securities laws.
Insofar as indemnification for liability arising under the Securities Act of 1933 (the 1933 Act) may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the 1933 Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the 1933 Act and will be governed by the final adjudication of such issue.
Item 31: Business and Other Connections of Investment Adviser and Sub-Advisers
A description of any other business, profession, vocation or employment of a substantial nature in which the directors and officers of Nuveen Fund Advisors, LLC (Nuveen Fund Advisors), the Funds investment adviser, who serve as officers or Trustees of the Fund have engaged during the last two years for his or her account or in the capacity of director, officer, employee, partner or trustee appears under Management in the Statement of Additional Information. Such information for the remaining senior officers appears below:
Name and Position with Nuveen Fund Advisors |
Other Business, Profession,
Vocation or
|
|
Michelle Beck, Executive Vice President | Executive Vice President (since 2017), formerly, Managing Director of Nuveen Alternative Investments, LLC; Chief Risk Officer and Executive Vice President (since 2017), formerly, Senior Managing Director, Chief Risk Officer (since 2016) of Teachers Advisors, LLC; Executive Vice President (since 2017) of Nuveen Services, LLC and TIAA-CREF Investment Management, LLC; Chief Risk Officer and Senior Managing Director (since 2016) of Nuveen Alternatives Advisors LLC; Chief Risk Officer (since 2017) of Nuveen, LLC; Managing Director, Head of Risk Management, Nuveen Investments, Inc. (2010-2017). | |
Joseph T. Castro, Senior Managing Director |
Senior Managing Director (since 2017), Head of Compliance (since 2013) of Nuveen, LLC; Senior Managing Director (since 2017) of Nuveen Services, LLC. |
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Name and Position with Nuveen Fund Advisors |
Other Business, Profession,
Vocation or
|
|
Anthony E. Ciccarone, Executive Vice President |
Executive Vice President (since 2016), formerly, Managing Director (2015-2016) of Nuveen Securities, LLC; Executive Vice President (since 2018) of Nuveen Services, LLC; formerly, Executive Vice President (2016-2017), of Nuveen Investments, Inc. |
|
Erik Mogavero, Managing Director and Chief Compliance Officer |
Formerly employed by Deutsche Bank (2013-2017) as Managing Director, Head of Asset Management and Wealth Management Compliance for the Americas region and Chief Compliance Officer of Deutsche Investment Management Americas. |
|
Austin P. Wachter, Managing Director and Controller |
Managing Director and Controller (since 2017) (formerly, Assistant Treasurer and Assistant Controller) of Nuveen Asset Management, LLC; Controller (since 2017) of Nuveen Investments, Inc., Nuveen Alternative Investments, LLC, Nuveen Alternatives Advisors LLC, Nuveen Finance, LLC, Nuveen Services, LLC, NWQ Investment Management Company, Nuveen Investments Advisers, LLC, Santa Barbara Asset Management, LLC and Winslow Capital Management, LLC; Controller (since 2014) of Nuveen, LLC; Controller (since 2016) formerly, Vice President and Funds Treasurer (2014-2016) of Teachers Advisors, LLC; Controller (since 2016), formerly, Senior Director and Funds Treasurer (2014-2016) of Teachers Insurance and Annuity Association of America. |
Nuveen Asset Management, LLC (Nuveen Asset Management) serves as investment sub-adviser to the Fund and also serves as investment sub-adviser to other open-end and closed-end funds and investment adviser to separately managed accounts. The following is a list of the remaining senior officers of Nuveen Asset Management. The principal business address of each person is 333 West Wacker Drive, Chicago, Illinois 60606.
Name and Position with Nuveen Asset Management |
Other Business, Profession, Vocation or
|
|
William T. Huffman, President | None. | |
Stuart J. Cohen, Managing Director and Head of Legal |
Managing Director and Assistant Secretary (since 2002) of Nuveen Securities, LLC; Managing Director (since 2007) and Assistant Secretary (since 2003) of Nuveen Fund Advisors, LLC. |
|
Diane S. Meggs, Managing Director and Chief Compliance Officer |
Managing Director and Compliance Manager (since 2011) of Nuveen Fund Advisors, LLC; Managing Director and Chief Compliance Officer (since 2013) of Nuveen Investments Advisers, LLC. |
C-5
Name and Position with Nuveen Asset Management |
Other Business, Profession, Vocation or
|
|
Austin P. Wachter, Managing Director and Controller |
Managing Director and Controller (since 2017) (formerly, Assistant Treasurer and Assistant Controller) of Nuveen Asset Management, LLC; Controller (since 2017) of Nuveen Investments, Inc., Nuveen Alternative Investments, LLC, Nuveen Alternatives Advisors LLC, Nuveen Finance, LLC, Nuveen Services, LLC, NWQ Investment Management Company, Nuveen Investments Advisers, LLC, Santa Barbara Asset Management, LLC and Winslow Capital Management, LLC; Controller (since 2014) of Nuveen, LLC; Controller (since 2016) formerly, Vice President and Funds Treasurer (2014-2016) of Teachers Advisors, LLC; Controller (since 2016), formerly, Senior Director and Funds Treasurer (2014-2016) of Teachers Insurance and Annuity Association of America. |
Intech Investment Management LLC (Intech) also serves as the Funds subadviser. The address for Intech is 525 Okeechobee Blvd, Suite 1800, West Palm Beach, Florida 33401. Set forth below is a list of each director and officer of Intech, indicating each business, profession, vocation or employment of a substantial nature in which such person has been, at any time during the past two fiscal years, engaged for his or her own account or in the capacity of director, officer, partner or trustee.
Name and Position with Intech |
Other Business, Profession, Vocation or
|
|
Adrian Banner, Chief Executive Officer, Chief Investment Officer and Director of Intech | None. | |
David Schofield, President, International Division Working Director of Intech | None. | |
Justin Wright, Executive Vice President, Chief Operating Officer, General Counsel and Working Director of Intech | None. | |
Enrique Chang, Director of Intech |
Global Chief Investment Officer and Portfolio Manager (2017-present) of Janus Henderson Group plc; President, Head of Investments (2016-2017), Chief Investment Officer, Equities and Asset Allocation (2013-2016) of Janus Capital Group Inc., Janus Capital Management LLC and Janus Management Holdings Corp. | |
Brennan Hughes, CPA, Working Director of Intech | Senior Vice President, Chief Accounting Officer & Treasurer (2017-present) of Janus Henderson Group plc; Senior Vice President, Chief Accounting Officer and Treasurer (2013-2017), Vice President and Controller (2011-2013), Controller (2010-2011), Manager, Accounting Policies and Financial Reporting (2005-2010) of Janus Capital Group Inc. | |
Bruce Koepfgen, Working Director of Intech | Executive Vice President, Head of North America (2017-present) at Janus Henderson Investors, President and Chief Executive Officer (2017-present) of Janus Investment Fund, Janus Aspen Series, Janus Detroit Street Trust and Clayton Street Trust, Board of Managers of Perkins Investment Management LLC. |
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Name and Position with Intech |
Other Business, Profession, Vocation or
|
|
Richard M. Weil, Working Director of Intech | Chief Executive Officer (2018-present) of Janus Henderson Investors, Co-CEO (2017-2018) of Janus Henderson Investors, CEO (2010-2017) of Janus Capital Group. |
Item 32: Location of Accounts and Records
Nuveen Fund Advisors, LLC, 333 West Wacker Drive, Chicago, Illinois 60606, maintains the Declaration of Trust, By-Laws, minutes of trustees and shareholders meetings and contracts of the Registrant and all advisory material of the investment adviser. Nuveen Asset Management and Intech, in their capacities as sub-advisers, also may hold certain accounts and records of the Fund.
State Street Bank and Trust Company, 250 Royal Street, Canton, Massachusetts 02021, maintains all general and subsidiary ledgers, journals, trial balances, records of all portfolio purchases and sales, and all other required records not maintained by Nuveen Fund Advisors, Nuveen Asset Management and Intech.
Item 33: Management Services
Not applicable.
Item 34: Undertakings
1. |
Registrant undertakes to suspend the offering of its shares until it amends its prospectus if: (1) subsequent to the effective date of its Registration Statement, the net asset value declines more than 10 percent from its net asset value as of the effective date of the Registration Statement; or (2) the net asset value increases to an amount greater than its net proceeds as stated in the prospectus. |
2. |
Not applicable. |
3. |
Not applicable. |
4. |
Not applicable. |
5. |
The Registrant undertakes that: |
a. For purposes of determining any liability under the 1933 Act, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in the form of prospectus filed by the Registrant under Rule 497(h) under the 1933 Act shall be deemed to be part of this Registration Statement as of the time it was declared effective.
b. For the purpose of determining any liability under the 1933 Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of the securities at that time shall be deemed to be the initial bona fide offering thereof.
6. |
The Registrant undertakes to send by first class mail or other means designed to ensure equally prompt delivery, within two business days of receipt of a written or oral request, any Statement of Additional Information. |
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in this City of Chicago, and State of Illinois, on the 30 th day of October, 2018.
NUVEEN CORE EQUITY ALPHA FUND |
/ S / G IFFORD R. Z IMMERMAN |
Gifford R. Zimmerman, Vice President and Secretary |
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the date indicated.
Signature |
Title |
Date |
||||||
/ S / S TEPHEN D. F OY S TEPHEN D. F OY |
Vice President and Controller (principal financial and accounting officer) | October 30, 2018 | ||||||
/ S / C EDRIC H. A NTOSIEWICZ C EDRIC H. A NTOSIEWICZ |
Chief Administrative Officer (principal executive officer) | October 30, 2018 | ||||||
T ERENCE J. T OTH * | Chairman of the Board and Trustee |
ü
ï ï ï ï ï ï ï ï ï ï ï ï ý ï ï ï ï ï ï ï ï ï ï ï ï ï þ |
By: |
/ S / G IFFORD R. Z IMMERMAN G IFFORD R. Z IMMERMAN Attorney-in-Fact October 30, 2018 |
||||
M ARGO L. C OOK * | Trustee | |||||||
J ACK B. E VANS * | Trustee | |||||||
W ILLIAM C. H UNTER * | Trustee | |||||||
A LBIN F. M OSCHNER * | Trustee | |||||||
J OHN K. N ELSON * | Trustee | |||||||
W ILLIAM J. S CHNEIDER * |
Trustee |
|||||||
J UDITH M. S TOCKDALE * |
Trustee |
|||||||
C AROLE E. S TONE * |
Trustee |
|||||||
M ARGARET L. W OLFF * | Trustee | |||||||
R OBERT L. Y OUNG * | Trustee |
* |
Original powers of attorney authorizing Gifford R. Zimmerman, among others, to execute this Registration Statement, and Amendments thereto, for the trustees of the Registrant on whose behalf this Registration Statement is filed, have been executed and filed as Exhibit s. to this Registration Statement. |
INDEX TO EXHIBITS
Exhibit |
Name |
|||
b. | Registrants By-laws (Amended and Restated as of November 18, 2009) | |||
e. | Terms and Conditions of the Automatic Dividend Reinvestment Plan | |||
g.1 | Investment Management Agreement between the Registrant and Nuveen Fund Advisors, LLC dated October 1, 2014 | |||
g.2 | Renewal of Investment Management Agreements between the Nuveen Closed-End Funds and Nuveen Fund Advisors, LLC dated July 24, 2018 | |||
g.3 | Investment Sub-Advisory Agreement dated October 1, 2014 between Nuveen Fund Advisors, LLC and Nuveen Asset Management | |||
g.4 | Investment Sub-Advisory Agreement dated May 30, 2017 between Nuveen Fund Advisors, LLC and Intech Investment Management LLC | |||
h.1 | Form of Distribution Agreement relating to At-the-Market Offerings between the Registrant and Nuveen Securities, LLC | |||
h.2 | Form of Dealer Agreement relating to At-the-Market Offerings between Nuveen Securities, LLC and [ ] | |||
i. | Nuveen Open-End and Closed-End Funds Deferred Compensation Plan for Independent Directors and Trustees (Restated effective April 27, 2017) | |||
j.1 | Amended and Restated Master Custodian Agreement dated July 15, 2015 between the Registrant and State Street Bank and Trust Company | |||
j.2 | Appendix A, updated as of August 1, 2017, to the Amended and Restated Master Custodian Agreement dated July 15, 2015 between the Registrant and State Street Bank and Trust Company | |||
k.1 | Transfer Agency and Service Agreement dated June 15, 2017 between the Registrant and Computershare Inc. and Computershare Trust Company, N.A. | |||
k.2 | First Amendment and updated Schedule A, dated September 7, 2017, to the Transfer Agency and Service Agreement dated June 15, 2017 between the Registrant and Computershare Inc. and Computershare Trust Company, N.A. | |||
n. | Consent of PricewaterhouseCoopers LLP | |||
r.1 | Code of Ethics and Reporting Requirements of Nuveen (including affiliated entities) and the Nuveen Funds, as amended July 1, 2018 | |||
r.2 | Code of Ethics for the Independent Trustees of Nuveen Funds | |||
r.3 | Code of Ethics for Janus Henderson Group plc (the parent company of Intech Investment Management LLC) | |||
s. | Powers of Attorney dated October 11, 2018 |
BY-LAWS
OF
NUVEEN TAXABLE CLOSED-END FUNDS
ORGANIZED AS
MASSACHUSETTS BUSINESS TRUSTS
(Amended and Restated as of November 18, 2009)
ARTICLE I
DECLARATION OF TRUST
AND
OFFICES
Section 1.1. The Trust; Declaration of Trust . These are the By-Laws, of each Nuveen Taxable Closed-End Fund listed on Exhibit A, each a Massachusetts business trust established by its own Declaration of Trust (each such fund being referred to individually as the Trust ). The Trust shall be subject to the Declaration of Trust, as from time to time in effect (the Declaration of Trust ).
Section 1.2. Registered Agent . The registered agent of the Trust in the Commonwealth of Massachusetts shall be CT Corporation System, 150 Federal Street, Boston, Massachusetts, or such other agent as may be fixed by the Board of Trustees.
Section 1.3 Other Offices . The Trust may have such other offices and places of business within or without the Commonwealth of Massachusetts as the Board of Trustees shall determine.
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ARTICLE II
SHAREHOLDERS
Section 2.1. Place of Meetings . Meetings of the Shareholders may be held at such place or places within or without the Commonwealth of Massachusetts as shall be fixed by the Board of Trustees and stated in the notice of the meeting.
Section 2.2. Regular Meeting . Regular meetings of the Shareholders for the election of Trustees and the transaction of such other business as may properly come before the meeting shall be held on an annual or other less frequent periodic basis at such date and time as the Board of Trustees by resolution shall designate, except as otherwise required by applicable law.
Section 2.3. Special Meeting . Special meetings of the Shareholders for any purpose or purposes may be called by the Chairman of the Board, the Chief Administrative Officer or at least sixty-six and two-thirds percent (66 2/3%) of the Trustees, and must be called at the written request, stating the purpose or purposes of the meeting, of Shareholders entitled to cast at least 10 percent of all the votes entitled to be cast at the meeting.
Section 2.4. Notice of Meetings . Notice of all meetings stating the time, place and purpose or purposes of the meeting shall be delivered to each Shareholder not less than ten (10) nor more than ninety (90) days prior to the meeting, except where the meeting is an adjourned meeting and the date, time and place of the meeting were announced at the time of the adjournment. For any matter to be properly before any regular or special meeting, the matter must be (i) specified in the notice of meeting given by or at the direction of the Chairman of the Board, the Chief Administrative Officer or at least sixty-six and two-thirds percent (66 2/3%) of the Trustees or (ii) brought before the meeting by a Shareholder in the manner specified in Section 2.5 of these By-Laws.
Section 2.5. Requirements for Matters to be Considered . (a) With the exception of Shareholder nominations for Trustee and Shareholder proposals submitted in accordance with the requirements of Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the Exchange Act ) (or any successor provision thereto), only matters proposed by the Chairman of the Board, the Chief Administrative Officer or at least sixty-six and two-thirds percent (66 2/3%) of the Trustees may be included in the Trusts proxy materials.
(b) In addition to any other requirements under applicable law and the Declaration of Trust and these By-Laws, any proposal to elect any person
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nominated by Shareholders for election as Trustee and any other proposals by Shareholders may only be brought before a regular meeting if timely written notice (the Shareholder Notice ) is provided to the Secretary. Unless a greater or lesser period is required under applicable law, to be timely, the Shareholder Notice must be delivered to or mailed and received at the principal executive offices of the Trust not less than forty-five (45) days nor more than sixty (60) days prior to the first anniversary date of the date on which the Trust first mailed its proxy materials for the prior years annual meeting; provided, however, if and only if the annual meeting is not scheduled to be held within a period that commences thirty (30) days before the first anniversary date of the annual meeting for the preceding year and ends thirty (30) days after such anniversary date (an annual meeting date outside such period being referred to herein as an Other Annual Meeting Date), such Shareholder Notice must be given in the manner provided herein by the later of the close of business on (i) the date forty-five (45) days prior to such Other Annual Meeting Date or (ii) the tenth (10th) business day following the date such Other Annual Meeting Date is first publicly announced or disclosed.
Any Shareholder desiring to nominate any person or persons (as the case may be) for election as a Trustee or Trustees of the Trust shall deliver, as part of such Shareholder Notice: (i) a statement in writing setting forth (A) the name, age, date of birth, business address, residence address and nationality of the person or persons to be nominated; (B) the class or series and number of all Shares of the Trust owned of record or beneficially by each such person or persons, as reported to such Shareholder by such nominee(s); (C) any other information regarding each such person required by paragraphs (a), (d), (e) and (f) of Item 401 of Regulation S-K or paragraph (b) of Item 22 of Rule 14a-101 (Schedule 14A) under the Exchange Act (or any successor provision thereto); (D) any other information regarding the person or persons to be nominated that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitation of proxies for election of Trustees pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder; and (E) whether such Shareholder believes any nominee is or will be an interested person of the Trust (as defined in the Investment Company Act of 1940, as amended (the 1940 Act )) and, if not an interested person, information regarding each nominee that will be sufficient for the Trust to make such determination; and (ii) the written and signed consent of the person or persons to be nominated to be named as nominees and to serve as Trustees if elected. In addition, the Trustees may require any proposed nominee to furnish such other information as they may reasonably require or deem necessary to determine the eligibility of such proposed nominee to serve as a Trustee.
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Without limiting the foregoing, any Shareholder who gives a Shareholder Notice of any matter proposed to be brought before a Shareholder meeting (whether or not involving nominees for Trustees) shall deliver, as part of such Shareholder Notice: (i) the description of and text of the proposal to be presented; (ii) a brief written statement of the reasons why such Shareholder favors the proposal; (iii) such Shareholders name and address as they appear on the Trusts books; (iv) any other information relating to the Shareholder that would be required to be disclosed in a proxy statement or other filings required to be made in connection with the solicitation of proxies with respect to the matter(s) proposed pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder; (v) the class or series and number of all Shares of the Trust beneficially owned and of record by such Shareholder; (vi) any material interest of such Shareholder in the matter proposed (other than as a Shareholder); (vii) a representation that the Shareholder intends to appear in person or by proxy at the Shareholder meeting to act on the matter(s) proposed; (viii) if the proposal involves nominee(s) for Trustees, a description of all arrangements or understandings between the Shareholder and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are to be made by the Shareholder; and (ix) in the case of a Shareholder (a Beneficial Owner ) that holds Shares entitled to vote at the meeting through a nominee or street name holder of record, evidence establishing such Beneficial Owners indirect ownership of, and entitlement to vote, Shares at the meeting of Shareholders. As used in this Section 2.5, Shares beneficially owned shall mean all Shares which such person is deemed to beneficially own pursuant to Rules 13d-3 and 13d-5 under the Exchange Act.
(c) For purposes of this Section 2.5, a matter shall be deemed to have been publicly announced or disclosed if such matter is disclosed in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service, in a document publicly filed by the Trust with the Securities and Exchange Commission, or in a Web site accessible to the public maintained by the Trust or by its investment adviser.
(d) In no event shall an adjournment or postponement (or a public announcement thereof) of a meeting of Shareholders commence a new time period (or extend any time period) for the giving of notice as provided in this Section 2.5.
(e) The person presiding at any annual or special meeting, in addition to making any other determinations that may be appropriate to the conduct of the meeting, shall have the power and duty to determine whether notice of nominees and other matters proposed to be brought before a meeting has been duly given in the manner provided in this Section 2.5 and, if not so given, shall
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direct and declare at the meeting that such nominees and other matters shall not be considered.
(f) Notwithstanding anything to the contrary in this Section 2.5 or otherwise in these By-Laws, unless required by applicable law, no matter shall be considered at or brought before any annual or special meeting unless such matter has been deemed a proper matter for Shareholder action by the Chairman of the Board, the Chief Administrative Officer or at least sixty-six and two-thirds percent (66 2/3%) of the Trustees.
Section 2.6. Quorum and Action. (a) The holders of a majority of the voting power of the shares of beneficial interest of the Trust (the Shares ) entitled to vote at a meeting are a quorum for the transaction of business. If a quorum is present when a duly called or held meeting is convened, the Shareholders present may continue to transact business until adjournment, even though the withdrawal of a number of Shareholders originally present leaves less than the proportion or number otherwise required for a quorum. Notwithstanding the foregoing, when the holders of Preferred Shares are entitled to elect any of the Trusts Trustees by class vote of such holders, the holders of 33 1/3% of the Shares entitled to vote at a meeting shall constitute a quorum for the purpose of such an election.
(b) The Shareholders shall take action by the affirmative vote of the holders of a majority, except in the case of the election of Trustees which shall only require a plurality, of the voting power of the Shares present and entitled to vote at a meeting of Shareholders at which a quorum is present, except as may be otherwise required by the 1940 Act , the Declaration of Trust, any resolution of the Trustees which authorizes the issuance of Preferred Shares or the written statement setting forth the relative rights and preferences of the Preferred Shares.
Section 2.7. Voting . At each meeting of the Shareholders, every, holder of Shares then entitled to vote may vote in person or by proxy and, except as otherwise provided by the 1940 Act, the Declaration of Trust or any resolution of the Trustees which authorizes the issuance of Preferred Shares, shall have one vote for each Share registered in his name.
Section 2.8. Proxy Representation . A Shareholder may cast or authorize the casting of a vote by filing a written appointment of a proxy with an officer of the Trust at or before the meeting at which the appointment is to be effective. The placing of a Shareholders name on a proxy pursuant to telephonic or electronically transmitted instructions obtained pursuant to procedures which are reasonably designed to verify that such instructions have been authorized by such Shareholder, shall constitute execution of such proxy by or on behalf of
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such Shareholder. The appointment of a proxy is valid for eleven months, unless a longer period is expressly provided in the appointment. No appointment is irrevocable unless the appointment is coupled with an interest in the Shares or in the Trust. Any copy, facsimile telecommunication or other reliable reproduction of a proxy may be substituted for or used in lieu of the original proxy for any and all purposes for which the original proxy could be used, provided that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original proxy.
Section 2.9. Adjourned Meetings . Any meeting of Shareholders may by announcement by the person presiding thereat, be adjourned to a designated time and place by the vote of the holders of a majority of the Shares present and entitled to vote thereon with respect to the matter to be adjourned whether or not a quorum is so present. An adjourned meeting may reconvene as designed, and when a quorum is present any business may be transacted which might have been transacted at the meeting as originally called.
Section 2.10. Action by Written Consent in Lieu of Meeting of Shareholders . See Section 6.3 of these By-Laws.
ARTICLE III
TRUSTEES
Section 3.1. Qualifications, Number, Vacancies and Classes. (a) Each Trustee shall be a natural person. A Trustee need not be a Shareholder, a citizen of the United States, or a resident of the Commonwealth of Massachusetts. The number of Trustees of the Trust and the filling of vacancies shall be as provided in the Declaration of Trust.
(b) The Trustees shall be classified by resolution into the following three classes to be elected by the holders of the outstanding Common Shares and outstanding Preferred Shares, if any, voting together as a single class, each to serve for three year terms (with the exception of the initial appointment or election of Trustees as provided below): Class I, Class II and Class III. Upon their initial election or appointment, such resolution electing or appointing the Trustees shall designate the Class of Trustees designated to serve for a term expiring at the first succeeding annual meeting subsequent to their election, the Class of Trustees designated to serve for a term expiring at the second succeeding annual meeting subsequent to their election, and the Class of Trustees designated to serve for a term expiring at the third succeeding annual meeting subsequent to their election. At each subsequent annual meeting, the Trustees chosen to succeed those whose terms are expiring shall be identified as being of the same class as the Trustees whom they succeed and shall be elected
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for a term expiring at the time of the third succeeding annual meeting subsequent to their election or thereafter in each case when their respective successors are elected and qualified.
(c) Upon or prior to the issuance of any Preferred Shares, the Trustees shall designate by resolution two Trustees to be appointed to serve as Trustees elected solely by the holders of the outstanding Preferred Shares (the Preferred Trustees). The Preferred Trustees shall initially be elected or appointed to the Board of Trustees for a term expiring at the first succeeding annual meeting subsequent to their election or appointment. At each subsequent annual meeting at which holders of Preferred Shares are entitled to vote, the Preferred Trustees shall be elected for a term expiring at the time of the next succeeding annual meeting subsequent to their election held for the election of Trustees of Class I, Class II or Class III or thereafter when their respective successors are elected and qualified.
(d) The Trustees shall only be elected at annual meetings, except as provided in the Declaration of Trust.
Section 3.2. Powers . The business and affairs of the Trust shall be managed under the direction of the Board of Trustees. All powers of the Trust may be exercised by or under the authority of the Board of Trustees, except those conferred on or reserved to the Shareholders by statute, the Declaration of Trust or these By-Laws.
Section 3.3. Investment Policies . It shall be the duty of the Board of Trustees to ensure that the purchase, sale, retention and disposal of portfolio securities and the other investment practices of the Trust are at all times consistent with the investment objectives, policies and restrictions with respect to securities investments and otherwise of the Trust filed from time to time with the Securities and Exchange Commission and as required by the 1940 Act, unless such duty is delegated to an investment adviser pursuant to a written contract, as provided in the Declaration of Trust. The Trustees, however, may delegate the duty of management of the assets of the Trust and may delegate such other of their powers and duties to the Executive Committee or any other committee, or to an individual or corporate investment adviser to act as investment adviser or subadviser pursuant to a written contract.
Section 3.4. Meetings . Regular meetings of the Trustees may be held without notice at such times as the Trustees shall fix. Special meetings of the Trustees may be called by the Chairman of the Board or the Chief Administrative Officer, and shall be called at the written request of two or more Trustees. Unless waived by each Trustee, three days notice of special meetings
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shall be given to each Trustee in person, by mail, by telephone, or by telegram or cable, or by any other means that reasonably may be expected to provide similar notice. Notice of special meetings need not state the purpose or purposes thereof. Meetings of the Trustees may be held at any place within or outside the Commonwealth of Massachusetts. A conference among Trustees by any means of communication through which the Trustees may simultaneously hear each other during the conference constitutes a meeting of the Trustees or of a committee of the Trustees, if the notice requirements have been met (or waived) and if the number of Trustees participating in the conference would be sufficient to constitute a quorum at such meeting. Participation in such meeting by that means constitutes presence in person at the meeting.
Section 3.5. Quorum and Action . A majority of the Trustees currently holding office, or in the case of a meeting of a committee of the Trustees, a majority of the members of such committee, shall constitute a quorum for the transaction of business at any meeting. If a quorum is present when a duly called or held meeting is convened, the Trustees present may continue to transact business until adjournment, even though the withdrawal of a number of Trustees originally present leaves less than the proportion or number otherwise required for a quorum. At any duly held meeting at which a quorum is present, the affirmative vote of the majority of the Trustees present shall be the act of the Trustees or the committee, as the case may be, on any question, except where the act of a greater number is required by these By-Laws or by the Declaration of Trust.
Section 3.6. Action by Written Consent in Lieu of Meetings of Trustees . See Section 6.3 of these By-Laws.
Section 3.7. Committees . The Trustees, by resolution adopted by the affirmative vote of a majority of the Trustees, may designate from their members an Executive Committee, an Audit Committee (whose function shall be to advise the Trustees as to the selection of and review of the work of the independent public accountants of the Trust) and any other committee or committees, each such committee to consist of two or more Trustees and to have such powers and authority (to the extent permitted by law) as may be provided in such resolution. Any such committee may be terminated at any time by the affirmative vote of a majority of the Trustees.
ARTICLE IV
OFFICERS
Section 4.1. Number and Qualifications . The officers of the Trust shall include a Chief Administrative Officer, a Controller, one or more Vice Presidents
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(one of whom may be designated Executive Vice President), a Treasurer, and a Secretary. Any two or more offices may be held by the same person. Unless otherwise determined by the Trustees, each officer shall be appointed by the Trustees for a term which shall continue until the meeting of the Trustees following the next regular meeting of Shareholders and until his successor shall have been duly elected and qualified, or until his death, or until he shall have resigned or have been removed, as hereinafter provided in these By-Laws. The Trustees may from time to time elect, or delegate to the Chairman of the Board or the Chief Administrative Officer, or both, the power to appoint, such officers (including one or more Assistant Vice Presidents, one or more Assistant Treasurers and one or more Assistant Secretaries) and such agents as may be necessary or desirable for the business of the Trust. Such other officers shall hold office for such terms as may be prescribed by the Trustees or by the appointing authority. The Chairman of the Board is not deemed to be an officer of the Trust by virtue of serving as Board Chair.
Section 4.2. Resignations . Any officer of the Trust may resign at any time by giving written notice of his resignation to the Trustees, the Chairman of the Board, the Chief Administrative Officer or the Secretary. Any such resignation shall take effect at the time specified therein or, if the time when it shall become effective shall not be specified therein, immediately upon its receipt, and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.
Section 4.3. Removal . An officer may be removed at any time, with or without cause, by a resolution approved by the affirmative vote of a majority of the Trustees present at a duly convened meeting of the Trustees.
Section 4.4. Vacancies . A vacancy in any office because of death, resignation, removal, disqualification or any other cause, may be filled for the unexpired portion of the term by the Trustees, or in the manner determined by the Trustees.
Section 4.5. The Chairman of the Board . The Chairman of the Board shall be elected from among the Trustees. He shall:
(a) when present, preside at all meetings of the Trustees and of the Shareholders;
(b) see that all orders and resolutions of the Trustees are carried into effect; and
(c) maintain records of and, whenever necessary, certify all proceedings of the Trustees and the Shareholders.
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In the absence of the Chief Administrative Officer or in the event of his disability, or inability to act or to continue to act, the Chairman of the Board shall perform the duties of the Chief Administrative Officer and when so acting shall have all the powers of, and be subject to all the restrictions upon, the Chief Administrative Officer.
Section 4.6. The Chief Administrative Officer . The Chief Administrative Officer shall be the chief executive and operating officer of the Trust and, subject to the Chairman of the Board, he shall have general authority over and general management and control of the business and affairs of the Trust. In general, he shall discharge all duties incident to the office of the chief executive and operating officer of the Trust and such other duties as may be prescribed by the Trustees from time to time. The Chief Administrative Officer shall be authorized to do or cause to be done all things necessary or appropriate, including preparation, execution and filing of any documents, to effectuate the registration from time to time of the Common Shares or Preferred Shares of the Trust with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended. He shall perform all duties incident to the office of Chief Administrative Officer and such other duties as from time to time may be assigned to him by the Trustees or by these By-Laws. Despite the fact that he/she is not a Trustee, in the absence of the Chairman of the Board or in the event of his disability, or inability to act or to continue to act, the Chief Administrative Officer shall perform the duties of the Chairman of the Board and when so acting shall have all the powers of, and be subject to all the restrictions upon, the Chairman of the Board.
Section 4.7. Executive Vice-President . In the case of the absence or inability to act of the Chief Administrative Officer and the Chairman of the Board, the Executive Vice-President shall perform the duties of the Chief Administrative Officer and when so acting shall have all the powers of, and be subject to all the restrictions upon, the Chief Administrative Officer . The Executive Vice-President shall perform all duties incident to the office of Executive Vice-President and such other duties as from time to time may be assigned to him by the Trustees, the Chief Administrative Officer or these By-Laws.
Section 4.8. Vice Presidents . Each Vice-President shall perform all such duties as from time to time may be assigned to him by the Trustees, the Chairman of the Board or the Chief Administrative Officer .
Section 4.9. Controller . The Controller shall:
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(a) keep accurate financial records for the Trust;
(b) render to the Chairman of the Board, the Chief Administrative Officer and the Trustees, whenever requested, an account of all transactions by and of the financial condition of the Trust; and
(c) in general, perform all the duties incident to the office of Controller and such other duties as from time to time may be assigned to him by the Trustees, the Chairman of the Board or the Chief Administrative Officer .
Section 4.10. Treasurer . The Treasurer shall:
(a) have charge and custody of, and be responsible for, all the funds and securities of the Trust, except those which the Trust has placed in the custody of a bank or trust company pursuant to a written agreement designating such bank or trust company as custodian of the property of the Trust, as required by Section 6.6 of these By-Laws;
(b) deposit all money, drafts, and checks in the name of and to the credit of the Trust in the banks and depositories designated by the Trustees;
(c) endorse for deposit all notes, checks, and drafts received by the Trust making proper vouchers therefor:
(d) disburse corporate funds and issue checks and drafts in the name of the Trust, as ordered by the Trustees; and
(e) in general, perform all the duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him by the Trustees, the Chairman of the Board or the Chief Administrative Officer .
Section 4.11. Secretary . The Secretary shall:
(a) keep or cause to be kept in one or more books provided for the purpose, the minutes of all meetings of the Trustees, the committees of the Trustees and the Shareholders;
(b) see that all notices are duly given in accordance with the provisions of these By-Laws and as required by statute;
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(c) be custodian of the records of the Trust;
(d) see that the books, reports, statements, certificates and other documents and records required by statute to be kept and filed are properly kept and filed; and
(e) in general, perform all the duties incident to the office of Secretary and such other duties as from time to time may be assigned to him by the Trustees, the Chairman of the Board or the Chief Administrative Officer .
Section 4.12. Salaries . The salaries of all officers shall be fixed by the Trustees and the Trustees have the authority by majority vote to reimburse expenses and to establish reasonable compensation of all Trustees for services to the Trust as Trustees, officers, or otherwise.
ARTICLE V
SHARES
Section 5.1. Share Certificates. No certificates representing Common Shares or Preferred Shares shall be issued except as the Trustees may otherwise authorize.
Section 5.2. Books and Records; Inspection. The Trust shall keep at its principal executive office, or at another place or places within the United States determined by the Trustees, a share register not more than one year old, containing the names and addresses of the shareholders and the number of Shares held by each Shareholder. The Trust shall also keep, at its principal executive office, or at another place or places within the United States determined by the Trustees, a record of the dates on which certificates representing Shares were issued.
Section 5.3. Share Transfers. Upon compliance with any provisions restricting the transferability of Shares that may be set forth in the Declaration of Trust, these By-Laws, or any resolution or written agreement in respect thereof, transfers of Shares of the Trust shall be made only on the books of the Trust by the registered holder thereof, or by his attorney thereunto authorized by power of attorney duly executed and filed with an officer of the Trust, or with a transfer agent or a registrar and on surrender of any certificate or certificates for such Shares properly endorsed and the payment of all taxes thereon. Except as may be otherwise provided by law or these By-Laws, the person in whose name Shares stand on the books of the Trust shall be deemed the owner thereof
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for all purposes as regards the Trust; provided that whenever any transfer of Shares shall be made for collateral security, and not absolutely, such fact, if known to an officer of the Trust, shall be so expressed in the entry of transfer.
Section 5.4. Regulations . The Trustees may make such additional rules and regulations, not inconsistent with these By-Laws, as they may deem expedient concerning the issue, certification, transfer and registration of Shares of the Trust. They may appoint, or authorize any officer or officers to appoint, one or more transfer agents or one or more transfer clerks and one or more registrars and may require all certificates for Shares to bear the signature or signatures of any of them.
Section 5.5. Lost, Destroyed or Mutilated Certificates . The holder of any certificate representing Shares of the Trust shall immediately notify the Trust of any loss, destruction or mutilation of such certificate, and the Trust may issue a new certificate in the place of any certificate theretofore issued by it which the owner thereof shall allege to have been lost or destroyed or which shall have been mutilated, and the Trustees may, in their discretion, require such owner or his legal representatives to give to the Trust a bond in such sum, limited or unlimited, and in such form and with such surety or sureties as the Trustees in their absolute discretion shall determine, to indemnify the Trust against any claim that may be made against it on account of the alleged loss or destruction of any such certificate, or the issuance of a new certificate. Anything herein to the contrary notwithstanding, the Trustees, in their absolute discretion, may refuse to issue any such new certificate, except as otherwise required by law.
Section 5.6. Record Date; Certification of Beneficial Owner . (a) The Trustees may fix a date not more than ninety (90) days before the date of a meeting of Shareholders as the date for the determination of the holders of Shares entitled to notice of and entitled to vote at the meeting or any adjournment thereof.
(b) The Trustees may fix a date for determining Shareholders entitled to receive payment of any dividend or distribution or allotment of any rights or entitled to exercise any rights in respect of any change, conversion or exchange of Shares.
(c) In the absence of such fixed record date, (i) the date for determination of Shareholders entitled to notice of and entitled to vote at a meeting of Shareholders shall be the later of the close of business on the day on which notice of the meeting is mailed or the thirtieth day before the meeting, and (ii) the date for determining Shareholders entitled to receive payment of any dividend or distribution or an allotment of any rights or entitled to exercise any rights in respect of any change, conversion or exchange of Shares shall be
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the close of business on the day on which the resolution of the Trustees is adopted.
(d) A resolution approved by the affirmative vote of a majority of the Trustees present may establish a procedure whereby a Shareholder may certify in writing to the Trust that all or a portion of the Shares registered in the name of the Shareholder are held for the account of one or more beneficial owners. Upon receipt by the Trust of the writing, the persons specified as beneficial owners, rather than the actual Shareholders, are deemed the Shareholders for the purposes specified in the writing.
ARTICLE VI
MISCELLANEOUS
Section 6.1. Fiscal Year . The fiscal year of the Trust shall be as fixed by the Trustees of the Trust.
Section 6.2. Notice and Waiver of Notice . (a) Any notice of a meeting required to be given under these By-Laws to Shareholders or Trustees, or both, may be waived by any such person (i) orally or in writing signed by such person before, at or after the meeting or (ii) by attendance at the meeting in person or, in the case of a Shareholder, by proxy.
(b) Except as otherwise specifically provided herein, all notices required by these By-Laws shall be printed or written, and shall be delivered either personally, by telecopy, telegraph or cable, or by mail or courier or delivery service, and, if mailed, shall be deemed to be delivered when deposited in the United States mail, postage prepaid, addressed to the Shareholder or Trustee at his address as it appears on the records of the Trust.
Section 6.3 Action by Written Consent in Lieu of Meeting. (a) An action required or permitted to be taken at a meeting of the Shareholders may be taken without a meeting by written action signed by all of the Shareholders entitled to vote on that action. The written action is effective when it has been signed by all of those Shareholders, unless a different effective time is provided in the written action.
(b) An action which is required or permitted to be taken at a meeting of Trustees and which also requires subsequent Shareholder approval may be taken by written action signed by all of the Trustees. An action which is required or permitted to be taken at a meeting of the Trustees or a Committee of the Trustees but which does not require Shareholder approval may be taken by written action signed by the number of Trustees that would be required to take
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the same action at a meeting of the Trustees or Committee, as the case may be, at which all Trustees were present. The written action is effective when signed by the required number of Trustees, unless a different effective time is provided in the written action. When written action is taken by less than all Trustees, all Trustees shall be notified immediately of this text and effective date.
Section 6.4 Reports to Shareholders. The books of account of the Trust shall be examined by an independent firm of public accountants at the close of each annual period of the Trust and at such other times, if any, as may be directed by the Trustees. A report to the Shareholders based upon such examination shall be mailed to each Shareholder of the Trust of record at his address as the same appears on the books of the Trust. Each such report shall show the assets and liabilities of the Trust as of the annual or other period covered by the report and the securities in which the funds of the Trust were then invested; such report shall also show the Trusts income and expenses for the period from the end of the Trusts preceding fiscal year to the close of the annual or other period covered by the report and any other information required by the 1940 Act, and shall set forth such other matters as the Trustees or such independent firm of public accountants shall determine.
Section 6.5 Approval of Firm of Independent Public Accountants. At any regular meeting of the Shareholders of the Trust there may be submitted, for ratification or rejection, the name of the firm of independent public accountants which has been selected for the fiscal year in which such meeting is held by a majority of those members of the Trustees who are not investment advisers of, or affiliated persons of an investment adviser of, or officers or employees of, the Trust, as such terms are defined in the 1940 Act.
Section 6.6 Custodian. All securities and cash of the Trust shall be held by a custodian meeting the requirements for a custodian contained in the 1940 Act and the rules and regulations thereunder and in any applicable state securities or blue sky laws. The Trust shall enter into a written contract with the custodian regarding the powers, duties and compensation of the custodian with respect to the cash and securities of the Trust held by the custodian. Said contract and all amendments thereto shall be approved by the Trustees of the Trust. The Trust shall upon the resignation or inability to serve of the custodian obtain a successor custodian and require that the cash and securities owned by the Trust be delivered to the successor custodian.
Section 6.7 Prohibited Transactions. No officer or Trustee of the Trust or of its investment adviser shall deal for or on behalf of the Trust with himself, as principal or agent, or with any corporation or partnership in which he has a financial interest. This prohibition shall not prevent: (a) officers or Trustees of the Trust from having a financial interest in the Trust, its principal underwriter
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or its investment adviser; (b) the purchase of securities for the portfolio of the Trust or the sale of securities owned by the Trust through a securities dealer, one or more of whose partners, officers or Trustees is an officer or Trustee of the Trust, provided such transactions are handled in the capacity of broker only and provided commission charged do not exceed customary brokerage charges for such service; (c) the purchase or sale of securities for the portfolio of the Trust pursuant to a rule under the 1940 Act or pursuant to an exemptive order of the Securities and Exchange Commission; or (d) the employment of legal counsel, registrar, transfer agent, dividend disbursing agent, or custodian having a partner, officer or director who is an officer or Trustee of the Trust, provided only customary fees are charged for services rendered to or for the benefit of the Trust.
Section 6.8 Bonds. The Trustees may require any officer, agent or employee of the Trust to give a bond to the Trust, conditioned upon the faithful discharge of his duties, with one or more sureties and in such amount as may be satisfactory to the Trustee. The Trustees shall, in any event, require the Trust to provide and maintain a bond issued by a reputable fidelity insurance company, authorized to do business in the place where the bond is issued, against larceny and embezzlement, covering each officer and employee of the Trust, who may singly, or jointly with others, have access to securities or funds of the Trust, either directly or through authority to draw upon such funds or to direct generally the disposition of such securities, such bond or bonds to be in such reasonable form and amount as a majority of the Trustees who are not interested persons of the Trust as defined in the 1940 Act shall approve not less than once every twelve months, with due consideration to all relevant factors including, but not limited to, the value of the aggregate assets of the Trust to which any such officer or employee may have access, the type and terms of the arrangements made for the custody and safekeeping of such assets, and the nature of the securities in the Trusts portfolio, and as meet all requirements which the Securities and Exchange Commission may prescribe by order, rule or regulation.
ARTICLE VII
AMENDMENTS
Section 7.1 . These By-Laws may be amended or repealed, or new By-Laws may be adopted, by a vote of a majority of the Trustees at any meeting thereof provided that notice of such meeting shall have been given if required by these By-Laws, which notice, if required, shall state that amendment or repeal of the By-Laws or adoption of new By-Laws, is one of the purposes of such meeting, or by action of the Trustees by written consent in lieu of a meeting.
Exhibit A
NUVEEN TAXABLE CLOSED-END FUNDS
(Organized as Massachusetts Business Trusts)
DATE ESTABLISHED:
|
|
|||
Nuveen Global Government Enhanced Income Fund |
4-13-06 | |||
Name changed to Nuveen Global Income Opportunities Fund on 10/9/12, REORGANIZED 11/24/14 |
|
|||
Nuveen Global Value Opportunities Fund |
5-17-06 | |||
Name changed to Nuveen Global Equity Income Fund on 1/27/14 |
-2-
Nuveen Core Equity Alpha Fund |
11-14-06 | |||
Nuveen Multi-Currency Short-Term Government Income Fund |
2/14/07 | |||
Fund name changed on 2/22/07 from Nuveen International Short-Term Government Income Fund, name changed on 10/9/12 to Nuveen Diversified Currency Opportunities Fund, REORGANIZED 11/24/14 |
|
|||
Nuveen Tax-Advantaged Dividend Growth Fund |
2/22/07 | |||
Nuveen Mortgage Opportunity Term Fund |
9-10-09 | |||
Nuveen Mortgage Opportunity Term Fund 2 |
12-16-09 | |||
Nuveen Energy MLP Total Return Fund |
9-27-2010 | |||
Nuveen Short Duration Credit Opportunities Fund |
1-3-2011 | |||
Nuveen Real Asset Income and Growth Fund |
1-10-2012 | |||
Nuveen Active Allocation Real Return Fund (formerly, Nuveen Real Return Active Allocation Fund) |
4-2-2012 | |||
Nuveen Preferred and Income Term Fund |
4-18-2012 | |||
Nuveen Flexible Investment Income Fund |
3-28-2013 | |||
Nuveen All Cap Energy MLP Opportunities Fund |
7-25-2013 | |||
Nuveen Multi-Market Income Fund |
4-30-2014 | |||
Nuveen Dow 30 S M Dynamic Overwrite Fund |
5-20-2014 | |||
Nuveen NASDAQ 100 Dynamic Overwrite Fund |
5-20-2014 | |||
Nuveen Global High Income Fund |
8-5-2014 | |||
Nuveen Technology Opportunities Fund |
10-23-2014 | |||
Nuveen High Income 2020 Target Term Fund |
4-13-15 | |||
Nuveen High Income December 2018 Target Term Fund |
7-13-15 | |||
Nuveen High Income November 2021 Target Term Fund (formerly, Nuveen High Income December 2020 Target Term Fund) | 7-13-15 | |||
Nuveen High Income December 2022 Target Term Fund |
7-13-15 | |||
Nuveen High Income December 2019 Target Term Fund |
2-10-16 | |||
Nuveen Preferred and Income 2022 Term Fund (formerly, Nuveen Preferred and Income December 2021 Term Fund) | 7-6-16 | |||
Nuveen Credit Opportunities 2020 Target Term Fund |
9-28-16 | |||
Nuveen Credit Opportunities 2022 Target Term Fund |
9-28-16 | |||
Nuveen Credit Opportunities 2024 Target Term Fund |
9-28-16 | |||
Nuveen Emerging Markets Debt 2022 Target Term Fund |
6-1-17 |
NUVEEN EQUITY-BASED EXCHANGE-TRADED FUNDS
Terms and Conditions of the Automatic Dividend Reinvestment Plan
This Dividend Reinvestment Plan (Plan) for the Nuveen Equity-Based Exchange-Traded Funds set forth on Exhibit A attached hereto (each, a Fund) provides for reinvestment of Fund distributions to shareholders, consisting of income dividends, returns of capital and capital gain distributions paid by the Fund, on behalf of all shareholders that have not opted out of participation in the Plan, by providing express written and duly executed notice to the Fund or by telephone notice satisfying such reasonable requirements as State Street and the Fund may agree, that they elect not to participate in the Plan (Participants), by State Street Bank and Trust (State Street), the Plan Agent, in accordance with the following terms:
1. State Street will act as Agent for Participants and will open an account for each Participant under the Dividend Reinvestment Plan in the same name as the Participants shares are registered, and will, for each Participant, automatically reinvest each Fund distribution to shareholders as of the first record date for a distribution to shareholders following the date on which the Participant becomes a shareholder of record. In the case of shareholders who hold shares for others who are the beneficial owners, State Street will administer the Plan on the basis of the number of Shares certified from time to time by the record shareholder as representing the total amount registered in the record shareholders name and held for the account of beneficial owners who are Participants. In the case of shareholders that elect not to participate in the Plan but rather elect to receive all distributions of income dividends, returns of capital and/or capital gains in cash, such shareholders must send written mailing instructions to the Agent, as dividend paying agent, at the Agents mailing address as detailed in the Funds prospectus.
2. Whenever the Fund declares a distribution payable in shares or cash at the option of the shareholders, each Participant shall take such distribution entirely in shares and State Street shall automatically receive such shares, including fractions, for the Participants account, except in circumstances described in Paragraph 3 below. Except in such circumstances, the number of additional shares to be credited to each Participants account shall be determined by dividing the dollar amount of the distribution payable on the Participants shares by the greater of net asset value or 95% of current market price per share on the payable date for such distribution.
3. Should the net asset value per Fund share exceed the market price per share on the day for which trades will settle on the payment date for such distribution (the Valuation Date), for a distribution payable in shares or in cash at the option of the shareholder, or should the Fund declare a distribution payable only in cash, each Participant shall take such distribution in cash and State Street shall apply the amount of such distribution to the purchase on the open market of shares of the Fund for the Participants account. Such Plan purchases shall be made as early as the Valuation Date, under the supervision of the investment adviser. State Street shall complete such Plan purchases no more than 30 days after the Valuation Date, except where temporary curtailment or suspension of purchases is necessary to comply with applicable provisions of federal securities law.
4. For the purpose of this Plan, the market price of the Funds shares on a particular date shall be the last sale price on the Exchange where it is traded on that date, or if there is no sale on such Exchange on that date, then the mean between the closing bid and asked quotations for such shares on such Exchange on such date.
5. Open-market purchases provided for above may be made on any securities exchange where the Funds shares are traded, in the over-the-counter market or in negotiated transactions and may be on such terms as to price, delivery and otherwise as State Street shall determine. Participants funds held uninvested by State Street will not bear interest, and it is understood that, in any event, State Street shall have no liability in connection with any inability to purchase shares within 30 days after the Valuation Date as herein provided, or with the timing of any purchase affected. State Street shall have no responsibility as to the value of the Funds shares acquired for Participants accounts. State Street may commingle all Participants amounts to be used for open-market purchase of Fund shares and the price per share allocable to each Participant in connection with such purchases shall be the average price (including brokerage commissions and other related costs) of all Fund shares purchased by State Street as Agent.
6. State Street may hold each Participants shares acquired pursuant to this Plan, together with the shares of other Participants, in non-certificated form in State Streets name or that of its nominee. State Street will forward to each Participant any proxy solicitation material and will vote any shares so held only in accordance with proxies returned to the Fund.
7. State Street will confirm to each Participant each acquisition made for the Participants account as soon as practicable but not later than 60 days after the date thereof. State Street will deliver to any Participant upon request, without charge, a certificate or certificates for his full shares. Although a Participant may from time to time have an undivided fractional interest (computed to three decimal places) in a share of the Fund, and distributions on fractional shares will be credited to the Participants account, no certificates for a fractional share will be issued. In the event of termination of a Participants account under the Plan, State Street will adjust for any such undivided fractional interest at the market value of the Funds shares at the time of termination.
8. Any stock dividends or split shares distributed by the Fund on full and fractional shares held by State Street for a Participant will be credited to the Participants account. In the event that the Fund makes available to its shareholders rights to purchase additional shares or other securities, the shares held for each Participant under the Plan will be added to other shares held by the Participant in calculating the number of rights to be issued to that Participant.
9. State Streets service fee for handling reinvestment of distributions pursuant hereto will be paid by the Fund. Participants will be charged their pro rata shares of brokerage commissions on all open market purchase.
10. Each Participant may terminate his account under the Plan by notifying State Street of his intent so to do, such notice to be provided either in writing duly executed by the Participant or by telephone in accordance with such reasonable requirements as State Street and the Fund may agree. Such termination will be effective immediately if notice is received by State Street not less than ten
2
days prior to any distribution record date for the next succeeding distribution; otherwise such termination will be effective shortly after the investment of such distribution with respect to all subsequent distributions. The Plan may be terminated by the Fund or State Street upon at least 90 days prior notice. Upon any termination, State Street will cause a certificate or certificates for the full shares held for each Participant under the Plan and cash adjustment for any fraction to be delivered to the Participant without charge. If any Participant elects in advance of such termination to have State Street sell part or all of his shares, State Street is authorized to deduct from the proceeds a $2.50 fee plus the brokerage commissions incurred for the transaction.
11. These terms and conditions may be amended or supplemented by State Street or the Fund at any time or times but, except when necessary or appropriate to comply with applicable law or the rules or policies of the Securities and Exchange Commission or any other regulatory authority, only by mailing to each Participant appropriate written notice at least 90 days prior to the effective date thereof. The amendment or supplement shall be deemed to be accepted by each Participant unless, prior to the effective date thereof, State Street receives notice of the termination of such Participants account under the Plan in accordance with the terms hereof. Any such amendment may include an appointment by State Street in its place and stead of a successor Agent under these terms and conditions. Upon any such appointment of any Agent for the purpose of receiving distributions, the Fund will be authorized to pay to such successor Agent, for each Participants account, all dividends and distributions payable on shares of the Fund held in the Participants name or under the Plan for retention or application by such successor Agent as provided in these terms and conditions.
12. The automatic reinvestment of distributions to shareholders does not relieve Participants of an federal, state or local taxes which may be payable (or required to be withheld on distributions to shareholders). Participants will receive tax information annually for their personal records and to help them prepare their federal income tax return. For further information as to tax consequences of participation in the Plan, Participants should consult with their own tax advisors.
13. State Street shall at all times act in good faith and agree to use its best efforts within reasonable limits to insure the accuracy of all services performed under this Agreement and to comply with applicable law, but assumes no responsibility and shall not be liable for loss or damage due to errors unless such error is caused by its negligence, bad faith or willful misconduct or that of its employees.
14. These terms and conditions shall be governed by the laws of the Commonwealth of Massachusetts.
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Exhibit A
JMLP | Nuveen All Cap Energy MLP Opportunities Fund | |
NUW | Nuveen AMT-Free Municipal Value Fund (f/k/a Nuveen Municipal Value Fund 2 | |
NBB | Nuveen Build America Bond Fund | |
NBD | Nuveen Build America Bond Opportunity Fund | |
NCB | Nuveen California Municipal Value Fund 2 | |
JCE | Nuveen Core Equity Alpha Fund | |
JCO | Nuveen Credit Opportunities 2022 Target Term Fund | |
DIAX | Nuveen Dow 30 Dynamic Overwrite Fund | |
JMF | Nuveen Energy MLP Total Return Fund | |
NEV | Nuveen Enhanced Municipal Value Fund | |
JGH | Nuveen Global High Income Fund | |
JHY | Nuveen High Income 2020 Target Term Fund | |
JHA | Nuveen High Income December 2018 Target Term Fund | |
JHD | Nuveen High Income December 2019 Target Term Fund | |
JHB | Nuveen High Income November 2021 Target Term Fund | |
NID | Nuveen Intermediate Duration Municipal Term Fund | |
NIQ | Nuveen Intermediate Duration Quality Municipal Term Fund | |
NMS | Nuveen Minnesota Municipal Income Fund | |
JMM | Nuveen Multi-Market Income Fund | |
NHA | Nuveen Municipal 2021 Target Term Fund | |
QQQX | Nuveen NASDAQ 100 Dynamic Overwrite Fund. | |
NJV | Nuveen New Jersey Municipal Value Fund | |
NYV | Nuveen New York Municipal Value Fund 2 | |
NPN | Nuveen Pennsylvania Municipal Value Fund | |
JPT | Nuveen Preferred and Income 2022 Term Fund | |
JPI | Nuveen Preferred and Income Term Fund | |
JRI | Nuveen Real Asset Income and Growth Fund | |
BXMX | Nuveen S&P 500 Buy-Write Income Fund (f/k/a Nuveen Equity Premium Income Fund-JPZ) | |
SPXX | Nuveen S&P 500 Dynamic Overwrite Fund (formerly Nuveen Equity Premium and Growth Fund-JPG) | |
JSD | Nuveen Short Duration Credit Opportunities Fund | |
JTD | Nuveen Tax-Advantaged Dividend Growth Fund | |
JTA | Nuveen Tax-Advantaged Total Return Strategy Fund |
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made this 1st day of October 2014, by and between NUVEEN CORE EQUITY ALPHA FUND, a Massachusetts business trust (the Fund), and NUVEEN FUND ADVISORS, LLC, a Delaware limited liability company (the Adviser).
W I T N E S S E T H
In consideration of the mutual covenants hereinafter contained, it is hereby agreed by and between the parties hereto as follows:
1. The Fund hereby employs the Adviser to act as the investment adviser for, and to manage the investment and reinvestment of the assets of the Fund in accordance with the Funds investment objective and policies and limitations, and to administer the Funds affairs to the extent requested by and subject to the supervision of the Board of Trustees of the Fund for the period and upon the terms herein set forth. The investment of the Funds assets shall be subject to the Funds policies, restrictions and limitations with respect to securities investments as set forth in the Funds then current registration statement under the Investment Company Act of l940, and all applicable laws and the regulations of the Securities and Exchange Commission relating to the management of registered closed-end, diversified management investment companies.
The Adviser accepts such employment and agrees during such period to render such services, to furnish office facilities and equipment and clerical, bookkeeping and administrative services (other than such services, if any, provided by the Funds transfer agent) for the Fund, to permit any of its officers or employees to serve without compensation as trustees or officers of the Fund if elected to such positions, and to assume the obligations herein set forth for the compensation herein provided. The Adviser shall, for all purposes herein provided, be deemed to be an independent contractor and, unless otherwise expressly provided or authorized, shall have no authority to act for nor represent the Fund in any way, nor otherwise be deemed an agent of the Fund.
2. For the services and facilities described in Section l, the Fund will pay to the Adviser, at the end of each calendar month, an investment management fee equal to the sum of a Fund-Level Fee and a Complex-Level Fee.
A. The Fund Level Fee shall be computed by applying the following annual rate to the average total daily net assets of the Fund:
Average Total Daily Net Assets (1) |
Rate | |||
Up to $500 million |
.7500 | % | ||
$500 to $1 billion |
.7250 | % | ||
$1 billion to $1.5 billion |
.7000 | % | ||
$1.5 billion to $2 billion |
.6750 | % | ||
$2 billion and over |
.6500 | % |
(1) |
Including net assets attributable to any Preferred Shares the Fund may issue and the principal amount of borrowings, if any. |
B. The Complex-Level Fee for the Fund shall be computed by applying the Complex-Level Fee Rate, expressed as a daily equivalent, to the average daily managed assets of the Fund. The Complex-Level Fee Rate shall be determined based upon the total daily net assets of all Eligible Funds, as defined below (with such daily net assets to include in the case of Eligible Funds whose advisory fees are calculated by reference to net assets that include net assets attributable to preferred stock issued by or borrowings by the Eligible Fund such leveraging net assets), pursuant to the annual fee schedule shown below in this section, with the following exclusions (as adjusted, Complex-Level Assets):
(i) in the case of Eligible Funds that invest in other Eligible Funds (Funds of Funds), that portion of the net assets of such Funds of Funds attributable to investments in such other Eligible Funds;
(ii) that portion of the net assets of each Eligible Fund comprising the daily Fund Asset Limit Amount (as defined below).
The Complex-Level Fee Rate shall be calculated in such a manner that it results in the effective rate at the specified Complex-Level Asset amounts shown in the following annual fee schedule:
Complex-Level Asset Breakpoint Level ($ million) |
Effective Rate
at Breakpoint Level (%) |
|||
55,000 |
0.2000 | |||
56,000 |
0.1996 | |||
57,000 |
0.1989 | |||
60,000 |
0.1961 | |||
63,000 |
0.1931 | |||
66,000 |
0.1900 | |||
71,000 |
0.1851 | |||
76,000 |
0.1806 | |||
80,000 |
0.1773 | |||
91,000 |
0.1691 | |||
125,000 |
0.1599 | |||
200,000 |
0.1505 | |||
250,000 |
0.1469 | |||
300,000 |
0.1445 |
C. Eligible Funds, for purposes of the Agreement, shall mean all Nuveen-branded closed-end and open-end registered investment companies organized in the United States. Any open-end or closed-end funds that subsequently become a Nuveen-branded fund because either (a) Nuveen Investments, Inc. or its affiliates acquire the investment adviser to such funds (or the advisers parent), or (b) Nuveen Investments, Inc. or its affiliates acquire the funds advisers rights under the management agreement for such fund (in either case, such acquisition an Acquisition and such fund an Acquired Fund), will be evaluated by both Nuveen management and the Nuveen Funds Board, on a case-by-case basis, as to
2
whether or not the assets of such Acquired Funds would be included in Complex-Level Assets and, if so, whether there would be a basis for any adjustments to the complex-level breakpoint schedule and/or its application.
D. The Fund Asset Limit Amount as of any calculation date shall for each Fund be equal to the lesser of (i) the Initial Fund Asset Limit Amount (defined below), and (ii) the Eligible Funds current net assets. The Initial Fund Asset Limit Amount for an Eligible Fund shall be determined as follows:
i. In the case of Nuveen-branded Funds that qualified as Eligible Funds on or prior to June 30, 2010, as well as Eligible Funds launched thereafter that are not Acquired Funds, the Initial Fund Asset Limit Amount shall be equal to zero, except to extent that such Fund may later participate in a subsequent Fund consolidation as described in (iii) below;
ii. In the case of Acquired Funds, the Initial Fund Asset Limit Amount is equal to the product of (i) 1 minus the Aggregate Eligible Asset Percentage (defined below), and (ii) an Acquired Funds net assets as of the effective date of such Funds Acquisition;
iii. In the event of a consolidation or merger of one or more Eligible Funds, the Initial Fund Asset Limit Amount of the combined fund will be equal to the sum of the Initial Fund Asset Limit Amounts of each individual Eligible Fund.
E. Following are additional definitions of terms used above:
i. Acquisition Assets: With respect to an Acquisition, the aggregate net assets as of the effective date of such Acquisition of all Acquired Funds.
ii. Aggregate Eligible Asset Amount: With respect to an Acquisition, that portion of the aggregate net assets of Acquired Funds as of the effective date of such Acquisition that is included in Complex-Level Assets. With respect to the series of First American Investment Funds, Inc. that became Acquired Funds as of December 31, 2010, the Aggregate Eligible Asset Amount is $2 billion.
iii. Aggregate Eligible Asset Percentage: The ratio of the Aggregate Eligible Asset Amount to Acquisition Assets.
F. For the month and year in which this Agreement becomes effective, or terminates, there shall be an appropriate proration on the basis of the number of days that the Agreement shall have been in effect during the month and year, respectively. The services of the Adviser to the Fund under this Agreement are not to be deemed exclusive, and the Adviser shall be free to render similar services or other services to others so long as its services hereunder are not impaired thereby.
3
3. The Adviser shall arrange for officers or employees of the Adviser to serve, without compensation from the Fund, as trustees, officers or agents of the Fund, if duly elected or appointed to such positions, and subject to their individual consent and to any limitations imposed by law.
4. Subject to applicable statutes and regulations, it is understood that officers, trustees, or agents of the Fund are, or may be, interested in the Adviser as officers, directors, agents, shareholders or otherwise, and that the officers, directors, shareholders and agents of the Adviser may be interested in the Fund otherwise than as trustees, officers or agents.
5. The Adviser shall not be liable for any loss sustained by reason of the purchase, sale or retention of any security, whether or not such purchase, sale or retention shall have been based upon the investigation and research made by any other individual, firm or corporation, if such recommendation shall have been selected with due care and in good faith, except loss resulting from willful misfeasance, bad faith, or gross negligence on the part of the Adviser in the performance of its obligations and duties, or by reason of its reckless disregard of its obligations and duties under this Agreement.
6. The Adviser currently manages other investment accounts and funds, including those with investment objectives similar to the Fund, and reserves the right to manage other such accounts and funds in the future. Securities considered as investments for the Fund may also be appropriate for other investment accounts and funds that may be managed by the Adviser. Subject to applicable laws and regulations, the Adviser will attempt to allocate equitably portfolio transactions among the portfolios of its other investment accounts and funds purchasing securities whenever decisions are made to purchase or sell securities by the Fund and one or more of such other accounts or funds simultaneously. In making such allocations, the main factors to be considered by the Adviser will be the respective investment objectives of the Fund and such other accounts and funds, the relative size of portfolio holdings of the same or comparable securities, the availability of cash for investment by the Fund and such other accounts and funds, the size of investment commitments generally held by the Fund and such accounts and funds, and the opinions of the persons responsible for recommending investments to the Fund and such other accounts and funds.
7. The Fund may use the name Nuveen or any other name derived from the name Nuveen only for so long as this agreement or any extension, renewal or amendment hereof remains in effect, including any similar agreement with any organization that shall remain affiliated with Nuveen and shall have succeeded to the business of the Adviser as investment adviser. At such time as this agreement or any extension, renewal or amendment hereof, or such other similar agreement shall no longer be in effect, the Fund will (by amendment of its agreement and declaration of trust if necessary) cease to use any name derived from the name Nuveen or otherwise connected with the Adviser or with any organization that shall have succeeded to the Advisers business as investment adviser.
8. This Agreement shall continue in effect until August l, 2015, unless and until terminated by either party as hereinafter provided, and shall continue in force from year to year thereafter, but only as long as such continuance is specifically approved, at least annually, in the manner required by the Investment Company Act of 1940.
This Agreement shall automatically terminate in the event of its assignment, and may be
4
terminated at any time without the payment of any penalty by the Fund or by the Adviser upon no less than sixty (60) days written notice to the other party. The Fund may effect termination by action of the Board of Trustees or by vote of a majority of the outstanding voting securities of the Fund, accompanied by appropriate notice.
This Agreement may be terminated, at any time, without the payment of any penalty, by the Board of Trustees of the Fund, or by vote of a majority of the outstanding voting securities of the Fund, in the event that it shall have been established by a court of competent jurisdiction that the Adviser, or any officer or director of the Adviser, has taken any action which results in a breach of the covenants of the Adviser set forth herein.
Termination of this Agreement shall not affect the right of the Adviser to receive payments on any unpaid balance of the compensation, described in Section 2, earned prior to such termination.
9. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule, or otherwise, the remainder shall not be thereby affected.
10. Any notice under this Agreement shall be in writing, addressed and delivered or mailed, postage prepaid, to the other party at such address as such other party may designate for receipt of such notice.
11. The Funds Declaration of Trust is on file with the Secretary of the Commonwealth of Massachusetts. This Agreement is executed on behalf of the Fund by the Funds officers as officers and not individually and the obligations imposed upon the Fund by this Agreement are not binding upon any of the Funds Trustees, officers or shareholders individually but are binding only upon the assets and property of the Fund.
5
12. This Agreement shall be construed in accordance with applicable federal law and (except as to Section 11 hereof which shall be construed in accordance with the laws of Massachusetts) the laws of the State of Illinois.
IN WITNESS WHEREOF, the Fund and the Adviser have caused this Agreement to be executed on the day and year above written.
NUVEEN CORE EQUITY ALPHA FUND |
||||
|
By: |
/s/ Kevin J. McCarthy |
||
Vice President |
Attest: |
/s/ Mark Winget |
NUVEEN FUND ADVISORS, LLC |
||||
|
By: |
/s/ Gifford R. Zimmerman |
||
Managing Director |
Attest: |
/s/ Mark Winget |
6
NUVEEN CLOSED-END FUNDS
RENEWAL OF INVESTMENT MANAGEMENT AGREEMENTS
This Agreement made this 24th day of July 2018 by and between the funds listed on Schedule A (the Nuveen Closed-End Funds), and Nuveen Fund Advisors, LLC, a Delaware limited liability company (the Adviser);
WHEREAS, the parties hereto are the contracting parties under each certain Investment Management Agreement (the Agreements) pursuant to which the Adviser furnishes investment management and other services to each Fund; and
WHEREAS, each Agreement terminates August 1, 2018 unless continued in the manner required by the Investment Company Act of 1940; and
WHEREAS, the Board of Directors/Trustees, at meetings held May 22-24, 2018, called for the purpose of reviewing each Agreement, have approved each Agreement and its continuance until August 1, 2019 in the manner required by the Investment Company Act of 1940.
NOW THEREFORE, in consideration of the mutual covenants contained in each Agreement the parties hereto do hereby continue each Agreement in effect until August 1, 2019 and ratify and confirm the Agreements in all respects.
On behalf of The Nuveen Closed-End Funds | ||
Listed on Schedule A |
By: |
/s/ Gifford R. Zimmerman |
|||
Vice President |
ATTEST: | ||
/s/ Virginia ONeal |
NUVEEN FUND ADVISORS, LLC | ||||
By: |
/s/ Kevin J. McCarthy |
|||
Senior Managing Director |
ATTEST: | ||
/s/ Virginia ONeal |
Schedule A
TICKER SYMBOLS | ||
Nuveen All Cap Energy MLP Opportunities Fund |
JMLP | |
Nuveen AMT-Free Municipal Credit Income Fund |
NVG | |
Nuveen AMT-Free Municipal Value Fund |
NUW | |
Nuveen AMT-Free Quality Municipal Income Fund |
NEA | |
Nuveen Arizona Quality Municipal Income Fund |
NAZ | |
Nuveen Build America Bond Fund |
NBB | |
Nuveen Build America Bond Opportunity Fund |
NBD | |
Nuveen California AMT-Free Quality Municipal Income Fund |
NKX | |
Nuveen California Municipal Value Fund 2 |
NCB | |
Nuveen California Municipal Value Fund, Inc. |
NCA | |
Nuveen California Quality Municipal Income Fund |
NAC | |
Nuveen California Select Tax-Free Income Portfolio |
NXC | |
Nuveen Connecticut Quality Municipal Income Fund |
NTC | |
Nuveen Core Equity Alpha Fund |
JCE | |
Nuveen Credit Opportunities 2022 Target Term Fund |
JCO | |
Nuveen Credit Strategies Income Fund |
JQC | |
Nuveen Diversified Dividend and Income Fund |
JDD | |
Nuveen Dow 30 SM Dynamic Overwrite Fund |
DIAX | |
Nuveen Energy MLP Total Return Fund |
JMF | |
Nuveen Enhanced Municipal Value Fund |
NEV | |
Nuveen Floating Rate Income Fund |
JFR | |
Nuveen Floating Rate Income Opportunity Fund |
JRO | |
Nuveen Georgia Quality Municipal Income Fund |
NKG | |
Nuveen Global High Income Fund |
JGH | |
Nuveen High Income 2020 Target Term Fund |
JHY | |
Nuveen High Income December 2018 Target Term Fund |
JHA | |
Nuveen High Income December 2019 Target Term Fund |
JHD | |
Nuveen High Income November 2021 Target Term Fund |
JHB | |
Nuveen Intermediate Duration Municipal Term Fund |
NID | |
Nuveen Intermediate Duration Quality Municipal Term Fund |
NIQ | |
Nuveen Maryland Quality Municipal Income Fund |
NMY | |
Nuveen Massachusetts Quality Municipal Income Fund |
NMT | |
Nuveen Michigan Quality Municipal Income Fund |
NUM | |
Nuveen Minnesota Quality Municipal Income Fund |
NMS | |
Nuveen Missouri Quality Municipal Income Fund |
NOM | |
Nuveen Mortgage Opportunity Term Fund 2 |
JMT | |
Nuveen Mortgage Opportunity Term Fund |
JLS | |
Nuveen Multi-Market Income Fund |
JMM | |
Nuveen Municipal 2021 Target Term Fund |
NHA | |
Nuveen Municipal Credit Income Fund |
NZF | |
Nuveen Municipal High Income Opportunity Fund |
NMZ | |
Nuveen Municipal Income Fund, Inc. |
NMI | |
Nuveen Municipal Value Fund, Inc. |
NUV | |
Nuveen NASDAQ 100 Dynamic Overwrite Fund |
QQQX | |
Nuveen New Jersey Municipal Value Fund |
NJV | |
Nuveen New Jersey Quality Municipal Income Fund |
NXJ | |
Nuveen New York AMT-Free Quality Municipal Income Fund |
NRK | |
Nuveen New York Municipal Value Fund 2 |
NYV | |
Nuveen New York Municipal Value Fund, Inc. |
NNY | |
Nuveen New York Quality Municipal Income Fund |
NAN | |
Nuveen New York Select Tax-Free Income Portfolio |
NXN |
TICKER SYMBOLS | ||
Nuveen North Carolina Quality Municipal Income Fund |
NNC | |
Nuveen Ohio Quality Municipal Income Fund |
NUO | |
Nuveen Pennsylvania Municipal Value Fund |
NPN | |
Nuveen Pennsylvania Quality Municipal Income Fund |
NQP | |
Nuveen Preferred and Income 2022 Term Fund |
JPT | |
Nuveen Preferred and Income Term Fund |
JPI | |
Nuveen Preferred & Income Opportunities Fund |
JPC | |
Nuveen Preferred & Income Securities Fund |
JPS | |
Nuveen Quality Municipal Income Fund |
NAD | |
Nuveen Real Asset Income and Growth Fund |
JRI | |
Nuveen Real Estate Income Fund |
JRS | |
Nuveen S&P 500 Buy-Write Income Fund |
BXMX | |
Nuveen S&P 500 Dynamic Overwrite Fund |
SPXX | |
Nuveen Select Maturities Municipal Fund |
NIM | |
Nuveen Select Tax-Free Income Portfolio 2 |
NXQ | |
Nuveen Select Tax-Free Income Portfolio 3 |
NXR | |
Nuveen Select Tax-Free Income Portfolio |
NXP | |
Nuveen Senior Income Fund |
NSL | |
Nuveen Short Duration Credit Opportunities Fund |
JSD | |
Nuveen Tax-Advantaged Dividend Growth Fund |
JTD | |
Nuveen Tax-Advantaged Total Return Strategy Fund |
JTA | |
Nuveen Texas Quality Municipal Income Fund |
NTX | |
Nuveen Virginia Quality Municipal Income Fund |
NPV |
DUE TO RENEW 8-1-2018:
Nuveen Credit Opportunities 2022 Target Term Fund JCO
Nuveen Municipal 2021 Target Term Fund, effective 1/26/16 NHA
Nuveen High Income December 2018 Target Term Fund effective 11-12-15 JHA
Nuveen High Income December 2019 Target Term Fund effective 5-10-16 JHD
RENEW in 2019:
JEMD, JEMX
INVESTMENT SUB-ADVISORY AGREEMENT
(Nuveen Core Equity Alpha Fund (JCE))
THIS AGREEMENT is effective as of this 1st day of October 2014 by and between Nuveen Fund Advisors, LLC, a Delaware limited liability company (the Adviser), and Nuveen Asset Management, LLC, a Delaware limited liability company (the Sub-Adviser).
WHEREAS, the Adviser acts as the investment adviser for the Nuveen Core Equity Alpha Fund (the Fund), pursuant to an investment advisory agreement between the Adviser and the Fund (the Advisory Agreement);
WHEREAS, the Adviser desires to retain the Sub-Adviser to furnish investment advisory services for the Fund, upon the terms and conditions hereafter set forth;
NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants contained herein, the parties agree as follows:
1. Appointment of Sub-Adviser . The Adviser desires to engage and hereby appoints the Sub-Adviser to provide certain sub-investment advisory services to the Fund for the period and on the terms set forth in this Agreement. The Sub-Adviser accepts the appointment and agrees to furnish the services described herein for the compensation set forth below.
2. Duties of Sub-Adviser .
The Sub-Adviser is hereby employed and authorized to conduct a continual program of investment, evaluation and, if appropriate, sale and reinvestment of the assets in the Fund. In connection therewith, the Sub-Adviser will (a) make investment decisions for the Fund; (b) place purchase and sale orders for portfolio transactions in the Fund; (c) employ professional portfolio managers and securities analysts to provide research services relating to the Fund; (d) employ qualified personnel to assist in the supervision of the Funds investment program and to monitor the level of risk incurred by the Fund in connection with its investment program; (e) provide input requested by the Adviser with respect to the possible forms and levels of leverage employed by the Fund, and help monitor the Funds compliance with leverage limits imposed under the 1940 Act; (f) provide assistance in connection with determining dividend and distribution levels for the Fund and preparing and reviewing dividend and distribution notices to shareholders; and (g) discuss with the Adviser, and take into account, tax issues arising in connection with management of the Funds portfolio. Subject to the supervision of the Funds Board of Directors (the Board) and the Adviser, the Sub-Adviser will manage the assets in the Fund in accordance with (a) the Funds investment objective(s), policies and restrictions, to the extent the Sub-Adviser has been notified of such objectives, policies and restrictions, (b) the Charter Documents (as such term is defined below) of the Fund, to the extent that they have been provided to the Sub-Adviser, and (c) applicable laws and regulations.
The Adviser has furnished to the Sub-Adviser the Funds compliance procedures pursuant to Rules 10f-3, 17a-7, and 17e-1 under the 1940 Act (collectively, the Compliance Procedures), the Articles of Incorporation or Declaration of Trust and Bylaws of the Fund, each as amended to date (the Charter Documents), and the Funds investment objective(s), policies
1
and restrictions. The Adviser agrees, on an ongoing basis, to provide to the Sub-Adviser, as promptly as practicable, copies of all amendments and supplements to the Compliance Procedures, all amendments to the Charter Documents and all revisions to the Funds investment objective(s), policies and restrictions.
3. Brokerage . In selecting brokers or dealers to execute transactions on behalf of the Fund, the Sub-Adviser will seek the best overall terms available. In assessing the best overall terms available for any transaction, the Sub-Adviser will consider factors it deems relevant, including, without limitation, the breadth of the market in the security, the price of the security, the financial condition and execution capability of the broker or dealer and the reasonableness of the commission, if any, for the specific transaction and on a continuing basis. In selecting brokers or dealers to execute a particular transaction, and in evaluating the best overall terms available, the Sub-Adviser is authorized to consider brokerage and research services (within the meaning of Section 28(e) of the Securities Exchange Act of 1934, as amended). The Sub-Adviser will not execute any portfolio transactions with a broker or dealer which is an affiliated person (as defined in the 1940 Act) of the Sub-Adviser or the Adviser, except pursuant to the any 17e-1 Policies and Procedures for affiliated brokerage transactions that have been approved by Board for such Fund. The Adviser will provide the Sub-Adviser with a list of brokers and dealers that are affiliated persons of the Adviser.
4. Proxy Voting . The Sub-Adviser shall vote all proxies with respect to securities held in the Fund in accordance with the Sub-Advisers proxy voting guidelines and procedures in effect from time to time. In the event material changes are made to such proxy voting guidelines, the Sub-Adviser agrees to provide the Adviser with a copy of the revised proxy voting guidelines. The Adviser agrees to instruct the Funds custodian to forward all proxy materials and related shareholder communications to the Sub-Adviser promptly upon receipt. The Sub-Adviser agrees to promptly inform the Adviser and any Fund of any conflict of interest of which the Sub-Adviser is aware that the Sub-Adviser has in voting proxies with respect to securities held in such Fund. The Sub-Adviser shall not be liable with regard to voting of proxies or other corporate actions if the proxy materials and related communications are not received in a timely manner.
5. Information Provided to the Adviser .
(a) The Sub-Adviser will keep the Adviser informed of developments materially affecting any Fund and will, on its own initiative, furnish the Adviser from time to time with whatever information the Sub-Adviser believes is appropriate for this purpose.
(b) The Sub-Adviser will confer with the Adviser as the Adviser may reasonably request regarding the investment and management of the Fund. The Sub-Adviser will not be required to advise the Adviser or act for the Adviser or any Fund in any legal proceedings, including bankruptcies or class actions, involving securities in any Fund or the issuers of the securities.
(c) The Sub-Adviser agrees to comply with all reporting requirements that the Board or the Adviser reasonably adopt and communicate to the Sub-Adviser in writing, including
2
reporting requirements related to performance of the Fund, brokerage practices, and proxy voting.
(d) The Sub-Adviser will monitor the pricing of portfolio securities, and events relating to the issuers of those securities and the markets in which the securities trade in the ordinary course of managing the portfolio securities of the Fund, and will notify the Adviser promptly of any issuer-specific or market events or other situations that occur that may materially impact the pricing of one or more securities in the Fund. In addition, upon the request of Adviser, the Sub-Adviser will assist the Adviser in evaluating the impact that such an event may have on the net asset value of the Fund and in determining a recommended fair value of the affected security or securities. Sub-Adviser shall not be liable for any valuation determined or adopted by the Fund, unless such determination is made based upon information provided by the Sub-Adviser that is materially incorrect or incomplete as a result of the Sub-Advisers gross negligence.
(e) The Sub-Adviser has provided the Adviser with a true and complete copy of its compliance policies and procedures that are reasonably designed to prevent violations of the federal securities laws (as such term is defined in Rule 38a-1 under the 1940 Act) and Rule 206(4)-7 under the Investment Advisers Act of 1940, as amended (the Advisers Act) (the Sub-Adviser Compliance Policies). The Sub-Advisers chief compliance officer (the Sub-Adviser CCO) shall provide to the Funds chief compliance officer (the Fund CCO) or his or her delegate, promptly (and in no event more than 10 business days) after the occurrence of the triggering event, the following:
(i) a report of any material changes to the Sub-Adviser Compliance Policies;
(ii) a report of any material compliance matters, as defined by Rule 38a-1 under the 1940 Act, that have occurred in connection with the Sub-Adviser Compliance Policies;
(iii) a copy of a summary of the Sub-Adviser CCOs report with respect to the annual review of the Sub-Adviser Compliance Policies pursuant to Rule 206(4)-7 under the Advisers Act; and
(iv) an annual (or more frequently as the Fund CCO may request) certification regarding the Sub-Advisers compliance with Rule 206(4)-7 under the Advisers Act and Section 38a-1 under the 1940 Act as well as the foregoing sub-paragraphs (i) - (iii).
(f) The Sub-Adviser will timely notify the Adviser of any material violations by the Sub-Adviser of the Funds investment policies or restrictions or any applicable law or regulation.
6. Standard of Care . The Sub-Adviser shall exercise its best judgment in rendering the services described in paragraphs 2, 3 and 4 above. The Sub-Adviser shall not be liable for any error of judgment or mistake of law or for any loss suffered by the Fund or the Adviser in connection with the matters to which this Agreement relates, except a loss resulting from willful misfeasance, bad faith or gross negligence on the Sub-Advisers part in the performance of its duties or from reckless disregard by the Sub-Adviser of its obligations and duties under this Agreement (each such act or omission shall be referred to as Disqualifying Conduct). Neither the Sub-Adviser nor its members, partners, officers, employees and agents shall be liable to the
3
Adviser, the Fund or its shareholders or any other person (a) for the acts, omissions, errors of judgment or mistakes of law of any other fiduciary or other person with respect to the Fund or (b) for any failure or delay in performance of the Sub-Advisers obligations under this Agreement arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including, without limitation, acts of civil or military authority, national emergencies, labor difficulties, fire, mechanical breakdowns, flood or catastrophe, acts of God, insurrection, war, riots or failure of the mails, transportation, communication or power supply.
The Sub-Adviser does not guarantee the future performance of the Fund or any specific level of performance, the success of any investment decision or strategy that the Sub-Adviser may use, or the success of the Sub-Advisers overall management of the Fund. The Adviser understands that investment decisions made for the Fund by the Sub-Adviser are subject to various market, currency, economic, political and business risks, and that those investment decisions will not always be profitable.
7. Compensation . In consideration of the services rendered pursuant to this Agreement, the Adviser will pay the Sub-Adviser on the fifth business day of each month a fee equal to 10.5263% of the fees (net of applicable breakpoints, waivers and reimbursements) paid by the Fund to the Adviser under the Advisory Agreement for the Fund. The fee for the period from the date of this Agreement to the end of the calendar month shall be prorated according to the proportion that such period bears to the full monthly period. Upon any termination of this Agreement before the end of a month, the fee for such part of that month shall be prorated according to the proportion that such period bears to the full monthly period and shall be payable upon the date of termination of this Agreement.
8. Expenses . The Sub-Adviser will bear all of its expenses in connection with the performance of its services under this Agreement. All other expenses to be incurred in the operation of the Fund will be borne by the Fund, except to the extent specifically assumed by the Adviser or Sub-Adviser. The expenses to be borne by the Fund include, by way of example, but not by way of limitation, (a) brokerage and commission expenses; (b) Federal, state, local and foreign taxes, including issue and transfer taxes incurred by or levied on the Fund; (c) interest charges on borrowings; (d) the Funds organizational and offering expenses; (e) fees and expenses of registering the Funds shares under the appropriate Federal securities laws and qualifying the Funds shares under applicable state securities laws; (f) fees and expenses of listing and maintaining the listing of the Funds shares on the principal securities exchanges where listed, or, if the Funds shares are not so listed, fees and expenses of listing and maintaining the quotation of the Funds shares on the principal securities market where traded; (g) expenses of printing and distributing reports to shareholders; (h) expenses of shareholders meetings and proxy solicitation; (i) charges and expenses of the Funds administrator, custodian and registrar, transfer agent and dividend disbursing agent; (j) compensation of the Funds officers, directors and employees that are not affiliated persons or interested persons (as defined in Section 2(a)(19) of the 1940 Act and the rules, regulations and releases relating thereto) of the Adviser or Sub-Adviser; (k) legal and auditing expenses; (l) cost of certificates representing shares of the Fund; (m) costs of stationery and supplies; (n) insurance expenses; and (o) association membership dues.
4
9. Services to Other Companies or Accounts . The Adviser understands that the Sub-Adviser now acts, will continue to act and may act in the future as investment adviser to fiduciary and other managed accounts and as investment adviser to other investment companies, and the Adviser has no objection to the Sub-Adviser so acting, provided that whenever the Fund and one or more other accounts or investment companies advised by the Sub-Adviser have available funds for investment, investments suitable and appropriate for each will be allocated in accordance with a methodology believed to be equitable to each entity. The Sub-Adviser agrees to similarly allocate opportunities to sell securities. The Adviser recognizes that, in some cases, this procedure may limit the size of the position that may be acquired or sold for the Fund. In addition, the Adviser understands that the persons employed by the Sub-Adviser to assist in the performance of the Sub-Advisers duties hereunder will not devote their full time to such service and nothing contained herein shall be deemed to limit or restrict the right of the Sub-Adviser or any affiliate of the Sub-Adviser to engage in and devote time and attention to other business or to render services of whatever kind or nature.
10. Books and Records . In compliance with the requirements of Rule 31a-3 under the 1940 Act, the Sub-Adviser hereby agrees that all records which it specifically maintains for the Fund are the property of the Fund and further agrees to surrender promptly to the Fund copies of any of such records upon the Funds or the Advisers request. The Sub-Adviser further agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the records relating to its activities hereunder required to be maintained by Rule 31a-1 under the 1940 Act and to preserve the records relating to its activities hereunder required by Rule 204-2 under the Advisers Act for the period specified in said Rule.
11. Term of Agreement . Unless sooner terminated, this Agreement shall continue in effect until August 1, 2015. Thereafter, this Agreement shall continue automatically for successive annual periods, provided such continuance is specifically approved at least annually by the Board of the Fund in the manner required by the 1940 Act. This Agreement is terminable, without penalty, on 60 days written notice (the date of termination may be less than 60 days after the written notice of termination so long as the duration of the notice period is agreed upon by the Adviser and Sub-Adviser) by the Adviser, by the Funds Board, by vote of a majority of the Funds outstanding voting securities, or by the Sub-Adviser, and will immediately terminate upon termination of the Advisory Agreement with respect to the Fund. This Agreement also will terminate automatically in the event of its assignment (as defined in the 1940 Act).
12. Trade Settlement at Termination . Termination will be without prejudice to the completion of any transaction already initiated. On, or after, the effective date of termination, the Sub-Adviser shall be entitled, without prior notice to the Adviser or the Fund, to direct the Funds custodian to retain and/or realize any assets of the Fund as may be required to settle transactions already initiated. Following the date of effective termination, any new transactions will only be executed by mutual agreement between the Adviser and the Sub-Adviser.
13. Indemnification . (a) The Adviser agrees to indemnify and hold harmless the Sub-Adviser and its members, partners, officers, employees, agents, successors and assigns (each a Sub-Adviser Indemnified Person) from and against any and all claims, losses, liabilities or damages (including reasonable attorneys fees and other related expenses) to which any Sub-Adviser Indemnified Person may become subject as a result of the Advisers material breach of
5
this Agreement or as a result of the Advisers willful misfeasance, bad faith, gross negligence or reckless disregard of its obligations and duties hereunder or violation of applicable law; provided , however , that no Sub-Adviser Indemnified Person shall be indemnified for any claim, loss, liability or damage that may be sustained as a result of the Sub-Advisers Disqualifying Conduct.
(b) The Sub-Adviser agrees to indemnify and hold harmless the Adviser and the Fund and their respective shareholders, members, partners, directors, officers, employees, agents, successors and assigns (each an Adviser Indemnified Person) from and against any and all claims, losses, liabilities or damages (including reasonable attorneys fees and other related expenses) to which any Adviser Indemnified Person may become subject as a result of the Sub-Advisers material breach of this Agreement or as a result of the Sub-Advisers willful misfeasance, bad faith, gross negligence or reckless disregard of its obligations and duties hereunder or violation of applicable law; provided , however , that no Adviser Indemnified Person shall be indemnified for any claim, loss, liability or damage that may be sustained as a result of the Advisers Disqualifying Conduct.
14. Delegation to Third Parties . Except where prohibited by applicable law or regulation, the Sub-Adviser may delegate or may employ a third party to perform any accounting, administrative, reporting and ancillary services required to enable the Sub-Adviser to perform its functions under this Agreement. Notwithstanding any other provision of the Agreement, the Sub-Adviser may provide information about the Adviser and any Fund to any such third party for the purposes of this paragraph, provided that the third party is subject to a confidentiality agreement that specifically prevents the misuse of any such information, including portfolio holdings. The Sub-Adviser will act in good faith and with due diligence in the selection, use and monitoring of third parties and shall be solely responsible for any loss, mistake, gross negligence or misconduct caused by such third party.
15. Disclosure . (a) Neither the Adviser, on its own behalf or on behalf of the Fund, or the Sub-Adviser shall disclose information of a confidential nature acquired in consequence of this Agreement, except for information that they may be entitled or bound to disclose by law, regulation or that is disclosed to their advisors where reasonably necessary for the performance of their professional services or, in the case of the Sub-Adviser, as permitted in accordance with Section 14 of this Agreement.
(b) Notwithstanding the provisions of Subsection 15(a), to the extent that any market counterparty with whom the Sub-Adviser deals requires information relating to the Fund (including, but not limited to, the identity of the Adviser or the Fund and market value of the Fund), the Sub-Adviser shall be permitted to disclose such information to the extent necessary to effect transactions on behalf of the Fund in accordance with the terms of this Agreement.
(c) Notwithstanding the provisions of Subsections 15(a) and 15(b), the Sub-Adviser acknowledges that the Adviser and the Fund intend to rely on Rule 17a-7, Rule 17a-10, Rule 10f-3, Rule 12d3-1 and Rule 17e-1 under the 1940 Act.
16. Instructions to Custodian . The Sub-Adviser shall have authority to issue to the Funds custodian such instructions as it may consider appropriate in connection with the
6
settlement of any transaction relating to the Fund that it has initiated. The Adviser shall ensure that the Funds custodian is obliged to comply with any instructions of the Sub-Adviser given in accordance with this Agreement. The Sub-Adviser will not be responsible for supervising the Funds custodian.
17. Representations and Warranties . (a) The Adviser represents and warrants to the Sub-Adviser that the Adviser:
(i) has full power and authority to appoint the Sub-Adviser to manage the Fund in accordance with the terms of this Agreement; and
(ii) this Agreement is valid and has been duly authorized by appropriate action of the Adviser, the Board of the Fund and its shareholders, does not violate any obligation by which the Adviser is bound, and when so executed and delivered, will be binding upon the Adviser in accordance with its terms subject to applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors rights generally and general principles of equity.
(b) The Sub-Adviser represents and warrants to the Adviser that the Sub-Adviser:
(i) is registered as an investment adviser under the Advisers Act and will continue to be so registered for so long as this Agreement remains in effect;
(ii) is not currently the subject of, and has not been the subject of during the last three (3) years, any enforcement action by a regulator, except as previously disclosed to the Adviser; and
(iii) maintains insurance coverage in an appropriate amount and shall upon request provide to the Adviser any information it may reasonably require concerning the amount of or scope of such insurance.
18. Miscellaneous .
(a) Notices . All notices provided for by this Agreement shall be in writing and shall be deemed given when received, against appropriate receipt, by the General Counsel of the Adviser or Sub-Adviser, as the case may be, or such other person as a party shall designate by notice to the other parties.
(b) Amendment . This Agreement may be amended at any time, but only by written agreement between the Adviser and the Sub-Adviser, which amendment must be approved by the Board of the Fund in the manner required by the 1940 Act.
(c) Entire Agreement . This Agreement constitutes the entire agreement among the parties hereto and supersedes any prior agreement among the parties relating to the subject matter hereof.
7
(d) Severability . If any provision of this Agreement will be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement will not be affected thereby.
(e) Headings . The paragraph headings of this Agreement are for convenience of reference and do not constitute a part hereof.
(f) Governing Law . This Agreement shall be governed in accordance with the internal laws of the State of Illinois, without giving effect to principles of conflict of laws.
(g) Use of Sub-Advisers Name . The Adviser shall furnish to the Sub-Adviser all prospectuses, proxy statements, reports to shareholders, sales literature or other material prepared for distribution which refers to the Sub-Adviser by name prior to the use thereof. The Adviser shall not use or cause any Fund to use any such materials if the Sub-Adviser reasonably objects to such use. This paragraph shall survive the termination of this Agreement.
8
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective duly authorized representatives as of the date first written above.
Nuveen Fund Advisors, LLC |
||
By: |
/s/ Kevin J. McCarthy |
|
Name: |
Kevin J. McCarthy |
|
Title: |
Managing Director |
Nuveen Asset Management, LLC |
||
By: |
/s/ Gifford R. Zimmerman |
|
Name: |
Gifford R. Zimmerman |
|
Title: |
Managing Director |
9
INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT made as of this 30 th day of May 2017 by and between Nuveen Fund Advisors, LLC, a Delaware limited liability company and a federally registered investment adviser (Manager), and INTECH Investment Management LLC, a Delaware limited liability company and a federally registered investment adviser (INTECH or Sub-Adviser).
WHEREAS, Manager serves as the investment manager for the Nuveen Core Equity Alpha Fund (the Fund), a closed-end management investment company registered under the Investment Company Act of 1940, as amended (the 1940 Act) pursuant to an Investment Management Agreement between Manager and the Fund (as such agreement may be modified from time to time, the Management Agreement); and
WHEREAS, Manager desires to retain Sub-Adviser to furnish investment advisory services for a certain designated portion of the Funds investment portfolio, upon the terms and conditions hereafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto agree as follows:
1. |
Appointment . Manager hereby appoints Sub-Adviser to provide certain sub-investment advisory services to the Fund for the period and on the terms set forth in this Agreement. Sub-Adviser accepts such appointment and agrees to furnish the services herein set forth for the compensation herein provided. |
2. |
Services to be Performed . Subject always to the supervision of Funds Board of Trustees and the Manager, Sub-Adviser will furnish an investment program in respect of, make investment decisions for, and place all orders for the purchase and sale of securities for the portion of the Funds investment portfolio allocated by Manager to Sub-Adviser, all on behalf of the Fund and as described in the Funds initial registration statement on Form N-2 as declared effective by the Securities and Exchange Commission, consistent with the investment objectives and restrictions of the Fund described therein and as they may subsequently be changed by the Funds Board of Trustees and publicly described and as the Sub-Adviser is notified of such changes. In the performance of its duties, Sub-Adviser will satisfy its fiduciary duties to the Fund, will monitor the Funds investments in securities selected for the Fund by the Sub-Adviser hereunder, and will comply with the provisions of the Funds Declaration of Trust and By-laws, as amended from time to time, and the investment objectives, policies and restrictions of the Fund, to the extent the Sub-Adviser has been notified of such objectives, policies and restrictions. Manager will provide Sub-Adviser with current copies of the Funds Declaration of Trust, By-laws, prospectus and any amendments thereto, and any written objectives, policies, procedures or limitations not appearing therein as they may be relevant to Sub-Advisers performance under this Agreement. Sub-Adviser and Manager will each make its officers and employees available to the other from time to time at reasonable times to review investment policies of the Fund and to consult with each other regarding the investment affairs of the Fund. Sub-Adviser will report to the Board of Trustees and to Manager with respect to the implementation of such program. |
Manager shall arrange for the Funds custodian to forward to Sub-Adviser or Sub-Advisers designated proxy agent on a timely basis copies of all proxies and shareholder communications relating to securities in which assets of the Funds investment portfolio allocated by Manager to Sub-Adviser are invested. The Sub-Adviser will vote all such proxies delivered to Sub-Adviser or Sub-Advisers designated proxy agent consistent with the Sub-Advisers proxy voting guidelines, as in effect from time to time, and the best interests of the Fund. The Sub-Adviser will maintain appropriate records detailing its voting of proxies on behalf of the Fund and upon reasonable request will provide a report setting forth the proposals voted on and how the Funds shares were voted, including the name of the corresponding issuers.
Sub-Adviser is authorized to select the brokers or dealers that will execute the purchases and sales of portfolio securities for the Fund, and is directed to use its commercially reasonable efforts to obtain best execution, which includes most favorable net results and execution of the Funds orders, taking into account all appropriate factors, including price, dealer spread or commission, size and difficulty of the transaction and research and other services, if any, that may be provided. It is understood that the Sub-Adviser will not be deemed to have acted unlawfully, or to have breached a fiduciary duty to the Fund, or be in breach of any obligation owing to the Fund under this Agreement, or otherwise, solely by reason of its having caused the Fund to pay a member of a securities exchange, a broker or a dealer a commission for effecting a securities transaction for the Fund in excess of the amount of commission another member of an exchange, broker or dealer would have charged if the Sub-Adviser determined in good faith that the commission paid was reasonable in relation to the brokerage or research services provided by such member, broker or dealer, viewed in terms of that particular transaction or the Sub-Advisers overall responsibilities with respect to its accounts, including the Fund, as to which it exercises investment discretion. In addition, if in the judgment of the Sub-Adviser, the Fund would be benefited by supplemental services, the Sub-Adviser is authorized to pay spreads or commissions to brokers or dealers furnishing such services in excess of spreads or commissions that another broker or dealer may charge for the same transaction, provided that the Sub-Adviser determined in good faith that the commission or spread paid was reasonable in relation to the services provided. The Sub-Adviser will properly communicate to the officers and trustees of the Fund such information relating to transactions for the Fund as they may reasonably request. In no instance will portfolio securities be purchased from or sold to the Manager, Sub-Adviser or any affiliated person of the Fund, Manager, or Sub-Adviser, except as may be permitted under the 1940 Act.
Sub-Adviser further agrees that, subject to the provisions of Section 9 hereof, it:
a) |
will use the same degree of skill and care in providing such services as it uses in providing services to fiduciary accounts for which it has investment responsibilities; |
b) |
will conform to all applicable Rules and Regulations of the Securities and Exchange Commission in all material respects and in addition will conduct its activities under this Agreement in accordance with any applicable regulations of any governmental authority pertaining to its investment advisory activities; |
2
c) |
will report regularly to Manager and to the Board of Trustees of the Fund and will make appropriate persons available for the purpose of reviewing with representatives of Manager and the Board of Trustees on a regular basis at reasonable times the management of the Fund, including, without limitation, review of the general investment strategies of the Fund with respect to the portion of the Funds portfolio allocated to the Sub-Adviser, the performance of the Funds investment portfolio allocated to the Sub-Adviser in relation to standard industry indices and general conditions affecting the marketplace and will provide various other reports from time to time as reasonably requested by Manager; |
d) |
will prepare such books and records with respect to the Funds securities transactions for the portion of the Funds investment portfolio allocated to the Sub-Adviser as reasonably requested by the Manager and will furnish Manager and Funds Board of Trustees such periodic and special reports as the Board or Manager may reasonably request. |
e) |
The Sub-Adviser is prohibited from consulting with any other sub-adviser of the Fund or any other sub-adviser to a fund under common control with the Fund concerning transactions of the Fund in securities or other assets. |
3. |
Representations of Manager . Manager hereby represents that it: |
a) |
is registered as an investment adviser under the 1940 Act and will continue to be so registered for so long as this Agreement remains in effect; |
b) |
is not prohibited by the 1940 Act or the Advisers Act from performing investment advisory services to the Fund; |
c) |
has met, and will continue to meet for so long as this Agreement remains in effect, any applicable federal or state requirements, or the applicable requirements of any regulatory or industry self-regulatory agency, or the applicable licensing requirements for the use of any trademarks necessary to be met in order to perform investment advisory services for the Fund; and |
d) |
will immediately notify the Sub-Adviser of the occurrence of any event that would disqualify the Manager from serving as an investment adviser of an investment company pursuant to Section 9 (a) of the 1940 Act or otherwise. |
4. |
Representations of Sub-Adviser . Sub-Adviser hereby represents that it: |
a) |
is registered as an investment adviser under the Advisers Act and will continue to be so registered for so long as this Agreement remains in effect; |
b) |
is not prohibited by the 1940 Act or the Advisers Act from performing investment advisory services to the Fund; |
c) |
has met, and will continue to meet for so long as this Agreement remains in effect, any applicable federal or state requirements, or the applicable requirements of any regulatory |
3
or industry self-regulatory agency necessary to be met in order to perform investment advisory services for the Fund; and |
d) |
will immediately notify the Manager of the occurrence of any event that would disqualify the Sub-Adviser from serving as an investment adviser of an investment company pursuant to Section 9 (a) of the 1940 Act or otherwise. |
5. |
Expenses . During the term of this Agreement, Sub-Adviser will pay all expenses incurred by it in connection with its activities under this Agreement other than the cost of securities (including brokerage commissions and other related expenses) purchased for the Fund. |
6. |
Compensation . For the services provided and the expenses assumed pursuant to this Agreement, Manager will pay the Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation therefor, a portfolio management fee calculated based on the Sub-Advisers allocation of Fund net assets (including net assets attributable to Fund Preferred Shares and the principal amount of any borrowings, if any) in accordance with the following schedule: |
Daily Net Assets | Sub-Advisers Annual Fee Rate | |
Up to $100 million |
0.400% | |
$100 million to $250 million |
0.325% | |
$250 million to $500 million |
0.275% | |
$500 million to $1 billion |
0.250% | |
$1 billion and over |
0.200% |
The portfolio management fee shall accrue on each calendar day, and shall be payable monthly on the first business day of the next succeeding calendar month. The daily fee accrual shall be computed by multiplying the fraction of one divided by the number of days in the calendar year by the applicable annual rate of fee, and multiplying this product by the net assets of the Fund allocated to the Sub-Advisor, determined in the manner established by the Funds Board of Trustees, as of the close of business on the last preceding business day on which the Funds net asset value was determined.
For the month and year in which this Agreement becomes effective or terminates, there shall be an appropriate proration on the basis of the number of days that the Agreement is in effect during the month and year, respectively.
Manager shall not agree to amend the financial terms of the Expense Reimbursement Agreement or the Management Agreement to the detriment of the Sub-Adviser by operation of this Section 6 without the express written consent of the Sub-Adviser.
7. |
Investment Restrictions . During the term of this Agreement, the Sub-Adviser will not invest in common stock issued by Nuveen Investments, Inc., CUSIP 67090F106. |
8. |
Services to Others . Manager understands, and has advised Funds Board of Trustees, that Sub-Adviser now acts, or may in the future act, as an investment adviser to other investment portfolios including investment companies, provided that whenever the Fund and one or more other investment advisory clients of Sub-Adviser have available funds for investment, |
4
investments suitable and appropriate for each will be allocated in a manner believed by Sub-Adviser to be equitable to each. Manager recognizes, and has advised Funds Board of Trustees, that in some cases this procedure may adversely affect the size of the position that the Fund may obtain in a particular security. It is further agreed that, on occasions when the Sub-Adviser deems the purchase or sale of a security to be in the best interests of the Fund as well as other accounts, it may, to the extent permitted by applicable law, but will not be obligated to, aggregate the securities to be so sold or purchased for the Fund with those to be sold or purchased for other accounts in order to obtain favorable execution and lower brokerage commissions. In addition, Manager understands, and has advised Funds Board of Trustees, that the persons employed by Sub-Adviser to assist in Sub-Advisers duties under this Agreement will not devote their full such efforts and service to the Fund. It is also agreed that the Sub-Adviser may use any supplemental research obtained for the benefit of the Fund in providing investment advice to its other investment advisory accounts or for managing its own accounts. INTECH shall be subject to a written code of ethics adopted by it pursuant to Rule 17j-1 of the 1940 Act, and shall not be subject to any other code of ethics, including the Managers code of ethics, unless specifically adopted by INTECH. |
9. |
Limitation of Liability . The Sub-Adviser shall not be liable for, and Manager will not take any action against the Sub-Adviser to hold Sub-Adviser liable for, any error of judgment or mistake of law or for any loss suffered by the Fund (including, without limitation, by reason of the purchase, sale or retention of any security) in connection with the performance of the Sub-Advisers duties under this Agreement, except for a loss resulting from willful misfeasance, bad faith or gross negligence on the part of the Sub-Adviser in the performance of its duties under this Agreement, or by reason of its reckless disregard of its obligations and duties under this Agreement. |
10. |
Term; Termination; Amendment . This Agreement shall become effective with respect to the Fund on the same date that it is approved by a vote of a majority of the outstanding voting securities of the Fund in accordance with the requirements of the 1940 Act, and shall remain in full force until August 1, 2018 unless sooner terminated as hereinafter provided. This Agreement shall continue in force from year to year thereafter with respect to the Fund, but only as long as such continuance is specifically approved for the Fund at least annually in the manner required by the 1940 Act and the rules and regulations thereunder; provided, however, that if the continuation of this Agreement is not approved for the Fund, the Sub-Adviser may continue to serve in such capacity for the Fund in the manner and to the extent permitted by the 1940 Act and the rules and regulations thereunder. |
This Agreement shall automatically terminate in the event of its assignment and may be terminated at any time without the payment of any penalty by the Manager on no less than sixty (60) days written notice to the Sub-Adviser. This Agreement may be terminated at any time without the payment of any penalty by the Sub-Adviser on no less than sixty (60) days written notice to the Manager. This Agreement may also be terminated by the Fund with respect to the Fund by action of the Board of Trustees or by a vote of a majority of the outstanding voting securities of such Fund on no less than sixty (60) days written notice to the Sub-Adviser by the Fund.
5
This Agreement may be terminated with respect to the Fund at any time without the payment of any penalty by the Manager, the Board of Trustees or by vote of a majority of the outstanding voting securities of the Fund in the event that it shall have been established by a court of competent jurisdiction that the Sub-Adviser or any officer or director of the Sub-Adviser has taken any action that results in a breach of the representations of the Sub-Adviser set forth herein.
The terms assignment and vote of a majority of the outstanding voting securities shall have the meanings set forth in the 1940 Act and the rules and regulations thereunder.
Termination of this Agreement shall not affect the right of the Sub-Adviser to receive payments on any unpaid balance of the compensation described in Section 6 earned prior to the effective date of such termination. This Agreement shall automatically terminate in the event the Management Agreement between the Manager and the Fund is terminated, assigned or not renewed.
11. |
INTECH Name . Manager shall furnish to Sub-Adviser all prospectuses, proxy statements, reports to shareholders, sales literature or other material prepared for distribution which refers to the Sub-Adviser by name prior to the use thereof. Manager shall not use any such materials if the Sub-Adviser reasonably objects to such use. This paragraph shall survive the termination of this Agreement. |
12. |
Notice . Any notice under this Agreement shall be in writing, addressed and delivered or mailed, postage prepaid, to the other party |
If to the Manager: | If to the Sub-Adviser: | |
Nuveen Fund Advisors, LLC | INTECH Investment Management LLC | |
333 West Wacker Drive | 525 Okeechobee Boulevard, Suite 1800 | |
Chicago, Illinois 60606 | West Palm Beach, Florida 33401 | |
Attention: General Counsel | Attention: General Counsel |
or such address as each such party may designate for the receipt of such notice.
13. |
Limitations on Liability . All parties hereto are expressly put on notice of the Funds Agreement and Declaration of Trust and all amendments thereto, a copy of which is on file with the Secretary of the Commonwealth of Massachusetts, and the limitation of shareholder and trustee liability contained therein. The obligations of the Fund entered in the name or on behalf thereof by any of the Trustees, representatives or agents are made not individually but only in such capacities and are not binding upon any of the Trustees, officers, or shareholders of the Fund individually but are binding upon only the assets and property of the Fund, and persons dealing with the Fund must look solely to the assets of the Fund and those assets belonging to the subject Fund, for the enforcement of any claims. |
14. |
Miscellaneous . The captions in this Agreement are included for convenience of reference only and in no way define or delimit any of the provisions hereof or otherwise affect their |
6
construction or effect. If any provision of this Agreement is held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement will not be affected thereby. This Agreement will be binding upon and shall inure to the benefit of the parties hereto and their respective successors. |
15. |
Applicable Law . This Agreement shall be construed in accordance with applicable federal law and (except as to Section 9 hereof which shall be construed in accordance with the laws of the Commonwealth of Massachusetts) the laws of the State of Illinois. |
IN WITNESS WHEREOF, the Manager and the Sub-Adviser have caused this Agreement to be executed as of the day and year first above written.
NUVEEN FUND ADVISORS, LLC |
By: | /s/ Gifford R. Zimmerman |
Name: | Gifford R. Zimmerman |
Title: | Managing Director | |
INTECH Investment Management LLC |
By: | /s/ Lance Campbell |
Name: | Lance Campbell |
Title: | Executive VP & Chief Financial |
Officer |
7
[FUND]
333 West Wacker Drive
Chicago, Illinois 60606
[ ], 2018
Nuveen Securities, LLC
333 West Wacker Drive
Chicago, Illinois 60606
Re: Distribution Agreement Relating to At-the-Market Offerings
Ladies and Gentlemen:
[FUND] is a Massachusetts business trust operating as a closed-end management investment company (hereinafter referred to as the Fund). The Fund has filed a registration statement on Form N-2 (File Nos. 333-XXXXXX and 811-XXXXX) (the Registration Statement) pursuant to the Investment Company Act of 1940, as amended, and the Securities Act of 1933, as amended, to register additional common shares of the Fund, which may be issued and sold from time to time through various specified transactions, including at-the-market (ATM) offerings.
You have informed us that Nuveen Securities, LLC is registered as a broker-dealer under the provisions of the Securities Exchange Act of 1934 and is a member in good standing of the Financial Industry Regulatory Authority, Inc. You have indicated your desire to act as distributor for the Funds common shares issued pursuant to the Registration Statement. We have been authorized by the Fund to execute and deliver this Agreement to you by a resolution of our Board of Trustees (the Trustees) adopted at a meeting of the Trustees, at which a majority of Trustees, including a majority of our Trustees who are not otherwise interested persons of our investment manager or its related organizations, were present and voted in favor of said resolution approving this Agreement.
1. APPOINTMENT OF DISTRIBUTOR. Upon the execution of this Agreement and in consideration of the agreements on your part herein expressed and upon the terms and conditions set forth herein, we hereby appoint you as the distributor for up to [XX] of the common shares of the Fund to be issued pursuant to the Registration Statement through ATM offerings (the Shares) and agree that we will issue such Shares as you may sell. You agree to use reasonable efforts to identify opportunities for the sale of Shares, but you are not obligated to sell any specific number of the Shares. The Shares will only be sold on such days as shall be agreed to by you and the Fund.
2. SELECTED DEALERS. You may enter into selected dealer agreements, on such terms and conditions as you determine are not inconsistent with this Agreement, with broker-dealers to act as your agent to effect the sale of the Shares. Such selected broker-dealers shall sell Shares only at market prices subject to a minimum price to be established each day by you and the Fund (see paragraph 3 below). This Agreement shall not be construed as authorizing any
dealer or other person to accept orders for sale on our behalf or to otherwise act as our agent for any purpose. You shall not be responsible for the acts of other dealers or agents except as and to the extent that they shall be acting for you or under your direction or authority.
3. SHARE PRICE. The price per Share shall be determined by reference to prevailing market prices through the National Market System. In no event shall the price be less than the current net asset value per share plus the per share amount of the commission to be paid to you (the Minimum Price). You shall suspend the sale of Shares if the per share price of the Shares is less than the Minimum Price.
4. SALES COMMISSION.
(a) You shall be entitled to receive a sales commission from the Fund of 1.0% of the gross sales price per Share of the Shares sold.
(b) You may pay to selected broker-dealers such selling agent commissions (not exceeding 80% of the total sales commission) (the ATM Sales Agent Commission) as you shall deem advisable, which shall be payable from the commissions payable to you under Section 4(a) above.
5. FURNISHING OF INFORMATION. We will furnish you with copies of the Registration Statement, and we warrant that the statements therein contained are true and correct as of the date of the Registration Statement, as it may be amended or supplemented from time to time. We will also furnish you with such other information that you may reasonably request for use in connection with the distribution of the Shares, including, at least annually, audited financial statements of our books and accounts certified by independent public accountants.
6. CONDUCT OF BUSINESS. Other than the currently effective Prospectus and Statement of Additional Information, you will not use any sales materials or statements except literature or advertising that conforms to the requirements of federal and state securities laws and regulations and that have been filed, where necessary, with the appropriate regulatory authorities. You will furnish us with copies of all material prior to their use and no such material shall be published if we shall reasonably and promptly object.
You shall comply with the applicable federal and state laws and regulations where our shares are offered for sale and conduct your affairs with us and with dealers, brokers or investors in accordance with the Conduct Rules of the Financial Industry Regulatory Authority, Inc.
7. OTHER ACTIVITIES. Your services pursuant to this Agreement shall not be deemed to be exclusive and you may render similar services and act as an underwriter, distributor, or dealer for other investment companies in the offering of their shares.
8. SUSPENSION OF SALES. We reserve the right at all times to suspend or limit the offering of the shares upon written notice to you and to reject any order in whole or in part.
2
9. PAYMENT OF EXPENSES.
(a) You shall bear all expenses incurred by you in connection with your duties and activities under this Agreement including the payment to selected dealers of any sales commissions for sales of the Funds Shares.
(b) The Fund shall bear all costs and expenses of the Fund, including expenses (including legal fees) pertaining to the preparation and filing of the Registration Statement and Prospectus and any amendment or supplement thereto, and expenses pertaining to the preparation, printing and distribution of any reports or communications to shareholders, including Prospectuses and Statements of Additional Information, annual and interim reports, or proxy materials.
10. TERMINATION. This Agreement (i) may be terminated by the Fund at any time without the payment of any penalty and (ii) may be terminated by you at any time without the payment of any penalty. This Agreement shall remain in full force and effect unless terminated pursuant to this provision or by the mutual agreement of the parties.
11. MISCELLANEOUS. This Agreement shall be subject to the laws of the State of Illinois and shall be interpreted and construed to further and promote the operation of the Fund as a closed-end management investment company.
12. STANDARD OF CARE. You shall be responsible for exercising reasonable care in carrying out the provisions of this Agreement.
13. DECLARATION OF TRUST AND LIMITATION OF LIABILITY. A copy of the Declaration of Trust of the Fund is on file with the Secretary of State of the Commonwealth of Massachusetts, and notice is hereby given that this Agreement is executed by an officer of the Fund on behalf of the Trustees, as trustees and not individually, and that the obligations of this Agreement with respect to the Fund shall be binding upon the assets and properties of the Fund only and shall not be binding upon the assets or properties of the Trustees, officers, employees, agents or shareholders of the Fund individually.
3
If the foregoing meets with your approval, please acknowledge your acceptance by signing each of the enclosed counterparts hereof and returning such counterparts to us, whereupon this shall constitute a binding agreement as of the date first above written.
Very truly yours,
[FUND]
By: |
|
|
Name: |
Gifford R. Zimmerman | |
Title: |
Vice President and Secretary |
Agreed to and Accepted:
NUVEEN SECURITIES, LLC
By: |
|
|
Name: |
Kevin J. McCarthy | |
Title: |
Senior Managing Director |
4
DEALER AGREEMENT
Nuveen Securities, LLC
333 West Wacker Drive
Chicago, Illinois 60606
[ ], 2018
[DEALER CONTACT INFORMATION]
RE: At-the-Market Offerings by [FUND]
Ladies and Gentlemen:
From time to time Nuveen Securities, LLC (the Manager , we or us ) will act as manager of registered at-the-market offerings by [FUND], a Massachusetts business trust (the Fund ), of the Funds common stock, par value $0.01 per share (the Common Stock ). In the case of such offerings, the Fund has agreed with the Manager to issue and sell through or to the Manager, as sales agent and/or principal, a certain number of shares of the Funds Common Stock.
We hereby agree to retain [DEALER] (the Dealer or you ) as a sub-placement agent with respect to such shares as we may specify (the Shares ) to be issued and sold by the Fund in such offerings of the Shares (the Offerings ), and you agree to act in such capacity, all upon, and subject to, the terms and conditions set forth below:
SECTION 1. Description of Offerings .
(a) The Shares are to be sold on a daily basis or otherwise as shall be agreed to by the Fund and the Manager on any day (each, an Offering Date ) that is a trading day for the exchange on which the Funds Shares are listed (the Stock Exchange ) (other than a day on which the Stock Exchange is scheduled to close prior to its regular weekday closing time). Promptly after the Fund and the Manager have determined the maximum amount of the Shares to be sold by the Manager for any Offering Date, the Manager shall advise the Dealer of such amount, which shall not in any event exceed the amount available for issuance under the currently effective Registration Statement (as defined below). Subject to the terms and conditions hereof, the Dealer shall use its reasonable efforts to sell all of the Shares designated in accordance with the plan of distribution set forth in the Prospectus Supplement (as defined below). The gross sales price of the Shares sold under this Section 1(a) shall be the market price at which the Dealer sells such Shares.
(b) Notwithstanding the foregoing, the Manager may instruct the Dealer by telephone (confirmed promptly by telecopy) not to sell the Shares if such sales cannot be effected at or above a price agreed to by the Fund and the Manager with respect to such Shares. In addition, the Manager may, upon notice to the Dealer by telephone (confirmed promptly by telecopy), suspend the offering of the Shares; provided, however, that such suspension or termination shall not affect or impair the parties respective obligations with respect to the Shares sold hereunder prior to the giving of such notice.
(c) The Dealer agrees not to make any sales of the Shares on behalf of the Manager pursuant to this Section 1, other than through transactions for which compliance with Rule 153 under the Securities Act will satisfy the prospectus delivery requirements of Section 5(b)(2) of the Securities Act.
(d) The compensation to the Dealer, as a sub-placement agent of the Manager for each sale of the Shares pursuant to this Section 1, shall be the Applicable Selling Agent Commission with respect to the Shares sold, multiplied by the Gross Sales Proceeds, as further described in the Addendum to this Agreement. The remaining proceeds, after further deduction for any transaction fees imposed by any governmental or self-regulatory organization in respect of such sales, shall constitute the net proceeds to the Manager for such Shares (the Net Proceeds ).
(e) The Dealer shall provide written confirmation to the Manager following the close of trading on the Stock Exchange on each Offering Date setting forth for each sale the number of Shares sold, the time of sale, the Gross Sales Price per Share, the Net Proceeds, and the compensation payable by the Manager to the Dealer with respect to such sales.
(f) Settlement for sales of the Shares pursuant to this Section 1 will occur on the second business day following the date on which such sales are made (each such day, a Settlement Date ). On each Settlement Date, the Shares sold through the Dealer for settlement on such date shall be delivered by the Manager to the Dealer against payment of the Net Proceeds for the sale of such Shares. Settlement for all such Shares shall be effected by free delivery of the Shares to the Dealers account at The Depository Trust Company in return for payments in same day funds delivered to the account designated by the Manager. If the Manager shall default on its obligation to deliver the Shares on any Settlement Date, the Manager shall (A) hold the Dealer harmless against any loss, claim or damage arising from or as a result of such default by the Manager and (B) pay the Dealer any commission to which it would otherwise be entitled absent such default. If the Dealer breaches this Agreement by failing to deliver proceeds on any Settlement Date for the Shares delivered by the Manager, the Dealer will pay the Manager interest based on the effective overnight Federal Funds rate.
(g) In connection with this Agreement and the Offering, the Manager shall provide to the Dealer such certificates and other documents as the Dealer may reasonably request no more than once per calendar quarter relating to authorization, capacity, enforceability and compliance matters.
SECTION 2. Representations and Warranties by the Manager . The Manager represents, warrants to and agrees with the Dealer, as of the date hereof and as of each Offering Date and Settlement Date, that:
(a) A registration statement on Form N-2 (File Nos. 333-XXXXXX and 811-XXXXX) (the Registration Statement ) (i) has been prepared by the Fund in conformity with the requirements of the Securities Act of 1933, as amended, and the rules and regulations thereunder (collectively called the Securities Act ), the Investment Company Act of 1940, as amended, and the rules and regulations thereunder (collectively called the 1940 Act ); (ii) has been filed with the Securities and Exchange Commission (the Commission ) under the Securities Act and the 1940 Act; and (iii) heretofore became, and is, effective; the registration statement sets forth the terms of the offering, sale and plan of distribution of the Shares and contains additional information concerning the Fund and its business; no stop order of the Commission preventing or suspending the use of any Basic Prospectus (as defined below), the Prospectus Supplement (as defined below) or the Prospectus (as defined below), or the effectiveness of the Registration Statement, has been issued, and no proceedings for such purpose have been instituted or, to the Funds knowledge after due inquiry, are contemplated by the Commission. Except where the context otherwise requires, Registration Statement , as used herein, means, collectively, the various parts of the registration statement, as amended at the time of effectiveness for purposes of Section 11 of the Securities Act, as such section applies to the Manager, including (1) all documents filed as a part thereof or incorporated or deemed to be incorporated by reference therein, and (2) any information contained or incorporated by reference in a prospectus filed with the Commission pursuant to Rule 497(c) and/or Rule 497(h) under the Securities Act, to the extent such information is deemed to be part of the registration statement at the Effective Time, Basic Prospectus , as used herein, means the prospectus filed as part of the Registration Statement, including the related statement of additional information, together with any amendments or supplements thereto as of the date of the Agreement. Except where the context otherwise requires, Prospectus Supplement , as used herein, means the final prospectus supplement, including the related statement of additional information, relating to the Shares, filed by the Fund with the Commission pursuant to Rule 497(c) and/or Rule 497(h) under the Securities Act on or before the second business day after the date hereof (or such earlier time as may be required under the Securities Act), in the form furnished by the Fund to the Manager in connection with the offering of the Shares. Except where the context otherwise requires, Prospectus , as used herein, means the Prospectus Supplement together with the Basic Prospectus attached to or used with the Prospectus Supplement. Any reference herein to the registration statement, the Registration Statement, any Basic Prospectus, the Prospectus Supplement or the Prospectus shall be deemed to refer to and include the documents, if any, incorporated by reference, or deemed to be incorporated by reference, therein (the Incorporated Documents ), including, unless the context otherwise requires, the documents, if any, filed as exhibits to such Incorporated Documents.
(b) The Fund is duly registered under the 1940 Act as a closed-end management investment company. A notification of registration of the Fund as an investment company under the 1940 Act on Form N-8A (the 1940 Act
2
Notification ) has been prepared by the Fund in conformity with the 1940 Act and has been filed with the Commission and, at the time of filing thereof and at the time of filing any amendment or supplement thereto, conformed in all material respects with all applicable provisions of the 1940 Act. The Fund has not received any notice from the Commission pursuant to Section 8(e) of the 1940 Act with respect to the 1940 Act Notification or the Registration Statement (or any amendment or supplement to either of them). No person is serving or acting as an officer, director or investment adviser of the Fund except in accordance with the provisions of the 1940 Act and the Investment Advisers Act of 1940, as amended and the rules and regulations thereunder.
(c) The Registration Statement, the 1940 Act Notification and the Prospectus as from time to time amended or supplemented each complied when it became effective or was filed, complies as of the date hereof and, as amended or supplemented, will comply, at the time of purchase, each additional time of purchase, if any, and at all times during which a prospectus is required by the Securities Act to be delivered in connection with any sale of Shares, in all material respects, with the requirements of the Securities Act and the 1940 Act; the Registration Statement did not, as of the Effective Time, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; the 1940 Act Notification did not, as of the Effective Time, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; at no time during the period that begins on the earlier of the date of the Basic Prospectus and the date such Basic Prospectus was filed with the Commission and ends at the later of the time of purchase, the latest additional time of purchase, if any, and the end of the period during which a prospectus is required by the Securities Act to be delivered in connection with any sale of Shares did or will the Prospectus, as from time to time amended or supplemented, include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(d) The financial statements incorporated by reference in the Registration Statement or the Prospectus, together with the related notes and schedules, present fairly the financial position of the Company as of the dates indicated and the results of operations, cash flows and changes in stockholders equity of the Company for the periods specified and have been prepared in compliance with the requirements of the Securities Act, the 1940 Act and the Exchange Act and in conformity with U.S. generally accepted accounting principles applied on a consistent basis during the periods involved; the other financial and statistical data contained or incorporated by reference in the Registration Statement or the Prospectus are accurately and fairly presented and prepared on a basis consistent with the financial statements and books and records of the Company; there are no financial statements that are required to be included or incorporated by reference in the Registration Statement, any Basic Prospectus or the Prospectus that are not included or incorporated by reference as required; the Company does not have any material liabilities or obligations, direct or contingent (including any off-balance sheet obligations), not described in the Registration Statement (excluding the exhibits thereto).
(e) As of the date of this Agreement, the Fund has an authorized and outstanding capitalization as set forth in the sections of the Registration Statement, the Basic Prospectus and the Prospectus entitled The Fund and Description of Shares, and, with respect to any issuance and sale under this Agreement, the Fund shall have as of the date of the most recent amendment or supplement to the Registration Statement or Prospectus, an authorized and outstanding capitalization as set forth in the sections of the Registration Statement and the Prospectus entitled The Fund and Description of Shares (and any similar sections or information, if any, contained in the Final Term Sheet, if any) (subject, in each case, to the issuance of shares of Common Stock upon exercise of any stock options and warrants disclosed as outstanding in the Registration Statement (excluding the exhibits thereto), each Basic Prospectus and the Prospectus, and to the grant of options under any existing stock option plans described in the Registration Statement (excluding the exhibits thereto), each Basic Prospectus and the Prospectus); all of the issued and outstanding shares of capital stock, including the Common Stock, of the Fund have been duly authorized and validly issued and are fully paid and non-assessable, have been issued in compliance with all applicable securities laws and were not issued in violation of any preemptive right, resale right, right of first refusal or similar right; the Shares are duly listed, and admitted and authorized for trading, subject to official notice of issuance, on the Stock Exchange.
(f) The Fund has been duly organized and is validly existing as a business trust in good standing under the laws of the Commonwealth of Massachusetts, with full power and authority to own, lease and operate and conduct its business as described in the Registration Statement, the Basic Prospectuses, the Prospectus and the Final
3
Term Sheet, if any, and to issue, sell and deliver the Shares as contemplated herein. The Fund is duly qualified to do business as a foreign entity and is in good standing in each jurisdiction where the ownership or leasing of its properties or the conduct of its business requires such qualification, except where the failure to be so qualified and in good standing would not, individually or in the aggregate, (i) have a material adverse effect on the business, properties, financial condition, results of operations or prospects of the Fund (a Material Adverse Effect ), (ii) prevent or materially interfere with consummation of the transactions contemplated hereby or (iii) result in the delisting of shares of Common Stock from the Stock Exchange (the occurrence of any such effect or any such prevention or interference or any such result described in the foregoing clauses (i), (ii) and (iii) being herein referred to as a Material Adverse Effect ).
(g) The Shares have been duly and validly authorized and, when issued and delivered against payment therefor as provided herein, will be duly and validly issued, fully paid and non-assessable and free of statutory and contractual preemptive rights, resale rights, rights of first refusal and similar rights; the Shares, when issued and delivered against payment therefor as provided herein, will be free of any restriction upon the voting or transfer thereof pursuant to the Funds charter or bylaws or any agreement or other instrument to which the Fund is a party. The capital stock of the Fund, including the Shares, conforms in all material respects to each description thereof, if any, contained or incorporated by reference in the Registration Statement, any Basic Prospectus, the Prospectus or the Final Term Sheet, if any; and the certificates for the Shares, if any, are in due and proper form. The Fund is in compliance with the rules of the Stock Exchange, including, without limitation, the requirements for continued listing of the Common Stock on the Stock Exchange and the Fund has not received any notice from the Stock Exchange regarding the delisting of the Common Stock from the Stock Exchange.
(h) The Manager has full corporate power and authority to enter into this Agreement and the transactions contemplated hereby. This Agreement has been duly authorized, executed and delivered by the Manager. This Agreement constitutes a valid and binding agreement of the Manager and is enforceable against the Manager in accordance with its terms, except as the enforceability hereof and thereof may be limited by applicable bankruptcy, insolvency, reorganization and similar laws affecting creditors rights generally and moratorium laws in effect from time to time and by equitable principles restricting the availability of equitable remedies.
(i) No approval, authorization, consent or order of or filing with any federal, state, local or foreign governmental or regulatory commission, board, body, authority or agency, or of or with any self-regulatory organization or other non-governmental regulatory authority (including, without limitation, the Stock Exchange), or approval of the stockholders of the Fund that has not already been obtained, is required in connection with the issuance and sale of the Shares or the consummation by the Fund of the transactions contemplated hereby, other than (i) registration of the Shares under the Securities Act and the 1940 Act, which has been effected, (ii) any necessary qualification under the securities or blue sky laws of the various jurisdictions in which the Shares are being offered by the Manager or (iii) under the Conduct Rules of the Financial Industry Regulatory Authority, Inc. (FINRA).
SECTION 3. Additional Covenants .
(a) The Dealer hereby confirms that it undertakes to comply with all applicable sections of the regulations of FINRAs Rules of Fair Practice in connection with the Offerings.
(b) The Dealer agrees that it will not use, authorize use of, refer to, or participate in the planning for use of any written communication (as defined in Rule 405 under the Securities Act) concerning any Offering, other than any Preliminary Prospectus or the Prospectus.
(c) The Manager shall not be under any obligation to the Dealer except for obligations assumed hereunder or in writing by the Manager in connection with any Offering. Nothing contained herein or in any communication in writing from us shall constitute the Manager and the Dealer an association or partners with one another. If such parties should be deemed to constitute a partnership for Federal income tax purposes, then the Dealer elects to be excluded from the application of Subchapter K, Chapter 1, Subtitle A of the Internal Revenue Code of 1986 and agrees not to take any position inconsistent with that election. The Dealer authorizes the Manager, in its discretion, to execute and file on its behalf such evidence of that election as may be required by the Internal Revenue Service. In connection with any Offering, each party shall be liable for its proportionate amount of any tax, claim, demand or liability that may be asserted against it alone, based upon the claim that either of them constitute
4
an association, an unincorporated business or other entity, including, in each case, its proportionate amount of any expense incurred in defending against any such tax, claim, demand or liability.
(d) The parties acknowledge and agree that all share related numbers contained in this Agreement shall be adjusted to take into account any stock split effected with respect to the Shares.
SECTION 4. Indemnification and Contribution .
(a) The Manager agrees to indemnify, defend and hold harmless the Dealer, its partners, directors and officers, and any person who controls the Dealer within the meaning of Section 15 of the Securities Act or Section 20 of the Securities Exchange Act of 1934, as amended (together with and the rules and regulations thereunder, the Exchange Act ), and the successors and assigns of all of the foregoing persons, from and against any loss, damage, expense, liability or claim (including the reasonable cost of investigation) which the Dealer or any such person may incur under the Securities Act, the 1940 Act, the Exchange Act, the common law or otherwise, insofar as such loss, damage, expense, liability or claim arises out of or is based upon (i) any breach of any representation, warranty, covenant or agreement of the Manager contained in this Agreement, (ii) any violation by the Manager of any law, rule or regulation (including any rule of any self-regulatory organization), or (iii) any untrue statement of a material fact appearing in the Registration Statement or Prospectus or omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, except to the extent such statements were provided in writing by the Dealer for inclusion in the Registration Statement or Prospectus.
(b) The Dealer agrees to indemnify, defend and hold harmless the Manager, the Fund, their partners, directors and officers, and any person who controls the Manager or the Fund within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, and the successors and assigns of all of the foregoing persons, from and against any loss, damage, expense, liability or claim (including the reasonable cost of investigation) which the Manager or any such person may incur under the Securities Act, the 1940 Act, the Exchange Act, the common law or otherwise, insofar as such loss, damage, expense, liability or claim arises out of or is based upon (i) any breach of any representation, warranty, covenant or agreement of the Dealer contained in this Agreement or (ii) any violation by the Dealer of any law, rule or regulation (including any rule of any self-regulatory organization).
(c) An indemnified person under Section 4 of this Agreement (the Indemnified Party ) shall give written notice to the other party (the Indemnifying Party ) of any loss, damage, expense, liability or claim in respect of which the Indemnifying Party has a duty to indemnify such Indemnified Party under Section 4(a) or (b) of this Agreement (a Claim ), specifying in reasonable detail the nature of the loss, damage, expense, liability or claim for which indemnification is sought, except that any delay or failure so to notify such other party shall only relieve such other party of its obligations hereunder to the extent, if at all, that you are actually prejudiced by reason of such delay or failure.
(d) If a Claim results from any action, suit or proceeding brought or asserted against an Indemnified Party, the Indemnifying Party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses. The Indemnified Party shall have the right to employ separate counsel in such action, suit or proceeding and participate in such defense thereof, but the fees and expenses of such counsel shall be at the expense of the Indemnified Party unless (i) the Indemnifying Party has agreed in writing to pay such fees and expenses, (ii) the Indemnifying Party has failed within a reasonable time to assume the defense and employ counsel or (iii) the named parties to any such action, suit or proceeding (including any impleaded parties) include both such Indemnified Party and Indemnifying Party and such Indemnified Party shall have been advised by its counsel that representation of such Indemnified Party and Indemnifying Party by the same counsel would be inappropriate under applicable standards of professional conduct (whether or not such representation by the same counsel has been proposed) due to actual or potential differing interests between the Indemnifying Party and the Indemnified Party (in which case the Indemnifying Party shall not have the right to assume the defense of such action, suit or proceeding on behalf of such Indemnified Party). It is understood, however, that the Indemnifying Party shall, in connection with any one action, suit or proceeding or separate but substantially similar or related actions, suits or proceedings in the same jurisdiction arising out of the same general allegations or circumstances be liable for the reasonable fees and expenses of only one separate firm of attorneys (in addition to any local counsel) at any time for all such Indemnified Parties not having actual or potential differing interests with the Indemnifying Party or among themselves, which firm shall be designated in writing by an
5
authorized representative of such parties and that all such fees and expenses shall be reimbursed promptly as they are incurred. The Indemnifying Party shall not be liable for any settlement of any such action, suit or proceeding effected without its written consent, but if settled with such written consent or if there be a final judgment for the plaintiff in any such action, suit or proceeding, the Indemnifying Party agrees to indemnify and hold harmless any Indemnified Party from and against any loss, liability, damage or expense by reason by such settlement or judgment.
(e) With respect to any Claim not within Paragraph (d) of Section 4 hereof, the Indemnifying Party shall have 20 days from receipt of notice from the Indemnified Party of such Claim within which to respond thereto. If the Indemnifying Party does not respond within such twenty-day period, it shall be deemed to have accepted responsibility to make payment and shall have no further right to contest the validity of such Claim. If the Indemnifying Party notifies the Indemnified Party within such twenty-day period that it rejects such Claim in whole or in part, the Indemnified Party shall be free to pursue such remedies as may be available to the Indemnified Party under applicable law.
(f) If the indemnification provided for in this Section 4 is unavailable to an Indemnified Party or insufficient to hold an Indemnified Party harmless in respect of any losses, damages, expenses, liabilities or claims referred to therein, then each applicable Indemnifying Party shall contribute to the amount paid or payable by such Indemnified Party as a result of such losses, damages, expenses, liabilities or claims in such proportion as is appropriate to reflect (i) the relative benefits received by the Indemnified Party and its Affiliates (treated jointly as one person for this purpose), on the one hand, and the Indemnifying Party and its Affiliates, on the other hand, from the offering of the Shares; or (ii) if, but only if, the allocation provided for in clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) but also the relative fault of the Indemnified Party and its Affiliates (treated jointly as one person for this purpose), on the one hand, and of the Indemnifying Party and its Affiliates, on the other, in connection with any statements or omissions or other matters which resulted in such losses, damages, expenses, liabilities or claims, as well as any other relevant equitable considerations. The relative benefits received by the Indemnified Party and its Affiliates (treated jointly as one person for this purpose), on the one hand, and the Indemnifying Party and its Affiliates, on the other, shall be deemed to be in the same respective proportions as the total proceeds from the Offering received by each such party and its Affiliates bear to the aggregate public offering price of the Shares. The relative fault of the parties and their Affiliates shall be determined by reference to, among other things, whether the untrue statement or alleged untrue statement of a material fact or omission or alleged omission relates to information supplied by such party or its Affiliate, on one hand, or by the other party or its Affiliate on the other hand and the parties relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the losses, damages, expenses, liabilities and claims referred to in this subsection shall be deemed to include any legal or other fees or expenses reasonably incurred by such party in connection with investigating, preparing to defend or defending any Proceeding.
(g) The parties agree that it would not be just and equitable if contribution pursuant to this Section 4 were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in subsection (f) above. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
(h) The indemnity and contribution agreements contained in this Section 4 and the covenants, warranties and representations of the parties contained in this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the Dealer, its partners, directors or officers or any person (including each partner, officer or director of such person) who controls the Dealer within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, or by or on behalf of the Manager, its directors or officers or any person who controls the Manager within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, and shall survive any termination of this Agreement or the issuance and delivery of the Shares.
SECTION 5. Representations and Agreements to Survive Delivery . The representations, warranties, covenants and agreements of the parties contained in this Agreement, including, without limitation, the indemnity agreement contained in Section 4 hereof, shall remain operative and in full force and effect, regardless of (i) any investigation made by or on behalf of any party or any person controlling any party, or their directors or officers, (ii) acceptance of any Shares and payment therefor and (iii) any termination of this Agreement.
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SECTION 6. Termination .
(a) This Agreement shall continue in full force and effect until terminated by either party by five days written notice to the other; provided, that if this Agreement has become effective with respect to any Offering pursuant to this Agreement, this Agreement may not be terminated by you with respect to such Offering.
(b) This Agreement shall remain in full force and effect unless terminated pursuant to Section 6(a) above or otherwise by mutual agreement of the parties; provided that any such termination by mutual agreement shall in all cases be deemed to provide that Section 4 and Section 5 shall remain in full force and effect.
(c) Any termination of this Agreement shall be effective on the date specified in such notice of termination; provided that such termination shall not be effective until the close of business on the date of receipt of such notice by the Manager or the Dealer, as the case may be. If such termination shall occur prior to the Settlement Date for any sale of the Shares, such sale shall settle in accordance with the provisions of Section 1 of this Agreement.
SECTION 7. Notices . Except as otherwise herein provided, all statements, requests, notices and agreements under this Agreement shall be in writing and delivered by hand, overnight courier, mail or facsimile and, if to the Manager, it shall be sufficient in all respects if delivered or sent to:
Nuveen Securities, LLC
333 West Wacker Drive
Suite 3300
Chicago, Illinois 60606
Attn: Manager, Closed-End Products
with a copy for information purposes to:
333 West Wacker Drive
Suite 3300
Chicago, Illinois 60606
Attn: General Counsel
and if to the Dealer, it shall be sufficient in all respects if delivered or sent to:
[DEALER CONTACT INFORMATION]
Each party to this Agreement may change such address for notices by sending to the parties to this Agreement written notice of a new address for such purpose.
SECTION 8. Parties at Interest . The Agreement herein set forth has been and is made solely for the benefit of the Manager, the Fund, and the Dealer and to the extent provided in Section 4 of this Agreement the controlling persons, directors and officers referred to in such section, and their respective successors, assigns, heirs, personal representatives and executors and administrators. No other person, partnership, association or corporation (including a purchaser, as such purchaser, from the Manager) shall acquire or have any right under or by virtue of this Agreement.
SECTION 9. No Fiduciary Relationship . The Manager hereby acknowledges that the Dealer is acting solely as sub-sales agent in connection with the sale of the Shares and that the Dealer is acting pursuant to a contractual relationship created solely by this Agreement entered into on an arms-length basis, and in no event do the parties intend that the Dealer act or be responsible as a fiduciary to the Manager or the Fund, their respective management, stockholders or creditors, or any other person in connection with any activity that the Dealer may undertake or have undertaken in furtherance of the sale of the Shares, either before or after the date hereof.
SECTION 10. Entire Agreement . This Agreement constitutes the entire agreement and supersedes all other prior and contemporaneous agreements and undertakings, both written and oral, among the parties hereto with regard to the subject matter hereof.
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SECTION 11. Counterparts; Heading . This Agreement may be signed by the parties in one or more counterparts which together shall constitute one and the same agreement among the parties. The Section headings in this Agreement have been inserted as a matter of convenience of reference and are not a part of this Agreement.
SECTION 12. Law; Construction . This Agreement and any claim, counterclaim or dispute of any kind or nature whatsoever arising out of or in any way relating to this Agreement ( Claim ), directly or indirectly, shall be governed by, and construed in accordance with, the internal laws of the State of New York.
SECTION 13. Submission to Jurisdiction . Except as set forth below, no Claim may be commenced, prosecuted or continued in any court other than the courts of the State of New York located in the City and County of New York or in the United States District Court for the Southern District of New York, which courts shall have jurisdiction over the adjudication of such matters, and each of the Manager and the Dealer consents to the jurisdiction of such courts and personal service with respect thereto. Each of the Manager and the Dealer hereby consents to personal jurisdiction, service and venue in any court in which any Claim arising out of or in any way relating to this Agreement is brought by any third party against the Manager or any indemnified party. Each of the Manager and the Dealer (on its behalf and, to the extent permitted by applicable law, on behalf of its stockholders and affiliates) waives all right to trial by jury in any action, proceeding or counterclaim (whether based upon contract, tort or otherwise) in any way arising out of or relating to this Agreement. Each of the Manager and the Dealer agrees that a final judgment in any such action, proceeding or counterclaim brought in any such court shall be conclusive and binding upon the Manager and the Dealer and may be enforced in any other courts to the jurisdiction of which the Manager or the Dealer is or may be subject, by suit upon such judgment.
SECTION 14. Successors and Assigns . This Agreement shall be binding upon the Manager, the Fund and the Dealer and their successors and assigns and any successor or assign of any substantial portion of the Managers, the Funds and the Dealers respective businesses and/or assets.
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If the foregoing correctly sets forth the understanding between the Manager and the Dealer, please so indicate in the space provided below for that purpose, whereupon this Agreement and your acceptance shall constitute a binding agreement between the Manager and the Dealer. Alternatively, the execution of this Agreement by the Manager and the acceptance by or on behalf of the Dealer may be evidenced by an exchange of telegraphic or other written communications.
Very truly yours, | ||
NUVEEN SECURITIES, LLC
|
||
By: |
|
|
Name: | Kevin J. McCarthy | |
Title: | Senior Managing Director |
ACCEPTED as of the date first above written
[DEALER]
(as sub-placement agent)
By: | ||
Name: | ||
Title: |
By: | ||
Name: | ||
Title: |
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ADDENDUM
TO
SUB-PLACEMENT AGENT AGREEMENT
BETWEEN
NUVEEN SECURITIES, LLC
AND
[DEALER]
Compensation payable to the Dealer for acting as a sub-placement agent on behalf of the Manager with respect to a specified sale of Shares pursuant to this Agreement shall be determined by multiplying the Gross Sales Proceeds by the Applicable Selling Agent Commission as set forth in the table below:
Gross Sales Commission |
Manager Retention |
Applicable
|
||
[XX.XX %] |
[XX.XX %] | [XX.XX %] |
Where:
Gross Sales Proceeds with respect to each sale of Shares shall be the Gross Sales Price multiplied by the number of Shares sold;
Gross Sales Price with respect to each sale of Shares sold pursuant to this Agreement shall be the gross sales price per share of such Shares.
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NUVEEN OPEN-END AND CLOSED-END FUNDS
DEFERRED COMPENSATION PLAN FOR
INDEPENDENT DIRECTORS AND TRUSTEES
(As Amended and Restated Effective April 27, 2017)
April 2017
TABLE OF CONTENTS
SECTION 1 PURPOSE OF PLAN; RESTATEMENT EFFECTIVE DATE |
1 | |||
1.1 Purpose of Plan |
1 | |||
1.2 Effective Date |
1 | |||
1.3 Grandfather Rule for Pre-2005 Accounts |
1 | |||
SECTION 2 DEFINITION OF TERMS AND CONSTRUCTION |
1 | |||
2.1 Definitions |
1 | |||
2.2 Plurals and Gender |
4 | |||
2.3 Headings |
4 | |||
2.4 Separate Agreement |
4 | |||
SECTION 3 DEFERRALS |
4 | |||
3.1 Deferral Election |
4 | |||
3.2 Payment Reduction |
4 | |||
3.3 Effect of Election. |
4 | |||
3.4 Unforeseeable Emergencies |
4 | |||
SECTION 4 ACCOUNTS |
5 | |||
4.1 Crediting of Deferrals. |
5 | |||
4.2 Valuation of Account. |
5 | |||
SECTION 5 DISTRIBUTIONS FROM ACCOUNT |
7 | |||
5.1 Participants Payment Election. |
7 | |||
5.2 Irrevocability |
8 | |||
5.3 Death Prior to Complete Distribution of Account |
8 | |||
5.4 Unforeseeable Emergency |
8 | |||
5.5 Designation of Beneficiary |
8 | |||
5.6 Domestic Relations Orders |
8 | |||
5.7 Compliance With Conflicts of Interest Laws |
9 | |||
SECTION 6 AMENDMENTS AND TERMINATION |
9 | |||
6.1 Amendments |
9 | |||
6.2 Termination |
9 | |||
SECTION 7 MISCELLANEOUS |
10 | |||
7.1 Rights of Creditors. |
10 | |||
7.2 Agents |
10 | |||
7.3 Incapacity |
10 | |||
7.4 Statement of Account |
10 | |||
7.5 Governing Law |
11 | |||
7.6 Non-Guarantee of Status |
11 |
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7.7 Counsel |
11 | |||
7.8 Interests Not Transferable |
11 | |||
7.9 Entire Agreement |
11 | |||
7.10 Powers of Administrator |
11 | |||
7.11 Participant Litigation |
12 | |||
7.12 Successors and Assigns |
12 | |||
7.13 Severability |
12 | |||
7.14 Section 409A |
12 |
ii
NUVEEN OPEN-END AND CLOSED-END FUNDS
DEFERRED COMPENSATION PLAN FOR
INDEPENDENT DIRECTORS AND TRUSTEES
(As Amended and Restated Effective April 27, 2017)
SECTION 1 PURPOSE OF PLAN; RESTATEMENT EFFECTIVE DATE
1.1 Purpose of Plan . The Board of each Participating Fund maintains this Deferred Compensation Plan for Independent Directors and Trustees. The purpose of the Plan is to allow the independent directors and trustees of the Participating Funds to defer receipt of all or a portion of the compensation they earn for their service to the Participating Funds in lieu of receiving current payments of such compensation, and to treat any deferred amount as though an equivalent dollar amount had been invested in shares of one or more Eligible Funds. Each Board intends that the Plan shall be maintained at all times on an unfunded basis for federal income tax purposes under the Code. The Plan is not covered by the Employee Retirement Income Security Act of 1974, as amended.
1.2 Effective Date . This amendment and restatement of the Plan, which is intended to implement the requirements of Section 409A, is generally effective January 1, 2013.
1.3 Grandfather Rule for Pre-2005 Accounts . Notwithstanding anything herein to the contrary, the terms of the Pre-2005 Plan shall apply to the portion (if any) of a Participants Account as of December 31, 2004, including credited earnings and losses with respect thereto (the Grandfathered Account); provided, however, that with respect to any election change otherwise allowable thereunder, (i) such change may be made only during such annual enrollment periods as the Administrator shall establish, and (ii) if a change in the Participants payment election would result in the commencement of payment in a given Plan Year, the change may in no event be made later than the end of the annual enrollment period occurring prior to the first day of such Plan Year. With the exception of this Section 1.3 the provisions of this amended and restated Plan shall not apply to such Grandfathered Account. The Pre-2005 Plan shall be deemed to constitute a separate plan for purposes of Section 409A.
SECTION 2 DEFINITION OF TERMS AND CONSTRUCTION
2.1 Definitions . The following terms as used in this Plan shall have the following meanings:
(a) Account shall mean the aggregation of a Participants Plan Year Accounts.
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(b) Administrator shall mean the Boards or such other person or persons as the Boards may from time to time designate, provided that no Participant may serve as Administrator.
(c) Beneficiary shall mean such person or persons designated pursuant to Section 5.5 hereof to receive benefits after the death of a Participant.
(d) Board shall mean the Board of Directors or the Board of Trustees of the respective Participating Funds.
(e) Code shall mean the Internal Revenue Code of 1986, as amended from time to time, or any successor statute.
(f) Compensation shall mean the retainer and fees paid to a Participant (prior to reduction for Deferrals made under this Plan) for serving as a member of the Board of any Participating Fund or as a member of any committee or subcommittee of such Board.
(g) Deferral shall mean the amount or amounts of a Participants Compensation deferred under the provisions of Section 3.
(h) Deferral Election shall mean the Participants election under Section 3.1 to defer all or a portion of his or her Compensation.
(i) Designated Fund shall have the meaning set forth in Section 4.2(a).
(j) Eligible Fund means an open-end fund managed by Nuveen and designated by the Boards as a fund that may be chosen by a Participant as a fund in which the Participants Account may be deemed to be invested.
(k) Net Asset Value shall mean the per share value of an open-end fund, as determined as set forth in such funds registration statement under the 1940 Act, governing instruments and otherwise in accordance with law.
(l) Nuveen shall mean Nuveen Investments, Inc. and its affiliates.
(m) Participant shall mean a member of a Board who is not an interested person of a Participating Fund or of Nuveen, as such term is defined under Section 2(a)(19) of the Investment Company Act of 1940, as amended (1940 Act).
(n) Participating Fund shall mean an open-end or closed-end fund managed by Nuveen that either (i) was a Participating Fund as of September 30, 2012, or (ii) has at least $270,000,000 in assets under management. A fund described in the foregoing clause (ii) shall become a Participating Fund on the first Quarterly Date as of which the criterion described in such clause (ii) is satisfied, and its status as a Participating Fund shall continue even if its assets under management should subsequently fall below $270,000,000. For purposes of this definition, a Quarterly Date means the first day of a calendar quarter. Participating Funds shall be listed on Exhibit A to the Plan, which
2
shall be revised from time to time by the Administrator; provided, however, that failure to list a Participating Fund on Exhibit A shall not affect its status as a Participating Fund. The Administrator shall report to the Board on a quarterly basis any changes to Exhibit A.
(o) Payment Election shall mean an election pursuant to Section 5.1.
(p) Plan shall mean this Deferred Compensation Plan for Independent Directors and Trustees, as amended from time to time.
(q) Plan Year shall mean the 12-month period beginning January 1 and ending December 31.
(r) Plan Year Account shall mean the book entry account described in Section 4.1(a).
(s) Plan Year Subaccount shall mean, with respect to a Participating Fund, the portion of a Plan Year Account attributable to Compensation deferred from such Participating Fund.
(t) Pre-2005 Plan shall mean the Plan as in effect prior to January 1, 2005.
(u) Section 409A shall mean Section 409A of the Code, as interpreted by regulations and other guidance promulgated thereunder.
(v) Separation from Service means a separation from service within the meaning of Section 409A. A Separation from Service with respect to any Participating Fund shall occur on the date as of which there is a complete termination of a Participants relationship as a director (or independent contractor or employee) with respect to such Participating Fund, with no reasonable anticipation (as determined in good faith by the Administrator) of the Participant being reappointed to the Board of such Participating Fund.
(w) Unforeseeable Emergency means a severe financial hardship of the Participant resulting from an illness or accident of the Participant or his or her spouse or dependent (as defined in Section 152(a) of the Code), loss of the Participants property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by insurance), or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the Participants control. Circumstances that may constitute an Unforeseeable Emergency include the imminent foreclosure of or eviction from the Participants primary residence; the need to pay for medical expenses, including nonrefundable deductibles, as well as for the costs of prescription drug medication; and the need to pay for the funeral expenses of a spouse or a dependent (as defined in Section 152(a) of the Code). The purchase of a home and the payment of college tuition generally are not Unforeseeable Emergencies. Whether the Participant is faced with an Unforeseeable Emergency permitting an emergency withdrawal shall be determined by the Administrator in its sole discretion, based on the
3
relevant facts and circumstances and applying regulations and other guidance under Section 409A.
(x) Valuation Date shall mean the last business day of each calendar quarter and any other day upon which Nuveen makes a valuation of the Account.
2.2 Plurals and Gender . Where appearing in this Plan the singular shall include the plural and the masculine shall include the feminine, and vice versa, unless the context clearly indicates a different meaning.
2.3 Headings . The headings and subheadings in this Plan are inserted for convenience of reference only and are to be ignored in any construction of the provisions hereof.
2.4 Separate Agreement . This Plan shall be construed as a separate agreement between each Participant and each of the Participating Funds.
SECTION 3 DEFERRALS
3.1 Deferral Election . A Participant may elect to defer all or a specified percentage of the Compensation earned in a Plan Year by such Participant for serving as a member of the Board of any Participating Fund or as a member of any committee or subcommittee thereof. Reimbursement of expenses of attending meetings of the Board, committees of the Board or subcommittees of such committees may not be deferred. Such election shall be made by executing before the first day of such Plan Year such election notice as the Administrator may prescribe; provided, however, that upon first becoming eligible to participate in the Plan by reason of appointment to a Board, a Participant may file a Deferral Election not later than 30 days after the effective date of such appointment, which election shall apply to Compensation earned in the portion of the Plan Year commencing the day after such election is filed and ending on the last day of such Plan Year.
3.2 Payment Reduction . While a Deferral Election is in effect, deferrals described in Section 3.1 shall be withheld, based upon the percentage elected, from each payment of Compensation to which the Participant would otherwise have been entitled but for his Deferral Election.
3.3 Effect of Election . A Deferral Election pursuant to Section 3.1 shall apply only to the Plan Year for which it is made and shall be irrevocable except to the extent otherwise provided in Section 3.4.
3.4 Unforeseeable Emergencies . In the event of a Participants Unforeseeable Emergency on account of which the Participant receives a withdrawal pursuant to Section 5.4, the Participants Deferral Election shall be canceled.
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SECTION 4 ACCOUNTS
4.1 Crediting of Deferrals .
(a) The Administrator shall establish a book entry account (Plan Year Account) consisting of one or more Plan Year Subaccounts, to which will be credited an amount equal to the Participants Deferrals of Compensation from each respective Participating Fund under this Plan with respect to such Plan Year. The requirement to maintain separate Plan Year Subaccounts shall be deemed satisfied if the Administrator maintains (i) separate Plan Year Accounts and (ii) adequate records to enable the portions of each Plan Year Account attributable to the respective Plan Year Subaccounts to be calculated at any time.
(b) Any Compensation from a Participating Fund for a Plan Year earned by a Participant which he has elected to defer pursuant to the Plan will be credited to the corresponding Plan Year Subaccount on the date such Compensation otherwise would have been payable to such Participant.
(c) The obligations to pay the amounts in a Participants Plan Year Subaccounts associated with a Participating Fund shall be the sole obligation of that Participating Fund.
(d) Plan Year Subaccounts shall be debited to reflect any distributions from such subaccounts. Such debits shall be allocated to the Plan Year Subaccount as of the date such distributions are made.
4.2 Valuation of Account .
(a) Each Board shall from time to time designate one or more open-end funds managed by Nuveen as Eligible Funds. A Participant, on his Deferral Election form, shall have the right to select from the then-current list of Eligible Funds one or more funds in which his Account shall be deemed invested as set forth in this Section 4.2 (Designated Funds). A Participant shall designate whether his election pursuant to this Section 4.2(a), or change in election pursuant to Section 4.2(b), is to apply to his entire Account or to one or more Plan Year Accounts as specified in the election. A Participant may designate an Eligible Fund even if he is not a member of the Board of that Eligible Fund. Except as provided below, amounts credited to a Participants Account shall be treated as though such amounts had been invested and reinvested in shares of the Participants Designated Funds, initially calculated as follows:
(i) the product of
(A) the amount of such Deferrals and
(B) the percentage of such Deferrals to be deemed invested in that Designated Fund, divided by
(ii) the Designated Funds Net Asset Value per share as of the date such amount is so credited.
5
(b) Each calendar quarter a seven-day window will be provided to each Participant by the Administrator where each Participant may direct that the Designated Funds in which his or her Account is deemed invested be changed. Any election to change such investment direction shall indicate the dollar amount or percentage of the balance in such Account (determined based on the then current Net Asset Value of each Designated Fund in which the Account is deemed invested immediately prior to giving effect to such investment change) to be invested in each such Designated Fund. Any such change shall be effective on the third Saturday of the second month of each calendar quarter (effective date). The number of shares of each Designated Fund to be deemed held in the Participants Account following such investment change shall be calculated as follows:
(i) the product of
(A) the balance in such Account and
(B) the percentage of such balance to be deemed invested in that Designated Fund divided by
(ii) the Designated Funds Net Asset Value per share as of the effective date.
(c) If a Designated Fund shall pay a stock dividend on, or split, combine, reclassify or substitute other securities by merger, consolidation or otherwise for its outstanding shares, the Participants Account shall be adjusted as though shares of such Designated Fund were actually held by the Account in order to preserve rights substantially proportionate to the rights deemed held immediately prior to such event.
(d) On each payment date of dividends or capital gains distributions declared on shares of any Designated Fund in which a Participants Account is deemed invested, the Account will be credited with book adjustments representing all dividends or capital gains distributions which would have been realized had such account been invested in shares of such Designated Fund and such dividend or capital gains distribution had been received and reinvested.
(e) The value of a Plan Year Subaccount on any Valuation Date shall be the sum of (i) the number of shares of each Designated Fund deemed to be held in the Plan Year Subaccount as provided by the preceding paragraphs, multiplied by (ii) the Net Asset Value per share of such Designated Fund on the Valuation Date.
(f) On each date upon which a distribution of less than the entire balance is to be charged to a Participants Plan Year Subaccount, the amount of such distribution shall, unless the Participant otherwise specifies in accordance with rules established by the Administrator, be allocated among all of the Designated Funds in which the Plan Year Subaccount is deemed to be invested in proportion to the aggregate value of the number of deemed shares of each such Designated Fund, and the number of deemed shares of each such Designated Fund shall then be reduced by the portion of the distribution allocated to such Designated Fund divided by the Net Asset Value per share of such Designated Fund on the date on which the distribution is charged.
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(g) Unless and until each Board otherwise determines, the Eligible Funds shall include only one or more open-end funds managed by Nuveen. Open-end funds that cease to be managed by Nuveen shall automatically cease to be Eligible Funds, unless one of the Boards otherwise determines with respect to Participants that are members of such Board. The Boards may at any time remove any open-end fund from the list of Eligible Funds, or may add any open-end fund (whether or not managed by Nuveen), for Participants who are members of that Board. If an Eligible Fund is removed from the list of Eligible Funds for any reason then no further deferrals shall be deemed invested in such fund and, unless the Board otherwise determines, the Administrator shall give each Participant whose Account is deemed to be invested in such Eligible Fund a reasonable period to submit a new designation, and any Participant who fails to submit a new designation shall be subject to the provisions of the last sentence of Section 4.2(h) below.
(h) As of each Valuation Date, income, gain and loss equivalents (determined as if the Account were invested in the manner set forth under Section 4.2(a) above) attributable to the period following the next preceding Valuation Date shall be credited to and/or deducted from the Participants Plan Year Subaccounts. Except as provided below, the Participants Plan Year Subaccounts shall receive a return in accordance with his investment designations, provided such designations conform to the provisions of this Section. If:
(i) the Participant does not furnish the Administrator with a written designation,
(ii) the written designation from the Participant is unclear, or
(iii) less than all of the Participants Account is covered by such written designation,
then the Participants Account shall receive no return until such time as the Participant shall provide the Administrator with instructions.
SECTION 5 DISTRIBUTIONS FROM ACCOUNT
5.1 Participant s Payment Election .
(a) Simultaneously with the filing of a Deferral Election for a Plan Year pursuant to Section 3.1, a Participant shall elect on such form as the Administrator may prescribe the time and manner in which the corresponding Plan Year Account shall be distributed. Such election shall specify (i) whether each Plan Year Subaccount within the Plan Year Account is to be paid in a lump sum, in 20 substantially equal quarterly installments, or in five substantially equal annual installments, and (ii) the date on which such lump-sum payment is to be made and/or such installments are to commence. For purposes of clause (ii) of the preceding sentence a Participant may specify either (i) the time of the Participants Separation from Service, (ii) a specific date (irrespective of whether such date is before or after the Participants Separation from Service), or (iii) the earlier of the Participants Separation from Service or a specific date. In the event of a
7
Participants Separation from Service from some but not all of the Participating Funds to which the Participants Plan Year Account is attributable, to the extent a Participants Payment Election relates to his or her Separation from Service it shall affect only the Plan Year Subaccounts attributable to the Participating Funds from which the Participant has incurred a Separation from Service.
(b) A Participants Payment Election shall apply only to the Plan Year Account for which it is made.
(c) Except as otherwise provided in this Section 5, the balance in a Participants Plan Year Account shall be paid in accordance with the Participants valid Payment Election made for such Plan Year Account pursuant to this Section 5.
5.2 Irrevocability . Except as otherwise provided in this Section 5, a Participants Payment Election shall be irrevocable.
5.3 Death Prior to Complete Distribution of Account . If a Participant dies prior to the commencement of the distribution of the amounts credited to his Account, the balance of such Account shall be distributed to his Beneficiary in a lump sum as soon as practicable after the Participants death. If a Participant dies after the commencement of such distributions, but prior to the complete distribution of his Account, the balance of the amounts credited to his Account shall be distributed to his Beneficiary over the remaining period during which such amounts were otherwise distributable to the Participant under Section 5.1 hereof.
5.4 Unforeseeable Emergency . In the event of a Participants Unforeseeable Emergency, such Participant may request an emergency withdrawal from his or her Account. Any such request shall be subject to the approval of the Administrator, which approval shall not be granted to the extent that such need may be relieved (i) through reimbursement or compensation by insurance or otherwise or (ii) by liquidation of the Participants assets (to the extent the liquidation of such assets would not itself cause severe financial hardship). A Participant may withdraw all or a portion of his or her Account due to an Unforeseeable Emergency; provided, however, that the withdrawal shall not exceed the amount reasonably needed to satisfy the need created by the Unforeseeable Emergency.
5.5 Designation of Beneficiary . For the purposes of Section 5.3 hereof, the Participants Beneficiary shall be the person or persons so designated by the Participant in a written instrument submitted to the Administrator. Subject to rules established by the Administrator, a Participant may designate multiple or alternative Beneficiaries, and may change his Beneficiary at any time without the consent of any prior Beneficiary; provided that no change of a Beneficiary shall be effective unless and until actually received, in proper form, by the Administrator during the Participants life. The Administrators determination of the person eligible to receive the Account of a deceased Participant, if made in good faith, shall be final and binding on all parties. If a Participant fails to properly designate a Beneficiary or if his Beneficiary predeceases him, his Beneficiary shall be his estate.
5.6 Domestic Relations Orders . If any judgment, decree or order (including approval of a property settlement agreement) which (i) relates to the provision of child support, alimony
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payments, or marital property rights to a spouse, former spouse, child, or other dependent of a Participant, and (ii) is made pursuant to a state or foreign domestic relations law (including a community property law) directs assignment of a portion of a Participants Account to a spouse, former spouse, child, or other dependent of a Participant, such amount may be paid in a lump-sum cash payment at the request of the person to whom assignment is directed to be made as soon as administratively possible after the Administrators receipt of the signed order, as long as the order (or a written direction to the Administrator of how to interpret the order, signed by the Participant and the person to whom the order directs assignment) clearly specifies the amount of the Account assigned and the timing of payment to the person to whom the assignment is made.
5.7 Compliance With Conflicts of Interest Laws . Notwithstanding any provision herein to the contrary, payment of a Participants Account shall be accelerated to the extent (and only to the extent) reasonably necessary to avoid the violation of an applicable Federal, state, or local conflicts of interest law.
SECTION 6 AMENDMENTS AND TERMINATION
6.1 Amendments . The Boards reserve the right to amend, in whole or in part, and in any manner, any or all of the provisions of this Plan by action of the Boards, except that no amendment shall reduce the balance in any Participants Account, or (unless necessary to comply with the 1940 Act or other applicable law) significantly delay the time at which such balance is payable without the consent of the Participant affected.
6.2 Termination.
(a) |
In General . Each Board may terminate this Plan at any time by action of the Board. If one Board elects to terminate the Plan with respect to the Participants who are members of such Board, the Plan shall remain in effect with respect to Participants who are members of one or more other Boards. Upon termination, payment of each Participants then current Account value shall be made in such manner as the Administrator shall determine consistent with the requirements of Section 409A. |
(b) |
Liquidating Fund Termination . |
(i) |
Notwithstanding any provision to the contrary herein, in the event a Participating Fund liquidates in a corporate dissolution taxed under Section 331 of the Code, or with the approval of a bankruptcy court pursuant to 11 U.S.C. § 503(b)(1)(A) (a Liquidating Fund), the Board of such Participating Fund may terminate and liquidate this Plan (a Liquidating Fund Termination) pursuant to the corporate dissolution exception of Treas. Reg. § 1.409A-3(j)(4)(ix)(A) with respect to Accounts attributable to the deferral of Compensation from such Participating Fund (Affected Accounts) by current or former members of the Board of such Participating Fund (Affected Participants). |
(ii) |
In the event of a Liquidating Fund Termination, the value of the Affected Accounts of the Affected Participants shall be paid in a lump sum no later than the last day of the calendar year in which the Liquidating Fund Termination |
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occurs or, if later, the last day of the first calendar year in which the payment is administratively feasible. |
(iii) |
Except as set forth above, a Liquidating Fund Termination shall not otherwise affect the Plan, and in particular shall have no effect on any Accounts other than the Affected Accounts. |
SECTION 7 MISCELLANEOUS
7.1 Rights of Creditors .
(a) This Plan is unfunded. With respect to the payment of amounts credited to a Participants Account, the Participant and his Beneficiaries have the status of unsecured creditors of the Participating Fund to which such Account relates. The Plan shall not be construed as conferring on a Participant any right, title, interest, or claim in or to any specific asset, reserve, account, or property or any kind possessed by the Participating Funds. To the extent that a Participant or any other person acquires a right to receive payments from the Participating Funds, such right shall be no greater than the right of an unsecured general creditor.
(b) This Plan is executed on behalf of each Participating Fund by an officer of that Participating Fund as such and not individually. Any obligation of a Participating Fund hereunder shall be an unsecured obligation of that Participating Fund and not of any other person.
7.2 Agents . Each Participating Fund may employ agents and provide for such clerical, legal, actuarial, accounting, advisory or other services as it deems necessary to perform its duties under this Plan. Each Participating Fund shall bear the cost of such services and all other expenses it incurs in connection with the administration of this Plan.
7.3 Incapacity . If the Administrator shall receive evidence satisfactory to it that a Participant or any Beneficiary entitled to receive any benefit under the Plan is, at the time when such benefit becomes payable, a minor, or is physically or mentally incompetent to receive such benefit and to give a valid release therefor, and that another person or an institution is then maintaining or has custody of the Participant or Beneficiary and that no guardian, committee or other representative of the estate of the Participant or Beneficiary shall have been duly appointed, a Participating Fund may make payment of such benefit otherwise payable to the Participant or Beneficiary to such other person or institution, including a custodian under a Uniform Transfers to Minors Act or corresponding legislation (who shall be an adult, a guardian of the minor or a trust company), and the release of such other person or institution shall be a valid and complete discharge for the payment of such benefit.
7.4 Statement of Account . The Administrator will furnish each Participant with a statement setting forth the value of such Participants Plan Year Accounts as of the end of each calendar year and all credits to and payments from such Plan Year Accounts during such year. Such statements will be furnished no later than 60 days after the end of each calendar year.
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7.5 Governing Law . This Plan shall be governed by the laws of the State of Illinois.
7.6 Non-Guarantee of Status . Nothing contained in this Plan shall be construed as a contract or guarantee of the right of a Participant to be, or remain as, a director or a trustee of a fund, or to receive any, or any particular rate of, Compensation.
7.7 Counsel . Each Board may consult with legal counsel with respect to the meaning or construction of this Plan, its obligations or duties hereunder or with respect to any action or proceeding or any question of law, and it shall be fully protected with respect to any action taken or omitted by it in good faith pursuant to the advice of legal counsel.
7.8 Interests Not Transferable . A Participants and Beneficiaries interests in the Account may not be anticipated, sold, encumbered, pledged, mortgaged, charged, transferred, alienated, assigned nor become subject to execution, garnishment or attachment and any attempt to do so by any person shall be deemed null and void; no Participating Fund shall recognize the rights of any party under this Plan except those of the Participant or his Beneficiary; provided that this Section 7.8 shall not preclude a Participating Fund from offsetting any amount payable to a Participant hereunder by any amount owed by such Participant to that Participating Fund or to Nuveen.
7.9 Entire Agreement . This Plan contains the entire understanding between each Participating Fund and the Participants with respect to the payment of non-qualified deferred compensation by a Participating Fund to the Participants.
7.10 Powers of Administrator . In addition to other powers specifically set forth herein, the Administrator shall have all power and authority necessary or convenient for the administration of this Plan, including without limitation the authority to:
(a) construe and interpret the Plan, and resolve any inconsistency or ambiguity with respect to any of its terms;
(b) decide all questions of eligibility and determine the amount, manner and time of payment of any benefits hereunder;
(c) prescribe rules and procedures to be followed by Participants or Beneficiaries in making any election or taking any action provided for herein, which rules and procedures may alter any provision of the Plan that is administrative or ministerial in nature without the necessity for an amendment;
(d) allocate Accounts among the Eligible Funds;
(e) maintain all the necessary records for the administration of the Plan;
(f) delegate any of it duties or powers under the Plan to any other person acting under its supervision; and
(g) do all other acts which the Administrator deems necessary or proper to accomplish and implement its responsibilities under the Plan.
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Any rule or procedure adopted by the Administrator, or any decision, ruling or determination made by the Administrator, in good faith shall be final, binding and conclusive on all Participating Funds, Participants, Beneficiaries and all persons claiming through them. The authority of the Administrator may be exercised by such person as the Chief Executive Officer of the Administrator may designate or, in the absence of a specific designation, by those officers and employees of the Administrator whose normal duties include payment of compensation to independent directors and trustees.
7.11 Participant Litigation . In any action or proceeding regarding the Participants or their Beneficiaries or any other persons having or claiming to have an interest in this Plan shall not be necessary parties and shall not be entitled to any notice or process. Any final judgment which is not appealed or appealable and may be entered in any such action or proceeding shall be binding and conclusive on the parties hereto and all persons having or claiming to have any interest in this Plan. To the extent permitted by law, if a legal action is begun against either Board, any Participating Fund, the Administrator, or any of their respective officers, directors, trustees, employees or agents (an indemnified party), by or on behalf of any person and such action results adversely to such person or if a legal action arises because of conflicting claims to a Participants or other persons benefits, the costs to the indemnified party of defending the action will be charged to the amounts, if any, which were involved in the action or were payable to the Participant or other person concerned. To the extent permitted by applicable law, acceptance of participation in this Plan shall constitute a release of each of the indemnified parties from any and all liability and obligation not involving willful misconduct or gross neglect.
7.12 Successors and Assigns . This Plan shall be binding upon, and shall inure to the benefit of, the Participating Funds and their successors and assigns and to the Participants and their heirs, executors, administrators and personal representatives.
7.13 Severability . In the event any one or more provisions of this Plan are held to be invalid or unenforceable, such illegality or unenforceability shall not affect the validity or enforceability of the other provisions hereof and such other provisions shall remain in full force and effect unaffected by such invalidity or unenforceability.
7.14 Section 409A . This Plan is intended to comply with Section 409A, and shall be administered and interpreted in accordance with such intent. If the Boards (or the Administrator, to the extent the Boards delegate such authority to the Administrator) determine that any provision of the Plan is or might be inconsistent with the requirements of Section 409A, they shall attempt in good faith to make such changes to the Plan as may be necessary or appropriate to avoiding a Participants becoming subject to adverse tax consequences under Code Section 409A.
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IN WITNESS WHEREOF, each Participating Fund listed on Appendix A has caused this amended and restated Plan to be executed by one of its duly authorized officers, this 27 th day of April, 2017.
By: |
/s/ Gifford R. Zimmerman |
|
Name: | Gifford R. Zimmerman | |
Title: | Vice President |
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EXHIBIT A
NUVEEN OPEN-END AND CLOSED-END FUNDS
DEFERRED COMPENSATION PLAN FOR INDEPENDENT
DIRECTORS AND TRUSTEES
Participating funds 1 : Funds from which director compensation can be deferred 2 : AUM ³ $270MM 3 : funds do not lose Participating status from a subsequent loss of assets 4 : list updated each quarter, with new funds that have surpassed the $270MM threshold
Current List of Participating Funds
Nuveen All-American Municipal Bond Fund |
Nuveen S&P 500 Buy-Write Income Fund |
Nuveen Connecticut Municipal Bond Fund |
Nuveen Dow 30SM Dynamic Overwrite Fund |
Nuveen Core Plus Bond Fund |
Nuveen Dividend Value Fund |
Nuveen Global Infrastructure Fund |
Nuveen High Income Bond Fund |
Nuveen Inflation Protected Securities Fund |
Nuveen Core Bond Fund |
Nuveen Large Cap Growth Opportunities Fund |
Nuveen Mid Cap Growth Opportunities Fund |
Nuveen Mid Cap Value Fund |
Nuveen Minnesota Municipal Bond Fund |
Nuveen Minnesota Intermediate Municipal Bond Fund |
Nuveen Real Estate Securities Fund |
Nuveen Small Cap Select Fund |
Nuveen Short Term Bond Fund |
Nuveen Short Term Municipal Bond Fund |
Nuveen Strategic Income Fund |
Nuveen Gresham Diversified Commodity Strategy Fund |
Nuveen Core Equity Alpha Fund |
Nuveen Diversified Dividend and Income Fund |
Nuveen Floating Rate Income Fund |
Nuveen Global High Income Fund |
Nuveen High Income December 2018 Target Term Fund |
Nuveen Mortgage Opportunity Term Fund |
Nuveen Energy MLP Total Return Fund |
Nuveen All Cap Energy MLP Opportunities Fund |
Nuveen Preferred Income Opportunities Fund |
Nuveen Preferred and Income Term Fund |
Nuveen Preferred Securities Income Fund |
Nuveen Credit Strategies Income Fund |
Nuveen Real Asset Income and Growth Fund |
Nuveen Floating Rate Income Opportunity Fund |
Nuveen Real Estate Income Fund |
Nuveen Short Duration Credit Opportunities Fund |
Nuveen Tax-Advantaged Total Return Strategy Fund |
Nuveen Tax-Advantaged Dividend Growth Fund |
Nuveen Kentucky Municipal Bond Fund |
Nuveen Limited Term Municipal Bond Fund |
Nuveen Missouri Municipal Bond Fund |
Nuveen California Dividend Advantage Municipal Fund |
Nuveen Quality Municipal Income Fund |
Nuveen New York Dividend Advantage Municipal Fund |
Nuveen Build America Bond Fund |
Nuveen North Carolina Municipal Bond Fund |
Nuveen California Municipal Value Fund, Inc. |
Nuveen California Municipal Bond Fund |
Nuveen California High Yield Municipal Bond Fund |
Nuveen Santa Barbara Dividend Growth Fund |
Nuveen AMT-Free Quality Municipal Income Fund |
Nuveen Enhanced Municipal Value Fund |
Nuveen Michigan Municipal Bond Fund |
Nuveen New Jersey Municipal Bond Fund |
Nuveen New York Municipal Bond Fund |
Nuveen Ohio Municipal Bond Fund |
Nuveen Pennsylvania Municipal Bond Fund |
Nuveen Virginia Municipal Bond Fund |
Nuveen Tradewinds Global All-Cap Fund |
Nuveen Large Cap Value Fund |
Nuveen High Yield Municipal Bond Fund |
Nuveen Intermediate Duration Municipal Term Fund |
Nuveen NWQ International Value Fund |
Nuveen California AMT-Free Municipal Income Fund |
Nuveen Intermediate Duration Municipal Bond Fund |
Nuveen NWQ Multi-Cap Value Fund |
Municipal Total Return Managed Accounts Portfolio |
Nuveen Maryland Premium Income Municipal Fund |
Nuveen Municipal High Income Opportunity Fund |
Nuveen North Carolina Premium Income Municipal Fund |
Nuveen Preferred Securities Fund |
Nuveen Virginia Premium Income Municipal Fund |
Nuveen Pennsylvania Investment Quality Municipal Fund |
Nuveen Real Asset Income Fund |
Nuveen New York AMT-Free Municipal Income Fund |
Nuveen NWQ Small-Cap Value Fund |
Nuveen Short Duration High Yield Municipal Bond Fund |
Exhibit A - Page 1
Nuveen Senior Income Fund |
Nuveen Connecticut Premium Income Municipal Fund |
Nuveen Michigan Quality Income Municipal Fund |
Nuveen Ohio Quality Income Municipal Fund |
Nuveen Municipal Value Fund, Inc. |
Nuveen Enhanced Municipal Credit Opportunities Fund |
Nuveen Tradewinds Value Opportunities Fund |
Nuveen California Dividend Advantage Municipal Fund 2 |
Nuveen NWQ Large-Cap Value Fund |
Nuveen California Select Tax-Free Income Portfolio |
Nuveen New Jersey Dividend Advantage Municipal Fund |
Nuveen New York Select Tax-Free Income Portfolio |
Nuveen Select Tax-Free Income Portfolio |
Nuveen Select Tax-Free Income Portfolio 2 |
Nuveen Select Tax-Free Income Portfolio 3 |
Nuveen Enhanced AMT-Free Municipal Credit Opportunities Fund |
Nuveen California Dividend Advantage Municipal Fund 3 |
Nuveen Nasdaq 100 Dynamic Overwrite Fund |
Nuveen International Growth Fund |
Nuveen Symphony Credit Opportunities Fund |
Nuveen Symphony Floating Rate Income Fund |
Nuveen S&P 500 Dynamic Overwrite Fund |
Nuveen Tennessee Municipal Bond Fund |
Nuveen Winslow Large-Cap Growth Fund |
Nuveen Small Cap Value Fund |
Nuveen Massachusetts Municipal Bond Fund |
Nuveen High Income November 2021 Target Term Fund |
Nuveen High Income December 2019 Target Term Fund |
Nuveen NWQ Flexible Income Fund |
Nuveen Large Cap Core Fund |
Exhibit A - Page 2
EXHIBIT B
NUVEEN OPEN-END AND CLOSED-END FUNDS DEFERRED COMPENSATION PLAN FOR INDEPENDENT DIRECTORS AND TRUSTEES
ELIGIBLE FUNDS
Eligible funds 1 : funds in which deferred compensation can be deemed invested 2 : selected from equity and taxable income open-end funds 3 : municipal funds are not included as they are tax-exempt and would therefore not be appropriate in a tax-advantaged deferred compensation plan 4 : deferred compensation is not actually invested in these funds; investments track the performance of these funds 5 : updated annually
Current List of Eligible Funds
Nuveen Core Plus Bond Fund |
Nuveen Dividend Value Fund |
Nuveen High Income Bond Fund |
Nuveen Inflation Protected Securities Fund |
Nuveen International Growth Fund |
Nuveen Large-Cap Value Fund |
Nuveen Mid Cap Growth Opportunities Fund |
Nuveen NWQ International Value Fund |
Nuveen NWQ Large-Cap Value Fund |
Nuveen NWQ Multi-Cap Value Fund |
Nuveen NWQ Small-Cap Value Fund |
Nuveen Real Asset Income Fund |
Nuveen Santa Barbara Dividend Growth Fund |
Nuveen Short Term Bond Fund |
Nuveen Strategy Balanced Allocation Fund |
Nuveen Symphony Credit Opportunities Fund |
Nuveen Symphony Floating Rate Income Fund |
Nuveen Symphony Large-Cap Growth Fund |
Nuveen Tradewinds Global All-Cap Fund |
Nuveen Tradewinds Value Opportunities Fund |
Nuveen Winslow Large-Cap Growth Fund |
Exhibit B - Page 1
Exhibit j.1
Execution Version
A MENDED AND R ESTATED M ASTER C USTODIAN A GREEMENT
This Agreement is made as of July 15, 2015 (this Agreement ), between each management investment company identified on Appendix A and each management investment company which becomes a party to this Agreement in accordance with the terms hereof (in each case, a Fund ), including, if applicable, each series of the Fund identified on Appendix A and each series which becomes a party to this Agreement in accordance with the terms hereof, and S TATE S TREET B ANK AND T RUST C OMPANY , a Massachusetts trust company (the Custodian ).
W ITNESSETH :
W HEREAS , the Funds and the Custodian have entered into an Amended and Restated Master Custodian Agreement, dated as of February 25, 2005 (as amended and in effect, the Master Custodian Agreement);
W HEREAS , the Funds and the Custodian desire to replace the Master Custodian Agreement with this Amended and Restated Master Custodian Agreement;
W HEREAS , each Fund desires for the Custodian to provide certain custodial services relating to securities and other assets of the Fund; and
W HEREAS , the Custodian is willing to provide the services upon the terms contained in this Agreement;
S ECTION 1. D EFINITIONS . In addition to terms defined in Section 4.1 (Rule 17f-5 and Rule 17f-7 related definitions) or elsewhere in this Agreement, (a) terms defined in the UCC have the same meanings herein as therein and (b) the following other terms have the following meanings for purposes of this Agreement:
1940 Act means the Investment Company Act of 1940, as amended from time to time.
Board means, in relation to a Fund, the board of directors, trustees or other governing body of the Fund.
Client Publications means the general client publications of State Street Bank and Trust Company available from time to time to clients and their investment managers.
Deposit Account Agreement means the Deposit Account Agreement and Disclosure, as may be amended from time to time, issued by the Custodian and available on the Custodians internet customer portal, my.statestreet.com.
Domestic securities means securities held within the United States.
Foreign securities means securities held primarily outside of the United States.
Held outside of the United States means not held within the United States.
Held within the United States means (a) in relation to a security or other financial asset, the security or other financial asset (i) is a certificated security registered in the name of the Custodian or its sub-custodian, agent or nominee or is endorsed to the Custodian or its sub-custodian, agent or nominee or in blank and the security certificate is located within the United States, (ii) is an uncertificated security or other financial asset registered in the name of the Custodian or its sub-custodian, agent or nominee at an office located in the United States, or (iii) has given rise to a security entitlement of which the Custodian or its sub-custodian, agent or nominee is the entitlement holder against a U.S. Securities System or another securities intermediary for which the securities intermediarys jurisdiction is within the United States, and (b) in relation to cash, the cash is maintained in a deposit account denominated in U.S. dollars with the banking department of the Custodian or with another bank or trust companys office located in the United States.
Investment Advisor means, in relation to a Portfolio, the investment manager or investment advisor of the Portfolio.
On book currency means (a) U.S. dollars or (b) a foreign currency that, when credited to a deposit account of a customer maintained in the banking department of the Custodian or an Eligible Foreign Custodian, the Custodian maintains on its books as an amount owing as a liability by the Custodian to the customer.
Portfolio means (a) in relation to a Fund that is a series organization, a series of the Fund and (b) in relation to a Fund that is not a series organization, the Fund itself.
Portfolio Interests means beneficial interests in a Portfolio.
Proper Instructions means instructions in accordance with Section 9 received by the Custodian from a Fund, the Funds Investment Advisor, or an individual or organization duly authorized by the Fund or the Investment Advisor. The term includes standing instructions.
SEC means the U.S. Securities and Exchange Commission.
Series organization means an organization that, pursuant to the statute under which the organization is organized, has the following characteristics: (a) the organic record of the organization provides for creation by the organization of one or more series (however denominated) with respect to specified property of the organization, and provides for records to be maintained for each series that identify the property of or associated with the series, (b) debt incurred or existing with respect to the activities of, or property of or associated with a particular series is enforceable against the property of or associated with the series only, and not against the property of or associated with the organization or of other series of the organization, and (c) debt incurred or existing with respect to the activities or property of the organization is enforceable against the property of the organization only, and not against the property of or associated with any series of the organization.
-2-
Tax or Taxes means any withholding or capital gains tax, stamp duty, levy, impost, charge, assessment, deduction or related liability, including any addition to tax, penalty or interest imposed on or in respect of (i) cash or securities, (ii) the transactions effected under this Agreement, or (iii) the Fund.
UCC means the Uniform Commercial Code of the Commonwealth of Massachusetts as in effect from time to time.
Underlying Portfolios means a group of investment companies as defined in Section 12(d)(1)(F) of the 1940 Act.
Underlying Shares means shares or other securities, issued by a U.S. issuer, of Underlying Portfolios and other registered investment companies (as defined in Section 3(a)(1) of the 1940 Act), whether or not in the same group of investment companies (as defined in Section 12(d)(1)(G)(ii) of the 1940 Act).
Underlying Transfer Agent means State Street Bank and Trust Company or such other organization which may from time to time be appointed by the Fund to act as a transfer agent for the Underlying Portfolios and with respect to which the Custodian is provided with Proper Instructions.
U.S. Securities System means a securities depository or book-entry system authorized by the U.S. Department of the Treasury or a clearing corporation as defined in Section 8-102 of the UCC.
S ECTION 2. E MPLOYMENT OF C USTODIAN .
S ECTION 2.1 G ENERAL . Each Fund hereby employs the Custodian as a custodian of (a) securities and cash of each of the Portfolios and (b) other assets of each of the Portfolios that the Custodian agrees to treat as financial assets. Each Fund, on behalf of each of its Portfolios, agrees to deliver to the Custodian (i) all securities and cash of the Portfolios, (ii) all other assets of each Portfolio that the Fund desires the Custodian, and the Custodian is willing, to treat as a financial asset and (iii) all cash and other proceeds of the securities and financial assets held in custody under this Agreement. The holding of confirmation statements that identify Underlying Shares as being recorded in the Custodians name on behalf of the Portfolios will be custody for purposes of this Section 2.1. This Agreement does not require the Custodian to accept an asset for custody hereunder or to treat any asset that is not a security as a financial asset.
S ECTION 2.2 S UB - CUSTODIANS . Upon receipt of Proper Instructions, the Custodian shall on behalf of a Fund appoint one or more banks, trust companies or other entities located in the United States and designated in the Proper Instructions to act as a sub-custodian for the purposes of effecting such transactions as may be designated by the Fund in the Proper Instructions. The Custodian may place and maintain each Funds foreign securities with foreign banking institution sub-custodians employed by the Custodian or foreign securities depositories, all in accordance with the applicable provisions of Sections 4 and 5. An entity acting in the capacity of Underlying Transfer Agent is not an agent or sub-custodian of the Custodian for purposes of this Agreement.
-3-
S ECTION 2.3 R ELATIONSHIP . With respect to securities and other financial assets, the Custodian is a securities intermediary and the Portfolio is the entitlement holder. With respect to cash maintained in a deposit account and denominated in an on book currency, the Custodian is a bank and the Portfolio is the banks customer. If cash is maintained in a deposit account with a bank other than the Custodian and the cash is denominated in an on book currency, the Custodian is that banks customer. The Custodian agrees to treat the claim to the cash as a financial asset for the benefit of the Portfolio . The Custodian does not otherwise agree to treat cash as financial asset. The duties of the Custodian as securities intermediary and bank set forth in the UCC are varied by the terms of this Agreement to the extent that the duties may be varied by agreement under the UCC.
SECTION |
3. A CTIVITIES OF THE C USTODIAN WITH R ESPECT TO P ROPERTY H ELD IN THE U NITED S TATES . |
S ECTION 3.1 H OLDING S ECURITIES . The Custodian may deposit and maintain securities or other financial assets of a Portfolio in a U.S. Securities System in compliance with the conditions of Rule 17f-4 under the 1940 Act. Upon receipt of Proper Instructions on behalf of a Portfolio, the Custodian shall establish and maintain a segregated account or accounts for and on behalf of the Portfolio and into which account or accounts may be transferred cash or securities and other financial assets, including securities and financial assets maintained in a U.S. Securities System. The Custodian shall hold and physically segregate for the account of each Portfolio all securities and other financial assets held by the Custodian in the United States, including all domestic securities of the Portfolio, other than (a) securities or other financial assets maintained in a U.S. Securities System and (b) Underlying Shares maintained pursuant to Section 3.6 in an account of an Underlying Transfer Agent. The Custodian may at any time or times in its discretion appoint any other bank or trust company, qualified under the 1940 Act to act as a custodian, as the Custodians agent to carry out such of the provisions of this Section as the Custodian may from time to time direct. The appointment of any agent shall not relieve the Custodian of any of its duties hereunder. The Custodian may at any time or times in its discretion remove the bank or trust company as the Custodians agent.
S ECTION 3.2 R EGISTRATION OF S ECURITIES . Domestic securities or other financial assets held by the Custodian and that are not bearer securities shall be registered in the name of the applicable Portfolio or in the name of any nominee of a Fund on behalf of the Portfolio or of any nominee of the Custodian, or in the name or nominee name of any agent or any sub-custodian permitted hereby. All securities accepted by the Custodian on behalf of the Portfolio under the terms of this Agreement shall be in street name or other good delivery form. However, if a Fund directs the Custodian to maintain securities or other financial assets in street name, the Custodian shall utilize best efforts only to timely collect income due the Fund on the securities and other financial assets and to notify the Fund of relevant issuer actions including, without limitation, pendency of calls, maturities, tender or exchange offers.
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S ECTION 3.3 B ANK A CCOUNTS . The Custodian shall open and maintain upon the terms of the Deposit Account Agreement a separate deposit account or accounts in the United States in the name of each Portfolio, subject only to draft or order by the Custodian acting pursuant to the terms of this Agreement. The Custodian shall credit to the deposit account or accounts, subject to the provisions hereof, all cash received by the Custodian from or for the account of the Portfolio, other than cash maintained by the Portfolio in a deposit account established and used in accordance with Rule 17f-3 under the 1940 Act. Funds held by the Custodian for a Portfolio may be deposited by the Custodian to its credit as Custodian in the banking department of the Custodian or in such other banks or trust companies as it may in its discretion deem necessary or desirable; provided, however, that (a) every such bank or trust company shall be qualified to act as a custodian under the 1940 Act and (b) each such bank or trust company and the funds to be deposited with each such bank or trust company shall on behalf of each applicable Portfolio of a Fund be approved by vote of a majority of the Funds Board. The funds shall be deposited by the Custodian in its capacity as Custodian and shall be withdrawable by the Custodian only in that capacity.
S ECTION 3.4 C OLLECTION OF I NCOME . Subject to the domestic securities or other financial assets held in the United States being registered as provided in Section 3.2, the Custodian shall collect on a timely basis all income and other payments with respect to the securities and other financial assets and to which a Portfolio shall be entitled either by law or pursuant to custom in the securities business. The Custodian shall collect on a timely basis all income and other payments with respect to bearer domestic securities if, on the date of payment by the issuer, the securities are held by the Custodian or its agent. The Custodian shall present for payment all income items requiring presentation as and when they become due and shall collect interest when due on securities and other financial assets held hereunder. The Custodian shall credit income to the Portfolio as such income is received or in accordance with the Custodians then current payable date income schedule. Any credit to the Portfolio in advance of receipt may be reversed when the Custodian determines that payment will not occur in due course, and the Portfolio may be charged at the Custodians applicable rate for time credited.
S ECTION 3.5 D ELIVERY O UT . The Custodian shall release and deliver out domestic securities and other financial assets of a Portfolio held in a U.S. Securities System, or in an account at the Underlying Transfer Agent, only upon receipt of Proper Instructions on behalf of the applicable Portfolio, specifying the domestic securities or financial assets held in the United States to be delivered out and the person or persons to whom delivery is to be made. The Custodian shall pay out cash of a Portfolio upon receipt of Proper Instructions on behalf of the applicable Portfolio, specifying the amount of the payment and the person or persons to whom the payment is to be made.
S ECTION 3.6 D EPOSIT OF F UND A SSETS WITH THE U NDERLYING T RANSFER A GENT . Underlying Shares of a Fund, on behalf of a Portfolio, shall be deposited and held in an account or accounts maintained with an Underlying Transfer Agent. The Custodians only responsibilities with respect to the Underlying Shares shall be limited to the following:
1) |
Upon receipt of a confirmation or statement from an Underlying Transfer Agent that the Underlying Transfer Agent is holding or maintaining Underlying Shares |
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in the name of the Custodian (or a nominee of the Custodian) for the benefit of a Portfolio, the Custodian shall identify by book-entry that the Underlying Shares are being held by it as custodian for the benefit of the Portfolio. |
2) |
Upon receipt of Proper Instructions to purchase Underlying Shares for the account of a Portfolio, the Custodian shall pay out cash of the Portfolio as so directed to purchase the Underlying Shares and record the payment from the account of the Portfolio on the Custodians books and records. |
3) |
Upon receipt of Proper Instructions for the sale or redemption of Underlying Shares for the account of a Portfolio, the Custodian shall transfer the Underlying Shares as so directed to sell or redeem the Underlying Shares, record the transfer from the account of the Portfolio on the Custodians books and records and, upon the Custodians receipt of the proceeds of the sale or redemption, record the receipt of the proceeds for the account of such Portfolio on the Custodians books and records. |
S ECTION 3.7 P ROXIES . The Custodian shall cause to be promptly executed by the registered holder of domestic securities or other financial assets held in the United States of a Portfolio, if the securities or other financial assets are registered otherwise than in the name of the Portfolio or a nominee of the Portfolio, all proxies, without indication of the manner in which the proxies are to be voted, and shall promptly deliver to the Fund such proxies, all proxy soliciting materials and all notices relating to the securities or other financial assets.
S ECTION 3.8 C OMMUNICATIONS . Subject to the domestic securities or other financial assets held in the United States being registered as provided in Section 3.2, the Custodian shall transmit promptly to the applicable Fund for each Portfolio all written information received by the Custodian from issuers of the securities and other financial assets being held for the Portfolio. The Custodian shall transmit promptly to the applicable Fund all written information received by the Custodian from issuers of the securities and other financial assets whose tender or exchange is sought and from the party or its agent making the tender or exchange offer. The Custodian shall also transmit promptly to the applicable Fund for each Portfolio all written information received by the Custodian regarding any class action or other collective litigation relating to Portfolio securities or other financial assets issued in the United States and then held, or previously held, during the relevant class-action period during the term of this Agreement by the Custodian for the account of the Fund for the Portfolio, including, but not limited to, opt-out notices and proof-of-claim forms. The Custodian does not support class-action participation by a Fund beyond such forwarding of written information received by the Custodian.
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S ECTION 4. P ROVISIONS R ELATING TO R ULES 17 F -5 AND 17 F -7 .
S ECTION 4.1. D EFINITIONS . As used in this Agreement, the following terms have the following meanings:
Country Risk means all factors reasonably related to the systemic risk of holding Foreign Assets in a particular country. The factors include but are not limited to risks arising from the countrys political environment, economic and financial infrastructure (including any Eligible Securities Depository operating in the country); prevailing or developing custody, tax and settlement practices; nationalization, expropriation or other government actions; currency restrictions, devaluations or fluctuations; market conditions affecting the orderly execution of securities transactions or the value of assets; the regulation of the banking and securities industries, including changes in market rules; and laws and regulations applicable to the safekeeping and recovery of Foreign Assets held in custody in that country.
Covered Foreign Country means a country listed on Schedule A, which list of countries may be amended from time to time at the request of any Fund and with the agreement of the Foreign Custody Manager.
Eligible Foreign Custodian has the meaning set forth in Section (a)(1) of Rule 17f-5. Eligible Securities Depository has the meaning set forth in section (b)(1) of Rule 17f-7. Foreign Assets means, in relation to a Portfolio, any of the Portfolios securities or other investments (including foreign currencies) for which the primary market is outside the United States, and any cash and cash equivalents that are reasonably necessary to effect transactions of the Portfolio in those investments.
Foreign Custody Manager has the meaning set forth in section (a)(3) of Rule 17f-5.
Foreign Securities System means an Eligible Securities Depository listed on Schedule B.
Rule 17f-5 means Rule 17f-5 promulgated under the 1940 Act.
Rule 17f-7 means Rule 17f-7 promulgated under the 1940 Act.
S ECTION 4.2. T HE C USTODIAN AS F OREIGN C USTODY M ANAGER .
4.2.1 D ELEGATION . Each Fund, by resolution adopted by its Board, hereby delegates to the Custodian, subject to Section (b) of Rule 17f-5, the responsibilities set forth in this Section 4.2 with respect to Foreign Assets of the Portfolios held outside the United States. The Custodian hereby accepts such delegation. By giving at least 30 days prior written notice to the Fund, the Foreign Custody Manager may withdraw its acceptance of the delegated responsibilities generally or with respect to a Covered Foreign Country designated in the notice. Following the withdrawal, the Custodian shall have no further responsibility in its capacity as Foreign Custody Manager to the Fund generally or, as the case may be, with respect to the Covered Foreign Country so designated.
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4.2.2 E XERCISE OF C ARE AS F OREIGN C USTODY M ANAGER . The Foreign Custody Manager shall exercise reasonable care, prudence and diligence such as a person having responsibility for the safekeeping of the Foreign Assets would exercise in performing the delegated responsibilities.
4.2.3 F OREIGN C USTODY A RRANGEMENTS . The Foreign Custody Manager shall be responsible for performing the delegated responsibilities only with respect to Covered Foreign Countries. The Foreign Custody Manager shall list on Schedule A for a Covered Foreign Country each Eligible Foreign Custodian selected by the Foreign Custody Manager to maintain the Foreign Assets of the Portfolios with respect to the Covered Foreign Country. The list of Eligible Foreign Custodians may be amended from time to time upon notice in the sole discretion of the Foreign Custody Manager. This Agreement constitutes a Proper Instruction by a Fund, on behalf of each applicable Portfolio, to open an account, and to place and maintain Foreign Assets, for the Portfolio in each applicable Covered Foreign Country. The Fund, on behalf of the Portfolios, shall satisfy the account opening requirements for the Covered Foreign Country, and the delegation with respect to the Portfolio for the Covered Foreign Country will not be considered to have been accepted by the Custodian until that satisfaction. If the Foreign Custody Manager receives from the Fund Proper Instructions directing the Foreign Custody Manager to close the account, the delegation shall be considered withdrawn, and the Custodian shall immediately cease to be the Foreign Custody Manager with respect to the Portfolio for the Covered Foreign Country.
4.2.4 S COPE OF D ELEGATED R ESPONSIBILITIES : Subject to the provisions of this Section 4.2, the Foreign Custody Manager may place and maintain Foreign Assets in the care of an Eligible Foreign Custodian selected by the Foreign Custody Manager in each applicable Covered Foreign Country. The Foreign Custody Manager shall determine that (a) the Foreign Assets will be subject to reasonable care, based on the standards applicable to custodians in the country in which the Foreign Assets will be held by the Eligible Foreign Custodian, after considering all factors relevant to the safekeeping of such assets, including, without limitation the factors specified in Rule 17f-5(c)(1) and (b) the contract between the Foreign Custody Manager and the Eligible Foreign Custodian governing the foreign custody arrangements will satisfy the requirements of Rule 17f-5(c)(2). The Foreign Custody Manager shall establish a system to monitor (i) the appropriateness of maintaining the Foreign Assets with the Eligible Foreign Custodian and (ii) the performance of the contract governing the custody arrangements. If the Foreign Custody Manager determines that the custody arrangements with an Eligible Foreign Custodian are no longer appropriate, the Foreign Custody Manager shall so notify the Fund.
4.2.5 R EPORTING R EQUIREMENTS . The Foreign Custody Manager shall (a) report the withdrawal of Foreign Assets from an Eligible Foreign Custodian and the placement of Foreign Assets with another Eligible Foreign Custodian by providing to the Funds Board an amended Schedule A at the end of the calendar quarter in which the action has occurred, and (b) after the occurrence of any other material change in the foreign custody arrangements of the Portfolios described in this Section 4.2, make a written report to the Board containing a notification of the change.
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4.2.6 R EPRESENTATIONS . The Foreign Custody Manager represents to each Fund that it is a U.S. Bank as defined in Section (a)(7) of Rule 17f-5. Each Fund represents to the Custodian that its Board has (a) determined that it is reasonable for the Board to rely on the Custodian to perform the responsibilities delegated pursuant to this Agreement to the Custodian as the Foreign Custody Manager of the Portfolios and (b) considered and determined to accept such Country Risk as is incurred by placing and maintaining the Foreign Assets of each Portfolio in each Covered Foreign Country.
4.2.7 T ERMINATION BY A P ORTFOLIO OF THE C USTODIAN AS F OREIGN C USTODY M ANAGER . By giving at least 30 days prior written notice to the Custodian, a Fund, on behalf of a Portfolio, may terminate the delegation to the Custodian as the Foreign Custody Manager for the Portfolio. Following the termination, the Custodian shall have no further responsibility in its capacity as Foreign Custody Manager to the Portfolio.
S ECTION 4.3 M ONITORING OF E LIGIBLE S ECURITIES D EPOSITORIES . The Custodian shall (a) provide the Fund or its Investment Advisor with an analysis of the custody risks associated with maintaining assets with the Eligible Securities Depositories set forth on Schedule B in accordance with Section (a)(1)(i)(A) of Rule 17f-7 and (b) monitor such risks on a continuing basis and promptly notify the Fund or its Investment Advisor of any material change in such risks, in accordance with Section (a)(1)(i)(B) of Rule 17f-7.
S ECTION 5. A CTIVITIES OF THE C USTODIAN WITH R ESPECT TO P ROPERTY H ELD O UTSIDE THE U NITED S TATES .
S ECTION 5.1. H OLDING S ECURITIES . Foreign securities and other financial assets held outside of the United States shall be maintained in a Foreign Securities System in a Covered Foreign Country through arrangements implemented by the Custodian or an Eligible Foreign Custodian, as applicable, in the Covered Foreign Country. The Custodian shall identify on its books as belonging to the Portfolios the foreign securities and other financial assets held by each Eligible Foreign Custodian or Foreign Securities System. The Custodian may hold foreign securities and other financial assets for all of its customers, including the Portfolios, with any Eligible Foreign Custodian in an account that is identified as the Custodians account for the benefit of its customers; provided however, that (a) the records of the Custodian with respect to foreign securities or other financial assets of a Portfolio maintained in the account shall identify those securities and other financial assets as belonging to the Portfolio and (b) to the extent permitted and customary in the market in which the account is maintained, the Custodian shall require that securities and other financial assets so held by the Eligible Foreign Custodian be held separately from any assets of the Eligible Foreign Custodian or of other customers of the Eligible Foreign Custodian.
S ECTION 5.2. R EGISTRATION OF F OREIGN S ECURITIES . Foreign securities and other financial assets held outside of the United States maintained in the custody of an Eligible Foreign Custodian and that are not bearer securities shall be registered in the name of the applicable Portfolio or in the name of the Custodian or in the name of any Eligible Foreign Custodian or in the name of any nominee of any of the foregoing. The Fund on behalf of the Portfolio agrees to
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hold any such nominee harmless from any liability as a holder of record of the foreign securities or other financial assets. The Custodian or an Eligible Foreign Custodian reserves the right not to accept securities or other financial assets on behalf of a Portfolio under the terms of this Agreement unless the form of the securities or other financial assets and the manner in which they are delivered are in accordance with local market practice.
S ECTION 5.3. I NDEMNIFICATION BY E LIGIBLE F OREIGN C USTODIANS . Each contract pursuant to which the Custodian employs an Eligible Foreign Custodian shall, to the extent possible, require the Eligible Foreign Custodian to indemnify and hold harmless the Custodian from and against any loss, cost or expense arising out of or in connection with the Eligible Foreign Custodians performance of its obligations. At a Funds election, a Portfolio shall be entitled to be subrogated to the rights of the Custodian with respect to any claims against an Eligible Foreign Custodian as a consequence of any such loss, cost or expense if and to the extent that the Portfolio has not been made whole for the loss, cost or expense. In no event shall the Custodian be obligated to bring suit in its own name or to allow suit to be brought in its name.
S ECTION 5.4 B ANK A CCOUNTS .
5.4.1 G ENERAL . The Custodian shall identify on its books as for the account of the applicable Portfolio the amount of cash (including cash denominated in foreign currencies) deposited with the Custodian. The Custodian shall maintain cash deposits in on book currencies on its balance sheet. The Custodian shall be liable for such balances. If the Custodian is unable to maintain, or market practice does not facilitate the maintenance for the Portfolio of a cash balance in a currency as an on book currency, a deposit account shall be opened and maintained by the Custodian outside the United States on behalf of the Portfolio with an Eligible Foreign Custodian. The Custodian shall not maintain the cash deposit on its balance sheet. The Eligible Foreign Custodian will be liable for such balance directly to the Portfolio. All deposit accounts referred to in this Section shall be subject only to draft or order by the Custodian or, if applicable, the Eligible Foreign Custodian acting pursuant to the terms of this Agreement. Cash maintained in a deposit account and denominated in an on book currency will be maintained under and subject to the laws of the Commonwealth of Massachusetts. The Custodian will not have any deposit liability for deposits in any currency that is not an on book currency.
5.4.2 N ON -U.S. B RANCH AND N ON -U.S. D OLLAR D EPOSITS . In accordance with the laws of the Commonwealth of Massachusetts, the Custodian shall not be required to repay any deposit made at a non-U.S. branch of the Custodian or any deposit made with the Custodian and denominated in a non-U.S. dollar currency, if repayment of the deposit or the use of assets denominated in the non-U.S. dollar currency is prevented, prohibited or otherwise blocked due to (a) an act of war, insurrection or civil strife; (b) any action by a non-U.S. government or instrumentality or authority asserting governmental, military or police power of any kind, whether such authority be recognized as a de facto or a de jure government, or by any entity, political or revolutionary movement or otherwise that usurps, supervenes or otherwise materially impairs the normal operation of civil authority; or (c) the closure of a non-U.S. branch in order to prevent, in the reasonable judgment of the Custodian, harm to the employees or property of the Custodian.
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S ECTION 5.5. C OLLECTION OF I NCOME . The Custodian shall use reasonable commercial efforts to collect all income and other payments with respect to the Foreign Assets held hereunder to which a Portfolio shall be entitled. If extraordinary measures are required to collect the income or payment, the Fund and the Custodian shall consult as to such measures and as to the compensation and expenses of the Custodian relating to such measures. The Custodian shall credit income to the applicable Portfolio as such income is received or in accordance with the Custodians then current payable date income schedule. Any credit to the Portfolio in advance of receipt may be reversed when the Custodian determines that payment will not occur in due course, and the Portfolio may be charged at the Custodians applicable rate for time credited. Income on securities or other financial assets loaned other than from the Custodians securities lending program shall be credited as received.
S ECTION 5.6. T RANSACTIONS IN F OREIGN C USTODY A CCOUNT .
5.6.1 D ELIVERY O UT . The Custodian or an Eligible Foreign Custodian shall release and deliver foreign securities or other financial assets held outside of the United States owned by a Portfolio and held by the Custodian or such Eligible Foreign Custodian, or in a Foreign Securities System account, only upon receipt of Proper Instructions, specifying the foreign securities to be delivered and the person or persons to whom delivery is to be made. The Custodian shall pay out, or direct the respective Eligible Foreign Custodian or the respective Foreign Securities System to pay out, cash of a Portfolio only upon receipt of Proper Instructions specifying the amount of the payment and the person or persons to payment is to be made.
5.6.2 M ARKET C ONDITIONS . Notwithstanding any provision of this Agreement to the contrary, settlement and payment for Foreign Assets received for the account of the Portfolios and delivery of Foreign Assets maintained for the account of the Portfolios may be effected in accordance with the customary established securities trading or processing practices and procedures in the country or market in which the transaction occurs, including, without limitation, delivering Foreign Assets to the purchaser thereof or to a dealer therefor (or an agent for such purchaser or dealer) with the expectation of receiving later payment for the Foreign Assets from such purchaser or dealer.
5.6.3 S ETTLEMENT P RACTICES . The Custodian shall provide to each Board the information with respect to custody and settlement practices in countries in which the Custodian employs an Eligible Foreign Custodian described on Schedule C at the time or times set forth on the Schedule. The Custodian may revise Schedule C from time to time, but no revision shall result in a Board being provided with substantively less information than had been previously provided on Schedule C.
S ECTION 5.7 S HAREHOLDER OR B ONDHOLDER R IGHTS . The Custodian shall use reasonable commercial efforts to facilitate the exercise of voting and other shareholder and bondholder rights with respect to foreign securities and other financial assets held outside the United States, subject always to the laws, regulations and practical constraints that may exist in the country where the securities or other financial assets are issued. The Custodian may utilize Broadridge Financial Solutions, Inc. or another proxy service firm of recognized standing as its
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delegate to provide proxy services for the exercise of shareholder and bondholder rights. Local conditions, including lack of regulation, onerous procedural obligations, lack of notice and other factors may have the effect of severely limiting the ability of a Fund to exercise shareholder and bondholder rights.
S ECTION 5.8. C OMMUNICATIONS . The Custodian shall transmit promptly to the applicable Fund written information with respect to materials received by the Custodian through Eligible Foreign Custodians from issuers of the foreign securities and other financial asset assets being held outside the United States for the account of a Portfolio. The Custodian shall transmit promptly to the applicable Fund written information with respect to materials so received by the Custodian from issuers of foreign securities whose tender or exchange is sought or from the party or its agent making the tender or exchange offer. The Custodian shall also transmit promptly to the Fund all written information received by the Custodian through Eligible Foreign Custodians from issuers of the foreign securities or other financial assets issued outside of the United States and being held for the account of the Portfolio regarding any class action or other collective litigation relating to the Portfolios foreign securities or other financial assets issued outside the United States and then held, or previously held, during the relevant class-action period during the term of this Agreement by the Custodian via an Eligible Foreign Custodian for the account of the Fund for the Portfolio, including, but not limited to, opt-out notices and proof- of-claim forms. The Custodian does not support class-action participation by a Fund beyond such forwarding of written information received by the Custodian.
S ECTION 6. |
F OREIGN E XCHANGE . |
S ECTION 6.1. G ENERALLY . Upon receipt of Proper Instructions, which for purposes of this section may also include security trade advices, the Custodian shall facilitate the processing and settlement of foreign exchange transactions. Such foreign exchange transactions do not constitute part of the services provided by the Custodian under this Agreement.
S ECTION 6.2. F UND E LECTIONS . Each Fund (or its Investment Advisor acting on its behalf) may elect to enter into and execute foreign exchange transactions with third parties that are not affiliated with the Custodian, with State Street Global Markets, which is the foreign exchange division of State Street Bank and Trust Company and its affiliated companies ( SSGM ), or with a sub-custodian. Where the Fund or its Investment Advisor gives Proper Instructions for the execution of a foreign exchange transaction using an indirect foreign exchange service described in the Client Publications, the Fund (or its Investment Advisor) instructs the Custodian, on behalf of the Fund, to direct the execution of such foreign exchange transaction to SSGM or, when the relevant currency is not traded by SSGM, to the applicable sub-custodian. The Custodian shall not have any agency (except as contemplated in preceding sentence), trust or fiduciary obligation to the Fund, its Investment Advisor or any other person in connection with the execution of any foreign exchange transaction. The Custodian shall have no responsibility under this Agreement for the selection of the counterparty to, or the method of execution of, any foreign exchange transaction entered into by the Fund (or its Investment Advisor acting on its behalf) or the reasonableness of the execution rate on any such transaction.
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S ECTION 6.3. F UND A CKNOWLEDGEMENT Each Fund acknowledges that in connection with all foreign exchange transactions entered into by the Fund (or its Investment Advisor acting on its behalf) with SSGM or any sub-custodian, SSGM and each such sub-custodian:
(i) |
shall be acting in a principal capacity and not as broker, agent or fiduciary to the Fund or its Investment Advisor; |
(ii) |
shall seek to profit from such foreign exchange transactions, and are entitled to retain and not disclose any such profit to the Fund or its Investment Advisor; and |
(iii) |
shall enter into such foreign exchange transactions pursuant to the terms and conditions, including pricing or pricing methodology, (a) agreed with the Fund or its Investment Advisor from time to time or (b) in the case of an indirect foreign exchange service, (i) as established by SSGM and set forth in the Client Publications with respect to the particular foreign exchange execution services selected by the Fund or the Investment Advisor or (ii) as established by the sub-custodian from time to time. |
S ECTION 6.4. T RANSACTIONS BY S TATE S TREET . The Custodian or its affiliates, including SSGM, may trade based upon information that is not available to the Fund (or its Investment Advisor acting on its behalf), and may enter into transactions for its own account or the account of clients in the same or opposite direction to the transactions entered into with the Fund (or its Investment Manager), and shall have no obligation, under this Agreement, to share such information with or consider the interests of their respective counterparties, including, where applicable, the Fund or the Investment Advisor.
S ECTION 6A. |
C ONTRACTUAL S ETTLEMENT S ERVICES (P URCHASE /S ALES ) . |
S ECTION 6A.1 G ENERAL . The Custodian shall, in accordance with the terms set out in this Section 6A, debit or credit the appropriate deposit account of each Portfolio on a contractual settlement basis in connection with the purchase of securities or other financial assets for the Portfolio or the receipt of the proceeds of the sale or redemption of securities or other financial assets.
S ECTION 6A.2 P ROVISION OF S ERVICES . The services described in Section 6A.1 (the Contractual Settlement Services ) shall be provided for the securities and other financial assets and in such markets as the Custodian may advise from time to time. The Custodian may terminate or suspend any part of the provision of the Contractual Settlement Services at its sole discretion immediately upon notice to the applicable Fund on behalf of each Portfolio, including, without limitation, in the event of force majeure events affecting settlement, any disorder in markets, or other changed external business circumstances affecting the markets or the Fund.
S ECTION 6A.3 P URCHASE C ONSIDERATION . The consideration payable in connection with a purchase transaction shall be debited from the appropriate deposit account of the Portfolio as of the time and date that funds would ordinarily be required to settle the transaction in the applicable market. The Custodian shall promptly recredit the amount at the time that the Portfolio or the Fund notifies the Custodian by Proper Instruction that the transaction has been canceled.
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S ECTION 6A.4 S ALES AND R EDEMPTIONS . A provisional credit of an amount equal to the net sale price for a sale or redemption of securities or other financial assets shall be made to the account of the Portfolio as if the amount had been received as of the close of business on the date on which good funds would ordinarily be immediately available in the applicable market. The provisional credit will be made conditional upon the Custodian having received Proper Instructions with respect to, or reasonable notice of, the transaction, as applicable; and the Custodian or its agent having possession of the securities of other financial assets (excluding financial assets subject to any third party lending arrangement entered into by a Portfolio) associated with the transaction in good deliverable form and not being aware of any facts which would lead the Custodian or its agent to believe that the transaction will not settle in the time period ordinarily applicable to such transactions in the applicable market.
S ECTION 6A.5. R EVERSALS OF P ROVISIONAL C REDITS OR D EBITS . The Custodian shall have the right to reverse any provisional credit or debit given in connection with the Contractual Settlement Services at any time when the Custodian believes, in its reasonable judgment, that such transaction will not settle in accordance with its terms or amounts due pursuant thereto, will not be collectable or where the Custodian has not been provided Proper Instructions with respect thereto, as applicable. The Portfolio shall be responsible for any costs or liabilities resulting from such reversal. Upon such reversal, a sum equal to the credited or debited amount shall become immediately payable by the Portfolio to the Custodian and may be debited from any deposit or other account held for benefit of the Portfolio.
S ECTION 7. |
T AX S ERVICES . |
(a) Each Fund will provide documentary evidence of its tax domicile, organisational specifics and other documentation and information as may be required by the Custodian from time to time for tax purposes, including, without limitation, information relating to any special ruling or treatment to which the Fund may be entitled that is not applicable to the general nationality and category of person to which the Fund belongs under general laws and treaty obligations and documentation and information required in relation to countries where the Fund engages or proposes to engage in investment activity or where Portfolio assets are or will be held. The provision of such documentation and information shall be deemed to be a Proper Instruction, which the Custodian shall be entitled to rely and act upon. In giving such documentation and information, each Fund represents and warrants that it is true and correct in all material respects and that it will promptly provide the Custodian with all necessary corrections or updates upon becoming aware of any changes or inaccuracies in the documentation or information supplied.
(b) Each Fund shall be liable for all taxes (including Taxes) relating to its investment activity, including with respect to any cash or securities held by the Custodian on behalf of the Fund or any transactions related thereto. Subject to compliance by the Client with its obligations under Section 7(a), the Custodian shall withhold (or cause to be withheld) the amount of any Tax which is required to be withheld under applicable law in connection with the collection on behalf of the Fund pursuant to this Agreement of any dividend, interest income or other distribution
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with respect to any security and the proceeds or income from the sale or other transfer of any security held by the Custodian. If any Taxes become payable with respect to any prior payment made to the Fund by the Custodian or otherwise, the Custodian may apply any credit balance in the Funds deposit account to the extent necessary to satisfy such Tax obligation. The Fund shall remain liable for any tax deficiency. The Custodian is not liable for any tax obligations relating to the Portfolio or the Fund, other than those Tax services as set out specifically in this Section. The Fund agrees that the Custodian is not, and shall not be deemed to be, providing tax advice or tax counsel.
(c) The Custodian will provide tax relief services in relation to designated markets as may be specified from time to time in the Client Publications. Subject to the preceding sentence and compliance by the Fund with its obligations under Section 7(a), the Custodian will apply for a reduction of withholding tax and refund of any tax paid or tax credits which apply in each applicable market in respect of income payments on securities for the benefit of the Fund. Unless otherwise informed by the Fund, the Custodian shall be entitled to apply categorical treatment of the Fund according to its nationality, particulars of its organisation and other relevant details supplied by the Fund.
S ECTION 8. |
P AYMENTS FOR S ALES OR R EDEMPTIONS OF P ORTFOLIO I NTERESTS . |
S ECTION 8.1 P AYMENT FOR P ORTFOLIO I NTERESTS I SSUED . The Custodian shall receive from the distributor of Portfolio Interests of a Fund or from the Funds transfer agent (the Transfer Agent ) and deposit into the account of the Portfolio such payments as are received for Portfolio Interests issued or sold from time to time by the Fund. The Custodian will provide timely notification to the Fund on behalf of the Portfolio and the Transfer Agent of any receipt of the payments by the Custodian.
S ECTION 8.2 P AYMENT FOR P ORTFOLIO I NTERESTS R EDEEMED . Upon receipt of instructions from the Transfer Agent, the Custodian shall set aside funds of a Portfolio to the extent available for payment to holders of Portfolio Interests who have delivered to the Transfer Agent a request for redemption of their Portfolio Interests. The Custodian is authorized upon receipt of instructions from the Transfer Agent to wire funds to or through a commercial bank designated by the redeeming interest holders. If the Custodian furnishes a check to a holder in payment for the redemption of the holders Portfolio Interests and the check is drawn on the Custodian, the Custodian shall honor the check so long as the check is presented to the Custodian in accordance with the Deposit Account Agreement and such procedures and controls as are mutually agreed upon from time to time between the Fund and the Custodian.
S ECTION 9. |
P ROPER I NSTRUCTIONS . |
S ECTION 9. 1 F ORM AND S ECURITY P ROCEDURES . Proper Instructions may be in writing signed by the authorized individual or individuals or may be in a tested communication or in a communication utilizing access codes effected between electro-mechanical or electronic devices or may be by such other means and utilizing such intermediary systems and utilities as may be agreed to from time to time by the Custodian and the individual or organization giving the instruction, provided that the Fund has followed any security procedures agreed to from time to
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time by the applicable Fund and the Custodian including, but not limited to, the security procedures selected by the Fund by reference to the form of Funds Transfer Addendum hereto, the terms of which are part of this Agreement. The Custodian may agree to accept oral instructions, and in such case oral instructions will be considered Proper Instructions. The Fund shall cause all oral instructions to be confirmed in writing, but the Funds failure to do so shall not affect the Custodians authority to rely on the oral instructions.
Section 9.2 R ELIANCE ON O FFICER S C ERTIFICATE . Concurrently with the execution of this Agreement, and from time to time thereafter, as appropriate, each Fund shall deliver to the Custodian an officers certificate setting forth the names, titles, signatures and scope of authority of all individuals authorized to give Proper Instructions or any other notice, request, direction, instruction, certificate or instrument on behalf of the Fund. The certificate may be accepted and conclusively relied upon by the Custodian and shall be considered to be in full force and effect until receipt by the Custodian of a similar certificate to the contrary and the Custodian has had a reasonable time to act thereon.
Section 9.3 U NTIMELY P ROPER I NSTRUCTIONS . If the Custodian is not provided with reasonable time to execute a Proper Instruction (including any Proper Instruction not to execute, or any other modification to, a prior Proper Instruction), the Custodian will use good faith efforts to execute the Proper Instruction but will not be responsible or liable if the Custodians efforts are not successful (including any inability to change any actions that the Custodian had taken pursuant to the prior Proper Instruction). The inclusion of a statement of purpose or intent (or any similar notation) in a Proper Instruction shall not impose any additional obligations on the Custodian or condition or qualify its authority to effect the Proper Instruction. The Custodian will not assume a duty to ensure that the stated purpose or intent is fulfilled and will have no responsibility or liability when it follows the Proper Instruction without regard to such purpose or intent.
S ECTION 10. |
A CTIONS P ERMITTED WITHOUT E XPRESS A UTHORITY . |
The Custodian may in its discretion, without express authority from the applicable Fund on behalf of each Portfolio:
1) |
Make payments to itself or others for minor expenses of handling securities or other financial assets relating to its duties under this Agreement; provided that all such payments shall be accounted for to the Fund on behalf of the Portfolio; |
2) |
Surrender securities or other financial assets in temporary form for securities or other financial assets in definitive form; |
3) |
Endorse for collection, in the name of the Portfolio, checks, drafts and other negotiable instruments; and |
4) |
In general, attend to all non-discretionary details in connection with the sale, exchange, substitution, purchase, transfer and other dealings with the securities and other financial assets of the Portfolio except as otherwise directed by the applicable Board. |
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S ECTION 11. |
D UTIES OF C USTODIAN WITH R ESPECT TO THE B OOKS OF A CCOUNT AND C ALCULATION OF N ET A SSET V ALUE AND N ET I NCOME . |
The Custodian shall cooperate with and supply necessary information to any organization appointed by the Board of a Portfolio of a Fund to keep the books of account of the Portfolio and compute the net asset value per Portfolio Interest of the outstanding Portfolio Interests or, if directed in writing to do so by the Fund on behalf of the Portfolio, shall itself keep such books of account and compute such net asset value per Portfolio Interest. If and as so directed, the Custodian shall also calculate daily the net income of the Portfolio as described in the Funds currently effective prospectus ( Prospectus ) and shall advise the Fund and the Transfer Agent daily of the total amounts of such net income and, if instructed in writing by an officer of the Fund to do so, shall advise the Transfer Agent periodically of the division of such net income among its various components. Each Fund acknowledges and agrees that, with respect to investments maintained with the Underlying Transfer Agent, the Underlying Transfer Agent is the sole source of information on the number of Portfolio Interests held by it on behalf of a Portfolio and that the Custodian has the right to rely on holdings information furnished by the Underlying Transfer Agent to the Custodian in performing its duties under this Agreement, including without limitation, the duties set forth in this Section 11 and in Section 12; provided, however, that the Custodian shall be obligated to reconcile information as to purchases and sales of Underlying Shares contained in trade instructions and confirmations received by the Custodian and to report promptly any discrepancies to the Underlying Transfer Agent. If and as so directed, the calculations of the net asset value per Portfolio Interest and the daily income of each Portfolio shall be made at the time or times described from time to time in the Prospectus.
S ECTION 12. |
R ECORDS . |
The Custodian shall with respect to each Portfolio create and maintain all records relating to its activities and obligations under this Agreement in such manner as will meet the obligations of each Fund under the 1940 Act, with particular attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder. All such records shall be the property of the Fund and shall at all times during the regular business hours of the Custodian be open for inspection by duly authorized officers, employees or agents of the Fund and employees and agents of the SEC. The Custodian shall, at the Funds request, supply the Fund with a tabulation of securities owned by each Portfolio and held by the Custodian and shall, when requested to do so by the Fund and for such compensation as shall be agreed upon between the Fund and the Custodian, include certificate numbers in such tabulations. In the event that the Custodian is requested or authorized by a Fund, or required by subpoena, administrative order, court order or other legal process, applicable law or regulation, or required in connection with any investigation, examination or inspection of the Fund by state or federal regulatory agencies, to produce the records of the Fund or the Custodians personnel as witnesses, the Fund agrees to pay the Custodian for the Custodians time and expenses, as well as the fees and expenses of the Custodians counsel, incurred in responding to such request, order or requirement.
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S ECTION 13. |
F UND S I NDEPENDENT A CCOUNTANTS ; R EPORTS . |
S ECTION 13.1 O PINIONS . The Custodian shall take all reasonable action, as a Fund with respect to a Portfolio may from time to time request, to obtain from year to year favorable opinions from the Funds independent accountants with respect to its activities hereunder in connection with the preparation of the Funds Form N-1A or Form N-2, as applicable, and Form N-SAR or other annual reports to the SEC and with respect to any other requirements thereof.
S ECTION 13.2 R EPORTS . Upon reasonable request of a Fund, the Custodian shall provide the Fund with a copy of the Custodians Service Organizational Control (SOC) 1 reports prepared in accordance with the requirements of AT section 801, Reporting on Controls at a Service Organization (formerly Statement on Standards for Attestation Engagements (SSAE) No. 16). The Custodian shall use commercially reasonable efforts to provide the Fund with such reports as the Fund may reasonably request or otherwise reasonably require to fulfill its duties under Rule 38a-1 of the 1940 Act or similar legal and regulatory requirements.
S ECTION 14. |
C USTODIAN S S TANDARD OF C ARE ; E XCULPATION . |
14.1 S TANDARD OF C ARE . In carrying out the provisions of this Agreement, the Custodian shall act in good faith and without negligence and willful misconduct and shall be held to the exercise of reasonable care.
14.2 R ELIANCE ON P ROPER I NSTRUCTIONS . The Custodian shall be entitled conclusively to rely and act upon Proper Instructions until the Custodian has received notice of any change from the Fund and has had a reasonable time to act thereon. The Custodian may act on a Proper Instruction if it reasonably believes that it contains sufficient information and may refrain from acting on any Proper Instructions until such time that it has determined, in its sole discretion, that is has received any required clarification or authentication of Proper Instructions. The Custodian may rely upon and shall be protected in acting upon any Proper Instruction or any other instruction, notice, request, consent, certificate or other instrument or paper believed by it in good faith to be genuine and to have been properly executed by or on behalf of the applicable Fund.
14.3 O THER R ELIANCE . The Custodian is authorized and instructed to rely upon the information that the Custodian receives from the Fund or any third party on behalf of the Fund. The Custodian shall have no responsibility to review, confirm or otherwise assume any duty with respect to the accuracy or completeness of any information supplied to it by or on behalf of any Fund. The Custodian shall have no liability in respect of any loss, cost or expense incurred or sustained by the Fund arising from the performance of the Custodians duties hereunder in reliance upon records that were maintained for the Fund by any individual or organization, other than the Custodian, prior to the Custodians appointment as custodian hereunder. The Custodian shall be entitled to rely on and may act upon advice of counsel (who may be counsel for the Fund) on all matters and shall be without liability for any action reasonably taken or omitted pursuant to the advice.
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14.4 L IABILITY FOR F OREIGN C USTODIANS . The Custodian shall be liable for the acts or omissions of an Eligible Foreign Custodian to the same extent as if the action or omission were performed by the Custodian itself, taking into account the facts and circumstances and the established local market practices and laws prevailing in the particular jurisdiction in which the Fund elects to invest.
14.5 I NSOLVENCY AND C OUNTRY R ISK . The Custodian shall in no event be liable for (a) the insolvency of any Eligible Foreign Custodian, (b) the insolvency of any depositary bank maintaining in a deposit account cash denominated in any currency other than an on book currency, or (c) any loss, cost or expense incurred or sustained by a Fund or Portfolio resulting from or caused by Country Risk.
14.6 F ORCE M AJEURE AND T HIRD P ARTY A CTIONS . The Custodian shall be without responsibility or liability to any Fund or Portfolio for: (a) events or circumstances beyond the reasonable control of the Custodian, including, without limitation, the interruption, suspension or restriction of trading on or the closure of any currency or securities market or system, power or other mechanical or technological failures or interruptions, computer viruses or communications disruptions, work stoppages, natural disasters, acts of war, revolution, riots or terrorism or other similar force majeure events or acts; (b) errors by any Fund, its Investment Advisor or any other duly authorized person in their instructions to the Custodian; (c) the insolvency of or acts or omissions by a U.S. Securities System, Foreign Securities System, Underlying Transfer Agent or domestic sub-custodian designated pursuant to Section 2.2; (d) the failure of any Fund, its Investment Advisor, Portfolio or any duly authorized individual or organization to adhere to the Custodians operational policies and procedures; (e) any delay or failure of any broker, agent, securities intermediary or other intermediary, central bank or other commercially prevalent payment or clearing system to deliver to the Custodians sub-custodian or agent securities or other financial assets purchased or in the remittance or payment made in connection with securities or other financial assets sold; (f) any delay or failure of any organization in charge of registering or transferring securities or other financial assets in the name of the Custodian, any Fund, any Portfolio, the Custodians sub-custodians, nominees or agents including non-receipt of bonus, dividends and rights and other accretions or benefits; (g) delays or inability to perform its duties due to any disorder in market infrastructure with respect to any particular security, other financial asset, U.S. Securities System or Foreign Securities System; and (h) the effect of any provision of any law or regulation or order of the United States of America, or any state thereof, or any other country, or political subdivision thereof or of any court of competent jurisdiction.
14.7 I NDIRECT /S PECIAL /C ONSEQUENTIAL D AMAGES . Notwithstanding any other provision set forth herein, in no event shall either party be liable for any special, indirect, incidental, punitive or consequential damages of any kind whatsoever (including, without limitation, lost profits) with respect to the services provided pursuant to this Agreement, regardless of whether either party has been advised of the possibility of such damages. The limitations of liability set forth in this Section 14.7 shall apply regardless of the form or type of action in which a claim is brought or under which it is made, whether in contract, tort (including negligence of any kind), warranty, strict liability, indemnity or any other legal or equitable grounds, and shall survive failure of an exclusive remedy.
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14.8 D ELIVERY OF P ROPERTY . The Custodian shall not be responsible for any securities or other assets of a Portfolio which are not received by the Custodian or which are delivered out in accordance with Proper Instructions. The Custodian shall not be responsible for the title, validity or genuineness of any securities or other assets or evidence of title thereto received by it or delivered by it pursuant to this Agreement.
14.9 N O I NVESTMENT A DVICE . The Custodian has no responsibility to monitor or oversee the investment activity undertaken by a Fund or its Investment Advisor or by an Portfolio. The Custodian has no duty to ensure or to inquire whether an Investment Advisor complies with any investment objectives or restrictions agreed upon between a Fund and the Investment Advisor or whether the Investment Advisor complies with its legal obligations under applicable securities laws or other laws, including laws intended to protect the interests of investors. The Custodian shall neither assess nor take any responsibility or liability for the suitability or appropriateness of the investments made by a Fund or a Portfolio or on its behalf.
14.10 C OMMUNICATIONS . The Custodian shall not be liable for any untimely exercise of any tender, exchange or other right or power in connection with securities or other financial assets of a Portfolio at any time held by the Custodian unless (a) the Custodian or the Eligible Foreign Custodian is in actual possession of such foreign securities or other financial assets, (b) the Custodian receives Proper Instructions with regard to the exercise of the right or power, and (c) both of the conditions referred to in the foregoing clauses (a) and (b) have been satisfied at least three business days prior to the date on which the Custodian is to take action to exercise the right or power.
14.11 L OANED S ECURITIES . Income due to each Portfolio on securities or other financial assets loaned shall be the responsibility of the applicable Fund. The Custodian will have no duty or responsibility in connection with loaned securities or other financial assets, other than to provide the Fund with such information or data as may be necessary to assist the Fund in arranging for the timely delivery to the Custodian of the income to which the Portfolio is entitled.
14.12 T RADE C OUNTERPARTIES . A Funds receipt of securities or other financial assets from a counterparty in connection with any of its purchase transactions and its receipt of cash from a counterparty in connection with any sale or redemption of securities or other financial assets will be at the Funds sole risk, and the Custodian shall not be obligated to make demands on the Funds behalf if the Funds counterparty defaults. If a Funds counterparty fails to deliver securities, other financial assets or cash, the Custodian will, as its sole responsibility, notify the Funds Investment Advisor of the failure within a reasonable time after the Custodian became aware of the failure.
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S ECTION 15. |
C OMPENSATION AND I NDEMNIFICATION OF C USTODIAN ; S ECURITY I NTEREST . |
S ECTION . 15.1 C OMPENSATION . The Custodian shall be entitled to reasonable compensation for its services and expenses as agreed upon from time to time between each Fund on behalf of each applicable Portfolio and the Custodian.
S ECTION 15.2 I NDEMNIFICATION . Each Portfolio agrees to indemnify the Custodian and to hold the Custodian harmless from and against any loss, cost or expense sustained or incurred by the Custodian in acting or omitting to act under or in respect of this Agreement in good faith and without negligence or willful misconduct, including, without limitation, (a) the Custodians compliance with Proper Instructions and (b) in connection with the provision of services to a Fund pursuant to Section 7, any obligations, including taxes, withholding and reporting requirements, claims for exemption and refund, additions for late payment, interest, penalties and other expenses, that may be assessed against the Fund, the Portfolio or the Custodian as custodian of the assets of the Fund or the Portfolio. If a Fund on behalf of a Portfolio instructs the Custodian to take any action with respect to securities or other financial assets, and the action involves the payment of money or may, in the opinion of the Custodian, result in the Custodian or its nominee assigned to the Fund or the Portfolio being liable therefor, the Fund on behalf of the Portfolio, as a prerequisite to the Custodian taking the action, shall provide to the Custodian at the Custodians request such further indemnification in an amount and form satisfactory to the Custodian.
S ECTION 15.3 S ECURITY I NTEREST . Each Fund hereby grants to the Custodian, to secure the payment and performance of the Funds obligations under this Agreement, whether contingent or otherwise, a security interest in and right of recoupment and setoff against all cash and all securities and other financial assets at any time held for the account of a Portfolio by or through the Custodian. The obligations include, without limitation, the Funds obligations to reimburse the Custodian if the Custodian or any of its affiliates, subsidiaries or agents advances cash or securities or other financial assets to the Fund for any purpose (including but not limited to settlements of securities or other financial assets, foreign exchange contracts and assumed settlement), or in the event that the Custodian or its nominee shall incur or be assessed any taxes, charges, expenses, assessments, claims or liabilities in connection with the performance of this Agreement, except such as may arise from its or its nominees own negligence, as well as the Funds obligation to compensate the Custodian pursuant to Section 15.1 or indemnify the Custodian pursuant to Section 15.2. Should the Fund fail to reimburse or otherwise pay the Custodian any obligation under this Agreement promptly, the Custodian shall have the rights and remedies of a secured party under this Agreement, the UCC and other applicable law, including the right to utilize available cash and to sell or otherwise dispose of the Portfolios assets to the extent necessary to obtain payment or reimbursement. The Custodian may at any time decline to follow Proper Instructions to deliver out cash, securities or other financial assets if the Custodian determines in its reasonable discretion that, after giving effect to the Proper Instructions, the cash, securities or other financial assets remaining will not have sufficient value fully to secure the Funds payment or reimbursement obligations, whether contingent or otherwise.
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S ECTION 16. |
E FFECTIVE P ERIOD AND T ERMINATION . |
S ECTION 16.1 T ERM . This Agreement shall remain in full force and effect for an initial term ending five (5) years from the date hereof. After the expiration of the Initial Term, this Agreement shall automatically renew for successive one-year terms unless a written notice of non-renewal is delivered by the non-renewing party no later than ninety (90) days prior to the expiration of the initial term or any renewal term, as the case may be. A written notice of non- renewal may be given as to a Fund or a Portfolio.
S ECTION 16.2 T ERMINATION . Either party may terminate this Agreement as to a Fund or a Portfolio: (a) in the event of the other partys material breach of a material provision of this Agreement that the other party has either failed to cure, or failed to establish a remedial plan to cure that is reasonably acceptable to the non-breaching party, within 120 days written notice being given by the non-breaching party of the breach, or (b) in the event of the appointment of a conservator or receiver for the other party, the commencement by or against the other party of a bankruptcy or insolvency case or proceeding, or upon the happening of a like event to the other party at the direction of an appropriate agency or court of competent jurisdiction.
S ECTION 16.3 P AYMENTS O WING TO THE C USTODIAN . Upon termination of this Agreement pursuant to Section 16.1 or 16.2 with respect to any Fund or Portfolio, the applicable Fund shall pay to the Custodian any compensation then due and shall reimburse the Custodian for its other fees, expenses and charges. Upon receipt of such payment and reimbursement, the Custodian will deliver the Funds or Portfolios cash and its securities and other financial assets as set forth in Section 17.
S ECTION 16.4 E FFECT OF T ERMINATION . Termination of this Agreement with respect to any one particular Fund or Portfolio shall in no way affect the rights and duties under this Agreement with respect to any other Fund or Portfolio. Following termination with respect to a Fund or Portfolio, the Custodian shall have no further responsibility to forward information under Section 3.8 or 5.8. The provisions of Sections 7, 14, 15 and 17 of this Agreement shall survive termination of this Agreement.
S ECTION 17. |
S UCCESSOR C USTODIAN . |
S ECTION 17.1 S UCCESSOR A PPOINTED . If a successor custodian shall be appointed for a Portfolio by its Board, the Custodian shall, upon termination of this Agreement and receipt of Proper Instructions, deliver to the successor custodian at the office of the Custodian, duly endorsed and in the form for transfer, all cash and all securities and other financial assets of the Portfolio then held by the Custodian hereunder and shall transfer to an account of the successor custodian all of the securities and other financial assets of the Portfolio held in a U.S. Securities System or Foreign Securities System or at the Underlying Transfer Agent.
S ECTION 17.2 N O S UCCESSOR A PPOINTED . If no such successor custodian shall be appointed, the Custodian shall, in like manner, upon receipt of Proper Instructions, deliver at the office of the Custodian and transfer the cash and the securities and other financial assets of the Portfolio in accordance with the Proper Instructions.
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S ECTION 17.3 N O S UCCESSOR A PPOINTED AND N O P ROPERTY I NSTRUCTIONS . If no successor custodian has been appointed and no Proper Instructions have been delivered to the Custodian on or before the termination of this Agreement, then the Custodian shall have the right to deliver to a bank or trust company, which is a bank as defined in the 1940 Act, doing business in Boston, Massachusetts, or New York, New York, of its own selection, all cash and all securities and other financial assets of the Portfolio then held by the Custodian hereunder, and to transfer to an account of the bank or trust company all of the securities and other financial assets of the Portfolio held in any U.S. Securities System or Foreign Securities System or at the Underlying Transfer Agent. The transfer will be on such terms as are contained in this Agreement or as the Custodian may otherwise reasonably negotiate with the bank or trust company. Any compensation payable to the bank or trust company, and any cost or expense incurred by the Custodian, in connection with the transfer shall be for the account of the Portfolio.
S ECTION 17.4 R EMAINING P ROPERTY . If any cash or any securities or other financial assets of the Portfolio held by the Custodian hereunder remain held by the Custodian after the termination of this Agreement owing to the failure of the applicable Fund to provide Proper Instructions, the Custodian shall be entitled to fair compensation for its services during such period as the Custodian holds the cash or the securities or other financial assets (the existing agreed-to compensation at the time of termation shall be one indicator of what is considered fair compensation). The provisions of this Agreement relating to the duties, exculpation and indemnification of the Custodian shall apply in favor of the Custodian during such period.
S ECTION 17.5 R ESERVES . Notwithstanding the foregoing provisions of this Section 17, the Custodian may retain cash or securities or other financial assets of the Fund or Portfolio as a reserve reasonably established by the Custodian to secure the payment or performance of any obligations of the Fund or Portfolio secured by a security interest or right of recoupment or setoff in favor of the Custodian.
S ECTION 18. R EMOTE A CCESS S ERVICES A DDENDUM . The Custodian and each Fund agree to be bound by the terms of the Remote Access Services Addendum hereto.
S ECTION 19. L OAN S ERVICES A DDENDUM . If a Fund directs the Custodian in writing to perform loan services, the Custodian and the Fund will be bound by the terms of the Loan Services Addendum attached hereto. The Fund shall reimburse Custodian for its fees and expenses related thereto as agreed upon from time to time in writing by the Fund and the Custodian.
S ECTION 20. |
G ENERAL . |
S ECTION 20.1 G OVERNING L AW . Any and all matters in dispute between the parties hereto, whether arising from or relating to this Agreement, shall be governed by and construed in accordance with laws of the Commonwealth of Massachusetts, without giving effect to any
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conflict of laws rules. Likewise, the law applicable to all issues in Article 2(1) of the Hague Convention on the Law Applicable to Certain Rights in respect of Securities Held with an Intermediary is the law in force in the Commonwealth of Massachusetts.
S ECTION 20.2 [R ESERVED ]
S ECTION 20.3 P RIOR A GREEMENTS ; A MENDMENTS . This Agreement supersedes all prior agreements between each Fund on behalf of each of the Funds Portfolios and the Custodian relating to the custody of the Funds assets. This Agreement may be amended at any time in writing by mutual agreement of the parties hereto.
S ECTION 20.4 A SSIGNMENT . This Agreement may not be assigned by (a) any Fund without the written consent of the Custodian or (b) the Custodian without the written consent of each applicable Fund. However, without the consent any Fund or any Portfolio, the Custodian may assign this Agreement to a successor of all or a substantial portion of its business, or to a party controlling, controlled by or under common control with the Custodian. Notwithstanding the foregoing, the Custodian may employ, engage, associate or contract with such person or persons, including, without limitation, affiliates and subsidiaries of the Custodian, as the Custodian may deem desirable to assist it in performing certain of its non-custodial obligations under this Agreement without the consent of any Fund; provided, however , that the compensation of such person or persons shall be paid by the Custodian and that the Custodian shall be as fully responsible to the Fund for the acts and omissions of any such person or persons as it is for its own acts and omissions under this Agreement.
S ECTION 20.5 I NTERPRETIVE AND A DDITIONAL P ROVISIONS . In connection with the operation of this Agreement, the Custodian and each Fund on behalf of each of the Portfolios, may from time to time agree on such provisions interpretive of or in addition to the provisions of this Agreement as may in their joint opinion be consistent with the general tenor of this Agreement. Any such interpretive or additional provisions shall be in a writing signed by all parties, provided that no such interpretive or additional provisions shall contravene any applicable laws or regulations or any provision of a Funds organic record and Prospectus. No interpretive or additional provisions made as provided in the preceding sentence shall be an amendment of this Agreement.
S ECTION 20.6 A DDITIONAL F UNDS AND P ORTFOLIOS .
20.6.1 A DDITIONAL F UND . If any management investment company in addition to those listed on Appendix A desires he Custodian to render services as custodian under the terms of this Agreement, the management investment company shall so notify the Custodian in writing. If the Custodian agrees in writing to provide the services, the management investment company shall become a Fund hereunder and be bound by all terms and conditions and provisions hereof including, without limitation, the representations and warranties set forth in Section 20.7 below.
20.6.2 A DDITIONAL P ORTFOLIO . If any Fund establishes a series in addition to the Portfolios set forth on Appendix A with respect to which the Fund desires the Custodian to render services as custodian under the terms of this Agreement, the Fund shall so notify the Custodian in writing. If the Custodian agrees in writing to provide the services, the series shall become a Portfolio hereunder.
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S ECTION 20.7 T HE P ARTIES ; R EPRESENTATIONS AND W ARRANTIES . All references in this Agreement to the Fund are to each of the management investment companies listed on Appendix A, and each management investment company made subject to this Agreement in accordance with Section 20.6 above, individually, as if this Agreement were between the individual Fund and the Custodian. In the case of a series organization, all references in this Agreement to the Portfolio are to the individual series of the series organization on behalf of the individual series. Any reference in this Agreement to the parties shall mean the Custodian and such other individual Fund as to which the matter pertains.
20.7.1 F UND R EPRESENTATIONS AND W ARRANTIES . Each Fund hereby represents and warrants that (a) it is duly organized and validly existing in good standing in its jurisdiction of organization; (b) it has the requisite power and authority under applicable law and its organic record to enter into and perform this Agreement; (c) all requisite proceedings have been taken to authorize it to enter into and perform this Agreement; (d) no legal or administrative proceedings have been instituted or threatened which would materially impair the Funds ability to perform its duties and obligations under this Agreement; and (e) its entering into this Agreement shall not cause a material breach or be in material conflict with any other agreement or obligation of the Fund or any law or regulation applicable to it.
20.7.2 C USTODIAN R EPRESENTATIONS AND W ARRANTIES . The Custodian hereby represents and warrants that (a) it is a trust company, duly organized and validly existing under the laws of the Commonwealth of Massachusetts; (b) it has the requisite power and authority to carry on its business in the Commonwealth of Massachusetts; (c) all requisite proceedings have been taken to authorize it to enter into and perform this Agreement; (d) no legal or administrative proceedings have been instituted or threatened which would materially impair the Custodians ability to perform its duties and obligations under this Agreement; and (e) its entering into this Agreement shall not cause a material breach or be in material conflict with any other agreement or obligation of the Custodian or any law or regulation applicable to it.
S ECTION 20.8 N OTICES . Any notice, instruction or other communication required to be given hereunder will, unless otherwise provided in this Agreement, be in writing and may be sent by hand, or by facsimile transmission, or overnight delivery by any recognized delivery service, to the parties at the following addresses or such other addresses as may be notified by any party from time to time.
To any Fund: | c/o N UVEEN I NVESTMENTS | |
333 West Wacker Drive | ||
Chicago, Illinois 60606 | ||
Attention: Stephen Foy | ||
Telephone: 312-917-7956 |
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To the Custodian: | S TATE S TREET B ANK AND T RUST C OMPANY | |
One Lincoln Street | ||
Boston, MA 02111 | ||
Attention: Louis Abruzzi | ||
Telephone: 617-662-0300 |
with a copy to:
S TATE S TREET B ANK AND T RUST C OMPANY
Legal Division Global Services Americas
One Lincoln Street
Boston, MA 02111
Attention: Senior Vice President and Senior Managing Counsel
S ECTION 20.9 C OUNTERPARTS . This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, and all such counterparts taken together shall constitute one and the same Agreement . Counterparts may be executed in either original or electronically transmitted form (e.g., faxes or emailed portable document format (PDF) form), and the parties hereby adopt as original any signatures received in electronically transmitted form.
S ECTION 20.10 S EVERABILITY ; N O W AIVER . If any provision of this Agreement shall be held to be invalid, unlawful or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired. The failure of a party hereto to insist upon strict adherence to any term of this Agreement on any occasion or the failure of a party hereto to exercise or any delay in exercising any right or remedy under this Agreement shall not constitute a waiver of any the term, right or remedy or a waiver of any other rights or remedies, and no single or partial exercise of any right or remedy under this Agreement shall prevent any further exercise of the right or remedy or the exercise of any other right or remedy.
S ECTION 20.11 C ONFIDENTIALITY . All information provided under this Agreement by a party (the Disclosing Party) to the other party (the Receiving Party) regarding the Disclosing Partys business and operations shall be treated as confidential. Subject to Section 20.12 below, all confidential information provided under this Agreement by Disclosing Party shall be used, including disclosure to third parties, by the Receiving Party, or its agents or service providers, solely for the purpose of performing or receiving the services and discharging the Receiving Partys other obligations under the Agreement or managing the business of the Receiving Party and its affiliates, including financial and operational management and reporting, risk management, legal and regulatory compliance and client service management. The foregoing shall not be applicable to any information (a) that is publicly available when provided or thereafter becomes publicly available, other than through a breach of this Agreement, (b) that is independently derived by the Receiving Party without the use of any information provided by the Disclosing Party in connection with this Agreement, (c) that is disclosed to comply with any legal or regulatory proceeding, investigation, audit, examination, subpoena, civil investigative demand or other similar process, (d) that is disclosed as required by operation of law or
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regulation or as required to comply with the requirements of any market infrastructure that the Disclosing Party or its agents direct the Custodian or its affiliates to employ (or which is required in connection with the holding or settlement of instruments included in the assets subject to this Agreement), or (e) where the party seeking to disclose has received the prior written consent of the party providing the information, which consent shall not be unreasonably withheld .
S ECTION 20.12 U SE OF D ATA .
(a) In connection with the provision of the services and the discharge of its other obligations under this Agreement, the Custodian (which term for purposes of this Section 20.12 includes each of its parent company, branches and affiliates ( Affiliates )) may collect and store information regarding a Fund and share such information with its Affiliates, agents and service providers in order and to the extent reasonably necessary (i) to carry out the provision of services contemplated under this Agreement and other agreements between the Fund and the Custodian or any of its Affiliates and (ii) to carry out management of its businesses, including, but not limited to, financial and operational management and reporting, risk management, legal and regulatory compliance and client service management.
(b) Subject to paragraph (c) below, the Custodian and/or its Affiliates (except those Affiliates or business divisions principally engaged in the business of asset management) may use any data or other information ( Data ) obtained by such entities in the performance of their services under this Agreement or any other agreement between the Fund and the Custodian or one of its Affiliates, including Data regarding transactions and portfolio holdings relating to the Fund, and publish, sell, distribute or otherwise commercialize the Data; provided that, unless the Fund otherwise consents, Data is combined or aggregated with information relating to (i) other customers of the Custodian and/or its Affiliates or (ii) information derived from other sources, in each case such that any published information will be displayed in a manner designed to prevent attribution to or identification of such Data with the Fund. The Fund agrees that Custodian and/or its Affiliates may seek to profit and realize economic benefit from the commercialization and use of the Data, that such benefit will constitute part of the Custodians compensation for services under this Agreement or such other agreement, and the Custodian and/or its Affiliates shall be entitled to retain and not be required to disclose the amount of such economic benefit and profit to the Fund.
(c) Except as expressly contemplated by this Agreement, nothing in this Section 20.12 shall limit the confidentiality and data-protection obligations of the Custodian and its Affiliates under this Agreement and applicable law. The Custodian shall cause any Affiliate, agent or service provider to which it has disclosed Data pursuant to this Section 20.12 to comply at all times with confidentiality and data-protection obligations as if it were a party to this Agreement.
S ECTION 20.13 D ATA P RIVACY . The Custodian will implement and maintain a written information security program that contains appropriate security measures to safeguard the personal information of the Funds shareholders, employees, directors and officers that the Custodian receives, stores, maintains, processes or otherwise accesses in connection with the provision of
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services hereunder. The term, personal information , as used in this Section, means (a) an individuals name (first initial and last name or first name and last name), address or telephone number plus (i) Social Security number, (ii) drivers license number, (iii) state identification card number, (iv) debit or credit card number, (v) financial account number or (vi) personal identification number or password that would permit access to a persons account, or (b) any combination of any of the foregoing that would allow a person to log onto or access an individuals account. The term does not include information that is lawfully obtained from publicly available information, or from federal, state or local government records lawfully made available to the general public.
S ECTION 20.14 R EPRODUCTION OF D OCUMENTS . This Agreement and all schedules, addenda, exhibits, appendices, attachments and amendments hereto may be reproduced by any photographic, photostatic, microfilm, micro-card, miniature photographic or other similar process. Any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding, whether or not the original is in existence and whether or not such reproduction was made by a party in the regular course of business, and any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.
S ECTION 20.15 R EGULATION GG . Each Fund represents and warrants that it does not engage in an Internet gambling business, as such term is defined in Section 233.2(r) of Federal Reserve Regulation GG (12 CFR 233) and covenants that it shall not engage in an Internet gambling business. In accordance with Regulation GG, each Fund is hereby notified that restricted transactions, as such term is defined in Section 233.2(y) of Regulation GG, are prohibited in any dealings with the Custodian pursuant to this Agreement or otherwise between or among any party hereto.
S ECTION 20.16 S HAREHOLDER C OMMUNICATIONS E LECTION . SEC Rule 14b-2 requires banks that hold securities, as that term is used in federal securities laws, for the account of customers to respond to requests by issuers of securities for the names, addresses and holdings of beneficial owners of securities of that issuer held by the bank unless the beneficial owner has expressly objected to disclosure of this information. In order to comply with the rule, as may be applicable, the Custodian needs each Fund to indicate whether it authorizes the Custodian to provide such Funds name, address, and share position to requesting companies whose securities the Fund owns. If a Fund tells the Custodian no, the Custodian will not provide this information to requesting companies. If a Fund tells the Custodian yes or does not check either yes or no below, the Custodian is required by the rule, as applicable, to treat the Fund as consenting to disclosure of this information for all securities owned by the Fund or any funds or accounts established by the Fund. For a Funds protection, the Rule, as applicable, prohibits the requesting company from using the Funds name and address for any purpose other than corporate communications. Please indicate below whether the Fund consents or objects by checking one of the alternatives below.
YES ☐ |
The Custodian is authorized to release the Funds name, address, and share positions. |
NO ☒ |
The Custodian is not authorized to release the Funds name, address, and share positions. |
S ECTION 20.17 L IMITATION OF L IABILITY . To the extent that a Funds Declaration of Trust is on file with the Secretary of The Commonwealth of Massachusetts, this Agreement is executed on behalf of such Fund by the Funds officers as officers and not individually. The obligations imposed upon the applicable Fund by this Agreement are not binding upon any of such Funds Trustees, officers or shareholders individually but are binding only upon the assets and property of the Fund.
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S IGNATURE P AGE
IN WITNESS WHEREOF , each of the parties has caused this Agreement to be executed in its name and behalf by its duly authorized representative under seal as of the date first above-written.
EACH OF THE MANAGEMENT INVESTMENT COMPANIES AND SERIES
SET FORTH ON APPENDIX A HERETO
By: |
/s/ Stephen D. Foy |
|
Name: Stephen D. Foy | ||
Title: Vice President and Fund Controller |
STATE STREET BANK AND TRUST COMPANY
By: |
/s/ Gunjan Kedia |
|
Name: Gunjan Kedia | ||
Title: Executive Vice President |
APPENDIX A
TO
M ASTER C USTODIAN A GREEMENT
NUVEEN CLOSED-END MANAGEMENT INVESTMENT COMPANIES
Diversified Real Asset Income Fund
Dow 30 SM Enhanced Premium & Income Fund Inc.
Dow 30 SM Premium & Dividend Income Fund Inc.
NASDAQ Premium Income & Growth Fund Inc.
Nuveen All Cap Energy MLP Opportunities Fund
Nuveen AMT-Free Municipal Income Fund
Nuveen AMT-Free Municipal Value Fund
Nuveen Arizona Premium Income Municipal Fund
Nuveen Build America Bond Fund
Nuveen Build America Bond Opportunity Fund Nuveen
California AMT-Free Municipal Income Fund Nuveen
California Dividend Advantage Municipal Fund Nuveen
California Dividend Advantage Municipal Fund 2
Nuveen California Dividend Advantage Municipal Fund 3
Nuveen California Municipal Value Fund 2
Nuveen California Municipal Value Fund, Inc.
Nuveen California Select Tax-Free Income Portfolio
Nuveen Connecticut Premium Income Municipal Fund
Nuveen Core Equity Alpha Fund
Nuveen Credit Strategies Income Fund
Nuveen Diversified Currency Opportunities Fund
Nuveen Diversified Dividend and Income Fund
Nuveen Dividend Advantage Municipal Fund
Nuveen Dividend Advantage Municipal Fund 2
Nuveen Dividend Advantage Municipal Fund 3
Nuveen Dividend Advantage Municipal Income Fund
Nuveen Dow 30 Dynamic Overwrite Fund
Nuveen Energy MLP Total Return Fund
Nuveen Enhanced Municipal Value Fund
Nuveen Equity Premium Advantage Fund
Nuveen Equity Premium and Growth Fund
Nuveen Equity Premium Income Fund
Nuveen Equity Premium Opportunity Fund
Nuveen Flexible Investment Income Fund
Nuveen Floating Rate Income Fund
Nuveen Floating Rate Income Opportunity Fund
Nuveen Georgia Dividend Advantage Municipal Fund 2
Nuveen Global High Income Fund
Nuveen Global Income Opportunities Fund
Nuveen Global Equity Income Fund f/k/a Nuveen Global Value Opportunities Fund
Nuveen High Income 2020 Target Term Fund
Nuveen Intermediate Duration Municipal Term Fund
Nuveen Intermediate Duration Quality Municipal Term Fund
D-1
Nuveen Investment Quality Municipal Fund, Inc.
Nuveen Maryland Premium Income Municipal Fund
Nuveen Massachusetts Premium Income Municipal Fund
Nuveen Michigan Quality Income Municipal Fund
Nuveen Minnesota Municipal Income Fund
Nuveen Missouri Premium Income Municipal Fund
Nuveen Mortgage Opportunity Term Fund
Nuveen Mortgage Opportunity Term Fund 2
Nuveen Municipal Advantage Fund, Inc.
Nuveen Municipal High Income Opportunity Fund
Nuveen Municipal Income Fund, Inc.
Nuveen Municipal Market Opportunity Fund, Inc.
Nuveen Municipal Opportunity Fund, Inc.
Nuveen Municipal Value Fund, Inc.
Nuveen Multi-Market Income Fund
Nuveen NASDAQ 100 Dynamic Overwrite Fund
Nuveen New Jersey Dividend Advantage Municipal Fund
Nuveen New Jersey Dividend Advantage Municipal Fund 2
Nuveen New Jersey Investment Quality Municipal Fund, Inc.
Nuveen New Jersey Municipal Value Fund
Nuveen New Jersey Premium Income Municipal Fund, Inc.
Nuveen New York AMT-Free Municipal Income Fund
Nuveen New York Dividend Advantage Municipal Fund
Nuveen New York Dividend Advantage Municipal Fund 2
Nuveen New York Municipal Value Fund 2
Nuveen New York Municipal Value Fund, Inc.
Nuveen New York Performance Plus Municipal Fund, Inc.
Nuveen New York Select Tax-Free Income Portfolio
Nuveen North Carolina Premium Income Municipal Fund
Nuveen Ohio Quality Income Municipal Fund
Nuveen Pennsylvania Investment Quality Municipal Fund
Nuveen Pennsylvania Municipal Value Fund
Nuveen Performance Plus Municipal Fund, Inc.
Nuveen Preferred and Income Term Fund
Nuveen Preferred Income Opportunities Fund
Nuveen Premier Municipal Income Fund, Inc.
Nuveen Premium Income Municipal Fund 2, Inc.
Nuveen Premium Income Municipal Fund 4, Inc.
Nuveen Premium Income Municipal Fund, Inc.
Nuveen Quality Income Municipal Fund, Inc.
Nuveen Quality Municipal Fund, Inc.
Nuveen Quality Preferred Income Fund
Nuveen Quality Preferred Income Fund 2
Nuveen Quality Preferred Income Fund 3
Nuveen Real Asset Income and Growth Fund
Nuveen Real Estate Income Fund
Nuveen Select Maturities Municipal Fund
Nuveen Select Quality Municipal Fund, Inc.
Nuveen Select Tax-Free Income Portfolio
Nuveen Select Tax-Free Income Portfolio 2
Nuveen Select Tax-Free Income Portfolio 3
Nuveen Senior Income Fund
Nuveen Short Duration Credit Opportunities Fund
Nuveen Tax-Advantaged Dividend Growth Fund
Nuveen Tax-Advantaged Total Return Strategy Fund
Nuveen Technology Opportunities Fund
Nuveen Texas Quality Income Municipal Fund
Nuveen Virginia Premium Income Municipal Fund
NUVEEN OPEN-END MANAGEMENT INVESTMENT COMPANIES
NUVEEN MUNICIPAL TRUST , on behalf of:
Nuveen Intermediate Duration Municipal Bond Fund
Nuveen All-American Municipal Bond Fund
Nuveen Limited Term Municipal Bond Fund
Nuveen High Yield Municipal Bond Fund
Nuveen Inflation Protected Municipal Bond Fund
Nuveen Short Duration High Yield Municipal Bond Fund
Nuveen Strategic Municipal Opportunities Fund
NUVEEN MULTISTATE TRUST I , on behalf of:
Nuveen Arizona Municipal Bond Fund
Nuveen Colorado Municipal Bond Fund
Nuveen Maryland Municipal Bond Fund
Nuveen New Mexico Municipal Bond Fund
Nuveen Pennsylvania Municipal Bond Fund
Nuveen Virginia Municipal Bond Fund
NUVEEN MULTISTATE TRUST II , on behalf of:
Nuveen California High Yield Municipal Bond Fund
Nuveen California Municipal Bond Fund
Nuveen Connecticut Municipal Bond Fund
Nuveen Massachusetts Municipal Bond Fund
Nuveen New Jersey Municipal Bond Fund
Nuveen New York Municipal Bond Fund
NUVEEN MULTISTATE TRUST III , on behalf of:
Nuveen Georgia Municipal Bond Fund
Nuveen Louisiana Municipal Bond Fund
Nuveen North Carolina Municipal Bond Fund
Nuveen Tennessee Municipal Bond Fund
NUVEEN MULTISTATE TRUST IV , on behalf of:
Nuveen Kansas Municipal Bond Fund
Nuveen Kentucky Municipal Bond Fund
Nuveen Michigan Municipal Bond Fund
Nuveen Missouri Municipal Bond Fund
Nuveen Ohio Municipal Bond Fund
Nuveen Wisconsin Municipal Bond Fund
NUVEEN INVESTMENT TRUST , on behalf of:
Nuveen Concentrated Core Fund
Nuveen Core Dividend Fund
Nuveen Equity Market Neutral Fund
Nuveen Global Total Return Bond Fund
Nuveen Large Cap Core Fund
Nuveen Large Cap Core Plus Fund
Nuveen Large Cap Growth Fund
Nuveen Large Cap Value Fund (f/k/a Nuveen Multi-Manager Large-Cap Value Fund)
Nuveen NWQ Global Equity Fund
Nuveen NWQ Global Equity Income Fund (f/k/a Nuveen NWQ Equity Income Fund)
Nuveen NWQ Multi-Cap Value Fund
Nuveen NWQ Small-Cap Value Fund
Nuveen NWQ Large-Cap Value Fund
Nuveen NWQ Small/Mid-Cap Value Fund
Nuveen Tradewinds Value Opportunities Fund
Nuveen U.S. Infrastructure Income Fund
NUVEEN INVESTMENT TRUST II , on behalf of:
Nuveen Equity Long/Short Fund
Nuveen Global Growth Fund
Nuveen Growth Fund
Nuveen International Growth Fund
Nuveen Santa Barbara Dividend Growth Fund
Nuveen Santa Barbara Global Dividend Growth Fund
Nuveen Santa Barbara International Dividend Growth Fund
Nuveen Symphony Dynamic Equity Fund
Nuveen Symphony International Equity Fund
Nuveen Symphony Large-Cap Growth Fund
Nuveen Symphony Low Volatility Equity Fund
Nuveen Symphony Mid-Cap Core Fund
Nuveen Symphony Small Cap Core Fund
Nuveen Tradewinds Emerging Markets Fund
Nuveen Tradewinds Global All-Cap Fund
Nuveen Tradewinds International Value Fund
Nuveen Tradewinds Japan Fund
Nuveen Winslow Large-Cap Growth Fund
NUVEEN INVESTMENT TRUST III , on behalf of:
Nuveen Symphony Credit Opportunities Fund
Nuveen Symphony Dynamic Credit Fund
Nuveen Symphony Floating Rate Income Fund
Nuveen Symphony High Yield Bond Fund
NUVEEN INVESTMENT TRUST V , on behalf of:
Nuveen Gresham Diversified Commodity Strategy Fund
Nuveen Gresham Long/Short Commodity Strategy Fund
Nuveen NWQ Flexible Income Fund
Nuveen Preferred Securities Fund
NUVEEN MANAGED ACCOUNTS PORTFOLIOS TRUST , on behalf of
Enhanced Multi-Strategy Income Managed Accounts Portfolio
Municipal Total Return Managed Accounts Portfolio
NUVEEN INVESTMENT FUNDS, INC. , on behalf of
Nuveen Global Infrastructure Fund
Nuveen Real Asset Income Fund
Nuveen International Select Fund
LOAN SERVICES ADDENDUM
TO MASTER CUSTODIAN AGREEMENT
ADDENDUM to that certain Master Custodian Agreement (the Custodian Agreement ) by and among each fund (a Fund ) identified on Appendix A thereto or made subject thereto pursuant to Section 20.6 thereof and State Street Bank and Trust Company, including its subsidiaries and other affiliates (the Custodian ). As used in this Addendum, the term Fund , in relation to a Loan (as defined below), includes a Portfolio on whose behalf the Fund acts with respect to the Loan.
The following provisions will apply with respect to interests in commercial loans, including loan participations, whether the loans are bilateral or syndicated and whether any obligor is located in or outside of the United States (collectively, Loans ), made or acquired by a Fund on behalf of one or more of its Portfolios.
S ECTION 1. P AYMENT C USTODY . If a Fund wishes the Custodian to receive payments directly with respect to a Loan for credit to the bank account maintained by the Custodian for the Fund under the Custodian Agreement,
(a) the Fund will cause the Custodian to be named as the Funds nominee for payment purposes under the relevant financing documents, e.g., in the case of a syndicated loan, the administrative contact for the agent bank, and otherwise provide for the payment to the Custodian of the payments with respect to the Loan; and
(b) the Custodian will credit to the bank account maintained by the Custodian for the Fund under the Custodian Agreement any payment on or in respect of the Loan actually received by the Custodian and identified as relating to the Loan, but with any amount credited being conditional upon clearance and actual receipt by the Custodian of final payment.
S ECTION 2. M ONITORING . If a Fund wishes the Custodian to monitor payments on and forward notices relating to a Loan,
(a) the Fund will deliver, or cause to be delivered, to the Custodian a schedule identifying the amount and due dates of the scheduled principal payments, the scheduled interest payment dates and related payment amount information, and such other information with respect to the Loan as the Custodian may reasonably require in order to perform its services hereunder (collectively, Loan Information ) and in such form and format as the Custodian may reasonably request; and
(b) the Custodian will (i) if the amount of a principal, interest, fee or other payment with respect to the Loan is not received by the Custodian on the date on which the amount is scheduled to be paid as reflected in the Loan Information, provide a report to the Fund that the payment has not been received and (ii) if the Custodian receives any consent solicitation, notice of default or similar notice from any syndication agent, lead or obligor on the Loan, undertake reasonable efforts to forward the notice to the Fund.
i
S ECTION 3. E XCULPATION OF THE C USTODIAN .
(a) Payment Custody and Monitoring. The Custodian will have no liability for any delay or failure by the Fund or any third party in providing Loan Information to the Custodian or for any inaccuracy or incompleteness of any Loan Information. The Custodian will have no obligation to verify, investigate, recalculate, update or otherwise confirm the accuracy or completeness of any Loan Information or other information or notices received by the Custodian in respect of the Loan. The Custodian will be entitled to (i) rely upon the Loan Information provided to it by or on behalf of the Fund or any other information or notices that the Custodian may receive from time to time from any syndication agent, lead or obligor or any similar party with respect to the Loan and (ii) update its records on the basis of such information or notices as may from time to time be received by the Custodian.
(b) Any Service . The Custodian will have no obligation to (i) determine whether any necessary steps have been taken or requirements have been met for the Fund to have acquired good or record title to a Loan, (ii) ensure that the Funds acquisition of the Loan has been authorized by the Fund, (iii) collect past due payments on the Loan, preserve any rights against prior parties, exercise any right or perform any obligation in connection with the Loan (including taking any action in connection with any consent solicitation, notice of default or similar notice received from any syndication agent, lead or obligor on the Loan) or otherwise take any other action to enforce the payment obligations of any obligor on the Loan, (iv) become itself the record title holder of the Loan or (v) make any advance of its own funds with respect to the Loan.
(c) Miscellaneous. The Custodian will not be considered to have been or be charged with knowledge of the sale of a Loan by the Fund, unless and except to the extent that the Custodian shall have received written notice of the sale from the Fund and the proceeds of the sale have been received by the Custodian for credit to the bank account maintained by the Custodian for the Fund under the Custodian Agreement. If any question arises as to the Custodians duties under this Addendum, the Custodian may request instructions from the Fund and will be entitled at all times to refrain from taking any action unless it has received Proper Instructions from the Fund. The Custodian will in all events have no liability, risk or cost for any action taken or omitted with respect to the Loan pursuant to Proper Instructions. The Custodian will have no responsibilities or duties whatsoever with respect to the Loan except as are expressly set forth in this Addendum.
ii
F UNDS T RANSFER A DDENDUM | ||||
OPERATING GUIDELINES | [STATE STREET LOGO] |
1. OBLIGATION OF THE SENDER : State Street is authorized to promptly debit Clients account(s) upon the receipt of a payment order in compliance with the selected Security Procedure chosen for funds transfer and in the amount of money that State Street has been instructed to transfer. State Street shall execute payment orders in compliance with the Security Procedure and with the Clients instructions on the execution date provided that such payment order is received by the customary deadline for processing such a request, unless the payment order specifies a later time. All payment orders and communications received after this time will be deemed to have been received on the next business day.
2. SECURITY PROCEDURE : The Client acknowledges that the Security Procedure it has designated on the Selection Form was selected by the Client from Security Procedures offered by State Street. The Client agrees that the Security Procedures are reasonable and adequate for its wire transfer transactions and agrees to be bound by any payment orders, amendments and cancellations, whether or not authorized, issued in its name and accepted by State Street after being confirmed by any of the selected Security Procedures. The Client also agrees to be bound by any other valid and authorized payment order accepted by State Street. The Client shall restrict access to confidential information relating to the Security Procedure to authorized persons as communicated in writing to State Street. The Client must notify State Street immediately if it has reason to believe unauthorized persons may have obtained access to such information or of any change in the Clients authorized personnel. State Street shall verify the authenticity of all instructions according to the Security Procedure.
3. ACCOUNT NUMBERS : State Street shall process all payment orders on the basis of the account number contained in the payment order. In the event of a discrepancy between any name indicated on the payment order and the account number, the account number shall take precedence and govern. Financial institutions that receive payment orders initiated by State Street at the instruction of the Client may also process payment orders on the basis of account numbers, regardless of any name included in the payment order. State Street will also rely on any financial institution identification numbers included in any payment order, regardless of any financial institution name included in the payment order.
4. REJECTION : State Street reserves the right to decline to process or delay the processing of a payment order which (a) is in excess of the collected balance in the account to be charged at the time of State Streets receipt of such payment order; (b) if initiating such payment order would cause State Street, in State Streets sole judgment, to exceed any volume, aggregate dollar, network, time, credit or similar limits upon wire transfers which are applicable to State Street; or (c) if State Street, in good faith, is unable to satisfy itself that the transaction has been properly authorized.
5. CANCELLATION OR AMENDMENT : State Street shall use reasonable efforts to act on all authorized requests to cancel or amend payment orders received in compliance with the Security Procedure provided that such requests are received in a timely manner affording State Street reasonable opportunity to act. However, State Street assumes no liability if the request for amendment or cancellation cannot be satisfied.
6. ERRORS: State Street shall assume no responsibility for failure to detect any erroneous payment order provided that State Street complies with the payment order instructions as received and State Street complies with the Security Procedure. The Security Procedure is established for the purpose of authenticating payment orders only and not for the detection of errors in payment orders.
7. INTEREST AND LIABILITY LIMITS : State Street shall assume no responsibility for lost interest with respect to the refundable amount of any unauthorized payment order, unless State Street is notified of the unauthorized payment order within thirty (30) days of notification by State Street of the acceptance of such payment order. In no event shall State Street be liable for special, indirect or consequential damages, even if advised of the possibility of such damages and even for failure to execute a payment order.
8. AUTOMATED CLEARING HOUSE (ACH) CREDIT ENTRIES/PROVISIONAL PAYMENTS : When a Client initiates or receives ACH credit and debit entries pursuant to these Guidelines and the rules of the National Automated Clearing House Association and the New England Clearing House Association, State Street will act as an Originating Depository Financial Institution and/or Receiving Depository Institution, as the case may be, with respect to such entries. Credits given by State Street with respect to an ACH credit entry are provisional until State Street receives final settlement for such entry from the Federal Reserve Bank. If State Street does not receive such final settlement, the Client agrees that State Street shall receive a refund of the amount credited to the Client in connection with such entry, and the party making payment to the Client via such entry shall not be deemed to have paid the amount of the entry.
9. CONFIRMATION STATEMENTS: Confirmation of State Streets execution of payment orders shall ordinarily be provided within 24 hours. Notice may be delivered through State Streets proprietary information systems, such as, but not limited to Horizon and GlobalQuest ® , account statements, advices, or by facsimile or callback. The Client must report any objections to the execution of a payment order within 30 days.
F UNDS T RANSFER A DDENDUM | ||||
[STATE STREET LOGO] |
10. LIABILITY ON FOREIGN ACCOUNTS: State Street shall not be required to repay any deposit made at a non-U.S. branch of State Street, or any deposit made with State Street and denominated in a non-U.S. dollar currency, if repayment of such deposit or the use of assets denominated in the non-U.S. dollar currency is prevented, prohibited or otherwise blocked due to: (a) an act of war, insurrection or civil strife; (b) any action by a non-U.S. government or instrumentality or authority asserting governmental, military or police power of any kind, whether such authority be recognized as a defacto or a dejure government, or by any entity, political or revolutionary movement or otherwise that usurps, supervenes or otherwise materially impairs the normal operation of civil authority; or(c) the closure of a non-U.S. branch of State Street in order to prevent, in the reasonable judgment of State Street, harm to the employees or property of State Street. The obligation to repay any such deposit shall not be transferred to and may not be enforced against any other branch of State Street.
The foregoing provisions constitute the disclosure required by Massachusetts General Laws, Chapter 167D, Section 36.
While State Street is not obligated to repay any deposit made at a non-U.S. branch or any deposit denominated in a non-U.S. currency during the period in which its repayment has been prevented, prohibited or otherwise blocked, State Street will repay such deposit when and if all circumstances preventing, prohibiting or otherwise blocking repayment cease to exist.
11. MISCELLANEOUS: State Street and the Client agree to cooperate to attempt to recover any funds erroneously paid to the wrong party or parties, regardless of any fault of State Street or the Client, but the party responsible for the erroneous payment shall bear all costs and expenses incurred in trying to effect such recovery. These Guidelines may not be amended except by a written agreement signed by the parties. For the avoidance of doubt, the Selection Form that is attached hereto may be updated from time to time by the parties without impacting the effectiveness of these Operating Guidelines.
[Logo]
FUNDS TRANSFER AND TRANSACTION ORIGINATION SECURITY SELECTION FORM
Client or Agent Name: (hereafter referred to as the Company)
This Form applies to all funds for which the Company is authorized to give proper instructions as such term is defined in the relevant contract with State Street.
Appendix A: Securities Procedure Selection Form
Additional commercially reasonable security controls may be required by State Street to supplement inherent features of funds transfer delivery methods in order to protect the integrity of each instruction.
1) Please select one or more of the delivery method options indicated below by checking the applicable boxes:
Security Controls required for the following delivery methods: |
None. Messages are deemed to be self-authenticating, and any message received will be relied upon as an authenticated instruction.
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☐ SWIFT (Society for Worldwide Interbank Financial Telecommunication) is a cooperative society owned and operated by member financial institutions that provides telecommunication services for its membership. Participation is limited to securities brokers and dealers, clearing and depository institutions, recognized exchanges for securities, and investment institutions. SWIFT provides a number of security features through encryption and authentication to protect against unauthorized access, loss or wrong delivery of messages, transmission errors, loss of confidentiality and fraudulent changes to messages. SWIFT is considered to be one of the most secure and efficient networks for the delivery of funds transfer instructions.
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☐ iPayBenefits is a portal that offers Retirement Plan Sponsors, record keepers, third party administrators, banks and insurance companies a total Benefit Payments processing platform to access to retiree information. There are three components: the PLUS Web retiree benefits management application to add participants, change addresses, and stop and release payments; a Custom Queries tool for creating customized reports; and an open Customer Workspace area for posting of shared documents. Access by authorized users is through a web portal which uses RSA Adaptive Authentication (User ID and Password + security map).
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Security Controls required for the following delivery methods:
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Enabled Encryption. Messages are deemed to be self-authenticating, and any message received will be relied upon as an authenticated instruction.
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☐ Data Communication - Message Queuing or a similarly architected product is a communication method that allows the Company to electronically deliver authorized financial transaction instructions to State Street using a straight through processing message delivery service.
Encryption must be enabled. All information communicated via this method is authorized by the Company.
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Security Controls required for the following delivery methods: |
A predetermined authorized signature list or Funds Transfer Initiators and Verifiers List which outlines who can send instructions and who can approve them.
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☐ Connect:Direct is a data transfer product . Secure+ is a product add-on that implements cryptographic features such as mutual authentication, data encryption and cryptographic message integrity checking to send file based transfer and transaction instructions which may include Fed wire and Automated Clearinghouse (ACH). Secure+ is required.
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Security Controls required: Predetermined authorizers.
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STATE STREET CORPORATION REV. 01/13 | Limited Access |
☐ Secure Email Send Secure Feature Available in Outlook with Verification is a communication method that allows clients to electronically deliver financial transaction instructions to State Street using an enforced (encrypted) connection by responding to a secure email received from State Street. The communication method features use of cryptography to effect point-to-point encryption at the desktop.
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Security Controls required: Predetermined authorizers
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☐ Secure Transport (Individual) is a file transfer application based upon the Secure File Transfer Protocol (SFTP) standard that is designed to enable State Street clients/ investment managers to send file based transfer and transaction instructions over the internet which may include Fed wire and Automated Clearinghouse (ACH). Secure Transport features multi-factor authenticators such as SecurID and digital certificates, and incorporates industry-standard encryption protocols.
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Security Controls required: Predetermined authorizers.
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Security Controls required for the following delivery methods:
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A predetermined authorized signature list or Funds Transfer Initiators and Verifiers List which outlines who can send instructions and who can approve them.
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☐ Secure Transport (Client) is a file transfer application based upon the Secure File Transfer Protocol (SFTP) standard that is designed to enable State Street clients/ investment managers to send file based transfer and transaction instructions over the internet which may include Fed wire and Automated Clearinghouse (ACH). Secure Transport features multi-factor authenticators such as SecurID and digital certificates, and incorporates industry-standard encryption protocols. Other SFTP solutions that require multi-factor authenticators such as SecurID and digital certificates, and incorporate industry-standard encryption protocols may also be considered.
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Security Controls required: Predetermined authorizers.
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Security Controls required for the following delivery methods:
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A predetermined authorized signature list or Funds Transfer Initiators and Verifiers List which outlines who can send instructions and who can approve them. Multi-factor authentication must be established using one of the following methods: user id, password + token, out of band one-time password, or digital certificate.
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☐ iDeliver/iReports - Document Upload The iDeliver platform (RDS) manages the retrieval, processing, reformatting, and distribution of reports and data. iReports, is a launched application from my.statestreet.com which allows users to view archived reports via the Intranet. The Document Upload is a feature of iReports (a web module of iDeliver) to facilitate users to upload documents (mostly ad-hoc) for distribution using one or more of the supported delivery channels.
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Security Controls required: Predetermined authorizers. Multi-factor authentication must be established.
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☐ Trust Interface Facility A Company disbursement system which provides workflow/approval with complete audit trail using ASG/ Citrix multi-factor authentication. This is the web- based front end used by SEI clients only to instruct two-party wires, check requests, interbank transfers, ACH, and direct movements within SEI.
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Security Controls required: Predetermined authorizers. Multi- factor authentication must be established.
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☐ Global Office (vendor application: front end to Global Plus) Access through dedicated circuit, a multi-currency accounting system that delivers automation and straight thru processing.
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Security Controls required: Predetermined authorizers. Multi -factor authentication must be established.
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☐ State Street Cash Manager and State Street Springboard Cash Manager Global Funds Transfer (GFT) represent State Streets proprietary web-based system that enables clients to originate and electronically transmit authenticated repetitive and non-repetitive Fed wires, CHIPS, internal book transfers, drawdowns, and international payments to State Street. Any activity initiated by the Clients use of either Cash Manager access point shall constitute an Instruction to State Street in accordance with the terms of the Clients Custody Agreement, and such Instructions shall constitute funds transfer instructions originated by the Client and can either be in U.S. dollar or other currencies supported by the system. State Street Cash Manager and State Street Springboard Cash Manager GFT are PC and mobile access points to a web-based system utilizing the Internet employing the use of ID and password security, two factor token authentication and encryption to protect the integrity of transmissions to State Street.
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Security Controls required: Predetermined authorizers.
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STATE STREET CORPORATION REV. 01/13 | Limited Access |
☐ Instruct is a State Street web-based application designed to provide internet-enabled remote access that allows for the capturing, verification and processing of various instruction types, including securities, cash and foreign exchange transactions. Instruct is designed using industry standard formats to facilitate straight-through processing. Instruct provides a number of security features through user entitlements, industry standard encryption protocols, digital security certificates and multiple tiers of user authentication requirements. |
Security Controls required: Predetermined authorizers. Multi-factor authentication must be established.
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Security Controls required for the following delivery methods: |
A predetermined authorized signature list or Funds Transfer Initiators and Verifiers List which outlines who can send instructions and who can approve them. A Standing Instruction is required; it is recommended that a Repetitive Wire be established for this purpose.
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☐ Facsimile The faxing of information between the Company and State Street. |
Security Controls required: Sophisticated Test Key or Telephone Confirmation (Callback); Predetermined authorizers; Standing Instructions.
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Security Controls required for the following delivery methods: |
A predetermined authorized signature list or Funds Transfer Initiators and Verifiers List which outlines who can send instructions and who can approve them. A Standing Instruction is required; it is recommended that a Repetitive Wire be established for this purpose. A Telephone Confirmation (Callback) to an Authorized Verifier is required for Private Edge clients not using Access Security Gateway (ASG).
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☐ Expense Manager is available as a launched application through my.statestreet.com, and is an expense processing tool that includes accrual calculation and posting to Multi-Currency Horizon (MCH), payment allocation via intra-fund demand deposit account (DDA) transfers, general ledger entries and budget projections. |
Security Controls required: Predetermined authorizers. Multi- factor authentication must be established.
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☐ Cash Flow Module (eCFM) is a State Street application designed to provide remote access that allows the Company to electronically provide State Street with authorization for the transfer of funds and foreign exchange transactions. eCFM provides a number of security features through user entitlements, an option for dual approval, industry standard encryption protocols and user authentication requirements. |
Security Controls required: Predetermined authorizers; Standing Instructions; Private Edge Services additionally require Telephone Confirmation (Callback) for clients not using ASG.
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Security Controls required for the following delivery methods: |
A predetermined authorized signature list or Funds Transfer Initiators and Verifiers List which outlines who can send instructions and who can approve them. A Telephone Confirmation (Callback) to an Authorized Verifier is required.
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☐ Email with Enforced Transport Layer Security (TLS) is a communication method that allows the Company to electronically deliver signed financial transaction instructions [Proper Instruction] to State Street using an enforced (encrypted) connection. The communication method features use of enforced network connections which include industry-standard transport layer cryptography to effect point-to-point encryption. State Street Enforced TLS requires third party trust and prohibits the use of self-signed digital certificates. |
Security Controls required: Predetermined authorizers; Telephone Confirmation (Callback).
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STATE STREET CORPORATION REV. 01/13 | Limited Access |
Appendix A: Securities Procedure Selection Form
2) |
The following Security Controls are required in conjunction with the delivery methods selected above. Please select one or more of the Security Controls indicated below by checking the applicable boxes: |
☐ Telephone Confirmation (Callback)
Telephone confirmation will be used to verify instructions where indicated in the delivery method option. This procedure requires the Company to designate individuals as authorized initiators and authorized verifiers. State Street will verify that the instruction contains the signature of an authorized person and prior to execution, will contact someone other than the originator at the Companys location to authenticate the instruction. A second authorized person different from the originator or original approver will be contacted for instructions equal to or greater than US $10,000,000 or local currency equivalent. Telephone confirmation callback is required for delivery method selections that do not use multi-factor authentication. For business continuity purposes, alternate telephone numbers for authorized verifiers are provided for telephonic confirmation in a force majeure event.
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☐ Callback with SecurID®
SecurID® is a state-of-the-art product used to identify and authenticate the identity of an individual. Used in conjunction with telephone callback, it is the preferred authentication method for transactions equal to or greater than USD 10,000,000 or local currency equivalent. A second authorized person different from the originator or original approver will be contacted for instructions equal to or greater than US $10,000,000 or local currency equivalent. SecurID® provides a more stringent security procedure for authenticating funds transfer requests, which substantially reduces the possibility of a fraudulent transaction.
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☐ Test Key
A test key is a unique character string that has been exchanged between the parties for the purpose of protecting the integrity of the communication and to identify and authenticate the Company in the ordinary course of business.
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☐ Sophisticated Test Key
Test keys submitted by clients are considered sophisticated when they are a combination of a test key number provided to them by State Street as well as some predefined detail(s) from the actual transaction instruction (currency, amount of shares or cash, settlement date, etc.). If the tested facsimile process involves the use of sophisticated test keys, no other security procedure is required.
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☐ Standing Instructions
Standing or Procedural Instructions may be used. For example: where funds are transferred to a broker on the Companys established list of brokers with which it engages in transactions. Only the date, the currency and the currency amount are variable. In order to establish this procedure, State Street will send to the Company a list of the brokers that State Street has determined are used by the Company. The Company will confirm the list in writing, and State Street will verify the written confirmation by telephone. Standing Instructions will be subject to a mutually agreed upon limit. If the payment order exceeds USD 10,000,000 or local currency equivalent , the execution of the Standing Instruction will be confirmed by telephone (person different than original initiator) prior to execution.
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☐ Repetitive Wires
For situations where funds are transferred periodically from an existing authorized account to the same payee (destination bank and account number) and only the date and currency amount are variable, a repetitive wire may be implemented. Repetitive wires will be subject to a mutually agreed upon limit. If the payment order exceeds US $10,000,000 or local currency equivalent, the instruction will be confirmed by telephone prior to execution. Telephone confirmation is used to establish this process. Repetitive wire instructions must be reconfirmed periodically.
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☐ Individual Instruction
Telephone confirmation is used to establish this process. An individual instruction is a non-recurring request. If the payment order exceeds US $10,000,000 or local currency equivalent , the instruction will be confirmed by telephone (person different than the original initiator) prior to execution.
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☐ Secure Email Confirmation
Confirmation via secure email that instructions were received and executed.
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☐ Predetermined Authorizers
A predetermined authorized signature list or a Funds Transfer Initiators and Authorized Verifiers List which outlines who can send instructions and who can approve them.
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☐ Blue Sky Standing Instructions via Limited Power of Attorney
State Street employees holding the titles of Officer, Blue Sky Manager or Senior Blue Sky Administrator (State Streets Blue Sky Personnel) shall have the authority to act on behalf of a clients mutual funds to transmit filing fees electronically so long as the client has executed and delivered (and has not revoked) a limited power of attorney to State Street granting said power.
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STATE STREET CORPORATION REV. 01/13 | Limited Access |
Selection of Security Control(s) and Authorization of Company
State Street is hereby instructed to accept funds transfer instructions only via the delivery methods using the Security Controls indicated. The selected delivery methods and security controls(s) will be effective on (insert date) for payment orders initiated on behalf of the Undersigned. State Street will rely upon each communication received as if the instruction has been authenticated by the Company.
Contingency Security Authorization
In the case of a force majeure event during which the delivery method(s) selected are not available, an alternate business continuity phone number for authorized verifiers is strongly recommended. State Street will use commercially reasonable best efforts to reach the authorized verifiers during such an event. If alternate telephone numbers are not provided for Telephone Confirmation, the verifiers signature will be required in addition to an approved and documented method of client contact.
In the event that the delivery method(s) you have selected are unavailable for any reason outside of our control, or should State Street be unable to reach the alternate phone numbers provided for Contingency Security Authorization, State Street will use commercially reasonable best efforts to implement a further contingency procedure to receive in and process your payment orders. However, despite such efforts, your payment orders may not be processed on value date and State Street will not be liable for any loss in such event.
Signed on behalf of Client or Agent: | ||||||
Name |
Title |
Authorized Signature |
Date |
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Name |
Title |
Authorized Signature |
Date |
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Client or Agent Name : ( hereafter referred to as the Company) |
This agreement applies to all funds for which the Company is authorized to give proper instructions as such term is defined in the relevant contract with State Street.
Appendix B: Funds Transfer Initiators and Verifiers List
☐ Hereby enclosed an Authorized Signature List - a listing of our staff members authorized to Initiate or Verify payment orders to State Street and to set up repetitive wires.
(In case of segregation on the type or limitations on the size of the transactions, please provide us with a decision matrix table or an equivalent document).
☐ We do not publish an Authorized Signature List. The authorized Initiator(s) and Verifier(s) are as follows:
Authorized Initiator(s): (Please Type or Print)
Please provide a listing of Initiators. An Initiator is a person whose signature the original instruction bears.
1) Name, Title | Specimen Signature | Amount Limit (If Any) | ||
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Alternate Phone Number |
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2) Name, Title
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Amount Limit (If Any)
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STATE STREET CORPORATION REV. 01/13 | Limited Access |
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3) Name, Title | Specimen Signature | Amount Limit (If Any) | ||
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4) Name, Title | Specimen Signature | Amount Limit (If Any) | ||
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Appendix B: Funds Transfer Initiators and Verifiers List (continued)
Authorized Verifier(s): (Please Type or Print)
Please provide a listing of Verifier(s). A Verifier is a person whom State Street may call back for telephone confirmation of the original instruction.
1) Name, Title | Specimen Signature | Amount Limit (If Any) | ||
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2) Name, Title | Specimen Signature | Amount Limit (If Any) | ||
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STATE STREET CORPORATION REV. 01/13 | Limited Access |
4) Name, Title | Specimen Signature | Amount Limit (If Any) | ||
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STATE STREET CORPORATION REV. 01/13 | Limited Access |
[LOGO]
Remote Access Services
Addendum
ADDENDUM to that certain Custodian Agreement between the Fund (the Customer) and State Street Bank and Trust Company, including its subsidiaries and affiliates (State Street).
State Street has developed and/or utilizes proprietary or third-party accounting and other systems in conjunction with the services that State Street provides to the Customer. In this regard, State Street maintains certain information in databases under its ownership and/or control that it makes available to its customers (the Remote Access Services).
The Services
State Street agrees to provide the Customer, and its designated investment advisors, consultants or other third parties who agree to abide by the terms of this Addendum (Authorized Designees) with access to State Street proprietary and third-party systems as may be offered by State Street from time to time (each, a System) on a remote basis.
Security Procedures
The Customer agrees to comply, and to cause its Authorized Designees to comply, with remote access operating standards and procedures and with user identification or other password control requirements and other security devices and procedures as may be issued or required from time to time by State Street or its third-party vendors for use of the System and access to the Remote Access Services. The Customer is responsible for any use and/or misuse of the System and Remote Access Services by its Authorized Designees. The Customer agrees to advise State Street immediately in the event that it learns or has reason to believe that any person to whom it has given access to the System or the Remote Access Services has violated or intends to violate the terms of this Addendum and the Customer will cooperate with State Street in seeking injunctive or other equitable relief. The Customer agrees to discontinue use of the System and Remote Access Services, if requested, for any security reasons cited by State Street and State Street may restrict access of the System and Remote Access Services by the Customer or any Authorized Designee for security reasons or noncompliance with the terms of this Addendum at any time.
Fees
Fees and charges for the use of the System and the Remote Access Services and related payment terms shall be as set forth in the fee schedule in effect from time to time between the parties. The Customer shall be responsible for any tariffs, duties or taxes imposed or levied by any government or governmental agency by reason of the transactions contemplated by this Addendum, including, without limitation, federal, state and local taxes, use, value added and personal property taxes (other than income, franchise or similar taxes which may be imposed or assessed against State Street). Any claimed exemption from such tariffs, duties or taxes shall be supported by proper documentary evidence delivered to State Street.
Proprietary Information/Injunctive Relief
The System and Remote Access Services described herein and the databases, computer programs, screen formats, report formats, interactive design techniques, formulae, processes, systems, software, knowhow, algorithms, programs, training aids, printed materials, methods, books, records, files, documentation and other information made available to the Customer by State Street as part of the Remote Access Services and
through the use of the System and all copyrights, patents, trade secrets and other proprietary and intellectual property rights of State Street and third-party vendors related thereto are the exclusive, valuable and confidential proprietary property of State Street and its relevant licensors and third-party vendors (the Proprietary Information). The Customer agrees on behalf of itself and its Authorized Designees to keep the Proprietary Information confidential and to limit access to its employees and Authorized Designees (under a similar duty of confidentiality) who require access to the System for the purposes intended. The foregoing shall not apply to Proprietary Information in the public domain or required by law to be made public.
The Customer agrees to use the Remote Access Services only in connection with the proper purposes of this Addendum. The Customer will not, and will cause its employees and Authorized Designees not to, (i) permit any third party to use the System or the Remote Access Services, (ii) sell, rent, license or otherwise use the System or the Remote Access Services in the operation of a service bureau or for any purpose other than as expressly authorized under this Addendum, (iii) use the System or the Remote Access Services for any fund, trust or other investment vehicle without the prior written consent of State Street, or (iv) allow or cause any information transmitted from State Streets databases, including data from third-party sources, available through use of the System or the Remote Access Services, to be published, redistributed or retransmitted for other than use for or on behalf of the Customer, as State Streets customer.
The Customer agrees that neither it nor its Authorized Designees will modify the System in any way; enhance, copy or otherwise create derivative works based upon the System; nor will the Customer or Customers Authorized Designees reverse engineer, decompile or otherwise attempt to secure the source code for all or any part of the System.
The Customer acknowledges that the disclosure of any Proprietary Information, or of any information which at law or equity ought to remain confidential, will immediately give rise to continuing irreparable injury to State Street or its third-party licensors and vendors inadequately compensable in damages at law and that State Street shall be entitled to obtain immediate injunctive relief against the breach or threatened breach of any of the foregoing undertakings, in addition to any other legal remedies which may be available.
Limited Warranties
State Street represents and warrants that it is the owner of and/or has the right to grant access to the System and to provide the Remote Access Services contemplated herein. Because of the nature of computer information technology, including but not limited to the use of the Internet, and the necessity of relying upon third-party sources, and data and pricing information obtained from third parties, the System and Remote Access Services are provided AS IS without warranty express or implied including as to availability of the System, and the Customer and its Authorized Designees shall be solely responsible for the use of the System and Remote Access Services and investment decisions, results obtained, regulatory reports and statements produced using the Remote Access Services. State Street and its relevant licensors and third-party vendors will not be liable to the Customer or its Authorized Designees for any direct or indirect, special, incidental, punitive or consequential damages arising out of or in any way connected with the System or the Remote Access Services, nor shall any party be responsible for delays or nonperformance under this Addendum arising out of any cause or event beyond such partys control.
EXCEPT AS EXPRESSLY SET FORTH IN THIS ADDENDUM, STATE STREET, FOR ITSELF AND ITS RELEVANT LICENSORS AND THIRD-PARTY VENDORS EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES CONCERNING THE SYSTEM AND THE SERVICES TO BE RENDERED HEREUNDER, WHETHER EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY WARRANTY OF MERCHANTIBILITY OR FITNESS FOR A PARTICULAR PURPOSE.
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Infringement
State Street will defend or, at its option, settle any claim or action brought against the Customer to the extent that it is based upon an assertion that access to or use of State Street proprietary systems by the Customer under this Addendum constitutes direct infringement of any United States patent or copyright or misappropriation of a trade secret, provided that the Customer notifies State Street promptly in writing of any such claim or proceeding, cooperates with State Street in the defense of such claim or proceeding and allows State Street sole control over such claim or proceeding. Should the State Street proprietary system or any part thereof become, or in State Streets opinion be likely to become, the subject of a claim of infringement or the like under any applicable patent, copyright or trade secret laws, State Street shall have the right, at State Streets sole option, to (i) procure for the Customer the right to continue using the State Street proprietary system (ii) replace or modify the State Street proprietary system so that the State Street proprietary system becomes noninfringing, or (iii) terminate this Addendum without further obligation. This section constitutes the sole remedy available to the Customer for the matters described in this section.
Termination
Either party to the Custodian Agreement may terminate this Addendum (i) for any reason by giving the other party at least one-hundred and eighty (180) days prior written notice in the case of notice of termination by State Street to the Customer or thirty (30) days notice in the case of notice from the Customer to State Street of termination, or (ii) immediately for failure of the other party to comply with any material term and condition of the Addendum by giving the other party written notice of termination. This Addendum shall in any event terminate within ninety (90) days after the termination of any service agreement applicable to the Customer. The Customers use of any third-party System is contingent upon its compliance with any terms and conditions of use of such System imposed by such third party and State Streets continued access to, and use of, such third-party System. In the event of termination, the Customer will return to State Street all copies of documentation and other confidential information in its possession or in the possession of its Authorized Designees and immediately cease access to the System and Remote Access Services. The foregoing provisions with respect to confidentiality and infringement will survive termination for a period of three (3) years.
Miscellaneous
This Addendum constitutes the entire understanding of the parties to the Custodian Agreement with respect to access to the System and the Remote Access Services. This Addendum cannot be modified or altered except in a writing duly executed by each of State Street and the Customer and shall be governed by and construed in accordance with the laws of The Commonwealth of Massachusetts.
By its execution of the Custodian Agreement, the Customer: (a) confirms to State Street that it informs all Authorized Designees of the terms of this Addendum; (b) accepts responsibility for its and its Authorized Designees compliance with the terms of this Addendum; and (c) indemnifies and holds State Street harmless from and against any and all costs, expenses, losses, damages, charges, counsel fees, payments and liabilities arising from any failure of the Customer or any of its Authorized Designees to abide by the terms of this Addendum.
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Global Services
[STATE STREET LOGO]
Global Custody Network Schedule A
M ARCH 31, 2015
MARKET |
SUBCUSTODIAN |
ADDRESS |
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Albania | Raiffeisen Bank sh.a. | Blv. Bajram Curri ETC Kati 14 | ||
Tirana, Albania | ||||
Australia | Citigroup Pty. Limited | 120 Collins St. | ||
Melbourne, VIC 3000 , Australia | ||||
The Hongkong and Shanghai Banking |
HSBC Custody and Clearing |
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Corporation Limited | Level 13, 580 George St. | |||
Sydney, NSW 2000 , Australia | ||||
Austria | Deutsche Bank AG | Fleischmarkt 1 | ||
A-1010 Vienna, Austria | ||||
UniCredit Bank Austria AG |
Custody Department / Dept. 8398-TZ |
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Julius Tandler Platz 3 | ||||
A-1090 Vienna, Austria | ||||
Bahrain | HSBC Bank Middle East Limited | 1 st Floor, Bldg. #2505 | ||
(as delegate of The Hongkong and Shanghai | Road # 2832, Al Seef 428 | |||
Banking Corporation Limited) | Kingdom of Bahrain | |||
Bangladesh | Standard Chartered Bank | Silver Tower, Level 7 | ||
52 South Gulshan Commercial Area | ||||
Gulshan 1, Dhaka 1212 , Bangladesh | ||||
Belgium | Deutsche Bank AG, Netherlands (operating | De Entrees 99-197 | ||
through its Amsterdam branch with support | 1101 HE Amsterdam, Netherlands | |||
from its Brussels branch) | ||||
Benin | via Standard Chartered Bank Côte dIvoire | 23, Bld de la République | ||
S.A., Abidjan, Ivory Coast | 17 BP 1141 Abidjan 17 Côte dIvoire | |||
Bermuda | HSBC Bank Bermuda Limited | 6 Front Street | ||
Hamilton, HM06 , Bermuda |
LIMITED ACCESS | STATE STREET CORPORATION 1 |
Federation of Bosnia and Herzegovina | UniCredit Bank d.d. | Zelenih beretki 24 | ||
71 000 Sarajevo | ||||
Federation of Bosnia and Herzegovina | ||||
Botswana | Standard Chartered Bank Botswana Limited | 4th Floor, Standard Chartered House | ||
Queens Road | ||||
The Mall | ||||
Gaborone, Botswana | ||||
Brazil | Citibank, N.A. | AV Paulista 1111 | ||
São Paulo, SP 01311-920 Brazil | ||||
Bulgaria | Citibank Europe plc, Bulgaria Branch | Serdika Offices, 10th floor | ||
48 Sitnyakovo Blvd. | ||||
1505 Sofia, Bulgaria | ||||
UniCredit Bulbank AD |
7 Sveta Nedelya Square |
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1000 Sofia, Bulgaria | ||||
Burkina Faso | via Standard Chartered Bank Côte dIvoire | 23, Bld de la République | ||
S.A., Abidjan, Ivory Coast | 17 BP 1141 Abidjan 17 Côte dIvoire | |||
Canada | State Street Trust Company Canada | 30 Adelaide Street East, Suite 800 | ||
Toronto, ON Canada M5C 3G6 | ||||
Chile | Banco Itaú Chile S.A. | Enrique Foster Sur 20, Piso 5 | ||
Las Condes, Santiago de Chile | ||||
Peoples Republic of China | HSBC Bank (China) Company Limited | 33 rd Floor, HSBC Building, Shanghai IFC | ||
(as delegate of The Hongkong and Shanghai | 8 Century Avenue | |||
Banking Corporation Limited) | Pudong, Shanghai, China ( 200120 ) | |||
China Construction Bank Corporation |
No.1 Naoshikou Street |
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(for A-share market only) | Chang An Xing Rong Plaza | |||
Beijing 100032-33 , China | ||||
Citibank N.A. |
39th Floor Citibank Tower |
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(for Shanghai Hong Kong Stock Connect | Citibank Plaza, | |||
market only) | 3 Garden Road | |||
Central, Hong Kong | ||||
The Hongkong and Shanghai Banking |
Level 30, |
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Corporation Limited | HSBC Main Building | |||
(for Shanghai Hong Kong Stock Connect | 1 Queens Road | |||
market only) | Central, Hong Kong | |||
Standard Chartered Bank (Hong Kong) Limited (for Shanghai Hong Kong Stock Connect market) |
15 th Floor Standard Chartered Tower 388 Kwun Tong Road Kwun Tong, Hong Kong |
|||
Colombia | Cititrust Colombia S.A. Sociedad Fiduciaria | Carrera 9A, No. 99-02 | ||
Bogotá DC, Colombia |
LIMITED ACCESS | STATE STREET CORPORATION 2 |
Costa Rica | Banco BCT S.A. | 160 Calle Central | ||
Edificio BCT | ||||
San José, Costa Rica | ||||
Croatia | Privredna Banka Zagreb d.d. | Custody Department | ||
Radnička cesta 50 | ||||
10000 Zagreb, Croatia | ||||
Zagrebacka Banka d.d. |
Savska 60 |
|||
10000 Zagreb, Croatia | ||||
Cyprus | BNP Paribas Securities Services, S.C.A., Greece (operating through its Athens branch) | 94 V. Sofias Avenue & 1 Kerasountos Str. | ||
115 28 Athens, Greece | ||||
Czech Republic | Československá obchodní banka, a.s. | Radlická 333/150 | ||
150 57 Prague 5, Czech Republic | ||||
UniCredit Bank Czech Republic and Slovakia, a.s. |
BB Centrum FILADELFIE eletavská 1525/1 |
|||
140 92 Praha 4 - Michle, Czech Republic | ||||
Denmark | Nordea Bank AB (publ), Sweden (operating | Strandgade 3 | ||
through its subsidiary, Nordea Bank Danmark A/S) | 0900 Copenhagen C, Denmark | |||
Skandinaviska Enskilda Banken AB (publ), |
Bernstorffsgade 50 |
|||
Sweden (operating through its Copenhagen branch) | 1577 Copenhagen, Denmark | |||
Ecuador | Banco de la Producción S.A. PRODUBANCO | Av. Amazonas N35-211 y Japon | ||
Quito, Ecuador | ||||
Egypt | HSBC Bank Egypt S.A.E. | 6 th Floor | ||
(as delegate of The Hongkong and Shanghai | 306 Corniche El Nil | |||
Banking Corporation Limited) | Maadi | |||
Cairo, Egypt | ||||
Estonia | AS SEB Pank | Tornimäe 2 | ||
15010 Tallinn, Estonia | ||||
Finland | Nordea Bank AB (publ), Sweden (operating | Satamaradankatu 5 | ||
through its subsidiary, Nordea Bank Finland Plc.) | 00500 Helsinki, Finland | |||
Skandinaviska Enskilda Banken AB (publ), |
Securities Services |
|||
Sweden (operating through its Helsinki branch) |
Box 630 SF-00101 Helsinki, Finland |
|||
France | Deutsche Bank AG, Netherlands (operating | De Entrees 99-197 | ||
through its Amsterdam branch with support from its Paris branch) | 1101 HE Amsterdam, Netherlands | |||
Republic of Georgia | JSC Bank of Georgia | 29a Gagarini Str. | ||
Tbilisi 0160 , Georgia |
LIMITED ACCESS | STATE STREET CORPORATION 3 |
Germany | Deutsche Bank AG | Alfred-Herrhausen-Allee 16-24 | ||
D-65760 Eschborn, Germany | ||||
Ghana | Standard Chartered Bank Ghana Limited | P. O. Box 768 | ||
1st Floor | ||||
High Street Building | ||||
Accra, Ghana | ||||
Greece | BNP Paribas Securities Services, S.C.A. | 94 V. Sofias Avenue & 1 Kerasountos Str. | ||
115 28 Athens, Greece | ||||
Guinea-Bissau | via Standard Chartered Bank Côte dIvoire | 23, Bld de la République | ||
S.A., Abidjan, Ivory Coast | 17 BP 1141 Abidjan 17 Côte dIvoire | |||
Hong Kong | Standard Chartered Bank (Hong Kong) | 15 th Floor Standard Chartered Tower | ||
Limited | 388 Kwun Tong Road | |||
Kwun Tong, Hong Kong | ||||
Hungary | Citibank Europe plc Magyarországi Fióktelepe | 7 Szabadság tér, Bank Center | ||
Budapest, H-1051 Hungary | ||||
UniCredit Bank Hungary Zrt. |
6th Floor |
|||
Szabadság tér 5-6 | ||||
H-1054 Budapest, Hungary | ||||
Iceland | Landsbankinn hf. | Austurstræti 11 | ||
155 Reykjavik, Iceland | ||||
India | Deutsche Bank AG | Block B1, 4th Floor, Nirlon Knowledge | ||
Park | ||||
Off Western Express Highway | ||||
Goregaon (E) | ||||
Mumbai 400 063 , India | ||||
The Hongkong and Shanghai Banking |
11F, Building 3, NESCO - IT Park, |
|||
Corporation Limited | NESCO Complex, | |||
Western Express Highway | ||||
Goregaon (East), | ||||
Mumbai 400 063 , India | ||||
Indonesia | Deutsche Bank AG | Deutsche Bank Building, 4 th floor | ||
Jl. Imam Bonjol, No. 80 | ||||
Jakarta 10310 , Indonesia | ||||
Ireland | State Street Bank and Trust Company, United | 525 Ferry Road | ||
Kingdom branch | Edinburgh EH5 2AW , Scotland | |||
Israel | Bank Hapoalim B.M. | 50 Rothschild Boulevard | ||
Tel Aviv, Israel 61000 | ||||
Italy |
Deutsche Bank S.p.A. |
Investor Services |
||
Via Turati 27 3rd Floor | ||||
20121 Milan, Italy |
LIMITED ACCESS | STATE STREET CORPORATION 4 |
Ivory Coast | Standard Chartered Bank Côte dIvoire S.A. | 23, Bld de la République | ||
17 BP 1141 Abidjan 17 Côte dIvoire | ||||
Japan | Mizuho Bank, Limited | 4-16-13, Tsukishima, Chou-ku | ||
Tokyo 104-0052 , Japan | ||||
The Hongkong and Shanghai Banking |
HSBC Building |
|||
Corporation Limited | 11-1 Nihonbashi 3-chome, Chuo-ku | |||
Tokyo 1030027 , Japan | ||||
Jordan | Standard Chartered Bank | Shmeissani Branch | ||
Al-Thaqafa Street, Building # 2 | ||||
P.O. Box 926190 | ||||
Amman 11110 , Jordan | ||||
Kazakhstan | JSC Citibank Kazakhstan | Park Palace, Building A, | ||
41 Kazibek Bi street, | ||||
Almaty 050010 , Kazakhstan | ||||
Kenya | Standard Chartered Bank Kenya Limited | Custody Services | ||
Standard Chartered @ Chiromo, Level 5 | ||||
48 Westlands Road | ||||
P.O. Box 40984 00100 GPO | ||||
Nairobi, Kenya | ||||
Republic of Korea | Deutsche Bank AG | 18th Fl., Young-Poong Building | ||
33 Seorin-dong | ||||
Chongro-ku, Seoul 110-752 , Korea | ||||
The Hongkong and Shanghai Banking |
HSBC Building #25 |
|||
Corporation Limited | 1-Ka Bongrae-Dong | |||
Chung-ku, Seoul 100-161 , Korea | ||||
Kuwait | HSBC Bank Middle East Limited | Kuwait City, Qibla Area | ||
(as delegate of The Hongkong and Shanghai | Hamad Al-Saqr Street | |||
Banking Corporation Limited) | Kharafi Tower, G/1/2 Floors | |||
P. O. Box 1683, Safat 13017 , Kuwait | ||||
Latvia | AS SEB banka | Unicentrs, Valdlauči | ||
LV-1076 Kekavas pag., Rigas raj., Latvia | ||||
Lebanon | HSBC Bank Middle East Limited | St. Georges Street, Minet El-Hosn | ||
(as delegate of The Hongkong and Shanghai | Beirut 1107 2080 , Lebanon | |||
Banking Corporation Limited) | ||||
Lithuania | AB SEB bankas | Gedimino av. 12 | ||
LT 2600 Vilnius, Lithuania | ||||
Malawi | Standard Bank Limited | Kaomba Centre | ||
Cnr. Victoria Avenue & Sir Glyn Jones | ||||
Road | ||||
Blantyre, Malawi |
LIMITED ACCESS | STATE STREET CORPORATION 5 |
Malaysia | Deutsche Bank (Malaysia) Berhad | Domestic Custody Services | ||
Level 20, Menara IMC | ||||
8 Jalan Sultan Ismail | ||||
50250 Kuala Lumpur, Malaysia | ||||
Standard Chartered Bank Malaysia Berhad |
Menara Standard Chartered |
|||
30 Jalan Sultan Ismail | ||||
50250 Kuala Lumpur, Malaysia | ||||
Mali | via Standard Chartered Bank Côte dIvoire | 23, Bld de la République | ||
S.A., Abidjan, Ivory Coast | 17 BP 1141 Abidjan 17 Côte dIvoire | |||
Mauritius | The Hongkong and Shanghai Banking | 5th Floor, HSBC Centre | ||
Corporation Limited | 18 Cybercity | |||
Ebene, Mauritius | ||||
Mexico | Banco Nacional de México, S.A. | 3er piso, Torre Norte | ||
Act. Roberto Medellín No. 800 | ||||
Col. Santa Fe | ||||
Mexico, DF 01219 | ||||
Morocco | Citibank Maghreb | Zénith Millénium Immeuble1 | ||
Sidi Maârouf B.P. 40 | ||||
Casablanca 20190 , Morocco | ||||
Namibia | Standard Bank Namibia Limited | Standard Bank Center | ||
Cnr. Werner List St. and Post St. Mall | ||||
2nd Floor | ||||
Windhoek, Namibia | ||||
Netherlands | Deutsche Bank AG | De Entrees 99-197 | ||
1101 HE Amsterdam, Netherlands | ||||
New Zealand | The Hongkong and Shanghai Banking | HSBC House | ||
Corporation Limited | Level 7, 1 Queen St. | |||
Auckland 1010 , New Zealand | ||||
Niger | via Standard Chartered Bank Côte dIvoire | 23, Bld de la République | ||
S.A., Abidjan, Ivory Coast | 17 BP 1141 Abidjan 17 Côte dIvoire | |||
Nigeria | Stanbic IBTC Bank Plc. | Plot 1712 | ||
Idejo St | ||||
Victoria Island, | ||||
Lagos 101007 , Nigeria | ||||
Norway | Nordea Bank AB (publ), Sweden (operating | Essendropsgate 7 | ||
through its subsidiary, Nordea Bank Norge ASA) | 0368 Oslo, Norway | |||
Skandinaviska Enskilda Banken AB (publ), | P.O. Box 1843 Vika | |||
Sweden (operating through its Oslo branch) | Filipstad Brygge 1 | |||
N-0123 Oslo, Norway |
LIMITED ACCESS | STATE STREET CORPORATION 6 |
Oman | HSBC Bank Oman S.A.O.G. | 2 nd Floor Al Khuwair | ||
(as delegate of The Hongkong and Shanghai | PO Box 1727 PC 111 | |||
Banking Corporation Limited) | Seeb, Oman | |||
Pakistan | Deutsche Bank AG | Unicentre Unitowers | ||
I.I. Chundrigar Road | ||||
P.O. Box 4925 | ||||
Karachi - 74000 , Pakistan | ||||
Palestine | HSBC Bank Middle East Limited | Jaffa Street, Ramallah | ||
(as delegate of The Hongkong and Shanghai | West Bank 2119 , Palestine | |||
Banking Corporation Limited) | ||||
Panama | Citibank, N.A. | Boulevard Punta Pacifica | ||
Torre de las Americas | ||||
Apartado | ||||
Panama City, Panama 0834-00555 | ||||
Peru | Citibank del Perú, S.A. | Canaval y Moreyra 480 | ||
3 rd Floor, San Isidro | ||||
Lima 27 , Perú | ||||
Philippines | Deutsche Bank AG | Global Transaction Banking | ||
Tower One, Ayala Triangle | ||||
1226 Makati City, Philippines | ||||
Poland | Bank Handlowy w Warszawie S.A. | ul. Senatorska 16 | ||
00-293 Warsaw, Poland | ||||
Bank Polska Kasa Opieki S.A |
31 Zwirki I Wigury Street |
|||
02-091 , Warsaw, Poland | ||||
Portugal | BNP Paribas Securities Services, S.C.A., Paris | 3 Rue DAntin | ||
(operating through its Paris branch with | Paris, France Lt 1.19.01 | |||
support from its Lisbon branch) | ||||
Deutsche Bank AG, Netherlands (operating |
De Entrees 99-197 |
|||
through its Amsterdam branch with support | 1101 HE Amsterdam, Netherlands | |||
from its Lisbon branch) | ||||
Puerto Rico | Citibank N.A. | 1 Citibank Drive, Lomas Verdes Avenue | ||
San Juan, Puerto Rico 00926 | ||||
Qatar | HSBC Bank Middle East Limited | 2 Fl Ali Bin Ali Tower | ||
(as delegate of The Hongkong and Shanghai | Building no.: 150 | |||
Banking Corporation Limited) | Airport Road | |||
Doha, Qatar | ||||
Romania | Citibank Europe plc, Dublin Romania Branch | 8, Iancu de Hunedoara Boulevard | ||
712042 , Bucharest Sector 1, Romania | ||||
Russia | Limited Liability Company Deutsche Bank | 82, Sadovnicheskaya Street | ||
Building 2 | ||||
115035 Moscow, Russia |
LIMITED ACCESS | STATE STREET CORPORATION 7 |
Saudi Arabia | HSBC Saudi Arabia Limited | HSBC Head Office | ||
(as delegate of The Hongkong and Shanghai | 7267 Olaya - Al Murooj | |||
Banking Corporation Limited) | Riyadh 12283-2255 Kingdom of Saudi | |||
Arabia | ||||
Senegal | via Standard Chartered Bank Côte dIvoire | 23, Bld de la République | ||
S.A., Abidjan, Ivory Coast | 17 BP 1141 Abidjan 17 Côte dIvoire | |||
Serbia | UniCredit Bank Serbia JSC | Omladinskih Brigada 88, Airport City | ||
11000 Belgrade, Serbia | ||||
Singapore | Citibank N.A. | 3 Changi Business Park Crescent | ||
#07-00, Singapore 486026 | ||||
United Overseas Bank Limited |
156 Cecil Street |
|||
FEB Building #08-03 | ||||
Singapore 069544 | ||||
Slovak Republic | UniCredit Bank Czech Republic and Slovakia, | Ŝancová 1/A | ||
a.s. | 813 33 Bratislava, Slovak Republic | |||
Slovenia | UniCredit Banka Slovenija d.d. | martinska 140 | ||
SI-1000 Ljubljana, Slovenia | ||||
South Africa | FirstRand Bank Limited | Mezzanine Floor | ||
3 First Place Bank City | ||||
Corner Simmonds & Jeppe Sts. | ||||
Johannesburg 2001 | ||||
Republic of South Africa | ||||
Standard Bank of South Africa Limited |
3 rd Floor, 25 Sauer St. |
|||
Johannesburg 2000 | ||||
Republic of South Africa | ||||
Spain | Deutsche Bank S.A.E. | Calle de Rosario Pino 14-16, | ||
Planta 1 | ||||
28020 Madrid, Spain | ||||
Sri Lanka | The Hongkong and Shanghai Banking | 24, Sir Baron Jayatilake Mawatha | ||
Corporation Limited | Colombo 01 , Sri Lanka | |||
Republic of Srpska | UniCredit Bank d.d. | Zelenih beretki 24 | ||
71 000 Sarajevo | ||||
Federation of Bosnia and Herzegovina | ||||
Swaziland | Standard Bank Swaziland Limited | Standard House, Swazi Plaza | ||
Mbabane, Swaziland H101 | ||||
Sweden |
Nordea Bank AB (publ) |
Smålandsgatan 17 |
||
105 71 Stockholm, Sweden | ||||
Skandinaviska Enskilda Banken AB (publ) |
Sergels Torg 2 |
|||
SE-106 40 Stockholm, Sweden | ||||
Switzerland | Credit Suisse AG | Uetlibergstrasse 231 | ||
8070 Zurich, Switzerland |
LIMITED ACCESS | STATE STREET CORPORATION 8 |
UBS AG | Badenerstrasse 574 | |||
8098 Zurich, Switzerland | ||||
Taiwan - R.O.C. |
Deutsche Bank AG |
296 Ren-Ai Road |
||
Taipei 106 Taiwan, Republic of China | ||||
Standard Chartered Bank (Taiwan) Limited |
168 Tun Hwa North Road |
|||
Taipei 105 , Taiwan, Republic of China | ||||
Tanzania |
Standard Chartered Bank (Tanzania) Limited |
1 Floor, International House |
||
Corner Shaaban Robert St and Garden | ||||
Ave | ||||
PO Box 9011 | ||||
Dar es Salaam, Tanzania | ||||
Thailand | Standard Chartered Bank (Thai) Public | Sathorn Nakorn Tower | ||
Company Limited | 14 th Floor, Zone B | |||
90 North Sathorn Road | ||||
Silom, Bangkok 10500 , Thailand | ||||
Togo | via Standard Chartered Bank Côte dIvoire | 23, Bld de la République | ||
S.A., Abidjan, Ivory Coast | 17 BP 1141 Abidjan 17 Côte dIvoire | |||
Trinidad & Tobago | Republic Bank Limited | 9-17 Park Street | ||
Port of Spain | ||||
Republic of Trinidad & Tobago, West | ||||
Indies | ||||
Tunisia | Banque Internationale Arabe de Tunisie | Direction des Marches de Capitaux | ||
1080 Tunis Cedex, Tunisia | ||||
Turkey | Citibank, A.Ş. | Tekfen Tower | ||
Eski Buyukdere Caddesi 209 | ||||
Kat 3 | ||||
Levent 34394 Istanbul, Turkey | ||||
Deutsche Bank A.Ş. |
Eski Buyukdere Caddesi |
|||
Tekfen Tower No. 209 | ||||
Kat: 17 4 | ||||
Levent 34394 Istanbul, Turkey | ||||
Uganda | Standard Chartered Bank Uganda Limited | 5 Speke Road | ||
P.O. Box 7111 | ||||
Kampala, Uganda | ||||
Ukraine | PJSC Citibank | 16-g Dymytrova St. | ||
Kyiv 03150 , Ukraine | ||||
United Arab Emirates Dubai Financial Market | HSBC Bank Middle East Limited | HSBC Securities Services | ||
(as delegate of The Hongkong and Shanghai | Emaar Square | |||
Banking Corporation Limited) | Level 3, Building No. 5 | |||
P O Box 502601 | ||||
Dubai, United Arab Emirates |
LIMITED ACCESS | STATE STREET CORPORATION 9 |
United Arab Emirates Dubai International Financial Center | HSBC Bank Middle East Limited | HSBC Securities Services | ||
(as delegate of The Hongkong and Shanghai | Emaar Square | |||
Banking Corporation Limited) | Level 3, Building No. 5 | |||
P O Box 502601 | ||||
Dubai, United Arab Emirates | ||||
United Arab Emirates Abu Dhabi | HSBC Bank Middle East Limited | HSBC Securities Services | ||
(as delegate of The Hongkong and Shanghai | Emaar Square | |||
Banking Corporation Limited) | Level 3, Building No. 5 | |||
P O Box 502601 | ||||
Dubai, United Arab Emirates | ||||
United Kingdom | State Street Bank and Trust Company, United Kingdom branch |
525 Ferry Road Edinburgh EH5 2AW , Scotland |
||
Uruguay | Banco Itaú Uruguay S.A. | Zabala 1463 | ||
11000 Montevideo, Uruguay | ||||
Venezuela | Citibank, N.A. | Centro Comercial El Recreo | ||
Torre Norte, Piso 19 | ||||
Avenida Casanova | ||||
Caracas, Venezuela 1050 | ||||
Vietnam | HSBC Bank (Vietnam) Limited | Centre Point | ||
(as delegate of The Hongkong and Shanghai Banking Corporation Limited) |
106 Nguyen Van Troi Street Phu Nhuan District |
|||
Ho Chi Minh City, Vietnam | ||||
Zambia | Standard Chartered Bank Zambia Plc. | Standard Chartered House | ||
Cairo Road | ||||
P.O. Box 32238 | ||||
10101 , Lusaka, Zambia | ||||
Zimbabwe | Stanbic Bank Zimbabwe Limited | 3rd Floor | ||
(as delegate of Standard Bank of South Africa Limited) |
Stanbic Centre 59 Samora Machel Avenue |
|||
Harare, Zimbabwe | ||||
Argentina | Citibank, N.A.* | Bartolome Mitre 530 | ||
1036 Buenos Aires, Argentina |
* |
Effective April 2, 2015, State Street suspended acceptance of Foreign Custody Manager responsibilities as delegated under U.S. SEC Rule 17f-5 for this market. |
LIMITED ACCESS | STATE STREET CORPORATION 10 |
Global Services
[STATE STREET LOGO]
Depositories Operating in Network Markets Schedule B
M ARCH 31, 2015
MARKET |
DEPOSITORY |
TYPES OF SECURITIES |
||
Albania | Bank of Albania | Government debt | ||
Australia | Austraclear Limited | Government securities, corporate bonds, and corporate money market instruments | ||
Austria | Oesterreichische Kontrollbank AG (Wertpapiersammelbank Division) | All securities listed on Wiener Börse AG, the Vienna Stock Exchange (as well as virtually all other Austrian securities) | ||
Bahrain | Clearing, Settlement, Depository and Registry System of the Bahrain Bourse | Equities | ||
Bangladesh | Bangladesh Bank | Government securities | ||
Central Depository Bangladesh Limited | Equities and corporate bonds | |||
Belgium | Euroclear Belgium | Equities and most corporate bonds | ||
National Bank of Belgium | Government securities, corporate bonds, and money market instruments | |||
Benin | Dépositaire Central Banque de Règlement | All securities traded on Bourse Régionale des Valeurs Mobilières, the West African regional exchange, including securities from the following West African nations: Benin, Burkina Faso, Guinea-Bissau, the Ivory Coast, Mali, Niger, Senegal and Togo. | ||
Bermuda | Bermuda Securities Depository | Equities, corporate bonds | ||
Federation of Bosnia and Herzegovina | Registar vrijednosnih papira u Federaciji Bosne i Hercegovine, d.d. | Equities, corporate bonds, government securities, money market instruments | ||
Botswana | Bank of Botswana | Government debt | ||
Central Securities Depository Company of Botswana Ltd. |
Equities and corporate bonds |
LIMITED ACCESS | STATE STREET CORPORATION 1 |
Brazil | Central de Custódia e de Liquidação Financeira de Títulos Privados (CETIP) | Corporate debt and money market instruments | ||
Companhia Brasileira de Liquidação e Custódia (CBLC) |
All equities listed on BM&F BOVESPA S.A. and SOMA, and non-financial corporate bonds traded at BM&F BOVESPA S.A. |
|||
Sistema Especial de Liquidação e de Custódia (SELIC) |
Government debt issued by the central bank and the National Treasury |
|||
Bulgaria | Bulgarian National Bank | Government securities | ||
Central Depository AD |
Eligible equities and corporate bonds |
|||
Burkina Faso | Dépositaire Central Banque de Règlement | All securities traded on Bourse Régionale des Valeurs Mobilières, the West African regional exchange, including securities from the following West African nations: Benin, Burkina Faso, Guinea-Bissau, the Ivory Coast, Mali, Niger, Senegal and Togo. | ||
Canada | The Canadian Depository for Securities Limited | All book-entry eligible securities, including government securities, equities, corporate bonds, money market instruments, strip bonds, and asset-backed securities | ||
Chile | Depósito Central de Valores S.A. | Government securities, equities, corporate bonds, mortgage-backed securities, and money market instruments | ||
Peoples Republic of China | China Securities Depository and Clearing Corporation Limited, Shanghai and Shenzhen Branches | A shares, B shares, Treasury bonds, local government bonds, enterprise bonds, corporate bonds, open and closed-end funds, convertible bonds, and warrants | ||
China Central Depository and Clearing Co., Ltd. |
Bonds traded through the China Interbank Bond Market (CIBM), including Treasury bonds, local government bonds, policy bank bonds, central bank bills, medium-term notes, commercial paper, enterprise bonds, and commercial bank bonds |
|||
Colombia | Depósito Central de Valores | Securities issued by the central bank and the Republic of Colombia | ||
Depósito Centralizado de Valores de Colombia S.A. (DECEVAL) |
Equities, corporate bonds, money market instruments |
|||
Costa Rica | Central de Valores S.A. | Securities traded on Bolsa Nacional de Valores | ||
Croatia | Sredinje klirinko depozitarno drutvo d.d. | Eligible equities, corporate bonds, government securities, and corporate money market instruments | ||
Cyprus | Central Depository and Central Registry | Equities, corporate bonds, dematerialized government securities, corporate money market instruments |
LIMITED ACCESS | STATE STREET CORPORATION 2 |
Czech Republic | Centrální depozitář cenných papírů, a.s. | All dematerialized equities, corporate debt, and government debt, excluding Treasury bills | ||
Czech National Bank |
Treasury bills |
|||
Denmark | VP Securities A/S | Equities, government securities, corporate bonds, corporate money market instruments, warrants | ||
Egypt | Central Bank of Egypt | Treasury bills | ||
Misr for Central Clearing, Depository and Registry S.A.E. |
Eligible equities, corporate bonds, and Treasury bonds |
|||
Estonia | AS Eesti Väärtpaberikeskus | All registered equity and debt securities | ||
Finland | Euroclear Finland | Equities, corporate bonds, government securities, money market instruments | ||
France | Euroclear France | Government securities, equities, bonds, and money market instruments | ||
Republic of Georgia | Georgian Central Securities Depository | Equities, corporate bonds, and money market instruments | ||
National Bank of Georgia |
Government securities |
|||
Germany | Clearstream Banking AG, Frankfurt | Equities, government securities, corporate bonds, money market instruments, warrants, investment funds, and index certificates | ||
Ghana |
Central Securities Depository (Ghana) Limited |
Government securities and Bank of Ghana securities; equities and corporate bonds | ||
Greece | Bank of Greece, System for Monitoring Transactions in Securities in Book-Entry Form | Government debt | ||
Hellenic Central Securities Depository |
Eligible listed equities, government debt, and corporate bonds |
|||
Guinea-Bissau | Dépositaire Central Banque de Règlement | All securities traded on Bourse Régionale des Valeurs Mobilières, the West African regional exchange, including securities from the following West African nations: Benin, Burkina Faso, Guinea-Bissau, the Ivory Coast, Mali, Niger, Senegal and Togo. | ||
Hong Kong | Central Moneymarkets Unit | Government debt (i.e., exchange fund bills and notes issued by the HKMA), other private debt, and money market instruments | ||
Hong Kong Securities Clearing Company Limited |
Securities listed or traded on the Stock Exchange of Hong Kong Limited |
|||
Hungary | KELER Központi Értéktár | Government securities, equities, corporate bonds, and investment fund notes |
LIMITED ACCESS | STATE STREET CORPORATION 3 |
Iceland | Icelandic Securities Depository Limited | Government securities, equities, corporate bonds, and money market instruments | ||
India | Central Depository Services (India) Limited | Eligible equities, debt securities, and money market instruments | ||
National Securities Depository Limited |
Eligible equities, debt securities, and money market instruments |
|||
Reserve Bank of India |
Government securities |
|||
Indonesia | Bank Indonesia | Sertifikat Bank Indonesia (central bank certificates), Surat Utang Negara (government debt instruments), and Surat Perbendaharaan Negara (Treasury bills) | ||
PT Kustodian Sentral Efek Indonesia |
Equities, corporate bonds, and money market instruments |
|||
Ireland | Euroclear UK & Ireland Limited* | GBP- and EUR-denominated money market instruments | ||
Euroclear Bank S.A./N.V. |
Government securities |
|||
Israel | Tel Aviv Stock Exchange Clearing House Ltd. (TASE Clearing House) | Government securities, equities, corporate bonds and trust fund units | ||
Italy | Monte Titoli S.p.A. | Equities, corporate debt, government debt, money market instruments, and warrants | ||
Ivory Coast | Dépositaire Central Banque de Règlement | All securities traded on Bourse Régionale des Valeurs Mobilières, the West African regional exchange, including securities from the following West African nations: Benin, Burkina Faso, Guinea-Bissau, the Ivory Coast, Mali, Niger, Senegal and Togo. | ||
Japan | Bank of Japan Financial Network System | Government securities | ||
Japan Securities Depository Center (JASDEC) Incorporated |
Equities, corporate bonds, and corporate money market instruments |
|||
Jordan | Central Bank of Jordan | Treasury bills, government bonds, development bonds, and public entity bonds | ||
Securities Depository Center |
Equities and corporate bonds |
|||
Kazakhstan | Central Securities Depository | Government securities, equities, corporate bonds, and money market instruments | ||
Kenya | Central Bank of Kenya | Treasury bills and Treasury bonds | ||
Central Depository and Settlement Corporation Limited |
Equities and corporate debt |
|||
Republic of Korea | Korea Securities Depository | Equities, government securities, corporate bonds and money market instruments |
LIMITED ACCESS | STATE STREET CORPORATION 4 |
Kuwait | Kuwait Clearing Company | Money market instruments, equities, and corporate bonds | ||
Latvia | Latvian Central Depository | Equities, government securities, corporate bonds, and money market instruments | ||
Lebanon | Banque du Liban | Government securities and certificates of deposit issued by the central bank | ||
Custodian and Clearing Center of Financial Instruments for Lebanon and the Middle East (Midclear) S.A.L. |
Equities, corporate bonds and money market instruments |
|||
Lithuania |
Central Securities Depository of Lithuania |
All securities available for public trading |
||
Malaysia | Bank Negara Malaysia | Treasury bills, Bank Negara Malaysia bills, Malaysian government securities, private debt securities, and money market instruments | ||
Bursa Malaysia Depository Sdn. Bhd. |
Securities listed on Bursa Malaysia Securities Berhad |
|||
Malawi | Reserve Bank of Malawi | Reserve Bank of Malawi bills and Treasury bills | ||
Mali | Dépositaire Central Banque de Règlement | All securities traded on Bourse Régionale des Valeurs Mobilières, the West African regional exchange, including securities from the following West African nations: Benin, Burkina Faso, Guinea-Bissau, the Ivory Coast, Mali, Niger, Senegal and Togo. | ||
Mauritius | Bank of Mauritius | Government debt (traded through primary dealers) | ||
Central Depository and Settlement Co. Limited |
Listed and unlisted equity and debt securities (corporate debt and T-bills traded on the exchange) |
|||
Mexico | S.D. Indeval, S.A. de C.V. | All securities | ||
Morocco | Maroclear | Eligible listed equities, corporate and government debt, certificates of deposit, commercial paper | ||
Namibia | Bank of Namibia | Treasury bills | ||
Netherlands | Euroclear Nederland | Government securities, equities, corporate bonds, corporate money market instruments, and stripped government bonds | ||
New Zealand | New Zealand Central Securities Depository Limited | Government securities, equities, corporate bonds, and money market instruments | ||
Niger | Dépositaire Central Banque de Règlement | All securities traded on Bourse Régionale des Valeurs Mobilières, the West African regional exchange, including securities from the following West African nations: Benin, Burkina Faso, Guinea-Bissau, the Ivory Coast, Mali, Niger, Senegal and Togo. | ||
Nigeria | Central Bank of Nigeria | Treasury bills and government bonds |
LIMITED ACCESS | STATE STREET CORPORATION 5 |
Central Securities Clearing System Limited | Equities and corporate bonds traded on the Nigeria Stock Exchange | |||
Norway | Verdipapirsentralen | All listed securities | ||
Oman | Muscat Clearing & Depository Company S.A.O.C. | Equities, corporate bonds, government debt | ||
Pakistan | Central Depository Company of Pakistan Limited | Equities and corporate bonds | ||
State Bank of Pakistan |
Government securities |
|||
Palestine | Clearing, Depository and Settlement system, a department of the Palestine Exchange | Equities listed on the Palestine Exchange | ||
Panama | Central Latinoamericana de Valores, S.A. (LatinClear) | Equities, government and corporate debt, commercial paper, short-term securities | ||
Peru | CAVALI S.A. Institución de Compensación y Liquidación de Valores | All securities in book-entry form traded on the stock exchange | ||
Philippines | Philippine Depository & Trust Corporation | Eligible equities and debt | ||
Registry of Scripless Securities (ROSS) of the Bureau of the Treasury |
Government securities |
|||
Poland | Rejestr Papierów Wartościowych | Treasury bills | ||
Krajowy Depozyt Papierów Wartościowych, S.A. |
Equities, corporate bonds, corporate money market instruments, Treasury bonds, warrants, and futures contracts |
|||
Portugal | INTERBOLSA - Sociedad Gestora de Sistemas de Liquidação e de Sistemas Centralizados de Valores Mobiliários, S.A. | All local Portuguese instruments | ||
Qatar | Qatar Central Securities Depository | Equities, government bonds and Treasury bills listed on the Qatar Exchange | ||
Romania | National Bank of Romania | Treasury bills and bonds | ||
S.C. Depozitarul Central S.A. |
Bursa de Valori Bucuresti- (Bucharest Stock Exchange-) listed equities, corporate bonds, government bonds, and municipal bonds |
|||
Russia | National Settlement Depository | Eligible equities, Obligatsii Federalnogo Zaima (OFZs), and corporate debt denominated in RUB | ||
Saudi Arabia | Saudi Arabian Monetary Agency | Government securities and Saudi government development bonds (SGDBs) | ||
Tadawul Central Securities Depository |
Equities |
LIMITED ACCESS | STATE STREET CORPORATION 6 |
Senegal | Dépositaire Central Banque de Règlement | All securities traded on Bourse Régionale des Valeurs Mobilières, the West African regional exchange, including securities from the following West African nations: Benin, Burkina Faso, Guinea-Bissau, the Ivory Coast, Mali, Niger, Senegal and Togo. | ||
Serbia | Central Securities Depository and Clearinghouse | All instruments | ||
Singapore | Monetary Authority of Singapore | Government securities | ||
The Central Depository (Pte.) Limited |
Eligible listed equities and eligible private debt traded in Singapore |
|||
Slovak Republic | Centrálny depozitár cenných papierov SR, a.s. | All dematerialized securities | ||
Slovenia | KDD Centralna klirinko depotna druba d.d. | All publicly traded securities | ||
South Africa | Strate (Pty) Ltd. | Eligible equities, government securities, corporate bonds, money market instruments, and warrants | ||
Spain | IBERCLEAR | Government securities, equities, warrants, money market instruments, and corporate bonds | ||
Sri Lanka | Central Bank of Sri Lanka | Government securities | ||
Central Depository System (Pvt) Limited |
Equities and corporate bonds |
|||
Republic of Srpska | Central Registry of Securities in the Republic of Srpska JSC | Government securities, equities, and corporate and municipal bonds | ||
Sweden | Euroclear Sweden | Government securities, equities, bonds, money market instruments, derivatives, exchange traded funds, and warrants | ||
Switzerland | SIX SIS AG | Government securities, equities, corporate bonds, money market instruments, derivatives, mutual funds, and warrants | ||
Taiwan - R.O.C. | Central Bank of the Republic of China (Taiwan) | Government securities | ||
Taiwan Depository and Clearing Corporation |
Listed equities, short-term bills, and corporate bonds |
|||
Tanzania | Central Depository System (CDS), a department of the Dar es Salaam Stock Exchange | Equities and corporate bonds | ||
Thailand | Thailand Securities Depository Company Limited | Government securities, equities and corporate bonds |
LIMITED ACCESS | STATE STREET CORPORATION 7 |
Togo | Dépositaire Central Banque de Règlement | All securities traded on Bourse Régionale des Valeurs Mobilières, the West African regional exchange, including securities from the following West African nations: Benin, Burkina Faso, Guinea-Bissau, the Ivory Coast, Mali, Niger, Senegal and Togo. | ||
Trinidad and Tobago | Central Bank of Trinidad and Tobago | Government debt | ||
Trinidad and Tobago Central Depository Limited |
Equities and corporate debt |
|||
Tunisia | Tunisie Clearing | All eligible listed securities | ||
Turkey | Central Bank of Turkey | Government securities | ||
Central Registry Agency |
Equities, corporate bonds, money market instruments, mutual fund certificates, exchange traded funds |
|||
Uganda | Bank of Uganda | Treasury bills and Treasury bonds | ||
Securities Central Depository |
Equities, corporate bonds |
|||
Ukraine | National Depository of Ukraine | Equities, bonds, and money market instruments | ||
United Arab Emirates Abu Dhabi | Clearing, Settlement, Depository and Registry department of the Abu Dhabi Securities Exchange | Equities, government securities, and corporate debt | ||
United Arab Emirates Dubai Financial Market | Clearing, Settlement and Depository Division, a department of the Dubai Financial Market | Equities, government securities, and corporate debt listed on the DFM | ||
United Arab Emirates Dubai International Financial Center | Central Securities Depository, owned and operated by NASDAQ Dubai Limited | Equities, corporate bonds, and corporate money market instruments | ||
United Kingdom | Euroclear UK & Ireland Limited | GBP- and EUR-denominated money market instruments | ||
Uruguay | Banco Central del Uruguay | Government securities | ||
Venezuela | Banco Central de Venezuela | Government securities | ||
Caja Venezolana de Valores |
Equities and corporate bonds |
|||
Vietnam | Vietnam Securities Depository | Equities, government bonds, T-bills, corporate bonds, and public fund certificates | ||
Zambia | Bank of Zambia | Treasury bills and Treasury bonds | ||
LuSE Central Shares Depository Limited |
Treasury bonds, corporate bonds, and equities |
|||
Zimbabwe | Chengetedzai Depository Company Limited | Equities and corporate bonds | ||
Reserve Bank of Zimbabwe |
Treasury bills and Treasury bonds |
LIMITED ACCESS | STATE STREET CORPORATION 8 |
TRANSNATIONAL DEPOSITORIES | ||
Euroclear Bank S.A./N.V. | Domestic securities from more than 40 markets | |
Clearstream Banking, S.A. | Domestic securities from more than 50 markets |
LIMITED ACCESS | STATE STREET CORPORATION 9 |
S TATE S TREET G LOBAL S ERVICES ®
SCHEDULE C
Publication / Type of Information | Brief Description | |||
(scheduled update frequency) |
||||
The Guide to Custody in World Markets (regular my.statestreet.com updates) |
An overview of settlement and safekeeping procedures, custody practices, and foreign investor considerations for the markets in which State Street offers custodial services. | |||
Global Custody Network Review (updated annually on my.statestreet.com ) |
Information relating to Foreign Subcustodians in State Streets Global Custody Network. The Review stands as an integral part of the materials that State Street provides to its U.S. mutual fund clients to assist them in complying with SEC Rule 17f-5. The Review also gives insight into State Streets market expansion and Foreign Subcustodian selection processes, as well as the procedures and controls used to monitor the financial condition and performance of our Foreign Subcustodian banks. | |||
Securities Depository Review (updated annually on my.statestreet.com ) |
Custody risk analyses of the Foreign Securities Depositories presently operating in Network markets. This publication is an integral part of the materials that State Street provides to its U.S. mutual fund clients to meet informational obligations created by SEC Rule 17f-7. | |||
Global Legal Survey (updated annually on my.statestreet.com ) |
With respect to each market in which State Street offers custodial services, opinions relating to whether local law restricts: | |||
(i) | access of a funds independent public accountants to books and records of a Foreign Subcustodian or Foreign Securities System, | |||
(ii) | a funds ability to recover in the event of bankruptcy or insolvency of a Foreign Subcustodian or Foreign Securities System, | |||
(iii) | a funds ability to recover in the event of a loss by a Foreign Subcustodian or Foreign Securities System, and | |||
(iv) | the ability of a foreign investor to convert cash and cash equivalents to U.S. dollars. | |||
Subcustodian Agreements (available on CD-ROM annually) |
Copies of the contracts that State Street has entered into with each Foreign Subcustodian that maintains U.S. mutual fund assets in the markets in which State Street offers custodial services. |
1 | LIMITED ACCESS |
S TATE S TREET G LOBAL S ERVICES ®
Publication / Type of Information
(scheduled update frequency) |
Brief Description | |
Global Market Bulletin (daily or as necessary via email and my.statestreet.com ) |
Information on changing settlement and custody conditions in markets where State Street offers custodial services. Includes changes in market and tax regulations, depository developments, dematerialization information, as well as other market changes that may impact State Streets clients. | |
Foreign Custody Risk Advisories (provided as necessary and on my.statestreet.com ) |
For those markets where State Street offers custodial services that exhibit special risks or infrastructures impacting custody, State Street maintains market advisories to highlight those unique market factors which might impact our ability to offer recognized custody service levels. | |
Foreign Custody Manager Material Change Notices (quarterly or as necessary and on my.statestreet.com ) |
Informational letters and accompanying materials, pursuant to our role as Foreign Custody Manager, confirming State Streets foreign custody arrangements, including a summary of material changes with Foreign Subcustodians that have occurred during the previous quarter. The notices also identify any material changes in the custodial risks associated with maintaining assets with Foreign Securities Depositories. |
Please contact GlobalMarketInformation@statestreet.com with questions about this document.
The information contained in this document has been carefully researched and is believed to be reliable as of the publication date. Due to the complexities of the markets and changing conditions, however, State Street cannot guarantee that it is complete or accurate in every respect. This document should not be construed or used as a substitute for appropriate legal or investment counsel. Specific advice should be sought on matters relevant to the investment activities of the reader. This application contains proprietary information and is fully protected by relevant copyright laws worldwide.
Copyright 2015 State Street Corporation
www.statestreet.com
2 | LIMITED ACCESS |
Exhibit j.2
APPENDIX A
TO
A MENDED AND R ESTATED M ASTER C USTODIAN A GREEMENT
July 15, 2015
(Updated as of August 1, 2017)
NUVEEN CLOSED-END MANAGEMENT INVESTMENT COMPANIES
Diversified Real Asset Income Fund
Nuveen All Cap Energy MLP Opportunities Fund
Nuveen AMT-Free Municipal Credit Income Fund f /k/a Nuveen Enhanced AMT-Free Municipal Credit Opportunities Fund
Nuveen AMT-Free Municipal Value Fund
Nuveen AMT-Free Quality Municipal Income Fund f/k/a Nuveen AMT-Free Municipal Income Fund
Nuveen Arizona Quality Municipal Income Fund f/k/a Nuveen Arizona Premium Income Municipal Fund
Nuveen Build America Bond Fund
Nuveen Build America Bond Opportunity Fund
Nuveen California AMT-Free Quality Municipal Income Fund f/k/a Nuveen California AMT-Free Municipal Income Fund
Nuveen California Dividend Advantage Municipal Fund 2
Nuveen California Dividend Advantage Municipal Fund 3
Nuveen California Municipal Value Fund 2
Nuveen California Municipal Value Fund, Inc.
Nuveen California Quality Municipal Income Fund f/k/a Nuveen California Dividend Advantage Municipal Fund
Nuveen California Select Tax-Free Income Portfolio
Nuveen Connecticut Quality Municipal Income Fund f/k/a Nuveen Connecticut Premium Income Municipal Fund
Nuveen Core Equity Alpha Fund
Nuveen Credit Opportunities 2020 Target Term Fund
Nuveen Credit Opportunities 2022 Target Term Fund
Nuveen Credit Opportunities 2024 Target Term Fund
Nuveen Credit Strategies Income Fund
Nuveen Diversified Dividend and Income Fund
Nuveen Dow 30 SM Dynamic Overwrite Fund
Nuveen Emerging Markets Debt 2022 Target Term Fund
Nuveen Energy MLP Total Return Fund
Nuveen Enhanced Municipal Value Fund
Nuveen Flexible Investment Income Fund
Nuveen Floating Rate Income Fund
Nuveen Floating Rate Income Opportunity Fund
Nuveen Georgia Quality Municipal Income Fund f/k/a Nuveen Georgia Dividend Advantage Municipal Fund 2
Nuveen Global Equity Income Fund
Nuveen Global High Income Fund
Nuveen High Income 2020 Target Term Fund
Nuveen High Income December 2018 Target Term Fund
Nuveen High Income December 2019 Target Term Fund
Nuveen High Income November 2021 Target Term Fund
Nuveen Intermediate Duration Municipal Term Fund
Nuveen Intermediate Duration Quality Municipal Term Fund
Nuveen Maryland Quality Municipal Income Fund f/k/a Nuveen Maryland Premium Income Municipal Fund
1
APPENDIX A
TO
A MENDED AND R ESTATED M ASTER C USTODIAN A GREEMENT
July 15, 2015
(Updated as of August 1, 2017)
Nuveen Massachusetts Quality Municipal Income Fund f/k/a Nuveen Massachusetts Premium Income Municipal Fund
Nuveen Michigan Quality Municipal Income Fund f/k/a Nuveen Michigan Quality Income Municipal Fund
Nuveen Minnesota Quality Municipal Income Fund f/k/a Nuveen Minnesota Municipal Income Fund
Nuveen Missouri Quality Municipal Income Fund f/k/a Nuveen Missouri Premium Income Municipal Fund
Nuveen Mortgage Opportunity Term Fund
Nuveen Mortgage Opportunity Term Fund 2
Nuveen Multi-Market Income Fund
Nuveen Municipal 2021 Target Term Fund
Nuveen Municipal Credit Income Fund f/k/a Nuveen Enhanced Municipal Credit Opportunities Fund
Nuveen Municipal High Income Opportunity Fund
Nuveen Municipal Income Fund, Inc.
Nuveen Municipal Value Fund, Inc.
Nuveen NASDAQ 100 Dynamic Overwrite Fund
Nuveen New Jersey Municipal Value Fund
Nuveen New Jersey Quality Municipal Income Fund f/k/a Nuveen New Jersey Dividend Advantage Municipal Fund
Nuveen New York AMT-Free Quality Municipal Income Fund f/k/a Nuveen New York AMT-Free Municipal Income Fund
Nuveen New York Municipal Value Fund 2
Nuveen New York Municipal Value Fund, Inc.
Nuveen New York Quality Municipal Income Fund f/k/a Nuveen New York Dividend Advantage Municipal Fund
Nuveen New York Select Tax-Free Income Portfolio
Nuveen North Carolina Quality Municipal Income Fund f/k/a Nuveen North Carolina Premium Income Municipal Fund
Nuveen Ohio Quality Municipal Income Fund f/k/a Ohio Quality Income Municipal Fund
Nuveen Pennsylvania Quality Municipal Income Fund f/k/a Nuveen Pennsylvania Investment Quality Municipal Fund
Nuveen Pennsylvania Municipal Value Fund
Nuveen Performance Plus Municipal Fund, Inc.
Nuveen Preferred and Income 2022 Term Fund
Nuveen Preferred and Income Term Fund
Nuveen Preferred Income Opportunities Fund
Nuveen Preferred Securities Income Fund f/k/a Nuveen Quality Preferred Income Fund 2
Nuveen Quality Municipal Income Fund f/k/a Nuveen Dividend Advantage Municipal Fund
Nuveen Real Asset Income and Growth Fund
Nuveen Real Estate Income Fund
Nuveen S&P 500 Buy-Write Fund
Nuveen S&P 500 Dynamic Overwrite Fund
Nuveen Select Maturities Municipal Fund
Nuveen Select Tax-Free Income Portfolio
Nuveen Select Tax-Free Income Portfolio 2
Nuveen Select Tax-Free Income Portfolio 3
Nuveen Senior Income Fund
Nuveen Short Duration Credit Opportunities Fund
2
Exhibit j.2
APPENDIX A
TO
A MENDED AND R ESTATED M ASTER C USTODIAN A GREEMENT
July 15, 2015
(Updated as of August 1, 2017)
Nuveen Tax-Advantaged Dividend Growth Fund
Nuveen Tax-Advantaged Total Return Strategy Fund
Nuveen Technology Opportunities Fund
Nuveen Texas Quality Municipal Income Fund f/k/a Nuveen Texas Quality Income Municipal Fund
Nuveen Virginia Quality Municipal Income Fund f/k/a Nuveen Virginia Premium Income Municipal Fund
NUVEEN OPEN-END MANAGEMENT INVESTMENT COMPANIES
NUVEEN MUNICIPAL TRUST , on behalf of:
Nuveen All-American Municipal Bond Fund
Nuveen High Yield Municipal Bond Fund
Nuveen Inflation Protected Municipal Bond Fund
Nuveen Intermediate Duration Municipal Bond Fund
Nuveen Limited Term Municipal Bond Fund
Nuveen Short Duration High Yield Municipal Bond Fund
Nuveen Strategic Municipal Opportunities Fund
NUVEEN MULTISTATE TRUST I , on behalf of:
Nuveen Arizona Municipal Bond Fund
Nuveen Colorado Municipal Bond Fund
Nuveen Maryland Municipal Bond Fund
Nuveen New Mexico Municipal Bond Fund
Nuveen Pennsylvania Municipal Bond Fund
Nuveen Virginia Municipal Bond Fund
NUVEEN MULTISTATE TRUST II , on behalf of:
Nuveen California High Yield Municipal Bond Fund
Nuveen California Intermediate Municipal Bond Fund
Nuveen California Municipal Bond Fund
Nuveen Connecticut Municipal Bond Fund
Nuveen Massachusetts Municipal Bond Fund
Nuveen New Jersey Municipal Bond Fund
Nuveen New York Municipal Bond Fund
NUVEEN MULTISTATE TRUST III , on behalf of:
Nuveen Georgia Municipal Bond Fund
Nuveen Louisiana Municipal Bond Fund
Nuveen North Carolina Municipal Bond Fund
Nuveen Tennessee Municipal Bond Fund
3
APPENDIX A
TO
A MENDED AND R ESTATED M ASTER C USTODIAN A GREEMENT
July 15, 2015
(Updated as of August 1, 2017)
NUVEEN MULTISTATE TRUST IV , on behalf of:
Nuveen Kansas Municipal Bond Fund
Nuveen Kentucky Municipal Bond Fund
Nuveen Michigan Municipal Bond Fund
Nuveen Missouri Municipal Bond Fund
Nuveen Ohio Municipal Bond Fund
Nuveen Wisconsin Municipal Bond Fund
NUVEEN INVESTMENT TRUST , on behalf of:
Nuveen Concentrated Core Fund
Nuveen Core Dividend Fund
Nuveen Equity Market Neutral Fund
Nuveen Global Total Return Bond Fund
Nuveen Large Cap Core Fund
Nuveen Large Cap Core Plus Fund
Nuveen Large Cap Growth Fund
Nuveen Large Cap Value Fund
Nuveen NWQ Global All-Cap Fund
Nuveen NWQ Global Equity Income Fund
Nuveen NWQ Multi-Cap Value Fund
Nuveen NWQ Large-Cap Value Fund
Nuveen NWQ Small-Cap Value Fund
Nuveen NWQ Small/Mid-Cap Value Fund
Nuveen Tradewinds Value Opportunities Fund
Nuveen U.S. Infrastructure Bond Fund
NUVEEN INVESTMENT TRUST II , on behalf of:
Nuveen Equity Long/Short Fund
Nuveen Global Growth Fund
Nuveen Growth Fund
Nuveen International Growth Fund
Nuveen NWQ International Value Fund
Nuveen NWQ Japan Fund
Nuveen Santa Barbara Dividend Growth Fund
Nuveen Santa Barbara Global Dividend Growth Fund
Nuveen Santa Barbara International Dividend Growth Fund
Nuveen Symphony Dynamic Equity Fund
Nuveen Symphony International Equity Fund
Nuveen Symphony Large-Cap Growth Fund
Nuveen Symphony Low Volatility Equity Fund
Nuveen Symphony Mid-Cap Core Fund
Nuveen Symphony Small Cap Core Fund
4
Exhibit j.2
APPENDIX A
TO
A MENDED AND R ESTATED M ASTER C USTODIAN A GREEMENT
July 15, 2015
(Updated as of August 1, 2017)
Nuveen Tradewinds Emerging Markets Fund
Nuveen Tradewinds Global All-Cap Fund
Nuveen Winslow International Small Cap Fund
Nuveen Winslow Large-Cap Growth Fund
Nuveen Winslow Managed Volatility Equity Fund
NUVEEN INVESTMENT TRUST III , on behalf of:
Nuveen Symphony Credit Opportunities Fund
Nuveen Symphony Dynamic Credit Fund
Nuveen Symphony Floating Rate Income Fund
Nuveen Symphony High Yield Bond Fund
NUVEEN INVESTMENT TRUST V , on behalf of:
Nuveen Gresham Diversified Commodity Strategy Fund
Nuveen Gresham Long/Short Commodity Strategy Fund
Nuveen Multi-Asset Income Fund
Nuveen Multi-Asset Income Tax-Aware Fund
Nuveen NWQ Flexible Income Fund
Nuveen Preferred Securities Fund
NUVEEN MANAGED ACCOUNTS PORTFOLIOS TRUST , on behalf of
Municipal Total Return Managed Accounts Portfolio
NUVEEN INVESTMENT FUNDS, INC. , on behalf of
Nuveen Global Infrastructure Fund
Nuveen International Select Fund
Nuveen Real Asset Income Fund
SIGNATURE PAGE FOLLOWS
5
APPENDIX A
TO
A MENDED AND R ESTATED M ASTER C USTODIAN A GREEMENT
July 15, 2015
(Updated as of August 1, 2017)
Acknowledged and Accepted:
For the Above Fund Parties
By: |
/s/ Stephen D. Foy |
|
Name: Stephen D. Foy | ||
Title: Vice President |
Acknowledged:
STATE STREET BANK AND TRUST COMPANY, as Custodian |
||
By: |
/s/ Andrew Erickson |
|
Name: Andrew Erickson | ||
Title: Executive Vice President |
6
Exhibit k.1
Transfer Agency and Service Agreement
Between
Each of the Nuveen Closed-End Investment Companies
Listed on Schedule A Attached Hereto
and
Computershare Inc.
and
Computershare Trust Company, N.A.
THIS TRANSFER AGENCY AND SERVICE AGREEMENT , effective as of June 15, 2017 ( Effective Date ), is by and between each of the Nuveen closed-end investment companies listed on Schedule A attached hereto, as may be amended from time to time ( Schedule A ) (each such investment company, a Fund ), and Computershare Inc., a Delaware corporation ( Computershare ), and its fully owned subsidiary Computershare Trust Company, N.A., a federally chartered trust company ( Trust Company , and together with Computershare, Transfer Agent ), each having a principal office and place of business at 250 Royall Street, Canton, Massachusetts 02021.
WHEREAS , Fund desires to appoint Trust Company as its sole transfer agent and registrar for the Shares, and administrator of any dividend reinvestment plan or direct stock purchase plan for Fund, and Computershare as processor of all payments received or made by Fund under this Agreement, as of the commencement date indicated for such Fund in Schedule A (Commencement Date);
WHEREAS, Trust Company and Computershare will each separately provide specified services covered by this Agreement and, in addition, Trust Company may arrange for Computershare to act on behalf of Trust Company in providing certain of its services covered by this Agreement; and
WHEREAS, Trust Company and Computershare desire to accept such respective appointments and perform the services related to such appointments;
NOW THEREFORE , in consideration of the mutual covenants herein contained, the parties hereto agree as follows:
1. CERTAIN DEFINITIONS .
1.1 Account means the account of each Shareholder which reflects any full or fractional Shares held by such Shareholder, outstanding funds, or reportable tax information.
1.2 Agreement means this agreement and any and all exhibits or schedules attached hereto and any and all amendments or modifications which may from time to time be executed.
1.3 Confidential Information means any and all technical or business information relating to a party, including, without limitation, financial, marketing and product development information, Shareholder Data (including any non-public information of such Shareholder), Proprietary Information, and the terms and conditions (but not the existence) of this Agreement, that is disclosed or otherwise becomes known to the other party or its affiliates, agents or representatives before or during the term of this Agreement. Confidential Information constitutes trade secrets and is of great value to the owner (or its affiliates). Confidential Information shall not include any information that is: (a) already known to the other party or its affiliates at the time of the disclosure; (b) publicly known at the time of the disclosure or becomes publicly known through no wrongful act or failure of the other party; (c) subsequently disclosed to the other party or its affiliates on a non-confidential basis by a third party not having a confidential relationship with the owner and which rightfully acquired such information; or (d) independently developed by one party without access to the Confidential Information of the other.
1.4 DSPP means direct stock purchase plan.
1.5 Plans means any dividend reinvestment plan, DSPP, or other investment programs administered by Trust Company for Fund relating to the Shares, whether as of the Effective Date or at any time during the term of this Agreement.
1.6 Services means all services performed or made available by Transfer Agent pursuant to this Agreement.
1
1.7 Share means, with respect to each Fund, shares of each class indicated for such Fund in Exhibit A, authorized by Funds organizational documents, and other classes of Funds shares to be designated by Fund in writing and which Transfer Agent agrees to service under this Agreement.
1.8 Shareholder means a holder of record of Shares.
1.9 Shareholder Data means all information maintained on the records database of Transfer Agent concerning Shareholders.
2. APPOINTMENT OF AGENT .
2.1 Appointments . Fund appoints Trust Company to act as sole transfer agent and registrar for all Shares and as administrator of Plans in accordance with the terms and conditions hereof and appoints Computershare as the service provider to Trust Company and as processor of all payments received or made by or on behalf of Fund under this Agreement, all as of the Commencement Date, and Trust Company and Computershare accept the respective appointments.
2.2 Documents . In connection with the appointments herein, upon any future original issuance of Shares for which Transfer Agent will act as transfer agent hereunder, Fund shall deliver the following appointment and corporate authority documents to Transfer Agent:
(a) |
Board resolution appointing Trust Company as the transfer agent; |
(b) |
If applicable, specimens of all forms of outstanding Share certificates, in forms approved by the Board of Directors of Fund, with a certificate of the Secretary of Fund as to such approval; |
(c) |
Board resolution and/or certificate of incumbency designating officers or other designated persons of Fund authorized to sign written instructions and requests and, if applicable, Share certificates, in connection with this Agreement (each an Authorized Person ); |
(d) |
An opinion of counsel, or reliance letter, for Fund addressed to both Trust Company and Computershare stating that: |
(i) |
Fund is duly organized, validly existing and in good standing under the laws of its state of organization; |
(ii) |
All Shares issued and outstanding on the date hereof were issued as part of an offering that was registered under the Securities Act of 1933, as amended ( 1933 Act ) and any other applicable federal or state statute or that was exempt from such registration; |
(iii) |
All Shares issued and outstanding on the date hereof are duly authorized, validly issued, fully paid and non-assessable; and |
(e) |
A certificate of Fund as to the Shares authorized, issued and outstanding, as well as a description of all reserves of unissued Shares relating to the exercise of options, as applicable; |
(f) |
A completed Internal Revenue Service Form 2678; and |
(g) |
A completed Form W-8 or W-9, as applicable. |
Funds existing on the Effective Date of this Agreement shall provide Transfer Agent with the Board resolution set forth in Section 2.2(a) above.
2.3 Records . Transfer Agent may adopt as part of its records all Shareholder lists, Share ledgers, records, books, and documents which have been employed by Fund or any of its agents and which are certified to be true, authentic and complete. Transfer Agent shall keep records relating to the Services, in the form and manner it deems advisable, but in any event consistent with the reasonable standards of the transfer agency industry. Transfer Agent agrees that all such records prepared or maintained by it relating to the Services are the property of Fund and will be preserved, maintained and made available in accordance with the requirements of law and Transfer Agents records management policy, and will be surrendered promptly to Fund in accordance with its request subject to applicable law and Transfer Agents records management policy.
2
2.4 Shares . Fund shall, if applicable, inform Transfer Agent as soon as reasonably practicable in advance as to: (a) the existence or termination of any restrictions on the transfer of Shares, the application to or removal from any Share of any legend restricting the transfer of such Shares (which may be subject, in the case of removal of any such legend, to delivery of such legal opinion in form and substance acceptable to Transfer Agent), or the substitution for such Share of a Share without such legend; (b) any authorized but unissued Shares reserved for specific purposes; (c) any outstanding Shares which are exchangeable for Shares and the basis for exchange; (d) reserved Shares subject to option and the details of such reservation; (e) any Share split or Share dividend; (f) any other relevant event or special instructions which may affect the Shares; and (g) any bankruptcy, insolvency or other proceeding regarding a Fund affecting the enforcement of creditors rights.
2.5 Share Certificates . If applicable, Fund shall provide Transfer Agent with (i) documentation required to print on demand Share certificates, or (ii) an appropriate supply of Share certificates which contain a signature panel for use by an authorized signor of Transfer Agent and state that such certificates are only valid after being countersigned and registered, whichever is applicable.
2.6 Fund Responsibility . Fund shall perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, documents, instruments and assurances as Transfer Agent may reasonably require in order to carry out or perform its obligations under this Agreement.
2.7 Scope of Agency .
(a) |
Transfer Agent shall act solely as agent for Fund under this Agreement and owes no duties hereunder to any other person. Transfer Agent undertakes to perform the duties and only the duties that are specifically set forth in this Agreement, and no implied covenants or obligations shall be read into this Agreement against Transfer Agent. |
(b) |
Transfer Agent may rely upon, and shall be protected in acting or refraining from acting in good faith reliance upon, (i) any communication from Fund, any predecessor transfer agent or co-transfer agent or any registrar (other than Agent), predecessor registrar or co-registrar; (ii) any instruction, notice, request, direction, consent, report, certificate, opinion or other instrument, paper, document or electronic transmission believed in good faith by Transfer Agent to be genuine and to have been signed or given by the proper party or parties; (iii) any guaranty of signature by an eligible guarantor institution that is a member or participant in the Securities Transfer Agents Medallion Program or other comparable signature guarantee program or insurance program in addition to, or in substitution for, the foregoing; or (iv) any instructions received through Direct Registration System/Profile. In addition, Transfer Agent is authorized to refuse to make any transfer that it determines in good faith not to be in good order. |
(c) |
From time to time, Fund may provide Transfer Agent with instructions concerning the Services. Further, Transfer Agent may apply to any Authorized Person for instruction, and may consult with legal counsel for Agent or Fund with respect to any matter arising in connection with the Services. Transfer Agent and its agents and subcontractors shall not be liable and shall be indemnified by Fund under Section 9.2 of this Agreement for any action taken or omitted by Transfer Agent in good faith reliance upon any Fund instructions or upon the advice or opinion of such counsel. Fund shall promptly provide Transfer Agent with an updated board resolution and/or certificate of incumbency regarding any change of authority for any Authorized Person. Transfer Agent shall not be held to have notice of any change of authority of any Authorized Person, until receipt of written notice thereof from Fund. |
(d) |
Compliance with Laws . Transfer Agent is obligated and agrees to comply with all applicable U.S. federal, state and local laws and regulations, codes, orders and government rules in the performance of its duties under this Agreement. |
2.8 Additional Funds. To the extent that a Fund is added to Schedule A after the Effective Date, such Fund is a Fund for all purposes of this Agreement and is bound by all terms and conditions and provisions of this Agreement, including, without limitation, the representations and warranties of Funds set forth herein.
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2.9 Amendment to Schedule A . The parties agree to amend Exhibit A to reflect the most updated information regarding Funds and Shares relevant to this Agreement. The parties agree that notwithstanding Section 15.4 of this Agreement, Schedule A may be amended without an executed written amendment if an Authorized Person delivers by email to Transfer Agents Relationship Manager a copy of an amended and restated Schedule A , dated as of the date such amended and restated Schedule A is intended to be effective, and a member of Transfer Agents Relationship Management team acknowledges in a responding email that the amended and restated Schedule A has been received. To the extent Schedule A is amended to add a Fund, Fund must provide Transfer Agent with the documents listed in Section 2.2 of this Agreement in relation to such Fund on a timeline mutually agreed by the parties.
2.10 Rule 38a-1 Compliance Program . Transfer Agent will maintain written policies and procedures reasonably designed to prevent violations of the Federal Securities Laws, as that term is defined in Rule 38a-1, adopted by the Securities and Exchange Commission under the Investment Company Act of 1940, as amended ( Rule 38a-1 ) with respect to the Services. On a quarterly basis, Transfer Agent will provide to Fund a certification certifying compliance with its responsibilities as Transfer Agent to the Funds under Rule 38a-1 or highlighting any material issue potentially impacting Transfer Agents services to the Funds. Upon Funds request, Transfer Agent will provide Fund with a summary of its policies and procedures in connection with Funds compliance with Rule 38a-1 and will provide such explanations of its policies and procedures as Fund may reasonably request. To the extent Transfer Agent makes any material changes to its written policies and procedures in order to address changing regulatory and industry developments that would impact Funds compliance with Rule 38a-1, Transfer Agent will notify Fund of any such changes in a timely manner. At least annually, Transfer Agent will also provide Fund a copy of third party audit reposts evaluating the Services (e.g. SSAE 18s or SOC 1s) and a copy of Transfer Agents annual assessment or review of Transfer Agents compliance programs.
2.11 Anti-Money Laundering; Office of Foreign Asset Control . Transfer Agent will comply with any laws or regulations relating to anti-money laundering applicable to Transfer Agent with respect to Funds Shareholders, including compliance with Office of Foreign Assets Control ( OFAC ) laws or regulations, currency transaction reporting laws and regulations and suspicious activity reporting and recordkeeping requirements, by adopting appropriate compliance policies, procedures, and internal controls. Compliance with OFAC laws or regulations will include periodic screening of the Funds Shareholders against updated OFAC lists. The results of the screening will be provided to the Fund in monthly management report certifications. An annual OFAC attestation will also be provided by the Transfer Agent to the Fund regarding OFAC-related screening results over the prior year.
3. STANDARD SERVICES .
3.1 Share Services . Transfer Agent shall perform the Services set forth in the Fee and Service Schedule ( Fee and Service Schedule ) attached hereto and incorporated herein. Further, Transfer Agent shall issue and record Shares as authorized, hold Shares in the appropriate Account, and effect transfers of Shares upon receipt of appropriate documentation.
3.2 Replacement Shares . Transfer Agent shall issue replacement Shares for those certificates alleged to have been lost, stolen or destroyed, upon receipt by Transfer Agent of an open penalty surety bond satisfactory to it and holding it and Fund harmless, absent notice to Agent that such certificates have been acquired by a bona fide purchaser. Transfer Agent may, at its option, issue replacement Shares for mutilated certificates upon presentation thereof without such indemnity. Transfer Agent may, at its sole option, accept indemnification from Fund to issue replacement Shares for those certificates alleged to have been lost, stolen or destroyed in lieu of an open penalty bond. Transfer Agent shall charge Shareholders an administrative fee for replacement of lost certificates, which shall be charged only once in instances where a single surety bond obtained covers multiple certificates. Transfer Agent may receive compensation, including in the form of surety premiums, for administrative services provided in connection with surety programs offered to Shareholders.
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3.3 Internet Services . Transfer Agent shall make available to Fund and Shareholders, through its web sites, including but not limited to www.computershare.com (collectively, Web Site ), online access to certain Account and Shareholder information and certain transaction capabilities ( Internet Services ), subject to Transfer Agents security procedures and the terms and conditions set forth herein and on the Web Site. Transfer Agent provides Internet Services as is, on an as available basis, and hereby specifically disclaims any and all representations or warranties, express or implied, regarding such Internet Services, including any implied warranty of merchantability or fitness for a particular purpose and implied warranties arising from course of dealing or course of performance. Transfer Agent shall at all times use reasonable care in performing Internet Services under this Agreement.
3.4 Proprietary Information . Fund agrees that the databases, programs, screen and report formats, interactive design techniques, Internet Services, software (including methods or concepts used therein, source code, object code, or related technical information) and documentation manuals furnished to Fund by Transfer Agent as part of the Services are under the control and ownership of Transfer Agent or a third party (including its affiliates) and constitute copyrighted, trade secret, or other proprietary information (collectively, Proprietary Information ). Shareholder Data is not Proprietary Information. Fund agrees that Proprietary Information is of substantial value to Transfer Agent or other third party and will treat all Proprietary Information as confidential in accordance with Section 11 of this Agreement. Fund shall take reasonable efforts to advise its relevant employees and agents of its obligations pursuant to this Section 3.4.
3.5 Third Party Content . Transfer Agent may provide real-time or delayed quotations and other market information and messages ( Market Data ), which Market Data is provided to Transfer Agent by certain third parties who may assert a proprietary interest in Market Data disseminated by them but do not guarantee the timeliness, sequence, accuracy or completeness thereof. Fund agrees and acknowledges that Transfer Agent shall not be liable in any way for any loss or damage arising from or occasioned by any inaccuracy, error, delay in, omission of, or interruption in any Market Data or the transmission thereof.
3.6 Lost Shareholders; In-Depth Shareholder Search .
(a) |
Transfer Agent shall conduct such database searches to locate lost Shareholders as are required by Rule 17Ad-17 under the Securities Exchange Act of 1934, as amended ( 1934 Act ), without charge to the Shareholder. If a new address is so obtained in a database search for a lost Shareholder, Transfer Agent shall conduct a verification mailing and update its records for such Shareholder accordingly. |
(b) |
Computershare may facilitate the performance of a more in-depth search for the purpose of (i) locating lost Shareholders for whom a new address is not obtained in accordance with clause (a) above, (ii) identifying Shareholders who are deceased (or locating the deceased Shareholders estate representative, heirs or other party entitled to act with respect to such Shareholders account ( Authorized Representative )), and (iii) locating Shareholders whose Accounts contain an uncashed check older than 180 days, in each case using the services of a locating service provider selected by Computershare, which service provider may be an affiliate of Computershare. Such provider may compensate Computershare for processing and other services that Computershare provides in connection with such in-depth search, including providing Computershare a portion of its service fees. |
(c) |
Upon locating any Shareholder (or such Shareholders Authorized Representative) pursuant to clause (b) above, the locating service provider shall clearly identify to such Shareholder (or such Shareholders Authorized Representative) all assets held in such Shareholders account. Such provider shall inform any such located Shareholders (or such Shareholders Authorized Representative) that such Shareholder (or such Shareholders Authorized Representative) may choose either (i) to contact Transfer Agent directly to obtain the assets in such account, at no charge other than any applicable fees to replace lost certificates, if applicable, or (ii) to use the services of such provider for a processing fee, which may not exceed 20% of the asset value of such Shareholders property where the registered Shareholder is living, deceased, or not a natural person; provided that in no case shall such fee exceed the maximum statutory fee permitted by |
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the applicable state jurisdiction. If Fund selects a locating service provider other than one selected by Computershare, then Transfer Agent shall not be responsible for the terms of any agreement between such provider and Fund and additional fees may apply. |
(d) |
Pursuant to Section 2.7(c) of this Agreement, Fund hereby authorizes and instructs Transfer Agent to provide a Shareholder file or list of those Shareholders not located following the required Rule 17Ad-17 searches to any service provider administering any in-depth shareholder location program on behalf of Transfer Agent or Fund. |
4. PLAN SERVICES .
4.1 Trust Company shall perform all services under the Plans, as the administrator of such Plans, with the exception of payment processing for which Computershare has been appointed as agent by Fund, and certain other services that Trust Company may subcontract to Computershare as permitted by applicable law ( e.g. , ministerial services).
4.2 Transfer Agent shall act as agent for Shareholders pursuant to the Plans in accordance with the terms and conditions of such Plans.
5. COMPUTERSHARE DIVIDEND DISBURSING AND PAYMENT SERVICES .
5.1 Declaration of Dividends . Upon receipt of written notice from an Authorized Person declaring the payment of a dividend, Computershare shall disburse such dividend payments to Shareholders provided that Fund furnishes Computershare with sufficient funds one day in advance of the applicable payable date. The payment of such funds to Computershare for the purpose of being available for the payment of dividends from time to time is not intended by Fund to confer any rights in such funds on Shareholders whether in trust, contract, or otherwise.
5.2 Stop Payments . Fund hereby authorizes Computershare to stop payment of checks issued in payment of sales proceeds and of dividends, if applicable, but not presented for payment, when the payees thereof allege either that they have not received the checks or that such checks have been mislaid, lost, stolen, destroyed or, through no fault of theirs, are otherwise beyond their control and cannot be produced by them for presentation and collection, and Computershare shall issue and deliver duplicate checks in replacement thereof, and Fund shall indemnify Transfer Agent against any loss or damage resulting from reissuance of the checks.
5.3 Tax Withholding . Fund hereby authorizes Computershare to deduct from all payments of sales proceeds and of dividends declared by Fund and disbursed by Computershare to Shareholders, if applicable, the tax required to be withheld pursuant to Sections 1441, 1442, 1445, 1471 through 1474, and 3406 of the Internal Revenue Code of 1986, as amended, or by any federal or state statutes subsequently enacted, and to make the necessary returns and payment of such tax to the relevant taxing authority. Fund will provide withholding and reporting instructions to Computershare from time to time as relevant, and upon request of Computershare.
5.4 Plan Payments . If applicable, Fund hereby authorizes Computershare to receive all payments made to Fund ( i.e. , optional cash purchases) or Transfer Agent under the Plans and make all payments required to be made under such Plans, including all payments required to be made to Fund. For optional cash purchases, in the event funds are unavailable for any reason (including, without limitation, due to a rejection or reversal of the payment), Computershare shall sell the Shares purchased and any gain thereon shall accrue to Computershare.
5.5 Bank Accounts . All funds received by Computershare under this Agreement that are to be distributed or applied by Computershare in the performance of Services (the Monies ) shall be held by Computershare as agent for Fund and deposited in one or more bank accounts to be maintained by Computershare in its name as agent for Fund. Until paid pursuant to this Agreement, Computershare may hold or invest the Monies
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through such Accounts in: (a) obligations of, or guaranteed by, the United States of America; (b) commercial paper obligations rated A-1 or P-1 or better by Standard & Poors Corporation ( S&P ) or Moodys Investors Service, Inc. ( Moodys ), respectively; (c) AAA rated money market funds that comply with Rule 2a-7 of the Investment Company Act of 1940; or (d) demand deposit accounts, short term certificates of deposit, bank repurchase agreements or bankers acceptances, of commercial banks with Tier 1 capital exceeding $1 billion or with an average rating above investment grade by S&P (LT Local Issuer Credit Rating), Moodys (Long Term Rating) and Fitch Ratings, Inc. (LT Issuer Default Rating) (each as reported by Bloomberg Finance L.P.). Computershare shall have no responsibility or liability for any diminution of the Monies that may result from any deposit or investment made by Computershare in accordance with this paragraph, including any losses resulting from a default by any bank, financial institution or other third party. Computershare may from time to time receive interest, dividends or other earnings in connection with such deposits or investments. Computershare shall not be obligated to pay such interest, dividends or earnings to Fund, any Shareholder or any other party.
6. ADDITIONAL SERVICES . To the extent that Fund elects to engage any entity other than Transfer Agent ( Vendor ) to provide any additional services ( e.g. , plans, restricted stock, corporate actions, etc.), Fund shall give Transfer Agent or its affiliates an opportunity to bid on such services upon the same terms and conditions as Vendor.
7. FEES AND EXPENSES .
7.1 Fee and Service Schedules . Fund agrees to pay Transfer Agent the fees and expenses for Services performed pursuant to this Agreement as set forth in the Fee and Service Schedule. At least ninety (90) days before the expiration of the Initial Term (as defined below) or a Renewal Term (as defined below), whichever is applicable, the parties to this Agreement will agree upon a new fee schedule for the upcoming Renewal Term. If no new fee schedule is agreed upon, the fees will increase as set forth in the Term Section of the Fee and Service Schedule.
7.2 Out-of-Balance Conditions . If any out-of-balance condition caused by Fund or any of its prior agents arises during any term of this Agreement, Fund will, promptly upon Transfer Agents request, provide Transfer Agent with funds or Shares sufficient to resolve the out-of-balance condition.
7.3 Invoices . Fund agrees to pay all fees and expenses within 30 days of the date of the respective billing notice, except for any fees or expenses that are subject to good faith dispute. In the event of such dispute, Fund must promptly notify Transfer Agent of such dispute and may only withhold that portion of the fee or expense subject to such dispute. Fund shall settle such disputed amounts within five (5) business days of the date on which the parties agree on the amount to be paid by payment of the agreed amount. If no agreement is reached, then such disputed amounts shall be settled as may be required by law or legal process.
7.4 Late Payments .
(a) |
If any undisputed amount in an invoice of Transfer Agent is not paid within 30 days after the date of such invoice, Transfer Agent may charge Fund interest thereon (from the due date to the date of payment) at a monthly rate equal to one and a half percent (1.5%). Notwithstanding any other provision hereof, such interest rate shall be no greater than permitted under applicable law. |
(b) |
The failure by Fund to (i) pay the undisputed portion of an invoice within 90 days after the date of such invoice or (ii) timely pay the undisputed portions of two consecutive invoices shall constitute a material breach of this Agreement by Fund. Notwithstanding terms to the contrary in Section 12.2 below, Transfer Agent may terminate this Agreement for such material breach immediately and shall not be obligated to provide Fund with 30 days to cure such breach. |
7.5 Transaction Taxes . Fund is responsible for all taxes, levies, duties, and assessments levied on Services purchased under this Agreement (collectively, Transaction Taxes ). Computershare is responsible for collecting and remitting Transaction Taxes in all jurisdictions in which Computershare is registered to collect
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such Transaction Taxes. Computershare shall invoice Fund for such Transaction Taxes that Computershare is obligated to collect upon the furnishing of Services. Fund shall pay such Transaction Taxes according to the terms in Section 7.3. Computershare shall timely remit to the appropriate governmental authorities all such Transaction Taxes that Computershare collects from Fund. To the extent that Fund provides Computershare with valid exemption certificates, direct pay permits, or other documentation that exempts Computershare from collecting Transaction Taxes from Fund, invoices issued for Services provided after Computershares receipt of such certificates, permits, or other documentation will not reflect exempted Transaction Taxes. Computershare is solely responsible for the payment of all personal property taxes, franchise taxes, corporate excise or privilege taxes, property or license taxes, taxes relating to Computershares personnel, and taxes based on Computershares net income or gross revenues relating to Services.
8. REPRESENTATIONS AND WARRANTIES .
8.1 Transfer Agent . Transfer Agent represents and warrants to Fund that:
(a) |
Governance . Trust Company is a federally chartered trust company duly organized, validly existing, and in good standing under the laws of the United States and Computershare is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware and each has full power, authority and legal right to execute, deliver and perform this Agreement; and |
(b) |
Compliance with Laws . The execution, delivery and performance of this Agreement by Transfer Agent has been duly authorized by all necessary action, constitutes a legal, valid and binding obligation of Transfer Agent enforceable against Transfer Agent in accordance with its terms, will not require the consent of any third party that has not been given, and will not violate, conflict with or result in the breach of any material term, condition or provision of (i) any existing law, ordinance, or governmental rule or regulation to which Transfer Agent is subject, (ii) any judgment, order, writ, injunction, decree or award of any court, arbitrator or governmental or regulatory official, body or authority applicable to Transfer Agent, (iii) Transfer Agents incorporation documents or by-laws, or (iv) any material agreement to which Transfer Agent is a party. |
(c) |
Trust Company is duly registered as a transfer agent under Section 17A(c)(2) of the Securities Exchange Act of 1934, as amended, and it will remain so registered for the duration of this Agreement. It will promptly notify the Fund in the event of any material change in its status as a registered transfer agent. |
(d) |
Trust Company has and will continue to have access to the necessary facilities, equipment and personnel to perform its duties and obligations under this Agreement. |
8.2 Fund . Fund represents and warrants to Transfer Agent that:
(a) |
Governance . It is duly organized, validly existing and in good standing under the laws of its state of domicile, and it has full power, authority and legal right to enter into and perform this Agreement; |
(b) |
Compliance with Laws . The execution, delivery and performance of this Agreement by Fund has been duly authorized by all necessary action, constitutes a legal, valid and binding obligation of Fund enforceable against Fund in accordance with its terms, will not require the consent of any third party that has not been given, and will not violate, conflict with or result in the breach of any material term, condition or provision of (i) any existing law, ordinance, or governmental rule or regulation to which Fund is subject, (ii) any judgment, order, writ, injunction, decree or award of any court, arbitrator or governmental or regulatory official, body or authority applicable to Fund, (iii) Funds organizational documents or by-laws, (iv) any material agreement to which Fund is a party, or (v) any applicable stock exchange rules; |
(c) |
Securities Laws . Registration statements under the 1933 Act and the 1934 Act have been filed and are currently effective, or will be effective prior to the sale of any Shares, and will remain so effective, and all appropriate state securities law filings have been made with respect to all Shares being offered for sale except for any Shares which are offered in a transaction or series of transactions which are exempt from the registration requirements of the 1933 Act, 1934 Act and state securities laws; Fund will immediately notify Transfer Agent of any information to the contrary; |
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(d) |
Shares . The Shares issued and outstanding on the date hereof have been duly authorized, validly issued and are fully paid and are non-assessable; and any Shares to be issued hereafter, when issued, shall have been duly authorized, validly issued and fully paid and will be non-assessable; and |
(e) |
Facsimile Signatures . The use of facsimile signatures by Transfer Agent in connection with the countersigning and registering of Share certificates has been duly authorized by Fund and is valid and effective. |
9. INDEMNIFICATION AND LIMITATION OF LIABILITY .
9.1 Standard of Care and Liability . Transfer Agent shall at all times act in good faith and agrees to use its best efforts within reasonable limits to ensure the accuracy of all Services performed under this Agreement. Transfer Agent shall only be liable for any loss or damage as a result of Transfer Agents gross negligence or willful misconduct; provided that any liability of Transfer Agent will be limited in the aggregate to the ongoing account management fees paid hereunder by Fund to Transfer Agent during the twelve (12) months immediately preceding the event for which recovery from Transfer Agent is being sought.
9.2 Indemnity . Fund shall indemnify and hold Transfer Agent harmless from and against, and Agent shall not be responsible for, any and all losses, claims, damages, costs, charges, counsel fees and expenses, payments, expenses and liability (collectively, Losses ) arising out of or attributable to Transfer Agents duties under this Agreement or this appointment, including the reasonable costs and expenses of defending itself against any Loss or enforcing this Agreement, except for any liability of Agent as set forth in Section 9.1 above.
10. DAMAGES . Notwithstanding anything in this Agreement to the contrary, neither party shall be liable to the other for any incidental, indirect, special or consequential damages of any nature whatsoever, including, but not limited to, loss of anticipated profits, occasioned by a breach of any provision of this Agreement even if apprised of the possibility of such damages.
11. CONFIDENTIALITY .
11.1 Use and Disclosure . All Confidential Information of a party will be held in confidence by the other party with at least the same degree of care as such party protects its own confidential or proprietary information of like kind and import, but not less than a reasonable degree of care. Neither party will disclose in any manner Confidential Information of the other party in any form to any person or entity without the other partys prior consent. However, each party may disclose relevant aspects of the other partys Confidential Information to its officers, affiliates, agents, subcontractors and employees to the extent reasonably necessary to perform its duties and obligations under this Agreement and such disclosure is not prohibited by applicable law. Without limiting the foregoing, each party will implement physical and other security measures and controls designed to protect (a) the security and confidentiality of Confidential Information; (b) against any threats or hazards to the security and integrity of Confidential Information; and (c) against any unauthorized access to or use of Confidential Information. To the extent that a party delegates any duties and responsibilities under this Agreement to an agent or other subcontractor, the party ensures that such agent and subcontractor are contractually bound to confidentiality terms consistent with the terms of this Section 11.
11.2 Required or Permitted Disclosure . In the event that any requests or demands are made for the disclosure of Confidential Information, other than requests to Transfer Agent for Shareholder records pursuant to subpoenas from state or federal government authorities ( e.g. , probate, divorce and criminal actions), the party receiving such request will promptly notify the other party to secure instructions from an authorized officer of such party as to such request and to enable the other party the opportunity to obtain a protective order or other confidential treatment, unless such notification is otherwise prohibited by law or court order. Each party expressly reserves the right, however, to disclose Confidential Information to any person whenever it is advised by counsel that it may be held liable for the failure to disclose such Confidential Information or if required by law or court order.
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11.3 Unauthorized Disclosure . As may be required by law and without limiting any partys rights in respect of a breach of this Section 11, each party will promptly:
(a) |
notify the other party in writing of any unauthorized possession, use or disclosure of the other partys Confidential Information by any person or entity that may become known to such party; |
(b) |
furnish to the other party full details of the unauthorized possession, use or disclosure; and |
(c) |
use commercially reasonable efforts to prevent a recurrence of any such unauthorized possession, use or disclosure of Confidential Information. |
11.4 Costs . Each party will bear the costs it incurs as a result of compliance with this Section 11.
12. TERM AND TERMINATION .
12.1 Term . The initial term of this Agreement shall be three (3) years from the Effective Date ( Initial Term ) unless terminated pursuant to the provisions of this Section 12. This Agreement will renew automatically from year to year (each a Renewal Term ), unless a terminating party gives written notice to the other party not less than ninety (90) days before the expiration of the Initial Term or Renewal Term, whichever is in effect.
12.2 Termination for Cause . This Agreement may be terminated at any time by any party (i) upon a material breach of a representation, covenant or term of this Agreement by any other party which is not cured within thirty (30) days after receipt of written notice thereof from the terminating party or (ii) if any proceeding in bankruptcy, reorganization, receivership or insolvency is commenced by or against any other party, such other party shall become insolvent or shall cease paying its obligations as they become due or such other party shall make any assignment for the benefit of its creditors.
12.3 Fees and Expenses . Upon termination or expiration of this Agreement for any reason, including any termination of this Agreement with respect to any Fund, or termination due to liquidation, Fund shall pay to Transfer Agent on or before the effective date of such termination or expiration (a) all fees and expenses due and payable to Transfer Agent up to and including the date of such termination or expiration, and (b) in connection with the movement of records, materials, and services to Fund or the successor agent, (i) all reasonable expenses and (ii) a conversion fee in an amount equal to 10% of the aggregate fees (not including expenses) incurred by Fund during the immediately preceding twelve (12) month period, for the standard conversion services listed on the attached Schedule B to this Agreement; provided, however, the fee under this Section 12.3(b)(ii) shall in no event be less than $5,000.00. In the event any of the extended conversion services listed on Schedule B are requested by Fund, the fee for each extended conversion service will be $2,500.00.
12.4 Early Termination . Notwithstanding anything in this Agreement to the contrary, if this Agreement is terminated prior to the expiration of the then-current term (a) by Fund for any reason other than pursuant to Section 12.2 above, including but not limited to, Funds liquidation, acquisition, merger or restructuring, or (b) by Transfer Agent pursuant to Section 12.2 above, then, in addition to the payments required in Section 12.3 above, Fund shall pay to Transfer Agent all fees accelerated through the end of, and including all months that would have remained in, the then-current term at the time of termination. Such fees will be calculated using the rates, volumes, and Services in effect as of the termination date. If Fund does not provide notice of early termination within the time period referenced in Section 12.1 above, Transfer Agent shall make a good faith effort, but cannot guarantee, to convert Funds records on the date requested by Fund.
13. ASSIGNMENT . Neither this Agreement nor any rights or obligations hereunder may be assigned by Fund or Transfer Agent without the written consent of the other, such consent not to be unreasonably withheld; provided, however, that Transfer Agent may, without further consent of Fund, assign any of its rights and obligations hereunder to any affiliated transfer agent registered under Rule 17Ac2-1 promulgated under the 1934 Act.
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14. SUBCONTRACTORS AND UNAFFILIATED THIRD PARTIES .
14.1 Subcontractors . Transfer Agent may, without further consent of Fund, subcontract with (a) any affiliates, or (b) unaffiliated subcontractors for such services as may be required from time to time ( e.g. , lost shareholder searches, escheatment, telephone and mailing services); provided, however, that Transfer Agent shall be as fully responsible to Fund for the acts and omissions of any subcontractor as it is for its own acts and omissions under this Agreement.
14.2 Unaffiliated Third Parties . Nothing herein shall impose any duty upon Transfer Agent in connection with or make Transfer Agent liable for the actions or omissions to act of unaffiliated third parties (other than subcontractors referenced in Section 14.1 of this Agreement) such as, by way of example and not limitation, airborne services, delivery services, the U.S. mails, and telecommunication companies, provided, if Transfer Agent selected such company, Transfer Agent exercised due care in selecting the same.
15. MISCELLANEOUS .
15.1 Notices . Any notice or communication by Transfer Agent or Fund to the other pursuant to this Agreement is duly given if in writing and delivered in person or sent by overnight delivery service or first class mail, postage prepaid, to the others address:
If to Fund: |
[ COMPANY NAME ] [ COMPANY CONTACT INFORMATION ] |
|
If to Transfer Agent: |
Computershare Trust Company, N.A. 250 Royall Street Canton, MA 02021 Attn: General Counsel |
15.2 No Expenditure of Funds . No provision of this Agreement shall require Transfer Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of its rights if it shall believe in good faith that repayment of such funds or adequate indemnification against such risk or liability is not reasonably assured to it.
15.3 Successors . All the covenants and provisions of this Agreement by or for the benefit of Fund or Transfer Agent shall bind and inure to the benefit of their respective successors and assigns hereunder.
15.4 Amendments . This Agreement may be amended or modified by a written amendment executed by the parties hereto and, to the extent required, authorized by a resolution of the Board of Directors of Fund.
15.5 Severability . If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated.
15.6 Governing Law; Jurisdiction . This Agreement shall be governed by the laws of the State of New York, without regard to principles of conflicts of law. The parties irrevocably (a) submit to the non-exclusive jurisdiction of any New York State court sitting in New York City or the United States District Court for the Southern District of New York in any action or proceeding arising out of or relating to this Agreement, (b) waive, to the fullest extent they may effectively do so, any defense based on inconvenient forum, improper venue or lack of jurisdiction to the maintenance of any such action or proceeding, and (c) waive all right to trial by jury in any action, proceeding or counterclaim arising out of this Agreement or the transactions contemplated hereby. Transfer Agent shall not be required hereunder to comply with the laws or regulations of any country other than the United States of America or any political subdivision thereof. Transfer Agent may consult with foreign counsel, at Funds expense, to resolve any foreign law issues that may arise as a result of Fund or any other party being subject to the laws or regulations of any foreign jurisdiction.
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15.7 Force Majeure . Notwithstanding anything to the contrary contained herein, Transfer Agent shall not be liable for any delays or failures in performance resulting from acts beyond its reasonable control including, without limitation, acts of God, terrorist acts, shortage of supply, breakdowns or malfunctions, interruptions or malfunction of computer facilities, or loss of data due to power failures or mechanical difficulties with information storage or retrieval systems, labor difficulties, war, or civil unrest.
15.8 Third Party Beneficiaries . The provisions of this Agreement are intended to benefit only Transfer Agent, Fund and their respective permitted successors and assigns. No rights shall be granted to any other person by virtue of this Agreement, and there are no third party beneficiaries hereof.
15.9 Survival . All provisions regarding indemnification, warranty, liability and limits thereon, compensation and expenses and confidentiality and protection of proprietary rights and trade secrets shall survive the termination or expiration of this Agreement.
15.10 Priorities . In the event of any conflict, discrepancy, or ambiguity between the terms and conditions contained in this Agreement and any schedules or attachments hereto, the terms and conditions contained in this Agreement shall take precedence.
15.11 Merger of Agreement . 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.
15.12 No Strict Construction . The parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the event any ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by all parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement.
15.13 Descriptive Headings . Descriptive headings contained in this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.
15.14 Counterparts . This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. A signature to this Agreement executed and/or transmitted electronically shall have the same authority, effect, and enforceability as an original signature.
16. LIMITATION OF LIABILITY . For each Fund that is a Massachusetts business trust, the Funds Declaration of Trust is on file with the Secretary of The Commonwealth of Massachusetts. This Agreement is executed on behalf of each such Fund by the Funds officers as officers and not individually. The obligations imposed upon each such Fund by this Agreement are not binding upon any of the Funds Trustees, officers or shareholders individually but are binding only upon the assets and property of the Fund.
[The remainder of page intentionally left blank.]
12
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed by one of its officers thereunto duly authorized, all as of the Effective Date.
Computershare Inc. and Computershare Trust Company, N.A. |
On behalf of each of the Nuveen closed-end investment companies listed on Schedule A hereto | |||||||
By: |
/s/ Martin J. McHale, Jr. |
By: |
/s/ Tina M. Lazar |
|||||
Name: | Martin J. McHale, Jr. | Name: | Tina M. Lazar | |||||
Title: | President, U.S. Equity Services | Title: | Managing Director |
[SIGNATURE PAGE TO TRANSFER AGENCY AND SERVICE AGREEMENT]
13
Schedule A
NUVEEN CLOSED-END FUNDS
Fund Name |
CPU COY | Cusip | ||
Nuveen Municipal Value Fund |
NUV | 670928100 | ||
Nuveen CA Municipal Value Fund |
NCA | 67062C107 | ||
Nuveen NY Municipal Value Fund |
NNY | 67062M105 | ||
Nuveen Municipal Income Fund |
NMI | 67062J102 | ||
Nuveen PA Quality Municipal Income Fund |
NQP | 670972108 | ||
Nuveen MI Quality Income Municipal Fund |
NUM | 670979103 | ||
Nuveen OH Quality Municipal Income Fund |
NUO | 670980101 | ||
Nuveen TX Quality Municipal Income Fund |
NTX | 670983105 | ||
Nuveen Select Tax-Free Income Portfolio |
NXP | 67062F100 | ||
Nuveen Select Tax-Free Income Portfolio 2 |
NXQ | 67063C106 | ||
Nuveen CA Select Tax-Free Inc Portfolio |
NXC | 67063R103 | ||
Nuveen Ins NY Select Tax-Free Inc Portfolio |
NXN | 67063V104 | ||
Nuveen Select Tax-Free Income Portfolio 3 |
NXR | 67063X100 | ||
Nuveen Select Maturities Municipal Fund |
NIM | 67061T101 | ||
Nuveen Enhanced AMT-Free Municipal Credit Opportunites Fund |
NVG | 67071L106 | ||
Nuveen Municipal Credit Income Fund |
NZF | 67070X101 | ||
Nuveen AMT-Free Municipal Income Fund |
NEA | 670657105 | ||
Nuveen NY AMT-Free Quality Municipal Income Fund |
NRK | 670656107 | ||
Nuveen CA AMT-Free Quality Municipal Income Fund |
NKX | 670651108 | ||
Nuveen Floating Rate Income Fund |
JFR | 67072T108 | ||
Nuveen Floating Rate Income Opportunity Fund |
JRO | 6706EN100 | ||
Nuveen AZ Quality Municipal Income Fund |
NAZ | 67061W104 | ||
Nuveen MD Quality Municipal Income Fund |
NMY | 67061Q107 | ||
Nuveen MA Quality Municipal Income Fund |
NMT | 67061E104 | ||
Nuveen VA Quality Municipal Income Fund |
NPV | 67064R102 | ||
Nuveen CT Quality Municipal Income Fund |
NTC | 67060D107 | ||
Nuveen MO Quality Municipal Income Fund |
NOM | 67060Q108 | ||
Nuveen NC Quality Municipal Income Fund |
NNC | 67060P100 | ||
Nuveen Dividend Advantage Municipal Fund |
NAD | 67066V101 | ||
Nuveen NY Quality Municipal Income Fund |
NAN | 67066X107 | ||
Nuveen CA Dividend Advantage Municipal Fund |
NAC | 67066Y105 | ||
Nuveen Senior Income Fund |
NSL | 67067Y104 | ||
Nuveen NJ Quality Municipal Income Fund |
NXJ | 67069Y102 | ||
Nuveen Real Estate Income Fund |
JRS | 67071B108 | ||
Nuveen GA Quality Municipal Income Fund |
NKG | 67072B107 | ||
Nuveen Quality Preferred Income Fund 2 |
JPS | 67072C105 | ||
Nuveen Preferred and Convertible Income Fund |
JPC | 67073B106 | ||
Nuveen Preferred and Convertible Income Fund 2 |
JQC | 67073D102 | ||
Nuveen Diversified Dividend and Income Fund |
JDD | 6706EP105 | ||
Nuveen Municipal High Income Opportunity Fund |
NMZ | 670682103 | ||
Nuveen Tax-Advantaged Total Return Strategy Fund |
JTA | 67090H102 | ||
Nuveen S&P 500 Buy-Write Income Fund |
JPZ | 6706ER101 |
14
Fund Name |
CPU COY | Cusip | ||
Nuveen S&P 500 Dynamic Overwrite Fund |
JPG | 6706EW100 | ||
Nuveen Core Equity Alpha Fund |
JCE | 67090X107 | ||
Nuveen Tax-Advantaged Dividend Growth Fund |
JTD | 67073G105 | ||
Nuveen Municipal Value Fund 2 |
NUW | 670695105 | ||
Nuveen NY Municipal Value Fund 2 |
NYVF | 670706100 | ||
Nuveen CA Municipal Value Fund 2 |
NCB | 6706EB106 | ||
Nuveen PA Municipal Value Fund |
NPN | 67074K105 | ||
Nuveen NJ Municipal Value |
NJV | 670702109 | ||
Nuveen Enhanced Municipal Value Fund |
NEVF | 67074M101 | ||
Nuveen Mortgage Opportunity Term Fund |
JLS | 670735109 | ||
Nuveen Mortgage Opportunity Term Fund 2 |
JMT | 67074R100 | ||
Nuveen Build America Bond Fund |
NBB | 67074C103 | ||
Nuveen Build America Bond Opportunity Fund |
NBDF | 67074Q102 | ||
Nuveen NASDAQ 100 Dynamic Overwrite Fund |
QQQF | 670699107 | ||
Nuveen Energy MLP Total Return Fund |
JMF | 67074U103 | ||
Nuveen Short Duration Credit Opportunity Fund |
JSD | 67074X107 | ||
Nuveen Real Asset Income and Growth Fund |
JRI | 67074Y105 | ||
Nuveen Preferred and Income Term Fund |
JPI | 67075A106 | ||
Nuveen Intermediate Duration Municipal Term Fund |
NID | 670671106 | ||
Nuveen Intermediate Duration Quality Municipal Term Fund |
NIQ | 670677103 | ||
Nuveen All Cap Energy MLP Opportunities Fund |
JMLP | 67075 E108 | ||
Nuveen Multi-Market Income Fund |
JMM | 67075J107 | ||
Diversified Real Asset Income |
DRA | 25533B108 | ||
Nuveen MN Quality Municipal Income Fund |
NMS | 670734102 | ||
Nuveen Global High Income Fund |
JGH | 67075G103 | ||
Nuveen Dow 30 Dynamic Overwrite Fund |
DIAX | 67075F105 | ||
Nuveen High Income 2020 Target Fund |
JHY | 67075L102 | ||
Nuveen High Income Dec 2018 Target Term |
JHA | 67075P103 | ||
Nuveen Municipal 2021 Target Term Fund |
NHA | 670687102 | ||
Nuveen High Income Nov 2021 Target Term |
JHB | 67077N106 | ||
Nuveen High Income Dec 2019 Target Term |
JHD | 6 7076E107 | ||
Nuveen Preferred & Income 2022 Term Fund |
JPT | 67075T105 | ||
Nuveen Credit Opportunity 2022 Target Term Fund |
JCO | 67075U102 | ||
Nuveen JFRT Term Preferred Shares Series 2027 |
JFRT | 67072TAD0 | ||
Nuveen JROT Term Preferred Shares Series 2027 |
JROT | 6706ENAC4 | ||
Nuveen NADR Var Rate MuniFund Term 2018 |
NADR | 67066V838 | ||
Nuveen Var Rate Munifund Term PFD 2019-1 |
NADT | 67066V820 | ||
Nuveen NEAR Var Rate MuniFund Term 2018 |
NEAR | 670657840 | ||
Nuveen Variable Rate MuniFund Series 2018 |
NIQP | 670677111 | ||
Nuveen NUM Var Rate MuniFund Series 2019 |
NUMW | 670979806 | ||
Nuveen NZF Var Rate MuniFund Term Pfd 2019 |
NZFW | 67070X853 | ||
Nuveen NAD Variable Rate MuniFund Term Pfd 2019 |
VNAD | 67066V887 | ||
Nuveen NAN Variable Rate MuniFund Term Pfd 2019 |
VNAN | 67066X800 | ||
Nuveen NAZ Var Rate MuniFund Pfd 2019 |
VNAZ | 67061W807 | ||
Nuveen NEA Variable Rate MuniFund 2019 |
VNEA | 670657873 | ||
Nuveen Variable Rate MuniFund Term Pfd Series 2018 |
VNID | 670671304 | ||
Nuveen VNKG Var Rate MuniFund Term 2019 |
VNKG | 67072B883 | ||
Nuveen NMS Variable Rate MuniFund Term Pfd 2019 |
VNMS | 670734409 |
15
Fund Name |
CPU COY | Cusip | ||
Nuveen NMY Variable Rate MuniFund Term Pfd 2019 |
VNMY | 67061Q867 | ||
Nuveen NNC Variable Rate MuniFund Term Pfd 2019 |
VNNC | 67060P878 | ||
Nuveen VNQP Var Rate MuniFund Term 2019 |
VNQP | 670972868 | ||
Nuveen VNTC Var Rate MuniFund Term 2019 |
VNTC | 67060D859 | ||
Nuveen JFRP Term Pfd Shares 2019 |
JFRP | 67072TAA6 | ||
Nuveen JROP Term Pfd Shr Series 2023 |
JROP | 6706ENAA8 | ||
Nuveen NAC Variable Rate MuniFund Term Preferred 2019 |
NACV | 67066Y857 | ||
Nuveen Variable Rate MuniFund Term Pfd Series 2018 |
NMZX | 670682806 | ||
Nuveen Munifund Variable Rate Preferred Series 2018 |
NOMV | 67060Q405 | ||
Nuveen NSL Term Preferred Shares Series 2021 |
NSLP | 67067YAA2 | ||
Nuveen JSD Term Preferred Shares Series 2020 |
PJSD | 67074XAA5 | ||
Nuveen NHA Variaple Rate Munifund Term Preferred Series 2016 |
VNHA | 670687201 | ||
Nuveen Variable Rate MuniFund Term Preferred shares Series 2018 |
VNVG | 67071L874 | ||
Nuveen JFRR Term Preferred Shares Series 2022 |
JFRR | 67072TAC2 | ||
Nuveen JROR Term Preferred Shares Series 2022 |
JROR | 6706ENAB6 | ||
Nuveen PJRO Term Preferred Shares 2022-1 |
PJRO | 6706ENAD2 | ||
Nuveen JFR MuniFund Term Preferred Shares 2024 |
PJFR | 67072TAE8 |
16
Exhibit k.2
FIRST AMENDMENT TO TRANSFER AGENCY AND SERVICE AGREEMENT
This First Amendment (Amendment) is entered into and effective as of this the 7th day of September, 2017, and hereby amends that certain Transfer Agency and Service Agreement by and among each Nuveen closed-end investment companies listed on Schedule A attached hereto, as may be amended from time to time ( Schedule A ) (each such investment company, a Fund ), and Computershare Inc., ( Computershare ) and its fully owned subsidiary Computershare Trust Company, N.A., ( Trust Company, and together with Computershare, Transfer Agent ) dated June 15, 2017 (the Agreement). Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Agreement.
WHEREAS, the Funds and Transfer Agent are parties to the Agreement; and
WHEREAS, the Funds and Transfer Agent desire to amend the Agreement upon the terms and conditions set forth herein;
NOW THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereby agree as follows:
1. Amendment to the Agreement . Schedule A of the Agreement is hereby deleted in its entirety and replaced with the new Schedule A attached hereto.
2. Limited Effect . Except as expressly modified herein, the Agreement and the Fee Schedule shall continue to be and shall remain, in full force and effect and the valid and binding obligation of the parties thereto in accordance with its terms.
3. Counterparts . This Amendment may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. A signature to this Amendment executed and/or transmitted electronically shall have the same authority, effect, and enforceability as an original signature.
[Remainder of this page is left intentionally blank.]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers, hereunto duly agreed and authorized, as of the Effective Date.
Computershare Inc. and Computershare Trust Company, N.A. On Behalf of Both Entities: |
On behalf of each of the Nuveen closed-end investment companies listed on Schedule A attached hereto: |
|||||||
By: |
/s/ Dennis V. Moccia |
By: |
/s/ Tina M. Lazar |
|||||
Name: |
Dennis V. Moccia. |
Name: |
Tina M. Lazar |
|||||
Title: |
Manager, Contract Administration |
Title: |
Vice President |
Schedule A
NUVEEN CLOSED-END FUNDS
Fund Name |
CPU COY | Cusip | ||
Nuveen Municipal Value Fund |
NUV | 670928100 | ||
Nuveen CA Municipal Value Fund |
NCA | 67062C107 | ||
Nuveen NY Municipal Value Fund |
NNY | 67062M105 | ||
Nuveen Municipal Income Fund |
NMI | 67062J102 | ||
Nuveen PA Quality Municipal Income Fund |
NQP | 670972108 | ||
Nuveen MI Quality Income Municipal Fund |
NUM | 670979103 | ||
Nuveen OH Quality Municipal Income Fund |
NUO | 670980101 | ||
Nuveen TX Quality Municipal Income Fund |
NTX | 670983105 | ||
Nuveen Select Tax-Free Income Portfolio |
NXP | 67062F100 | ||
Nuveen Select Tax-Free Income Portfolio 2 |
NXQ | 67063C106 | ||
Nuveen CA Select Tax-Free Inc Portfolio |
NXC | 67063R103 | ||
Nuveen NY Select Tax-Free Inc Portfolio |
NXN | 67063V104 | ||
Nuveen Select Tax-Free Income Portfolio 3 |
NXR | 67063X100 | ||
Nuveen Select Maturities Municipal Fund |
NIM | 67061T101 | ||
Nuveen AMT-Free Municipal Credit Income Fund |
NVG | 67071L106 | ||
Nuveen Municipal Credit Income Fund |
NZF | 67070X101 | ||
Nuveen AMT-Free Municipal Income Fund |
NEA | 670657105 | ||
Nuveen NY AMT-Free Quality Municipal Income Fund |
NRK | 670656107 | ||
Nuveen CA AMT-Free Quality Municipal Income Fund |
NKX | 670651108 | ||
Nuveen Floating Rate Income Fund |
JFR | 67072T108 | ||
Nuveen Floating Rate Income Opportunity Fund |
JRO | 6706EN100 | ||
Nuveen AZ Quality Municipal Income Fund |
NAZ | 67061W104 | ||
Nuveen MD Quality Municipal Income Fund |
NMY | 67061Q107 | ||
Nuveen MA Quality Municipal Income Fund |
NMT | 67061E104 | ||
Nuveen VA Quality Municipal Income Fund |
NPV | 67064R102 | ||
Nuveen CT Quality Municipal Income Fund |
NTC | 67060D107 | ||
Nuveen MO Quality Municipal Income Fund |
NOM | 67060Q108 | ||
Nuveen NC Quality Municipal Income Fund |
NNC | 67060P100 | ||
Nuveen Quality Municipal Income Fund |
NAD | 67066V101 | ||
Nuveen NY Quality Municipal Income Fund |
NAN | 67066X107 | ||
Nuveen CA Quality Municipal Income Fund |
NAC | 67066Y105 | ||
Nuveen Senior Income Fund |
NSL | 67067Y104 | ||
Nuveen NJ Quality Municipal Income Fund |
NXJ | 67069Y102 | ||
Nuveen Real Estate Income Fund |
JRS | 67071B108 | ||
Nuveen GA Quality Municipal Income Fund |
NKG | 67072B107 | ||
Nuveen Preferred Securities Income Fund |
JPS | 67072C105 | ||
Nuveen Preferred Income Opportunities Fund |
JPC | 67073B106 | ||
Nuveen Credit Strategies Income Fund |
JQC | 67073D102 | ||
Nuveen Diversified Dividend and Income Fund |
JDD | 6706EP105 | ||
Nuveen Municipal High Income Opportunity Fund |
NMZ | 670682103 | ||
Nuveen Tax-Advantaged Total Return Strategy Fund |
JTA | 67090H102 | ||
Nuveen S&P 500 Buy-Write Income Fund |
JPZ | 6706ER101 | ||
Nuveen S&P 500 Dynamic Overwrite Fund |
JPG | 6706EW100 | ||
Nuveen Core Equity Alpha Fund |
JCE | 67090X107 | ||
Nuveen Tax-Advantaged Dividend Growth Fund |
JTD | 67073G105 | ||
Nuveen Municipal Value Fund 2 |
NUW | 670695105 | ||
Nuveen NY Municipal Value Fund 2 |
NYVF | 670706100 | ||
Nuveen CA Municipal Value Fund 2 |
NCB | 6706EB106 | ||
Nuveen PA Municipal Value Fund |
NPN | 67074K105 | ||
Nuveen NJ Municipal Value |
NJV | 670702109 | ||
Nuveen Enhanced Municipal Value Fund |
NEVF | 67074M101 | ||
Nuveen Mortgage Opportunity Term Fund |
JLS | 670735109 | ||
Nuveen Mortgage Opportunity Term Fund 2 |
JMT | 67074R100 |
Nuveen Build America Bond Fund |
NBB | 67074C103 | ||
Nuveen Build America Bond Opportunity Fund |
NBDF | 67074Q102 | ||
Nuveen NASDAQ 100 Dynamic Overwrite Fund |
QQQF | 670699107 | ||
Nuveen Energy MLP Total Return Fund |
JMF | 67074U103 | ||
Nuveen Short Duration Credit Opportunities Fund |
JSD | 67074X107 | ||
Nuveen Real Asset Income and Growth Fund |
JRI | 67074Y105 | ||
Nuveen Preferred and Income Term Fund |
JPI | 67075A106 | ||
Nuveen Intermediate Duration Municipal Term Fund |
NID | 670671106 | ||
Nuveen Intermediate Duration Quality Municipal Term Fund |
NIQ | 670677103 | ||
Nuveen All Cap Energy MLP Opportunities Fund |
JMLP | 67075 E108 | ||
Nuveen Multi-Market Income Fund |
JMM | 67075J107 | ||
Nuveen Emerging Markets Debt 2022 Target Term Fund |
JEMD | 25533B108 | ||
Nuveen MN Quality Municipal Income Fund |
NMS | 670734102 | ||
Nuveen Global High Income Fund |
JGH | 67075G103 | ||
Nuveen Dow 30 Dynamic Overwrite Fund |
DIAX | 67075F105 | ||
Nuveen High Income 2020 Target Fund |
JHY | 67075L102 | ||
Nuveen High Income Dec 2018 Target Term |
JHA | 67075P103 | ||
Nuveen Municipal 2021 Target Term Fund |
NHA | 670687102 | ||
Nuveen High Income Nov 2021 Target Term |
JHB | 67077N106 | ||
Nuveen High Income Dec 2019 Target Term |
JHD | 6 7076E107 | ||
Nuveen Preferred & Income 2022 Term Fund |
JPT | 67075T105 | ||
Nuveen Credit Opportunity 2022 Target Term Fund |
JCO | 67075U102 | ||
Nuveen JFRT Term Preferred Shares Series 2027 |
JFRT | 67072TAD0 | ||
Nuveen JROT Term Preferred Shares Series 2027 |
JROT | 6706ENAC4 | ||
Nuveen NADR Var Rate MuniFund Term 2018 |
NADR | 67066V838 | ||
Nuveen Var Rate Munifund Term PFD 2019-1 |
NADT | 67066V820 | ||
Nuveen NEAR Var Rate MuniFund Term 2018 |
NEAR | 670657840 | ||
Nuveen Variable Rate MuniFund Series 2018 |
NIQP | 670677111 | ||
Nuveen NUM Var Rate MuniFund Series 2019 |
NUMW | 670979806 | ||
Nuveen NZF Var Rate MuniFund Term Pfd 2019 |
NZFW | 67070X853 | ||
Nuveen NAD Variable Rate MuniFund Term Pfd 2019 |
VNAD | 67066V887 | ||
Nuveen NAN Variable Rate MuniFund Term Pfd 2019 |
VNAN | 67066X800 | ||
Nuveen NAZ Var Rate MuniFund Pfd 2019 |
VNAZ | 67061W807 | ||
Nuveen NEA Variable Rate MuniFund 2019 |
VNEA | 670657873 | ||
Nuveen Variable Rate MuniFund Term Pfd Series 2018 |
VNID | 670671304 | ||
Nuveen VNKG Var Rate MuniFund Term 2019 |
VNKG | 67072B883 | ||
Nuveen NMS Variable Rate MuniFund Term Pfd 2019 |
VNMS | 670734409 | ||
Nuveen NMY Variable Rate MuniFund Term Pfd 2019 |
VNMY | 67061Q867 | ||
Nuveen NNC Variable Rate MuniFund Term Pfd 2019 |
VNNC | 67060P878 | ||
Nuveen VNQP Var Rate MuniFund Term 2019 |
VNQP | 670972868 | ||
Nuveen VNTC Var Rate MuniFund Term 2019 |
VNTC | 67060D859 | ||
Nuveen JFRP Term Pfd Shares 2019 |
JFRP | 67072TAA6 | ||
Nuveen JROP Term Pfd Shr Series 2023 |
JROP | 6706ENAA8 | ||
Nuveen NAC Variable Rate MuniFund Term Preferred 2019 |
NACV | 67066Y857 | ||
Nuveen Variable Rate MuniFund Term Pfd Series 2018 |
NMZX | 670682806 | ||
Nuveen Munifund Variable Rate Preferred Series 2018 |
NOMV | 67060Q405 | ||
Nuveen NSL Term Preferred Shares Series 2021 |
NSLP | 67067YAA2 | ||
Nuveen JSD Term Preferred Shares Series 2020 |
PJSD | 67074XAA5 | ||
Nuveen NHA Variaple Rate Munifund Term Preferred Series 2016 |
VNHA | 670687201 | ||
Nuveen Variable Rate MuniFund Term Preferred shares Series 2018 |
VNVG | 67071L874 | ||
Nuveen JFRR Term Preferred Shares Series 2022 |
JFRR | 67072TAC2 | ||
Nuveen JROR Term Preferred Shares Series 2022 |
JROR | 6706ENAB6 | ||
Nuveen PJRO Term Preferred Shares 2022-1 |
PJRO | 6706ENAD2 | ||
Nuveen JFR Term Preferred Shares 2024 |
PJFR | 67072TAE8 |
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in this Registration Statement on Form N-2 of Nuveen Core Equity Alpha Fund of our report dated February 27, 2018, relating to the financial statements and financial highlights, which appears in Nuveen Core Equity Alpha Funds Annual Report on Form N-CSR for the year ended December 31, 2017. We also consent to the references to us under the headings Independent Registered Public Accounting Firm and Financial Highlights in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
Chicago, Illinois
October 24, 2018
Nuveen Compliance | 1 July 2018 |
Code of Ethics
SUMMARY AND SCOPE
What the Code is about
Helping to ensure that Nuveen personnel place the interests of Nuveen clients ahead of their own personal interests.
Who the Code applies to and what the implications are
This Code applies to individuals in the following categories:
| Nuveen Employees based in the U.S. or Canada (except employees of Gresham Investment Management LLC, Westchester Group Investment Management, Inc., and any employees of Greenwood Resources, Inc. who are based outside of Portland, Oregon). |
| Employees of any U.S.-registered investment adviser who are based outside the U.S. (except employees of Gresham Investment Management LLC, or Greenwood Resources, Inc.). |
| Consultants, interns and temporary workers based in the U.S. or Canada whose contract length is 90 days or more. |
| Any TIAA employees designated as Access Persons by the TIAA-CREF Funds Chief Compliance Officer or the Nuveen Ethics Office. |
In addition, the independent directors and trustees of the TIAA-CREF Funds Complex and Nuveen sponsored or branded funds are not covered by this Code but have their pre-clearance, reporting and other obligations set forth in their own separate policies.
For individuals who are subject to the Code, there are two designations with different implications: Access Person and Investment Person.
ACCESS PERSON
All Nuveen Employees who are subject to the Code are considered Access Persons, since they have, or could have, access to non-public information about securities transactions and other investments, holdings, or recommendations for Affiliate-Advised Accounts or Portfolios.
Key characteristics of this designation. An individual may be considered an Access Person of multiple advisers affiliated with Nuveen, or of only one. If your regular duties
give you access to non-public information, or you are an officer of a Nuveen or TIAA-CREF sponsored or branded fund, your personal trading is generally monitored only against the trading activity of the specific adviser(s) or Affiliated Funds with which you are involved. For other employees, personal trading is typically monitored against the trading activities of all advisers affiliated with Nuveen. You will generally not be permitted to execute transactions in a security on any day when an Affiliate-Advised Account or Portfolio managed by the adviser(s) that you are monitored against has a pending buy or sell order for that security.
INVESTMENT PERSON
An Access Person who meets any of the following criteria will in addition be considered an Investment Person:
| The Access Person is a Portfolio Manager, Research Analyst or Research Assistant, or they otherwise participate in making recommendations or decisions concerning the purchase or sale of securities in any Affiliate-Advised Account or Portfolio. |
| The Access Person has been designated an Investment Person by the Nuveen Ethics Office. |
Key characteristics of this designation. The vast majority of Investment Persons are employees of Nuveens affiliated investment advisers.
An Investment Person is prohibited from transacting in securities during the period starting 7 calendar days before, and ending 7 calendar days after, any trade in an Affiliate-Advised Account or Portfolio for which he/she has responsibility. In addition, an Investment Persons personal transactions will be reviewed for conflicts in the period starting 7 calendar days before, and ending 7 calendar days after, all trades by their associated investment adviser. In some cases, the Investment Person may be required to reverse a trade and/or forfeit an appropriate portion of any profit as determined by the Nuveen Ethics Office. These consequences can apply whether or not the trade was pre-cleared.
The personal trading of Investment Persons is generally only monitored against the trading activity of the specific adviser for which they have been designated an Investment Person.
Code of Ethics | Page 2 of 8 |
Important to understand
Some of our affiliated investment advisers may have policies of their own that impose additional rules on the same topics covered in this Code. Check with your manager or local/designated Chief Compliance Officer (CCO) if you have questions.
Personal trading is a privilege, not a right. Nuveen Employees are expected to follow the law and adhere to the highest standards of behaviorincluding with respect to personal trading. Any violation of the Code could have severe adverse effects on you, your co-workers, and Nuveen. You may be held personally liable for your conduct and be subject to fines, regulatory sanctions, and even criminal penalties. Because Nuveen can restrict your trading or take actions such as forcing you to hold a position or to disgorge profits, personal trading carries risks beyond normal market risks.
Some requirements in this Code apply to Household Members. Each Household Member (see Terms with Special Meanings at right) is subject to the same restrictions and requirements that apply to his/her related Nuveen Employee.
The Code does not address every ethical issue that might arise. If you have any doubt at all after consulting the Code, contact the Nuveen Ethics Office for direction.
The Code applies to appearance as well as substance. Always consider how any action might appear to an outside observer (such as a client or regulator).
You are expected to follow the Code both in letter and in spirit. Literal compliance, such as pre-clearing a transaction, does not necessarily protect you from liability for conduct that violates the spirit of the Code. If you have questions about how to comply with this Code, consult the Nuveen Ethics Office.
WHO TO CONTACT
Nuveen Ethics Office (Americas): nuveenethicsoffice@nuveen.com
Nuveen Ethics Office (Americas) Hotline: 1-800-842-2733 extension 22-5599
|
Code of Ethics | Page 3 of 8 |
TERMS WITH SPECIAL MEANINGS (continued)
Independent Director Any director or trustee of an Affiliated Fund who is not an interested person within the meaning of Section 2(a)(19) of the Investment Company Act of 1940, as amended.
Managed Account Any account in which you or a Household Member has Beneficial Ownership and for which you have delegated full investment discretion in writing to a third-party broker or investment manager.
Nuveen Nuveen, LLC and all of its direct or indirect subsidiaries.
Nuveen Employee Any full- or part-time employee of Nuveen, and any consultants, interns or temporary workers designated by the Nuveen Ethics Office.
Reportable Account Any account for which you or a Household Member has Beneficial Ownership AND in which securities can be bought or held. This includes, among others:
All Managed Accounts.
Any Nuveen 401(k) plan account.
Any 401(k) plan account from a previous employer that permits transactions in any Reportable Security.
Any direct holding in an Affiliated Fund.
Any retirement account or health savings account (HSA) that permits the purchase of any Reportable Security, and any 529 college savings plan that permits the purchase of Affiliated Funds.
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The following are NOT considered Reportable Accounts:
Charitable giving accounts.
Any 401(k) plan account or any other account held directly with a mutual fund complex or mutual fund-only platform in which open-end, non-Affiliated Funds are the only possible investment.
Any cash management account with a broker in which a Reportable Security cannot be purchased or sold.
Reportable Security Any security EXCEPT:
Direct obligations of the U.S. government (indirect obligations, such as Fannie Mae and Freddie Mac securities, are reportable).
Certificates of deposit, bankers acceptances, commercial paper, and high quality short-term debt (including repurchase agreements).
Money market funds.
Open-end funds that are not Affiliated Funds.
Reportable Transaction Any transaction involving a Reportable Security EXCEPT:
Transactions in Managed Accounts.
Transactions occurring under an Automatic Investment Plan. |
GENERAL RESTRICTIONS AND REQUIREMENTS
BASIC PRINCIPLES
1. |
Never abuse a clients trust, rights, or interests. This means you must never do any of the following: |
| Engage in any plan or action, or use any device, that would defraud or deceive a client. |
| Make any material statements of fact that are incorrect or misleading, either as to what they include or omit. |
| Engage in any manipulative practice. |
| Use your position (including any knowledge or access to opportunities you have gained by virtue of your position) to personal advantage or to a clients disadvantage. This would include, for example, front-running or tailgating (trading directly before or after the execution of a large client trade order), or any attempt to influence a clients trading to enhance the value of your personal holdings. |
| Conduct personal trading in any way that could be inconsistent with your fiduciary duties to a client (even if it does not technically violate the Code). |
2. |
Handle conflicts of interest appropriately. This applies not only to actual conflicts of interest, but also to any situation that might appear to an outside observer to be improper or a breach of fiduciary duty. |
3. |
Keep confidential information confidential. Always properly safeguard any confidential information you obtain in the course of your work. This includes confidential information related to any of the following: |
| Any Affiliate-Advised Account or Portfolio and any other financial product offered or serviced by Nuveen. |
| New products, product changes, or business initiatives. |
| Past, current, and prospective clients, including their identities, investments, and account activity. |
Keeping information confidential means using discretion in disclosing information as well as guarding against unlawful or inappropriate access by others. This includes:
| Making sure no confidential information is visible on your computer screen and desk when you are not there. |
| Not sharing passwords with others. |
| Using caution when discussing business in any location where your conversation could be overheard. Confidential information may be released only as required by law or as permitted under the applicable privacy policy(ies). Consult the Nuveen Ethics Office or your local/designated CCO before releasing any confidential information. |
Code of Ethics | Page 4 of 8 |
4. |
Handle Material Non-Public Information properly. Follow all of the terms described in Material Non-Public Information below. Be aware that any failure to handle such information properly is a serious offense and may lead to disciplinary action from Nuveen as well as serious civil or criminal liability. |
5. |
Comply with Federal Securities Laws. Any violation of these laws is punishable as a violation of the Code. |
6. |
Never do anything indirectly that, if done directly, would violate the Code. Such actions will be considered the equivalent of direct Code violations. |
7. |
Promptly alert the Nuveen Ethics Office or your local/designated CCO of any actual or suspected wrongdoing. Examples of wrongdoing include violations of the Federal Securities Laws, misuse of corporate assets, misuse of confidential information, or other violations of the Code. If you prefer to report confidentially, call the TIAA Confidential Helpline at 1-877-774-6492. Note that failure to report suspected wrongdoing in a timely fashion is itself a violation of the Code. |
PRE-CLEARANCE AND
HOLDING REQUIREMENTS
8. |
Pre-clear any trade in Reportable Securities, including certain Affiliated Funds (see box on next page for additional information). |
If your trade requires pre-clearance, request approval through the Protegent PTA system (PTA) before you or any Household Member places an order to buy or sell any Reportable Security. Any approval you receive expires at the end of the day it was granted; however, you may place after-hours trades in international markets until 11:59 PM local time on that day. When requesting pre-clearance, follow this process:
| Request pre-clearance on the same day you want to trade, during standard U.S. trading hours (9:30 AM to 4:00 PM ET). Be sure your pre-clearance request is accurate as to security and direction of trade. |
| Wait for approval to be displayed before trading. If you receive approval, you may only trade that same day, and only within the scope of approval. If you do not receive approval, do not trade. |
| Place day orders only. Do not place good-til-canceled orders. You may place orders for an after-hours trading session or in foreign markets using that days pre-clearance approval, but you must not place any order that could remain open into the next days trading session. |
9. |
Hold positions in securities that are subject to pre-clearance for 60 calendar days, or be prepared to forfeit any gains. Several things to note: |
| You may be required to surrender any gains realized (net of commissions) through a violation of this rule. |
| The 60-day holding requirement is tested on a last-in-first-out basis, across all of your holdings (not just within individual accounts). |
| The 60-day holding requirement extends to any options or other transactions that may have the same effect as a purchase or sale, and to all Reportable Securitiesexcept for ETFs and open-end Affiliated Funds. Nuveen-branded or sponsored closed-end funds are subject to the 60-day holding requirement. |
| You may sell the security on the 60th day after purchase, provided you secure pre-clearance or an exemption applies. |
| You may re-purchase a security immediately after executing a sale of that same security, which will trigger a new 60 calendar day holding period. |
| You may close a position at a loss at any time, provided pre-clearance has been obtained or an exemption applies. |
10. |
Comply with trading restrictions described in the prospectuses for all Affiliated Funds. This includes restrictions on frequent trading in shares of any open-end Affiliated Fund. |
11. |
Pre-clear any transaction in a Managed Account that involves your influence. You must also immediately consult with the Nuveen Ethics Office to discuss whether the account in question can properly remain classified as a Managed Account. |
12. |
Obtain approval before investing in a private placement (such as a private equity investment, hedge fund, or limited partnership) and before selling or redeeming a private placement that is branded, sponsored, advised or sub-advised by Nuveen. This includes transactions in any private funds advised or sub-advised by Nuveen. Approval is required even if the investment is made in a Managed Account. Approval is not needed for additional capital calls following the initial investment. |
Code of Ethics | Page 5 of 8 |
WHAT NEEDS TO BE PRE-CLEARED |
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Pre-clearance required
All actively initiated trades in Reportable Securities, except those listed here under No pre-clearance required. Be aware that pre-clearance can be withdrawn even after it has been granted, and even after you have traded, if Nuveen later becomes aware of Affiliate- Advised Account
No pre-clearance required
Shares of any open-end mutual fund (including Affiliated Funds).
Any ETF.
CDs and commercial paper.
Securities acquired or disposed of through actions outside your control or issued pro rata to all holders of the same class of investment, such as automatic dividend reinvestments, stock splits, mergers, spin-offs, or rights subscriptions.
Sales pursuant to a bona fide tender offer.
Trades made through an Automatic Investment Plan that has been disclosed to the Nuveen Ethics Office in advance. |
or Portfolio trades whose existence would have resulted in denial of pre-clearance. In these cases you may be required to reverse a trade and/or forfeit an appropriate portion of any profit, as determined by the Nuveen Ethics Office.
Note that ETFs are Reportable Securities but do not need to be pre-cleared.
Trades in a Managed Account (except that you must pre-clear any trades that involve your influence, any initial purchases of private placements, purchases in any equity IPO, and any sales or redemptions of private placements that are branded, sponsored, advised or sub-advised by Nuveen).
Foreign currencies, including futures.
Commodity instruments.
Index options and index futures.
Direct investments in cryptocurrencies. |
OTHER RESTRICTIONS
13. |
Never knowingly trade any security being traded or considered for trade by any Affiliate-Advised Account or Portfolio. This applies to employee transactions in securities that are exempt from pre-clearance, and includes equivalent or related securities. |
For example, if a companys common stock is being traded, you may face restrictions on trading any of the companys debt, preferred, or foreign equivalent securities, and from trading or exercising any options based on the companys securities.
14. |
Always prioritize client trades over personal trades. Your fiduciary duties to the client are far more important than your personal trading, which is a privilege and not a right. Never delay or in any way alter the timing or terms of a client trade for your personal benefit. |
15. |
Do not engage in trading that involves single stock futures, naked short sales or naked options on individual securities. Options are permitted only to generate income or for hedging purposes (that is, the sale of covered calls or the purchase of puts that are offset by existing long positions), with the following exceptions: |
| You may buy or sell naked long-term options (those with an expiration of 1 year or more from the date of purchase), subject to the 60-day holding period. |
| You may hedge with puts or shorts against the box, however, you must first hold the underlying position for 60 days (except for covered calls, which may be written at the same time as the underlying security). |
16. |
Never participate in an investment club or similar entity. |
17. |
Do not engage in excessive or inappropriate trading activity. Never let personal trading interfere with your professional duties. The Nuveen Ethics Office and/or your local/designated CCO, in consultation with your manager, will determine what constitutes excessive or inappropriate trading. |
18. |
Never purchase an IPO without advance approval. Equity IPO participation is generally prohibited, but approval may be granted in special circumstances, such as when: |
| You already have equity in the company and are offered shares. |
| You are a policy holder or depositor in a company that is demutualizing. |
| A family member has been offered shares as an employee. |
You must obtain approval to purchase an equity IPO even if the investment is made in a Managed Account. You may receive approval for initial offerings of fixed income securities, convertible securities, preferred securities, open- and closed-end funds, commodity pools, and any secondary equity offerings.
Code of Ethics | Page 6 of 8 |
MATERIAL NON-PUBLIC INFORMATION |
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What is Material Non-Public Information?
Material Non-Public Information is defined as information regarding any security, securities-based derivatives or issuer of a security that is both material and non-public. Information is material if both of the following are true:
A reasonable investor would likely consider it important when making an investment decision.
Public release of the information would likely affect the price of a security.
Information is generally non-public if it has not been distributed through a widely used public medium, such as a press release or a report, filing or other periodic communication.
Restrictions and requirements
Any time you think you might have, or may be about to, come into possession of Material Non-Public Information (whether in connection with your position at Nuveen or not), alert the Nuveen Ethics Office. Alternatively, you may alert your local/designated CCO or Legal office, who in turn must promptly notify the Nuveen Ethics Office. Follow the instructions you are given.
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Until you receive further instructions from the Nuveen Ethics Office, your local/designated CCO, or Legal, do not take any action in relation to the information, including trading or recommending the relevant securities or communicating the information to anyone else.
Never make decisions on your own regarding potential Material Non-Public Information, including whether such information is actually Material Non-Public Information or what steps should be taken.
If the Nuveen Ethics Office, your local/designated CCO and/or Legal determine that you have Material Non-Public Information:
Do not buy, sell, gift, or otherwise dispose of the issuers securities, whether on behalf of an Affiliate-Advised Account or Portfolio, yourself, or anyone else.
Do not in any way recommend, encourage, or influence others to transact in the issuers securities, even if you do not specifically disclose or reference the Material Non-Public Information.
Do not communicate the Material Non-Public Information to anyone, whether inside or outside Nuveen, except in discussions with the Nuveen Ethics Office and Legal and as expressly permitted by any confidentiality agreement or supplemental policies and procedures of your business unit. |
REPORTING REQUIREMENTS
UPON BECOMING A NUVEEN EMPLOYEE
19. |
Within 10 calendar days of starting at Nuveen, acknowledge receipt of the Code. This includes certifying that you have read the Code, understand it, recognize that you are subject to it, have complied with all of its applicable requirements, and have submitted all Code-required reports. |
20. |
Within 10 calendar days of starting at Nuveen, report all of your Reportable Accounts and holdings in Reportable Securities . Use PTA for this reporting. Include current information (no older than 45 calendar days before your first day of employment) on all Reportable Securities. For each security, provide the security name and type, a ticker symbol or CUSIP, the number of shares or units held, and principal amount (dollar value). For each Reportable Account, provide information about the broker, dealer, or bank through which the account is held and the type of account. For each Reportable Account, submit a copy of the most recent statement. |
Note that there are separate procedures for Managed Accounts, as described below in item 23.
21. |
Within 10 calendar days of starting at Nuveen, report all current investments in private placements (limited offerings). Limited offerings are Reportable Securities. |
22. |
Within 30 calendar days of starting at Nuveen, move or close any Reportable Account that is not at an approved firm. This does not include 401(k) Reportable Accounts . The list of approved firms is maintained by the Ethics Office and may be accessed on PTA. |
Under very limited circumstances, it may be possible to obtain a waiver to keep a Reportable Account at a non-approved firm. Examples include:
| An account owned by a Household Member who works at another financial firm with comparable restrictions. |
| An account that holds securities that cannot be transferred. |
| An account that cannot be moved because of a trust agreement. |
To apply for an exception, contact the Nuveen Ethics Office. For any account granted an exception, arrange for the Nuveen Ethics Office to receive duplicates of all
Code of Ethics | Page 7 of 8 |
periodic statements. If a firm cannot provide duplicate statements directly to the Nuveen Ethics Office, you must take responsibility for providing them yourself. In all cases, if your accounts are not held at an approved firm, you must manually enter all executed transactions in PTA within 5 days of execution.
At the discretion of the Nuveen Ethics Office, some consultants and temporary workers may not be required to move or close Reportable Accounts.
WHEN OPENING ANY NEW REPORTABLE ACCOUNT (INCLUDING A MANAGED ACCOUNT)
23. |
Get pre-approval for any new Managed Account before any trading activity commences. Using the appropriate form (available from the Nuveen Ethics Office), provide representations that support the classification of the account as a Managed Account. For an account to be classified as a Managed Account, the account owner must have no direct or indirect influence or control over the securities in the account. The form must be signed by the accounts broker or investment manager and by all account owners. You may be asked periodically to confirm these representations. |
Note that if the Managed Account is not maintained at an approved firm, you are also responsible for providing duplicate statements for the Managed Account to the Ethics Office, if requested.
24. |
Report any new Reportable Account (other than a Managed Account) that is opened with an approved firm. Do this within 10 calendar days of the date you or a Household Member opens the account or an account becomes a Reportable Account through marriage, cohabitation, divorce, death, or another event. |
EVERY QUARTER
25. |
Within 30 calendar days of the end of each calendar quarter, verify in PTA that all Reportable Transactions made during that quarter have been reported. PTA will display all transactions of yours for which it has received notice. For any Reportable Transactions not displayed, or displayed inaccurately, you are responsible for making any necessary revisions in PTA to complete your certification. |
For each Reportable Transaction, you must provide, as applicable, the transaction date, security name and type, ticker symbol or CUSIP, interest rate (coupon) and maturity date, number of shares, price at which the transaction was effected, principal amount (dollar value), the nature of the trade (buy or sell), and the name of the broker, dealer, or bank that effected the transaction. It is very important that you carefully review and verify the transactions and related details displayed on PTA, checking for accuracy and completeness. Once again, if you find any errors or omissions, correct or add to your list of transactions in PTA.
EVERY YEAR
26. |
Within 45 calendar days of the end of each calendar year, acknowledge receipt of the most recent version of the Code and certify in PTA as to your Annual Holdings and Accounts Report. |
The report must contain the information described in item 20 above, and include your certification that you have reported all Reportable Accounts, and all holdings in Reportable Securities at year end.
If any of your holdings in Reportable Securities are not displayed in PTA or are displayed inaccurately, you are responsible for making any necessary revisions in PTA to complete your certification.
In addition, you must affirm each year through PTA that each Managed Account is properly classified as a Managed Account, for yourself and on behalf of any Household Member. This separate certification does not require broker or investment manager involvement.
You also must acknowledge any amendments to the Code that occur during the course of the year.
Code of Ethics | Page 8 of 8 |
ADDITIONAL RULES FOR SECTION 16 PERSONS
Section 16 Persons are insiders, or people with responsibility for policy decisions or portfolio transactions. If you are unsure of your status as a Section 16 Person, please contact Legal or the Nuveen Ethics Office.
Pre-clear (through PTA) any transactions in closed-end funds of which you are a Section 16 Person. Your request will be reviewed by Legal.
When selling for a gain any securities you buy that are issued by the entity of which you are a Section 16 Person, make sure it is at least 6 months after your most recent purchase of that security. This rule extends to any options or other transactions that may have the same effect as a purchase or sale, and is tested on a last-in-first-out basis. You may be required to surrender any gains realized through a violation of this rule. Note that for any fund of which you are a Section 16 Person, no exception from preclearance is available.
Promptly email details of all executed transactions in these securities to the appropriate contact in Legal.
Section 16 Persons should refer to the Nuveen Funds Section 16 Policy and Procedures for additional information.
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CODE ADMINISTRATION
Training
You will be required to participate in training on the Code when joining Nuveen as well as periodically during the time you are subject to the Code.
Exceptions
The Code exists to prevent violations of law. The Nuveen Ethics Office may, under certain circumstances, grant waivers from a Code requirement. No waivers or exceptions that would violate any law will be granted.
Monitoring
The Nuveen Ethics Office is responsible for monitoring transactions and holdings for any violations of this Code.
Consequences of violation
Any individual who violates the Code is subject to penalty. Penalties could include, among other possibilities, a written warning, restriction of trading privileges, disgorgement of trading profits, fines, and suspension or termination of employment. |
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Applicable rules
The Code has been adopted in recognition of Nuveens fiduciary obligations to clients and in accordance with various provisions of Rule 204A-1 under the Investment Advisers Act of 1940 and Rule 17j-1 under the Investment Company Act of 1940. This Code is also adopted by the Affiliated Funds advised by Nuveen Fund Advisors, LLC, TIAA-CREF Investment Management, LLC and Teachers Advisors, LLC under Rule 17j-1.
Some elements of the Code also constitute part of Nuveens response to Financial Industry Regulatory Authority (FINRA) requirements that apply to registered personnel of Nuveen Securities, LLC.
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Exhibit r.2
Code of Ethics for the Independent Trustees of the Nuveen Funds
Effective: January 1, 2013
Last Amended: August 4, 2016
I. |
Summary |
a. |
Purpose |
The purpose of this Code is to help to ensure that the Independent Directors/Trustees (Trustees) of the Nuveen Funds place the interests of the Nuveen Funds and their shareholders ahead of the Trustees own personal interests. This Code has been adopted in recognition of Nuveens and the Trustees fiduciary obligations to Nuveen Fund shareholders and in accordance with various provisions of Rule 17j-1 under the Investment Company Act of 1940.
b. |
Important to understand |
The securities industry is highly regulated and its participants are expected to adhere to high standards of behavior, including in their personal trading. A violation of the Code can have an adverse effect on you, your fellow Trustees, and Nuveen, as well as the Funds and their shareholders. The Code does not address every ethical issue that might arise.
It is important for Trustees to be sensitive to investments that may compromise your independence, directly or indirectly. The Code applies to appearance as well as substance. Always consider how any action might appear to an outside observer such as a regulator. If you have any doubt after consulting the Code, contact Compliance.
c. |
Terms with Special Meanings |
i. |
Code. This Code of Ethics. |
ii. |
Inside Information. Inside information is information that is both material and non-public. Information is material if: (1) a reasonable investor would likely consider it important when making an investment decision; and (2) public release of the information would likely affect the price of a security. Information is non-public if it has not been distributed through a widely used public medium such as a press release or a report, filing or other periodic communication. |
iii. |
Nuveen: Nuveen Investments, Inc. and all of its direct or indirect subsidiaries. |
iv. |
Nuveen Fund: Any Nuveen-sponsored open-end fund, closed-end fund, or exchange traded fund (respectively, OEF, CEF, and ETF) |
v. |
NFA: Nuveen Fund Advisors, LLC |
vi. |
Trustee: Any director or trustee of a Nuveen Fund advised by NFA who is not an interested person within the meaning of Section 2(a)(19) of the Investment Company Act of 1940. Any Interested Trustee is covered by the Nuveen Investments, Inc. Code of Ethics along with other Nuveen employees. |
II. |
Restrictions and requirements |
a. Do not purchase or sell common or preferred shares of any Nuveen CEF or ETF without prior approval from Nuveen Legal. The procedures are found under the Governance tab of the boards online portal at https://nuveen.boardvantage.com .
b. Do not purchase or sell any securities if you know at the time of the proposed transaction that a Nuveen Fund has purchased or sold the same securities within the past 15 days, or is considering purchasing or selling the same securities within the next 15 days. This is the 15 day window.
c. Avoid conflicts of interest. This applies not only to actual conflicts of interest, but also to any situation that might appear to an outside observer to be improper or a breach of fiduciary duty.
d. Keep confidential information regarding the Nuveen Funds, including information regarding securities held in or under consideration for a Nuveen Fund, confidential.
e. Comply with trading restrictions found in the prospectuses for the Nuveen Funds. This includes restrictions on frequent trading in shares of any Nuveen OEF.
f. Never do anything indirectly that, if done directly, would violate the Code. Such actions will be considered the equivalent of direct Code violations.
g. Promptly alert Compliance of any actual or suspected wrongdoing.
h. Hold Nuveen ETF positions for thirty (30) calendar days from your most recent purchase of that Nuveen ETF before realizing any profit (last-in, first-out at the overall holding level, not at an account level).
III. |
Actions to Take |
a. |
When you become an Independent Trustee: Sign an acknowledgement that you have received this Code. |
b. |
If you want to trade in a security within the 15-day window (described above) |
i. |
Contact Legal to pre-clear your trade. |
ii. |
Submit a quarterly transaction report to Compliance within 30 days after the end of the quarter in which the transaction takes place. |
c. |
If you want to trade in common or preferred shares of any Nuveen CEF or ETF |
i. |
Contact Legal to pre-clear your trade. |
ii. |
After you have purchased or sold the shares, immediately notify Compliance of the number of shares and the price. |
2
d. |
Section 16 CEF Insider Requirements |
i. |
Reporting Requirements Section 16 of the Securities Exchange Act required officers and directors of certain publicly-traded companies to report promptly to the SEC their trades in the company of which they are an insider. As an Independent Trustee, you are considered an insider of the Nuveen CEFs and must report your trades in Nuveen CEF shares. |
ii. |
Short Swing Profit Prohibition Section 16 insiders are also subject to a ban on short-swing profits from sales of shares of the company. This means that you may not profit from any purchase and any sale of Nuveen CEF shares within 6 months of each other. You must surrender to the Nuveen CEF in question any profits from such trades. This extends to options or other transactions that may have the same effect as a purchase or sale. |
e. |
During the year: Acknowledge receipt of any amendments to the Code. |
IV. |
Administration of this Code |
a. |
Training : A Nuveen representative will review this Code with you when you join the Board. |
b. |
Exceptions : The Code exists to ensure that Trustees place the interests of the Nuveen Funds and shareholders ahead of Trustees own personal interests. No exceptions that would violate that principle will be granted. |
c. |
Monitoring and enforcement : Compliance is responsible for monitoring transactions and holdings for any violations of this Code. Compliance will alert the Nuveen Fund Board to any violations of this Code. The Nuveen Fund Board shall determine what action is appropriate for any breach of the provisions of this Code by a Trustee. |
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Personal Code of Ethics
Personal Account Dealing Policy
Outside Business Activities Policy
Gifts & Entertainment Received Policy
Political Activities Policy
Policies for Non-Executive Directors and Independent Fund Trustees
Effective Date: March 1, 2018
Version: 2.1 |
Personal Code of Ethics
Introduction
As an investment adviser, Janus Henderson is entrusted with the assets of our Clients for investment purposes. As a result, both Janus Henderson and you have a fiduciary obligation to place the interests of our Clients before our own. In order to avoid conflicts of interest, we have a duty to conduct personal activities and personal securities transactions in such a manner that we avoid even the appearance of a conflict of interest.
The Personal Code of Ethics (the Code) serves as a set of guiding principles to ensure that when we enter into personal transactions and other activities, our Clients are first and foremost in our minds. Complying with the Personal Code of Ethics is a key part of earning and keeping our Clients trust. To protect this trust, we hold ourselves to the highest ethical standards.
Janus Henderson created the Code to comply with U.S. federal securities laws, UK Financial Conduct Authority rules, and regulations in the various jurisdictions where Janus Henderson operates. Compliance with the various laws requires adopting and enforcing a written code of ethics and maintaining certain records. The administration and monitoring of our Code is the responsibility of Compliance with oversight by the Ethics & Conflicts Committee 1 .
It is not possible for the Code to identify every situation involving your personal trading, outside business activities, political activities and gifts and entertainment. The Ethics & Conflicts Committee is charged with the oversight and interpretation of the Code in a manner considered fair and equitable and in all cases placing our Clients interests first.
Janus Henderson Fund Trustees and Janus Henderson Group Directors must also adhere to applicable portions of the Code. These are outlined in the Trustees and Directors section of this document.
Our Commitment to Ethical Standards
The Personal Code of Ethics helps ensure that our professional and personal conduct preserves our companys integrity and reputation. These policies complement the Janus Henderson Corporate Code of Business Conduct and apply to all employees and contractors at Janus Henderson and our affiliates (collectively referred to as Janus Henderson, we, our and Company). Portions of these policies may also apply to others including certain members of your family. Our Personal Code of Ethics includes the following policies:
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Personal Account Dealing (PAD) |
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Outside Business Activities (OBA) |
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Political Activities (PA) |
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Gifts & Entertainment (G&E) |
Your Commitment to Ethical Standards
You are required to conduct Janus Hendersons business with the highest ethical and legal standards. Ethical standards to which we are committed, and for which you are individually accountable, include:
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Placing the interests of our Clients first. |
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Complying with legal regulations. |
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Acting with the highest degree of ethical standards. |
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Avoiding or, where applicable, disclosing conflicts of interest. |
Know the Code
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Read, attest to and comply with the Code |
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Seek help if you have questions about the Code |
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Failure to comply with the Code may result in disciplinary action, up to and including termination of employment |
1 |
Governance committee comprised of senior leaders throughout Janus Henderson Group. The Committee meets quarterly or more often as needed, to review potential violations of the Personal Code of Ethics, our Code of Business Conduct and other related policies. |
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Personal Account Dealing Policy
Effective Date: March 1, 2018
Version: 1.3 |
Personal Account Dealing Policy
Contents
1 | Overview | 1 | ||||||
1.1 | Policy Statement | 1 | ||||||
1.2 | Key principles | 1 | ||||||
1.3 | Scope | 2 | ||||||
1.4 | Roles and Responsibilities | 2 | ||||||
1.5 | References | 2 | ||||||
1.6 | Escalation Requirements | 3 | ||||||
2 | Definitions | 3 | ||||||
3 | Policy Requirements | 5 | ||||||
3.1 | Disclosure | 5 | ||||||
3.2 | Preclearance Requirements for Dealing in Covered Securities | 6 | ||||||
3.3 | Restrictions on Dealing in Covered Securities | 7 | ||||||
3.4 | Exceptions | 8 | ||||||
3.5 | Trading in Reportable Funds | 9 | ||||||
3.6 | Trading in Janus Henderson Group plc Securities | 10 | ||||||
3.7 | Policy Breaches | 10 | ||||||
4 | Document Control | 11 | ||||||
Appendix I | 12 | |||||||
Covered Securities | 12 | |||||||
Non-Covered Securities | 12 | |||||||
Appendix II | 13 | |||||||
Beneficial Ownership Guidelines | 13 |
Personal Account Dealing Policy
1 |
Overview |
1.1 |
Policy Statement |
As a global investment adviser, Janus Henderson is entrusted with the assets of our clients for investment purposes. As a result, Janus Henderson employees have a fiduciary obligation to place the interests of our clients before our own. However, because of the potential conflicts of interest inherent in our business, our industry and Janus Henderson have implemented certain standards and limitations designed to minimise these conflicts and help ensure that we focus on meeting our duties as a fiduciary for our clients. The Personal Account Dealing Policy (the Policy) is in place to help manage and mitigate the conflicts of interest that can arise from personal account dealing activities and safeguard our clients interests. Please be aware that your ability to liquidate positions may be severely restricted under the Policy, including times of market volatility. Therefore, as a general matter, Janus Henderson discourages personal investments by employees in individual securities and encourages personal investments in managed collective vehicles, such as mutual and exchange traded funds.
1.2 |
Key principles |
You have an obligation to conduct your personal investment activities and related securities transactions lawfully and in a manner that avoids actual or potential conflicts between your own interests and the interests of Janus Henderson and its clients. You must carefully consider the nature of your Janus Henderson responsibilitiesand the type of information that you might be deemed to possess in light of any particular securities transactionbefore engaging in any investment-related activity or transaction. In addition:
1. |
You must take responsibility for ensuring you are aware of the requirements of this Policy. |
2. |
At all times the interests of clients, in this case Janus Henderson funds and client accounts, take priority over your personal investment interests. |
3. |
You may not personally benefit by causing a Client to act, or fail to act, in making investment decisions. |
4. |
You may not engage in fraudulent or manipulative conduct in connection with the trading of securities in a Client account. |
5. |
You may not profit, or cause others to profit, based on your knowledge of completed or contemplated Client transactions. |
6. |
You must preclear all of your personal trades and subsequently execute your trades in accordance with stated timeframes. |
7. |
No dealing is permitted that is in conflict with the interests of our clients, the parameters set by the Policy, the restrictions imposed by Janus Henderson restricted/embargo lists and the close periods applicable to Janus Henderson Group plc shares. |
8. |
You are discouraged from dealing on the basis of unpublished tips or rumours. |
9. |
Dealing on the basis of material non-public information is illegal. |
10. |
You should ensure that personal transactions are in keeping with your financial circumstances. |
11. |
You must adhere to the Policy to mitigate the risk of conflicts of interest and to Treat Customers Fairly (TCF). |
12. |
You must not mislead the Client by presenting untrue statements of material fact to the Client or by failing to provide a material fact necessary to the Client. |
1
Personal Account Dealing Policy
1.3 |
Scope |
1.3.1 |
Persons covered by the policy |
You are covered by the Policy if you are an employee or contractor of Janus Henderson Group plc and its subsidiaries and affiliates.
You are covered by portions of the Policy if you are:
|
An Independent Trustee of Janus Henderson Mutual Funds and ETFs |
|
A Non-Executive (Outside) Director of Janus Henderson Group |
1.3.2 |
Investments covered by the policy |
Your investments are subject to the Policy if they meet both of the following criteria:
|
Investments held in brokerage accounts under your Beneficial Ownership: You are the beneficial owner of any account in which you have a direct or indirect financial interest. This generally includes accounts held in your name and the names of: |
|
Your spouse or equivalent domestic partner |
|
Your minor children |
|
A relative sharing your home to whom you provide financial support |
|
Trusts for which you are a beneficiary |
|
Investments defined as Covered Securities: Covered Securities include stocks, bonds, exchange traded funds (ETFs) and private placements/limited offerings. See Appendix I for a detailed list of Covered and non-Covered Securities. |
|
Reportable Funds: Any fund or product in which JHG acts as an investment adviser, sub-adviser or principal underwriter. Click here for a current list of Reportable Funds . |
1.4 |
Roles and Responsibilities |
All disclosures, requests and attestations related to the Policy are made in MyComplianceOffice (MCO). In certain non-U.S. countries, local laws or customs may impose requirements in addition to those imposed by the Policy.
The Compliance department, under the direction of the CCO and the Ethics & Conflicts Committee administers this Policy. Compliance trains employees on the Policy, approves employee personal trades in Covered Securities and monitors employee brokerage accounts for potential Policy violations.
The Ethics & Conflicts Committee provides oversight of the Policy by reviewing quarterly account dealing reports for potential conflicts and issuing reprimands and sanctions for Policy violations.
1.5 |
References |
The Policy is designed to ensure compliance with regulatory requirements and rules of international regulators, who have jurisdiction over Janus Hendersons business, including, but not limited to:
2
Personal Account Dealing Policy
|
SEC regulations (U.S.): Registered investment advisers are required by R u l e 2 0 4 A - 1 under the Investment Advisers Act of 1940, as amended (the Advisers Act), to adopt a code of ethics which, among other things, sets forth the standards of business conduct required of their Access Persons as defined in this Policy. Similarly, each registered investment company and its adviser and principal underwriter must adopt a code of ethics pursuant to R u l e 17 j - 1 under the Investment Company Act of 1940, as amended (the PTA Act). |
|
FCA regulations (U.K): In accordance with the F C A C O BS 11.7 rules on personal account dealing, a firm that conducts designated investment business must establish, implement and maintain adequate arrangements aimed at preventing employee activities that may give rise to a conflict of interest, or those where a person may have access to inside information (as defined in the Market Abuse Regulation) or to other confidential information relating to clients or client transactions. |
1.6 |
Escalation Requirements |
To report violations of this policy, please follow the escalation requirements described in the Janus Henderson Risk Events Policy. You may also anonymously report violations to our i nd e pe n d e nt h o t l i ne p r o vi d e r . Although the Company will not retaliate against anyone for making a good faith report, failure to report violations may lead to appropriate disciplinary action.
2 |
Definitions |
Access Person: An Access Person is any employee or contractor who has access to non-public information regarding any Clients purchase or sale of securities, or non-public information regarding the portfolio holdings of any Client account. All persons covered by the Policy are deemed Access Persons.
Beneficial Ownership: You are the beneficial owner of any account or securities in which you have a direct or indirect financial interest. This includes accounts held in the name of your spouse or equivalent domestic partner, your minor children, and relatives living with you to whom you provide financial support and can include trusts for which you are a trustee or a beneficiary. See Appendix II for more detailed information on Beneficial Ownership.
CCO: Chief Compliance Officer or his/her designee.
Client: Any investment management client of Janus Henderson including a fund.
Close Period: The time period between the completion of a listed companys financial results and the announcing of these results to the public.
Covered Securities: Covered Securities are generally all securities, including but not limited to individual stocks and bonds, exchange traded products (ETFs and ETNs), closed-end funds, private placements and limited offerings. See Appendix I for a detailed list of covered and non-covered securities.
Ethics & Conflicts Committee: Governance committee comprised of senior leaders throughout Janus Henderson Group. The Committee meets quarterly or more often as needed, to review potential violations of the Personal Code of Ethics, our Code of Business Conduct and other related policies.
3
Personal Account Dealing Policy
FCA: Financial Conduct AuthorityUK regulator
Investment Person: An Access Person who also makes or participates in making, decisions regarding the trading of securities in any Client account, has access to such decisions or assists in the trade process. Investment Persons generally can include PMs, research analysts, traders, trade operations, compliance, investments, product development and ExCo members.
Janus Henderson Group plc (JHG): Janus Henderson Group plc includes all of its direct and indirect subsidiaries.
MyComplianceOffice (MCO): The monitoring system utilized for all personal compliance disclosures including Personal Account Dealing.
Personal Account Dealing (PAD): The personal transactions in Covered Securities held in accounts under the Beneficial Ownership of persons covered by the Policy.
Reportable Funds: Any fund or product in which JHG acts as an investment adviser, sub-adviser or principal underwriter.
SEC: U.S Securities and Exchange CommissionUS regulator
4
Personal Account Dealing Policy
3 |
Policy Requirements |
3.1 |
Disclosure |
3.1.1 |
Initial Brokerage Account Disclosures |
Within ten calendar days of your start date, you must disclose all brokerage accounts in which you have Beneficial Ownership. Additionally, you must disclose any account which holds or can hold Janus Henderson products (e.g., mutual funds, hedge funds or subadvised products).
You must allow your brokers or financial institutions to provide duplicate confirmations and statements directly to Compliance. If your broker is unwilling or unable to provide duplicate confirmations and statements, you are required to provide them to Compliance.
3.1.2 |
Initial Holdings Disclosures |
Within ten calendar days of your start date, you must disclose all holdings in Covered Securities that are beneficially owned by you. Additionally, you must disclose any holdings in Janus Henderson managed products, including mutual funds, commingled pools, hedge funds or subadvised products. Holdings information must be current as of 45 days prior to your start date.
See Appendix I for a detailed list of Covered and non-Covered Securities.
3.1.3 |
Ongoing Disclosure Requirements |
Accounts: During your tenure with JHG, you must promptly disclose any newly opened accounts that are under your Beneficial Ownership.
Transactions/Holdings: You must deal through your own brokers and must ensure that compliance receives duplicate statements and trade confirmations/contract notes in one of the three ways listed below.
1. |
Electronic Feeds You are encouraged to deal through brokers that provide JHG with trade confirmations and holdings via electronic feed. This provides Compliance with the most timely and accurate PAD information. A list of electronic feed brokers can be found here . |
2. |
Broker delivery of duplicate confirmations and statements In jurisdictions where applicable, you should allow for their brokers to provide delivery of duplicate confirmations and statements directly to Compliance. Compliance staff will enter trade details for you if you are utilizing this option. |
3. |
Employee upload of confirmations and statements If neither of the above options are possible, you are required to enter your trade details into MCO and upload the trade confirmation/contract notes within 10 business days of executing a precleared trade. Additionally, you will be required to attest to your trades quarterly and upload year-end statements annually. |
5
Personal Account Dealing Policy
3.1.4 |
Attestation Requirements |
Compliance will promptly notify you of any material changes to this Policy and you will be required to attest to the changes. Additionally, you are required to submit the following periodic attestations. You may also be required to complete additional attestations to meet jurisdictional and regulatory requirements.
Annually:
|
PAD Policy Attestation |
|
Account Attestation |
|
Holdings Attestation |
|
JHG Mutual Fund Trades Attestation (Investment Persons) |
Quarterly:
|
Quarterly Trades Attestation (for accounts without direct feed or statement delivery to Compliance) |
3.1.5 |
Management Information |
It is your responsibility to ensure that the Compliance Department is appropriately notified of all accounts, transactions and holdings you must ensure that transaction, holdings and account data is accurate in MCO, as Personal Account information is subject to internal and regulatory review. You must allow your brokers to provide duplicate confirmations and statements (electronically or via paper) to Janus Henderson or provide it yourself if a broker is unable or unwilling to provide this information.
The Compliance Department will review the documents for personal accounts to ensure that JHGs policies and procedures are being complied with, and make additional inquiries as necessary. Access to duplicate confirmations and account statements will be restricted to those persons, who are assigned to perform review functions, and all such materials will be kept confidential except as otherwise required by law.
3.2 |
Preclearance Requirements for Dealing in Covered Securities |
The requirements in the Policy are designed to mitigate or eliminate any potential conflict, or appearance of conflict, that may occur between your personal account dealing and Client security dealing. The following requirements apply to your personal dealing in Covered Securities in accounts you beneficially own.
3.2.1 |
Requesting Preclearance |
You and your related parties (your spouse, minor children and other adult family members living in your household) must preclear any trades in Covered Securities via MCO, unless the transaction meets one of the provisions noted in the Excluded Transactions section. Preclearance requests are evaluated for potential conflicts of interest that may deem the trade to not be, or appear to not be, in the best interest of Clients. Generally, most requests are approved or denied immediately but some may take up to 48 hours to evaluate.
Compliance retains the right to refuse you permission to conduct a personal trade without providing a reason for the refusal. No reason for refusal will be given if in the opinion of Compliance the explanation would result in the release of confidential information.
3.2.2 |
Approval Window |
Approvals and denials are communicated from MCO via email. If approved, and you choose to transact, you must place and execute your transaction by the close of business on the day after you receive an approval email from MCO .
6
Personal Account Dealing Policy
If the day after the date of preclearance approval is a bank holiday or a weekend then you must place and execute the transaction by the close of business on the day you receive approval.
If the transaction is not instructed and executed within the approved timeframe then you must submit a new request to trade in MCO.
3.2.3 |
Delayed Execution |
If your trade has a delayed execution date, e.g. an illiquid or unlisted security, you should request an exception from Compliance.
3.2.4 |
Preclearance Attestation (Portfolio Managers only) |
If you are requesting to personally trade a Covered Security that is an eligible investment for Client Accounts you manage, you must provide your rationale for the trade via an attestation form in MCO.
3.3 |
Restrictions on Dealing in Covered Securities |
3.3.1 |
Blackout Periods |
Generally, you will not be granted preclearance to deal in a Covered Security when there is a pending buy or sell order for a Client in that same security. Additionally:
|
Access Persons will generally not be granted preclearance to trade in a Covered Security within one (1) business day after a Client trade occurs in the same security. |
|
Investment Persons will generally not be granted preclearance to trade in a Covered Security within seven (7) calendar days after a Client trade occurs in the same security. |
3.3.2 |
Minimum Holding Periods |
Minimum holding periods are applicable for any purchase and subsequent sale, or any sale then subsequent purchase (for short sales), of the same Covered Security (or its equivalent). In respect of derivatives any transaction to close out a derivative position cannot be executed until the end of the holding period. The holding period starts the day after execution of your trade. Calculations are made using the first-in, first-out (FIFO) method.
Minimum holding periods for Covered Securities are as follows:
Profile |
ETFs/ETNs (Including Janus Henderson ETFs/ETNs) |
All other Covered Securities |
||
Access Person | One week (7 calendar days) | Three months (90 calendar days) | ||
Investment Person | Six months (180 calendar days) |
Where this restriction would cause undue financial hardship due to your personal circumstances or in periods of extreme market turmoil, you may request an exception to this restriction. This should be seen as an exceptional measure and requires the approval of the CCO or her/his designee and ratified by the Ethics & Conflicts Committee
Holding periods are designed to discourage derivatives trading and securities trading with a high frequency.
7
Personal Account Dealing Policy
3.3.3 |
Best Price Rule (Investment Persons only) |
In order to eliminate even the appearance of impropriety, if you (1) buy or sell a security within seven days before a Client trade is executed in the same security, and (2) receive a price advantage over the Clients trade, at the Ethics & Conflicts Committees discretion you may be required to surrender the price advantage.
3.3.4 |
Private Placements and Initial Public Offerings (IPOs) |
You must request pre-approval prior to investing in a private placement or limited offering. Requests are submitted in MCO via the Private Placement/Limited Offering form. No employee, or other Access person, shall acquire any security issued in any limited or private offering (please note that hedge funds are sold as limited or private offerings) unless the CCO (or designee) gives express prior written approval and document the basis for granting approval after due inquiry. The CCO, in determining whether approval should be given, will take into account, among other factors, whether the investment opportunity should be reserved for a Client and whether the opportunity is being offered to the individual by virtue of his or her position with JHG.Contact Compliance for assistance with these requests.
You are generally not allowed to participate in IPOs. If you are a FINRA affiliated person, you are prohibited from participating in an IPO. Requests to participate in an IPO will be considered only under limited circumstances and only with prior approval from the CCO, in consultation with the Ethics & Conflict Committee. Please contact Compliance for advice and direction.
3.3.5 |
Restricted stocks |
You may not trade securities of any issuer that are on the JHG Embargoed/Restricted List. Certain securities may have restrictions placed upon them which restrict both personal and Client dealing, typically when Janus Henderson or a part of Janus Henderson is in receipt of material, non-public information. These restrictions will be maintained collectively using the Embargoed/Restricted Lists.
3.4 |
Exceptions |
3.4.1 |
Excluded Transactions |
The following transactions are excluded from the Covered Securities trading restrictions:
|
Transactions involving futures or options in foreign currencies or broad-based indices. |
|
Purchases or sales that are not voluntary, which include but are not limited to: tender offers and broker- initiated transactions. |
|
Purchases or sales which are part of an automatic investment plan that has been disclosed to Compliance. |
|
The acquisition of: |
|
securities as a result of a corporate action |
|
securities as a result of a gift or inheritance |
|
an employers securities through an employer retirement plan such as 401(k) plan or stock purchase plan |
(Note: The subsequent sale of any securities acquired is subject to all of the trading restrictions of the Personal Trading Policy.)
|
Transfers in-kind of Covered Securities. |
8
Personal Account Dealing Policy
Please refer to Section 3.6.3 for details on Janus Henderson Group plc security transfers.
3.4.2 |
Discretionary Management by Third Parties |
The trading restrictions outlined above do not apply to trades in an investment account or another arrangement over which you have no direct or indirect influence or control (Discretionary Management). In order to rely upon this provision you must receive approval from Compliance. To receive approval, you must submit documentation to Compliance demonstrating that all trading in the account is under the sole discretion of your advisor or other designee.
Discretionary accounts still require disclosure in MCO and are subject to preclearance for JHG stock shares and the restriction on the purchase of IPOs.
You are required to inform Compliance immediately if you terminate any approved advisory relationship or make management changes. Additionally, you are required to acknowledge and attest annually that:
1. |
You have had no direct or indirect influence or control over the trading decisions in your discretionary account(s). |
2. |
You did not suggest trades to the manager or in any way direct the manager to make any particular trades in securities for the discretionary account(s). |
3.4.3 |
Share / Investment clubs |
If you wish to participate in collective arrangements (e.g. a share or investment club), seek advice and direction from Compliance.
3.4.4 |
Spread Betting |
Spread betting is a speculative transaction that involves taking a bet on the price movement of a security, index or other financial product via a spread betting company. Spread betting on financial products is not permitted and you may not use spread betting accounts to circumvent this Policy. Spread betting on non-financial products, such as sporting events, is not covered by this Policy.
3.5 |
Trading in Reportable Funds |
3.5.1 |
Janus Henderson Mutual Funds |
Janus Henderson serves as the adviser to a variety of open-ended funds. Persons are required to disclose in MCO any accounts where they hold Janus Henderson Funds. Preclearance is not required to deal in Janus Henderson Funds; however a minimum holding period of 90 days is required for all funds with the exception of money market funds.
Additionally:
|
The holding period starts the day after execution of the trade and lasts until the 90 th day; |
|
The prohibition applies on a first in, first out (FIFO) basis; |
The restriction does not apply to acquisitions or sales of a fund where it is executed without instruction from the employee (e.g. automatic dividend reinvestments, share plan investing etc.).
3.5.2 |
Janus Henderson Exchange Traded Products |
Janus Henderson ETFs/ETNs are treated the same as all other ETFs/ETNs under the Policy. See Sections 3.2 and 3.3.
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Personal Account Dealing Policy
3.5.3 |
Janus Henderson Investment Trusts |
The Policy also extends to trading in securities of other Janus Henderson Group plc related entities that are listed on a securities exchange while in the possession of inside information concerning that entity. A person who is a director of an Investment Trust managed by Janus Henderson must also comply with the FCAs Listing and Disclosure Guidance and Transparency Rules, which prohibits dealings during Closed Periods.
A list of these Investment Trusts can be found under the link ww w . he n de rs ont r u s t s . c om and Closed Period restrictions will be applied on MCO for all persons.
Fund managers of Investment Trusts managed by Janus Henderson should be aware of the specific regulatory risks associated with personal investing in their trusts and should consult Compliance if they consider that there might be any potential conflict or market conduct risk associated with a proposed PA trade. All preclearance requests for Janus Henderson managed Investment Trusts will be blocked pending checks for risks such as closed periods or involvement or information on buy-back programmes.
3.6 |
Trading in Janus Henderson Group plc Securities |
Janus Henderson Group (JHG) is a publicly traded company and, as an employee or contractor of Janus Henderson, all of your trades in securities issued by JHG are monitored. You may not engage in transactions in JHG securities if they are speculative or short-term in nature. For example, speculative trading includes short sales, transactions in put or call options or similar derivative transactions. In addition, you may not engage in any hedging or monetization transactions with respect to JHG securities. The J a n us Hen d e rs on Gr o u p S ha r e T r ad i ng P o l i c y provides additional guidance on the trading of JHG securities.
3.6.1 |
Preclearance of Janus Henderson Group plc securities |
You must obtain preclearance on MCO for all personal deals in Janus Henderson Group plc securities. This includes in-kind transfers where ownership of the shares changes, as in a charitable gift of shares. Preclearance requests must be submitted via MCO.
You may only request to trade in JHG shares during the Window Period. The Window Period generally opens the day Janus Henderson publicly announces its quarterly earnings and closes at each quarter end.
Automatic investment plans, stock awards and grants are exempt from preclearance.
3.6.2 |
Material non-public information |
You may not trade or take up rights, or cause someone else to trade, in Janus Henderson Group plc securities while in the possession of material non-public information.
3.7 |
Policy Breaches |
Failure to adhere to any of the requirements outlined above may result in a breach of the Policy. Breaches are taken very seriously by Janus Henderson Management. Any potential violation of the provisions of the Policy will be investigated by Compliance or, if necessary, the Ethics & Conflicts Committee. If a determination is made that a violation has occurred, a sanction may be imposed. Sanctions may include, but are not limited to, one or more of the following: a warning letter, profit surrender, personal trading ban, and termination of employment or referral to civil or criminal authorities.
Material violations will be reported promptly to the respective boards of trustees/managers of the Reportable Funds or relevant committees of the boards.
10
Personal Account Dealing Policy
4 |
Document Control |
Policy Owners | Liz Baesman/Keith Farndon | |
Author | Liz Baesman | |
Committee Approval | Ethics & Conflicts Committee | |
Date Last Reviewed | February 2018 | |
Date Due for Next Review | December 2018 |
11
Personal Account Dealing Policy
Appendix I
Covered Securities
The following securities (and derivatives thereof) are considered Covered Securities and are therefore subject to this policy:
|
Equities - listed and unlisted shares |
|
Fixed Income Instruments |
|
Corporate |
|
U.S. Guaranteed or of federally sponsored enterprises (FHLMC, FNMA, GNMA, etc.) |
|
Municipal |
|
Closely Held |
|
ADRs, EDRs and GDRs |
|
ETFs/ETNs (including Janus Henderson ETFs/ETNs) |
|
Closed-End Funds |
|
Hedge Funds |
|
Private placements and limited offerings |
|
Investment Trustsincluding Henderson Investment Trusts, REITs |
|
Investments above held in wrapped products such as ISAs, SIPPs, EIS, SEIS etc. |
Any investment that you are unsure about should be precleared
Non-Covered Securities
The following securities (and derivatives thereof) are considered Non-Covered Securities and are not subject to this policy:
|
Bank and term deposits |
|
Bonds and other direct debt instruments issued by the government of the UK, the US or other foreign governments. |
|
Premium bonds (UK specific) |
|
Derivatives trading (such as futures and options) or direct investment in: |
|
physical commodities |
|
currencies |
|
interest rates |
|
broad-based indices |
|
Regulated open-ended funds (UCITS, NURS, US Mutual Funds, Australian Managed Investment Schemes etc.) except for Reportable Funds |
Whilst the instruments above are exempt from the specific preapproval requirements and investment restrictions set out in this Policy, be aware that any type of trading that could result in a conflict of interest arising is actively discouraged. This includes high levels of trading in Non-Covered securities.
12
Personal Account Dealing Policy
Appendix II
Beneficial Ownership Guidelines
Definition of Beneficial Ownership
The Policy applies to all accounts and securities beneficially owned by you as well as accounts under your direct or indirect influence or control. Essentially this means that if you have the ability to profit, directly or indirectly, or share in any profit from a transaction, you have Beneficial Ownership. If you are unsure if an account or investment falls under your beneficial ownership, contact Compliance for further guidance.
Practical Application
You live with your parents: If you live in your parents house, but do not financially support your parents, your parents accounts and securities are not beneficially owned by you and do not require disclosure.
Your parent lives with you: If you provide financial support to your parent, your parents accounts and securities are beneficially owned by you and require disclosure.
You have an adult child living in your home: If you provide financial support to your child, your childs accounts and securities are beneficially owned by you and require disclosure.
You have a college age child: If your child is in college and you still claim the child as a dependent for tax purposes, you are the beneficial owner of their accounts and securities.
Your child has an UGMA /UTMA account: If you (or your spouse) are the custodian for the minor child, the childs accounts are beneficially owned by you. If someone other than you (or your spouse) is the custodian for your minor childs account, the account is not beneficially owned by you.
You have a domestic partner or similar co - habitation arrangement: If you contribute to the maintenance of a household and the financial support of a partner, your partners accounts and securities are beneficially owned by you and require disclosure.
You have a roommate: Generally, roommates are presumed to be temporary and therefore you have no beneficial ownership in one anothers accounts and securities.
You have power of attorney: If you have been granted power of attorney over an account, you are not the beneficial owner of the account until the time that the power of attorney has been activated.
You are the trustee and /or the beneficiary of a trust: Due to the complexity and variety of trust agreements, these situations require case-by-case review by Compliance.
13
Outside Business Activities Policy
Effective Date: October 1, 2017
Version: 1.1 |
Outside Business Activities Policy
Contents
1 | Overview | 1 | ||||
1.1 | Policy Statement | 1 | ||||
1.2 | Key principles | 1 | ||||
1.3 | Scope | 1 | ||||
1.4 | Roles and Responsibilities | 1 | ||||
1.5 | References | 2 | ||||
1.6 | Escalation Requirements | 2 | ||||
2 | Definitions | 2 | ||||
3 | Policy Requirements | 2 | ||||
3.1 | Disclosure | 3 | ||||
3.2 | Pre-Approval | 3 | ||||
3.3 | Annual Attestation | 4 | ||||
4 | Document Control | 4 |
Outside Business Activities Policy
1 |
Overview |
1.1 |
Policy Statement |
As an Employee of Janus Henderson, you have a fiduciary obligation to place the interests of the Company, our shareholders and our clients before your own in matters related to your employment. This fiduciary duty of loyalty does not end when you leave the office: your ability to act in the best interest of the Company, its shareholders and its clients may be compromised by your personal activities outside of work if those activities give rise to a perceived, actual or potential conflict of interest (conflict) or other risk.
In order to ensure that the Company adequately manages any perceived, actual or potential conflicts or other risks that might harm the Company, its shareholders or its clients, you have an obligation to first disclose any proposed Outside Business Activity (OBA) to Compliance via MyComplianceOffice. Compliance will consult with your management as necessary. Second, you must abide by the Companys determination as to whether participation in the OBA is permissible and, if so, by any conditions it places on your participation in the OBA.
1.2 |
Key principles |
|
All Employees must take responsibility for ensuring they are aware of the requirements of this Policy; |
|
Employees activities outside of work may present a conflict or other risk that could harm the Company, its shareholders or its clients; |
|
At all times the interests of the Company, its shareholders and its clients take priority over the personal activities of Employees with respect to matters related to their employment; |
|
All Employees have an obligation to disclose, and seek pre-approval for, any proposed OBAs; |
|
All Employees have an obligation to abide by the Companys decision as to whether to permit an OBA and, if so, any conditions it places on their participation in the OBA; |
|
Any OBA that involves a significant amount of time or provides a significant amount of income may present a conflict; |
|
Any OBA that is investment-related, including activities on behalf of a non-profit, may present a conflict; |
|
Any OBA that involves service on the board of directors of a publicly traded company may present a conflict and will generally not be permitted; and |
|
The OBA policy is separate from, and in addition to, other policies at the Company (e.g., the Political Activities Policy and the Conflicts of Interest Policy) which may impose additional restrictions. |
1.3 |
Scope |
This policy applies to all Employees.
1.4 |
Roles and Responsibilities |
You are required to disclose any OBAs to Compliance via MyComplianceOffice.
Compliance is responsible for:
1
Outside Business Activities Policy
|
providing training and guidance on the policy to all Employees; |
|
monitoring disclosures; |
|
approving OBAs that do not present a conflict or other risk; |
|
escalating OBAs that do present a conflict or other risk to the Ethics & Conflicts Committee and direct managers, as appropriate; and |
|
ensuring that any agreed upon controls for approved OBAs are implemented and monitored. |
Direct managers are responsible for:
|
Review of the OBA disclosure when escalated from Compliance |
|
Recommendations for approval /denial for OBA disclosures. |
The Ethics & Conflicts Committee approves or denies any escalated OBA requests and provides oversight.
1.5 |
References |
F o r m A DV P a r t 2 B, I tem 4 (Other Business Activities)
F INRA R u l e 3 2 70 (Outside Business Activities of Registered Persons)
N Y S E R u l e 3 0 3 A . 10 (Code of Business Conduct and Ethics)
F CA S Y S C 1 0 (Conflicts of Interest)
AS I C R e gu l ato r y G u i de 1 8 1 (Managing conflicts of interest)
1.6 |
Escalation Requirements |
To report violations of this policy, please follow the escalation requirements described in the Janus Henderson Risk Events Policy. You may also anonymously report violations to our i n d e pe n dent h o t l i ne p r o v i de r . Although the Company will not retaliate against anyone for making a good faith report, failure to report violations may lead to appropriate disciplinary action.
2 |
Definitions |
Employees: All employees and contractors of Janus Henderson Group plc, its subsidiaries and affiliates.
Ethics & Conflicts Committee: Governance committee comprised of senior leaders throughout Janus Henderson Group. The Committee meets quarterly or more often as needed, to review potential violations of the Personal Code of Ethics, our Code of Business Conduct and other related policies.
Janus Henderson or the Company: Janus Henderson Group plc, its affiliates and its subsidiaries.
MyComplianceOffice (MCO): The monitoring system utilized for all personal compliance disclosures including OBAs.
OBA or Outside Business Activity: Any personal activities outside of work subject to the disclosure and pre- approval requirements described in Section 3.
3 |
Policy Requirements |
2
Outside Business Activities Policy
3.1 |
Disclosure |
You are required to disclose 1, 2 , and seek pre-approval for, any of the following OBAs:
|
Serving as an employee, independent contractor, sole proprietor, officer, director or partner of a for-profit business; |
|
Serving as a director, officer or executive management of a non-profit entity or performing investment- related functions on its behalf; and |
|
Engaging in any other outside employment or activity (paid or unpaid) which may give rise to a conflict with the Company, its shareholders or clients, or other risk (e.g. operating a blog which provides financial advice). |
For clarity, you are not required to disclose service as a non-director, non-officer, non-executive management employee or volunteer for a non-profit entity, including civic organizations (e.g., your local homeowners or resident association), unless you will be performing investment-related functions on its behalf.
3.2 |
Pre-Approval |
Upon joining the Company, you should submit a request for approval in MCO before continuing any existing Outside Business Activity. Additionally, prior to commencing any new Outside Business Activity, you should submit a request for approval in MCO.
Approval process:
1. |
Compliance reviews your request. Compliance approves your OBA if it does not present any actual or potential conflict or other risk. Compliance escalates your request to the Ethics & Conflicts Committee and your direct manager, as appropriate, if the activity presents perceived, actual or potential conflict. |
2. |
If requested by Compliance, your direct manager reviews your request and provides a recommendation. |
3. |
The Ethics & Conflicts Committee reviews all requests. It may ratify or revoke any approvals granted by Compliance or your manager. It also approves or denies any requests escalated by Compliance. |
In deciding whether to approve the activity, Compliance, your direct manager and/or the Ethics & Conflicts Committee will consider whether the OBA presents any conflict or other risk and, if so, whether that conflict or risk can be effectively mitigated. Your request will not be denied without good cause. Compliance, your direct manager and/or the Ethics & Conflicts Committee may impose any conditions on your participation in the OBA reasonably necessary to manage any conflicts or risks, including but not limited to requiring periodic certifications.
As a general rule, you will not be allowed to serve on the board of directors of any publicly-traded company.
1 |
FINRA obligation: If you are a FINRA licensed person you must also disclose Outside Business Activities through Distribution Compliance |
2 |
Hong Kong SFC obligation: If you are a Hong Kong SFC licensed person, please consult with local compliance on the disclosure obligations in relation to outside directorships and other business interests. |
3
Outside Business Activities Policy
3.3 |
Annual Attestation |
You are required to keep your OBA disclosures current and accurate by promptly notifying Compliance of any relevant changes to your status (e.g., you are now serving on the investment committee) or the entitys status (e.g., the company has become, or is becoming, publicly-traded). You must attest to the accuracy and completeness of your OBA disclosures in MCO annually.
3.4 |
Policy Breaches |
Failure to adhere to any of the requirements outlined above may result in a breach of this policy. Breaches are taken very seriously by Janus Henderson Management with possible disciplinary procedures being applied including termination of employment.
4 |
Document Control |
Policy Owner |
Liz Baesman |
|
Author |
Liz Baesman |
|
Committee Approval |
Ethics & Conflicts Committee |
|
Date Last Reviewed |
October 2017 |
|
Date Due for Next Review |
December 2018 |
4
|
|
Gifts & Entertainment Received Policy
Effective Date: January 3, 2018
Version: 2.0 |
Gifts & Entertainment Received Policy
Contents
1 | Overview | 1 | ||||||
1.1 | Policy Statement | 1 | ||||||
1.2 | Key principles | 1 | ||||||
1.3 | Scope | 2 | ||||||
1.4 | Thresholds and Limits | 2 | ||||||
1.5 | Roles and Responsibilities | 2 | ||||||
1.6 | References | 2 | ||||||
1.7 | Escalation Requirements | 2 | ||||||
2 | Definitions | 3 | ||||||
3 | Policy Requirements | 4 | ||||||
3.1 | Disclosure | 4 | ||||||
3.2 | Approval and Exceptions Process | 4 | ||||||
3.3 | Attestation | 4 | ||||||
3.4 | Policy Breaches | 4 | ||||||
4 | Document Control | 5 | ||||||
Appendix I: U.S. and North America Requirements | 6 | |||||||
Appendix II: U.K. and Europe Requirements | 7 | |||||||
Appendix III: Pan-Asia Requirements | 8 |
Gifts & Entertainment Received Policy
1 |
Overview |
1.1 |
Policy Statement |
The receipt of gifts or entertainment may create the appearance of impropriety or a conflict of interest. In this context, an appearance of impropriety or conflict may occur if the gift or entertainment might reasonably be interpreted as being intended to influence the recipient. For that reason, Janus Henderson has adopted this Gifts and Entertainment Received Policy (the Policy). The Policy applies to any Gifts or Entertainment, including Business Meals, received by or offered to an Employee of Janus Henderson from a Business Relationship.
You are required to ensure that your activity does not raise any question of impropriety or impair our duty to act honestly, fairly and professionally in the best interest of our Clients. This Policy provides general principles that apply globally; however, it also recognizes and authorizes regional differences based on local regulations and customs. Those differences are addressed in the Appendices to the Policy. You are responsible for knowing and understanding both the general and more specific policies that apply to your jurisdiction and business area. This Policy should be utilized in conjunction with the Janus Henderson Conflicts of Interest Policy and the Janus Henderson Anti-Bribery and Corruption Policy . Please refer to the Janus Henderson Global Inducements Policy for guidelines on providing/giving gifts and entertainment.
1.2 |
Key principles |
In order for Janus Henderson to identify, and eliminate, mitigate and/or disclose any perceived, actual or potential conflicts of interest, you must disclose and receive approval for certain Gifts or Entertainment received, or intended to be accepted, from a Business Relationship.
You must follow the restrictions that may apply to your jurisdiction and business as set forth in the relevant regional Appendix. Employees located or doing business in the U.K. and Europe are generally limited to receiving only certain minor non-monetary benefits, including hospitality of a reasonable de minimis value, such as food and drink during a business meeting, or a conference, seminar or other training event.
Regardless of your business unit and jurisdiction, you may not :
|
Receive cash, cash equivalents, loans or personal services on behalf of Janus Henderson, even if these fall within the limits outlined in the Appendices. This includes gift cards or certificates if they can be redeemed for cash. |
|
Receive special discounts unless they are available to all other Employees (e.g., a discount coupon from a retail store). |
|
Receive a Gift or Entertainment if it could be perceived by others as a bribe or consideration for a business favour. |
|
Receive a Gift or Entertainment that would be embarrassing to you or Janus Henderson if made public. |
|
Request a Gift or Entertainment from a Business Relationship. |
1
Gifts & Entertainment Received Policy
1.3 |
Scope |
This policy applies to all Employees.
1.4 |
Thresholds and Limits |
The Appendices outline for each jurisdiction:
|
prohibitions, |
|
Disclosure Thresholds, |
|
Individual Limits, |
|
Annual Limits, and |
|
other rules or guidelines. |
The described thresholds and limits apply to the total, fair market value of the Gift or Entertainment, including meals, drinks, tickets to sporting events, etc. For the avoidance of doubt, fair market value is the greater of the value at which it could be purchased in the open market and the nominal cost to the Business Relationship. Any Annual Limits per provider apply to the combined total of all Entertainment received from the Business Relationship, including Business Meals. All Individual and Annual Limits related to Business Meals are exclusive of tax and gratuity.
1.5 |
Roles and Responsibilities |
Employees disclose Gifts or Entertainment received, adhere to the limits described in the Appendices and obtain any necessary approvals in accordance with the Policy and relevant Appendix. Compliance trains Employees on the policy. Compliance also reviews and approves any exceptions to the Policy in conjunction with direct managers. The Ethics & Conflicts Committee reviews all exceptions to the Policy.
1.6 |
References |
Rules on Gifts and Entertainment exist in all jurisdictions in which Janus Henderson operates. Main examples include:
|
F INRA R u l e 3 220 sets value limits and recordkeeping requirements for gifts/gratuities received by member firms and associated persons. |
|
The F o r e i gn Co rr upt P r a c t ic es A c t prohibits the payment or receipt of bribes, including those disguised as gifts, travel, entertainment or meals. |
|
The Code of B u s i ne s s S t a nda r ds prohibits firms and their employees from receiving any gift, entertainment or other inducement that is likely to cause, or be perceived to cause, a conflict of interest. |
|
The UK B r i b e r y A c t requires firms to ensure that any gift or entertainment received is not intended to promote corrupt or inappropriate behaviour. |
1.7 |
Escalation Requirements |
To report violations of this policy, please follow the escalation requirements described in the Janus Henderson Risk Events Policy. You may also anonymously report violations to our i nd e pe n d e nt h o t l i ne p r o vi d e r . Although the Company will not retaliate against anyone for making a good faith report, failure to report violations may lead to appropriate disciplinary action.
2
Gifts & Entertainment Received Policy
2 |
Definitions |
Annual Limit: The maximum fair market value of Gifts or Entertainment which can be received from a single provider over the course of a year, absent an exception. The Annual Limit is combined for Business Meals and Entertainment.
Business Meals: A meal which the Business Relationship pays for and whose primary purpose is to discuss business. If the meal accompanies a form of Entertainment, it should be disclosed in conjunction with the Entertainment.
Business Relationship: Any person or entity that does or seeks to do business with or on behalf of Janus Henderson or any Client.
Client: Any investment management client of Janus Henderson, including a fund.
Disclosure Threshold: The fair market value above which Gifts or Entertainment are required to be disclosed.
Employees: All employees and contractors of Janus Henderson.
Entertainment: A sporting event, concert, theatre performance, outdoor activity, reception, cocktail party, Business Meal or any other event which the Business Relationship pays for. In order to qualify as Entertainment, the Business Relationship must attend the event with you.
Ethics & Conflicts Committee: Governance committee comprised of senior leaders throughout Janus Henderson. The Committee meets regularly to review potential violations of the Personal Code of Ethics, Code of Business Conduct and other related policies.
Gift: Any item of value that is received from a current or prospective Business Relationship. Entertainment which the Business Relationship pays for, but does not attend, qualifies as a Gift.
Individual Limit: The maximum fair market value of Gifts or Entertainment which can be received from a single provider in connection with a single event, absent an exception.
Janus Henderson: Janus Henderson Group plc, its subsidiaries and affiliates.
MyComplianceOffice (MCO): The monitoring system utilized for all personal compliance disclosures, including Gifts and Entertainment received.
3
Gifts & Entertainment Received Policy
3 |
Policy Requirements |
3.1 |
Disclosure |
You are required to promptly disclose in MyComplianceOffice any Gifts or Entertainment that you receive or wish to accept to the extent they exceed the relevant Disclosure Threshold described in the Appendices.
3.2 |
Approval and Exceptions Process |
Any Gift or Entertainment whose value exceeds the relevant Individual or Annual Limit, or which is otherwise impermissible due to restrictions described in the Appendices constitutes an exception to the Policy. Compliance and your direct manager will generally review and approve or deny any exceptions to the Policy. The receipt of Gifts and Entertainment in excess of the Individual or Annual Limits by the Co-CEOs is subject to review and approval by the Chairman of the Janus Henderson Board. The receipt of Gifts and Entertainment in excess of the Individual or Annual Limits by other members of the Executive Committee is subject to review and approval by the Co-CEOs. In connection with the approval of an exception, the Company may impose additional conditions or restrictions on the receipt of the Gifts or Entertainment, including but not limited to requiring the Employee reimburse the Business Relationship or donate to an appropriate charitable organization the amount by which the fair market value of the Entertainment exceeds the relevant Individual Limit. The Ethics & Conflicts Committee will review all exceptions granted.
Employees may be invited to speak at industry conferences and events. In some situations, the speech or appearance involves travel, lodging, or other customary speaker amenities (travel accommodations). You must promptly disclose such accommodations in MyComplianceOffice and seek Compliance approval to receive such accommodations.
If, after you have received Gifts or Entertainment, you or Compliance determine the value is over the relevant Individual or Annual Limit or is otherwise inappropriate, your direct manager and Compliance will work with you to resolve issue and ensure that you remain compliant with the Policy and local regulations. In the event an Employee receives a Gift over the applicable limit, the Employee will be required to return the Gift or, at the direction of Compliance and the Ethics & Conflicts Committee, (i) pay the fair market value of the Gift and keep it; (ii) donate the Gift to charity; or (iii) destroy the Gift.
3.3 |
Attestation |
Employees are required to attest annually that they have disclosed all Gifts and Entertainment required to be disclosed and that they have not received any Gifts or Entertainment outside of the Policy. Certain members of the investment team are also required to attest monthly to their disclosures.
3.4 |
Policy Breaches |
Failure to adhere to any of the requirements outlined above may result in a breach of this Policy. Breaches are taken very seriously by Janus Henderson. Any potential violation of the provisions of the Policy will be investigated by Compliance and, if necessary, the Ethics & Conflicts Committee. If a determination is made that a violation has occurred, the Ethics & Conflicts Committee may impose an appropriate sanction in its discretion, up to and including termination of employment.
4
Gifts & Entertainment Received Policy
4 |
Document Control |
Policy Owner |
Liz Baesman/Keith Farndon |
|
Author |
Liz Baesman |
|
Committee Approval |
N/A |
|
Date Last Reviewed |
December 2017 |
|
Date Due for Next Review |
December 2018 |
5
Gifts & Entertainment Received Policy
Appendix I: U.S. and North America Requirements
Limits and Thresholds
Category |
Disclosure Threshold |
Individual Limit (per event) |
Annual Limit (per provider) |
|||
Gifts | $50 | $100 | $100 | |||
Business Meals | $50 | $300 * |
$1500 (combined) |
|||
Entertainment | $50 | $300 * |
Prohibitions
You may not receive any Entertainment that constitutes an extraordinary event, such as the Super Bowl, World Series, College Football Playoff Semi-Final and Championship games, NBA Finals, NHL Finals, etc.
Additional Restrictions for Traders and Trade Operations
Employees in Trading and Trade Operations may only accept Entertainment in the form of reasonable Business Meals. Participation in other Entertainment is allowed with permission from the applicable Head of Trading. The Employees portion of the event must be paid for by the Employee or treated as a company expense and must be documented in MyComplianceOffice with proof supporting the expense or the reimbursement to the provider.
* |
If the provider has invited you and a guest, the limit is doubled. |
6
Gifts & Entertainment Received Policy
Appendix II: U.K. and Europe Requirements
Limits and Thresholds
The FCA has prohibited the receipt of anything other than acceptable minor non-monetary benefits in connection with the provision of an investment service or an ancillary service. Therefore, Employees in the UK and Europe may receive Gifts or Entertainment that do not qualify as acceptable minor non-monetary benefits only if the Gift or Entertainment is unrelated to the provision of an investment service or an ancillary service. In making this determination, Compliance will evaluate all relevant factors, including the Employees position, the nature of the Gifts or Entertainment and the nature of the Business Relationship. By way of example, a Gift or Entertainment, such as invitations to a sporting or social event, provided by a software vendor to a member of the Finance team would likely not be related to the provision of an investment service or an ancillary service. For any Gift or Entertainment that is determined to be unrelated to the provision of an investment service or an ancillary service, the limits and thresholds described below apply. For other Gifts or Entertainment, the stricter limits and thresholds outlined in the Additional Restrictions section apply. Regardless of how a Gift or Entertainment is categorized, the approver must consider the appropriateness of the receipt of the Gift or Entertainment by the Employee when reviewing for approval.
Category |
Disclosure
Threshold |
Individual Limit
(per event) |
Annual Limit
(per provider) |
|||||||||
Gifts |
£ | 10 | £ | 75 | £ | 75 | ||||||
Business Meals |
£ | 10 | £ | 225 |
£
|
1125
(combined) |
|
|||||
Entertainment |
£ | 10 | £ | 225 |
Additional Restrictions for Front Office and Distribution Employees
The FCA has prohibited the receipt of anything other than acceptable minor non-monetary benefits in connection with the provision of an investment service or an ancillary service. Therefore, Employees in the Front Office and Distribution functions may only receive acceptable minor non-monetary benefits. Acceptable minor non-monetary benefits are those which are (i) capable of enhancing the quality of service provided to the Client; (ii) of a scale and nature that they could not be judged to impair Janus Hendersons compliance with its duty to act honestly, fairly and professionally in the best interests of the Client; and (iii) reasonable, proportionate and of a scale that is unlikely to influence Janus Hendersons behaviour in any way that is detrimental to the interests of the relevant Client. For purposes of this Policy, this is limited to participation in conferences, seminars and other training events on the benefits and features of a specific financial instrument or an investment service, and hospitality of a reasonable de minimis value, such as food and drink during a business meeting, or a conference, seminar or other training event. The following limits and thresholds apply.
Category |
Disclosure
Threshold |
Individual Limit
(per event) |
Annual Limit
(per provider) |
|||||||||
Gifts |
Not permitted | |||||||||||
Business Meals |
£ | 10 | £ | 75 | £ | 750 | ||||||
Entertainment |
Not permitted |
7
Gifts & Entertainment Received Policy
Appendix III: Pan-Asia Requirements
Limits and Thresholds
Category |
Disclosure
Threshold |
Individual
Limit (per event) |
Annual Limit
(per provider) |
|||
Australia |
||||||
Gifts |
AUD 50 | AUD 200 | AUD 200 | |||
Business Meals |
AUD 100 | AUD 250 |
AUD 1,250
(combined) |
|||
Entertainment |
AUD 50 | AUD 250 | ||||
Hong Kong & PRC |
||||||
Gifts |
HKD 300 | HKD 1,000 | HKD 1,000 | |||
Business Meals |
HKD 600 | HKD 1,500 |
HKD 7,500
(combined) |
|||
Entertainment |
HKD 300 | HKD 1,500 | ||||
Taiwan |
||||||
Gifts |
TWD 1,200 | TWD 3,000 | TWD 3,000 | |||
Business Meals |
TWD 2,400 | TWD 6,000 |
TWD 30,000
(combined) |
|||
Entertainment |
TWD 1,200 | TWD 6,000 | ||||
Japan |
||||||
Gifts |
JPY 4,000 | JPY 15,000 | JPY 15,000 | |||
Business Meals |
JPY 8,000 | JPY 20,000 |
JPY 100,000
(combined) |
|||
Entertainment |
JPY 4,000 | JPY 20,000 | ||||
Singapore |
||||||
Gifts |
SGD 50 | SGD 200 | SGD 200 | |||
Business Meals |
SGD 100 | SGD 250 |
SGD 1,250
(combined) |
|||
Entertainment |
SGD 50 | SGD 250 |
Prohibitions
Gifts of travel or accommodation cannot be accepted.
Additional Restrictions for Traders and Trade Operations
Employees in Trading and Trade Operations may only accept Entertainment in the form of reasonable Business Meals. Participation in other Entertainment is allowed with permission from the applicable Head of Trading. The Employees portion of the event must be paid for by the Employee or treated as a company expense and must be documented in MyComplianceOffice with proof supporting the expense or the reimbursement to the provider.
|
For PRC, the amount is RMB equivalent. |
|
For Taiwan, this limit applies to any Gifts received for festivals / custom convention purpose (SITCA rule). Limit applies on a case-by-case basis for each Client. |
8
|
|
Political Activities Policy
Effective Date: October 1, 2017
Version: 1.1 |
Political Activities Policy
Contents |
|
1 | Overview | 1 | ||||
1.1 | Policy Statement | 1 | ||||
1.2 | Key principles | 1 | ||||
1.3 | Scope | 1 | ||||
1.4 | Roles and Responsibilities | 2 | ||||
1.5 | References | 2 | ||||
1.6 | Escalation Requirements | 2 | ||||
2 | Definitions | 2 | ||||
3 | Policy Requirements | 3 | ||||
3.1 | Identification of Covered Associates | 3 | ||||
3.2 | Pre-Approval | 3 | ||||
3.3 | Policy Breaches | 3 | ||||
4 | Document Control | 4 |
Political Activities Policy
1 |
Overview |
1.1 |
Policy Statement |
We recognize that, as active members of the community and involved citizens, our directors, officers and employees may participate from time to time in political activities that may include contributions to political candidates. Although we encourage civic and community involvement by our directors, officers and employees, we seek to avoid any situation that could curtail our current or prospective business opportunities, raises a potential or actual conflict of interest or creates an appearance of impropriety.
This Political Activities Policy (the Policy) addresses Rule 206(4)-5 (the Rule) of the Investment Advisers Act of 1940, as amended and related recordkeeping rules regarding political activity by investment advisers and their employees who do business with government entities and the use of placement agents. Many states and local municipalities also have their own legislative and regulatory requirements regarding political activity by investment advisers who conduct business with entities under their control. This Policy is designed to address the Rule and these specific jurisdictional regulations (refer to Political Activities Policy Background for more information).
1.2 |
Key principles |
The Rule is intended to remove the connection between political contributions to state and local officials who may have influence over awarding government and public pension investment advisory business (i.e., pay-to- play practices):
|
The following individuals must request pre-approval for any political Contributions and Activities: |
|
All Janus Henderson employees |
|
All family members (i.e., a spouse, domestic partner or minor children) of Janus Henderson officers |
|
All employees must ensure they are aware of the requirements of this Policy; |
|
At all times the interests of clients, in this case Janus Henderson funds and client accounts, take priority over the personal political interests of employees; |
|
Only Covered Associates are allowed to solicit investment advisory services from Government Entities; |
|
No employee may, directly or indirectly, use a third-party to solicit investment advisory services without pre-approval from Compliance; and |
|
Employees are prohibited from performing any act which would result in a violation of this Policy whether directly or through or by any other person or means. |
1.3 |
Scope |
This Policy applies to Janus Henderson Group plc (Janus Henderson), its subsidiaries and affiliates, and their employees.
1
Political Activities Policy
1.4 |
Roles and Responsibilities |
Employees are required to request pre-approval for all Political Contributions and Activities via MyComplianceOffice.
Compliance, and Legal as necessary, will review all political activities pre-clearance requests and Candidate Political Activities Disclosure Details for potential employees before they are hired.
The Ethics & Conflicts Committee provides oversight of the policy by approving certain requests, reviewing quarterly political contribution and activity reports for potential conflicts and issuing reprimands for policy violations.
1.5 |
References |
External References:
|
Final Rule: S E C R u le 2 0 6 ( 4 )- 5 |
|
Recordkeeping Requirements: S EC R u l e 2 0 4 - 2 |
Internal References:
|
Anti-Bribery and Corruption Policy |
1.6 |
Escalation Requirements |
To report violations of this policy, please follow the escalation requirements described in the Janus Henderson Risk Events Policy. You may also anonymously report violations to our i n d e pe n dent h o t l i ne p r o v i de r . Although the Company will not retaliate against anyone for making a good faith report, failure to report violations may lead to appropriate disciplinary action.
2 |
Definitions |
Activity: Any activity that directly or indirectly supports a candidates campaign for office.
Adviser: Janus Henderson Group plc and its subsidiaries and affiliates.
Contribution : any gift, subscription, loan, advance, or deposit of money or anything of value for: (i) the purpose of influencing any election for federal, state or local office; (ii) the payment of debt incurred in connection with any such election; or (iii) transition or inaugural expenses incurred by the successful candidate for state or local office.
Covered Associate: Employees who are identified by Compliance based upon requirements of the rule including, but not limited to, members of sales teams, Compliance, Legal, Investments, Marketing, the Executive Committee and certain department heads.
2
Political Activities Policy
Government Entity : any U.S. state or local government; any agency, authority or instrumentality of a state or local government; any pool of assets sponsored by a state or local government (such as a defined benefit pension plan, separate account or general fund); and any participant-directed government plan (such as 529, 403(b), or 457 plans).
MyComplianceOffice (MCO): The monitoring system utilized for all personal compliance disclosures including Political Activity Requests.
3 |
Policy Requirements |
3.1 |
Identification of Covered Associates |
Compliance will notify individual employees of his or her status as a Covered Associate and will maintain and update these lists as necessary. Individuals may not solicit investment advisory services to Government Entities, or be promoted, transferred, or otherwise hold a Covered Associate position, unless they have been pre- approved by Compliance.
Compliance will work with Human Resources to screen potential hires and internal transfers who may be entering or exiting Covered Associate status to ascertain if their political contributions have or have not exceeded the applicable de minimis limits prescribed by the Rule or any state, local or contractual limitation.
3.2 |
Pre-Approval |
Employees should submit all requests for pre-approval to Compliance via MCO. Compliance, and Legal as necessary, will review all requests to determine whether they are permissible based on the requirements of this Policy as well as applicable federal, state and local restrictions in accordance with the Political Activities Procedures . In general, employees may make Contributions of $150 to a candidate per election, subject to Compliance approval.. If employees are unsure if a Contribution or Activity would comply with this Policy and federal, state or local requirements or require pre-approval, please consult with the Compliance or Legal Department.
All officers must also obtain written approval from Compliance before a family member (i.e., a spouse, domestic partner or minor children) makes a Contribution or engages in any political activity.
3.3 |
Policy Breaches |
Failure to adhere to any of the requirements outlined above may result in a breach of this policy. Breaches are taken very seriously by Janus Henderson Management with possible disciplinary procedures being applied including termination of employment.
3
Political Activities Policy
4 |
Document Control |
Policy Owner | Paul Seyler | |
Author | Paul Seyler | |
Committee Approval | Ethics & Conflicts Committee | |
Date Last Reviewed | July 2017 | |
Date Due for Next Review | July 2018 |
4
|
|
Personal Code of Ethics
Non-Executive Directors
Independent Fund Trustees
Effective Date: August 1, 2017
Version: 1.0 |
Personal Code of Ethics
Personal Code of Ethics Non-Executive (Outside) Directors
The following rules apply to the Non-Executive (Outside) Directors of Janus Henderson Group.
Personal Account Dealing Requirements
Janus Henderson Mutual Funds Ninety Day Rule
Trading in and out of Janus Henderson Funds within 90 days is discouraged. If you do, then you must surrender any profits resulting from the purchase and subsequent sale, or sale and subsequent purchase. The Ninety Day Rule does not apply to systematic transactions such as payroll deduction, automatic monthly investments, or 401(k) contributions. However, it does apply to all other non-systematic transactions including periodic rebalancing. Profit calculations are determined by the First-in, First-out (FIFO) method.
Trading in JHG Securities
Insider trading laws prohibit the trading of securities based on your knowledge of material, non-public information. Since you routinely have access to material, non-public information regarding JHG, you are deemed an Insider and a Restricted Person and are subject to the policies outlined below.
As a Director of JHG:
1. |
You are required to preclear any JHG transactions; |
2. |
You are prohibited from engaging in short sales of JHG; and |
3. |
You are not allowed to pledge your JHG stock shares. |
Our Policy prohibits short term trading in JHG and JHG transactions that are speculative in nature. Speculative trading is characterized by short sales, transactions in put or call options or similar derivative transactions. Janus Henderson allows you to trade in JHG shares only during the Window Period. The Window Period generally opens the day Janus Henderson publicly announces its quarterly earnings and closes at each quarter end. Unless you have received permission from Compliance, you may not trade JHG outside the Window Period. Non-discretionary transactions in JHG securities do not require preclearance (e.g., the grant of JHG as part of a compensation or benefit plan).
1
Personal Code of Ethics
Personal Code of Ethics Independent Fund Trustees
The following provisions apply to the Independent Trustees of the Janus Investment Fund (JIF), the Janus Aspen Series (JAS), and the Janus Detroit and Clayton Street Trusts. Interested Trustees are subject to all provisions of the Policy.
Personal Account Dealing Requirements
Disclosure Requirements
As an Independent Trustee, you must disclose to Compliance any new and existing accounts in which you have beneficial ownership through which shares of Janus Henderson Products are held. You must complete the disclosures and certify annually thereafter. In addition, you must allow your brokers or financial institutions to provide duplicate account statements to Compliance.
Trades in Covered Securities
You must refrain from trading in a Covered Security when you have knowledge of Janus Henderson trading recommendations for that security. Additionally, you must certify annually that you adhered to this requirement.
Janus Henderson Mutual Funds Ninety Day Rule for Trustees of JIF/JAS
Trading in and out of Janus Henderson Funds within 90 days is discouraged. If you do, then you must surrender any profits resulting from the purchase and subsequent sale, or sale and subsequent purchase. The Ninety Day Rule does not apply to systematic transactions such as payroll deduction, automatic monthly investments, or 401(k) contributions. However, it does apply to all other non-systematic transactions including periodic rebalancing. Profit calculations are determined by the First-in, First-out (FIFO) method.
JHG Securities
Independent Trustees are prohibited from owning Janus Henderson Group (JHG) securities.
Communications with the Investment Team
Janus Henderson provides regular information about investment activities in board meetings, meetings of the Trustees Investment Oversight Committee where portfolio managers meet and present to the Trustees, on the Trustee website, and ongoing communications between Janus Henderson and the Trustees. In addition, Janus Henderson personnel respond to inquiries from Trustees, particularly as they relate to general strategy considerations or economic or market conditions affecting the Funds. The mutual funds holdings disclosure policy specifically provides that, for legitimate business purposes, the Trustees may receive non-public portfolio holdings. With regard to specific holdings, however, Janus Henderson typically does not communicate specific trading or holdings information to Trustees except as set forth above and in accordance with the policy. Any pattern of repeated requests for specific trading information not in accordance with the mutual funds holdings disclosure policy will be reported to the Chief Compliance Officer.
2
Personal Code of Ethics
Gifts and Entertainment Policy for Trustees
Gifts
As an Independent Trustee, you are prohibited from soliciting gifts or entertainment from Janus Henderson. You may not receive more than $100 in gifts in a calendar year from Janus Henderson. Gifts are things of value received where there was no direct meeting with Janus Henderson.
Entertainment
You may attend Janus Henderson hosted events, (such as occasional meals, sporting events, theatre/Broadway shows, golf outings, an invitation to a reception or cocktail party or comparable entertainment where Janus Henderson personnel are in attendance). The maximum per outing is a $300 value and, if applicable, a $600 value for you and your guest. The limits apply to the total market value cost (not face value) of the outing, including meals, travel (airfare/ hotels/ cars), sporting events, limo rides, etc. The aggregate value of all such benefits may not exceed $1,500 per calendar year. These limitations do not apply to meals served in conjunction with board meetings.
3
N UVEEN C LOSED -E ND F UNDS
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENT, that the undersigned, in her capacity as a director/trustee of the above-referenced organizations listed on Appendix A hereto (the Funds), hereby constitutes and appoints MARK CZARNIECKI, DIANA R. GONZALEZ, KEVIN J. McCARTHY, CHRISTOPHER M. ROHRBACHER, MARK L. WINGET, GIFFORD R. ZIMMERMAN and ERIC F. FESS, and each of them (with full power to each of them to act alone) her true and lawful attorney-in-fact and agent, for her and on her behalf and in her name, place and stead, in any and all capacities, to sign, execute and file the Funds Registration Statements on Form N-2 under the Securities Act of 1933 and the Investment Company Act of 1940 registering shares of the Funds, including any pre-effective and post-effective amendments thereto, with all exhibits, and any and all other documents required to be filed with any regulatory authority, federal or state, relating to the registration thereof, or the issuance of shares thereof, without limitation, granting unto said attorneys, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises in order to effectuate the same as fully to all intents and purposes as she might or could do if personally present, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned director/trustee of the above-referenced organizations has hereunto set her hand this 11th day of October 2018.
/s/ Margo L. Cook |
Margo L. Cook |
N UVEEN C LOSED -E ND F UNDS
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENT, that the undersigned, in his capacity as a director/trustee of the above-referenced organizations listed on Appendix A hereto (the Funds), hereby constitutes and appoints MARK CZARNIECKI, DIANA R. GONZALEZ, KEVIN J. McCARTHY, CHRISTOPHER M. ROHRBACHER, MARK L. WINGET, GIFFORD R. ZIMMERMAN and ERIC F. FESS, and each of them (with full power to each of them to act alone) his true and lawful attorney-in-fact and agent, for him and on his behalf and in his name, place and stead, in any and all capacities, to sign, execute and file the Funds Registration Statements on Form N-2 under the Securities Act of 1933 and the Investment Company Act of 1940 registering shares of the Funds, including any pre-effective and post-effective amendments thereto, with all exhibits, and any and all other documents required to be filed with any regulatory authority, federal or state, relating to the registration thereof, or the issuance of shares thereof, without limitation, granting unto said attorneys, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises in order to effectuate the same as fully to all intents and purposes as he might or could do if personally present, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned director/trustee of the above-referenced organizations has hereunto set his hand this 11th day of October 2018.
/s/ Jack B. Evans |
Jack B. Evans |
N UVEEN C LOSED -E ND F UNDS
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENT, that the undersigned, in his capacity as a director/trustee of the above-referenced organizations listed on Appendix A hereto (the Funds), hereby constitutes and appoints MARK CZARNIECKI, DIANA R. GONZALEZ, KEVIN J. McCARTHY, CHRISTOPHER M. ROHRBACHER, MARK L. WINGET, GIFFORD R. ZIMMERMAN and ERIC F. FESS, and each of them (with full power to each of them to act alone) his true and lawful attorney-in-fact and agent, for him and on his behalf and in his name, place and stead, in any and all capacities, to sign, execute and file the Funds Registration Statements on Form N-2 under the Securities Act of 1933 and the Investment Company Act of 1940 registering shares of the Funds, including any pre-effective and post-effective amendments thereto, with all exhibits, and any and all other documents required to be filed with any regulatory authority, federal or state, relating to the registration thereof, or the issuance of shares thereof, without limitation, granting unto said attorneys, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises in order to effectuate the same as fully to all intents and purposes as he might or could do if personally present, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned director/trustee of the above-referenced organizations has hereunto set his hand this 11th day of October 2018.
/s/ William C. Hunter |
William C. Hunter |
N UVEEN C LOSED -E ND F UNDS
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENT, that the undersigned, in his capacity as a director/trustee of the above-referenced organizations listed on Appendix A hereto (the Funds), hereby constitutes and appoints MARK CZARNIECKI, DIANA R. GONZALEZ, KEVIN J. McCARTHY, CHRISTOPHER M. ROHRBACHER, MARK L. WINGET, GIFFORD R. ZIMMERMAN and ERIC F. FESS, and each of them (with full power to each of them to act alone) his true and lawful attorney-in-fact and agent, for him and on his behalf and in his name, place and stead, in any and all capacities, to sign, execute and file the Funds Registration Statements on Form N-2 under the Securities Act of 1933 and the Investment Company Act of 1940 registering shares of the Funds, including any pre-effective and post-effective amendments thereto, with all exhibits, and any and all other documents required to be filed with any regulatory authority, federal or state, relating to the registration thereof, or the issuance of shares thereof, without limitation, granting unto said attorneys, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises in order to effectuate the same as fully to all intents and purposes as he might or could do if personally present, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned director/trustee of the above-referenced organizations has hereunto set his hand this 11th day of October 2018.
/s/ Albin F. Moschner |
Albin F. Moschner |
N UVEEN C LOSED -E ND F UNDS
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENT, that the undersigned, in his capacity as a director/trustee of the above-referenced organizations listed on Appendix A hereto (the Funds), hereby constitutes and appoints MARK CZARNIECKI, DIANA R. GONZALEZ, KEVIN J. McCARTHY, CHRISTOPHER M. ROHRBACHER, MARK L. WINGET, GIFFORD R. ZIMMERMAN and ERIC F. FESS, and each of them (with full power to each of them to act alone) his true and lawful attorney-in-fact and agent, for him and on his behalf and in his name, place and stead, in any and all capacities, to sign, execute and file the Funds Registration Statements on Form N-2 under the Securities Act of 1933 and the Investment Company Act of 1940 registering shares of the Funds, including any pre-effective and post-effective amendments thereto, with all exhibits, and any and all other documents required to be filed with any regulatory authority, federal or state, relating to the registration thereof, or the issuance of shares thereof, without limitation, granting unto said attorneys, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises in order to effectuate the same as fully to all intents and purposes as he might or could do if personally present, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned director/trustee of the above-referenced organizations has hereunto set his hand this 11th day of October 2018.
/s/ John K. Nelson |
John K. Nelson |
N UVEEN C LOSED -E ND F UNDS
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENT, that the undersigned, in his capacity as a director/trustee of the above-referenced organizations listed on Appendix A hereto (the Funds), hereby constitutes and appoints MARK CZARNIECKI, DIANA R. GONZALEZ, KEVIN J. McCARTHY, CHRISTOPHER M. ROHRBACHER, MARK L. WINGET, GIFFORD R. ZIMMERMAN and ERIC F. FESS, and each of them (with full power to each of them to act alone) his true and lawful attorney-in-fact and agent, for him and on his behalf and in his name, place and stead, in any and all capacities, to sign, execute and file the Funds Registration Statements on Form N-2 under the Securities Act of 1933 and the Investment Company Act of 1940 registering shares of the Funds, including any pre-effective and post-effective amendments thereto, with all exhibits, and any and all other documents required to be filed with any regulatory authority, federal or state, relating to the registration thereof, or the issuance of shares thereof, without limitation, granting unto said attorneys, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises in order to effectuate the same as fully to all intents and purposes as he might or could do if personally present, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned director/trustee of the above-referenced organizations has hereunto set his hand this 11th day of October 2018.
/s/ William J. Schneider |
William J. Schneider |
N UVEEN C LOSED -E ND F UNDS
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENT, that the undersigned, in her capacity as a director/trustee of the above-referenced organizations listed on Appendix A hereto (the Funds), hereby constitutes and appoints MARK CZARNIECKI, DIANA R. GONZALEZ, KEVIN J. McCARTHY, CHRISTOPHER M. ROHRBACHER, MARK L. WINGET, GIFFORD R. ZIMMERMAN and ERIC F. FESS, and each of them (with full power to each of them to act alone) her true and lawful attorney-in-fact and agent, for her and on her behalf and in her name, place and stead, in any and all capacities, to sign, execute and file the Funds Registration Statements on Form N-2 under the Securities Act of 1933 and the Investment Company Act of 1940 registering shares of the Funds, including any pre-effective and post-effective amendments thereto, with all exhibits, and any and all other documents required to be filed with any regulatory authority, federal or state, relating to the registration thereof, or the issuance of shares thereof, without limitation, granting unto said attorneys, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises in order to effectuate the same as fully to all intents and purposes as she might or could do if personally present, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned director/trustee of the above-referenced organizations has hereunto set her hand this 11th day of October 2018.
/s/ Judith M. Stockdale |
Judith M. Stockdale |
N UVEEN C LOSED -E ND F UNDS
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENT, that the undersigned, in her capacity as a director/trustee of the above-referenced organizations listed on Appendix A hereto (the Funds), hereby constitutes and appoints MARK CZARNIECKI, DIANA R. GONZALEZ, KEVIN J. McCARTHY, CHRISTOPHER M. ROHRBACHER, MARK L. WINGET, GIFFORD R. ZIMMERMAN and ERIC F. FESS, and each of them (with full power to each of them to act alone) her true and lawful attorney-in-fact and agent, for her and on her behalf and in her name, place and stead, in any and all capacities, to sign, execute and file the Funds Registration Statements on Form N-2 under the Securities Act of 1933 and the Investment Company Act of 1940 registering shares of the Funds, including any pre-effective and post-effective amendments thereto, with all exhibits, and any and all other documents required to be filed with any regulatory authority, federal or state, relating to the registration thereof, or the issuance of shares thereof, without limitation, granting unto said attorneys, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises in order to effectuate the same as fully to all intents and purposes as she might or could do if personally present, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned director/trustee of the above-referenced organizations has hereunto set her hand this 11th day of October 2018.
/s/ Carole E. Stone |
Carole E. Stone |
N UVEEN C LOSED -E ND F UNDS
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENT, that the undersigned, in his capacity as a director/trustee of the above-referenced organizations listed on Appendix A hereto (the Funds), hereby constitutes and appoints MARK CZARNIECKI, DIANA R. GONZALEZ, KEVIN J. McCARTHY, CHRISTOPHER M. ROHRBACHER, MARK L. WINGET, GIFFORD R. ZIMMERMAN and ERIC F. FESS, and each of them (with full power to each of them to act alone) his true and lawful attorney-in-fact and agent, for him and on his behalf and in his name, place and stead, in any and all capacities, to sign, execute and file the Funds Registration Statements on Form N-2 under the Securities Act of 1933 and the Investment Company Act of 1940 registering shares of the Funds, including any pre-effective and post-effective amendments thereto, with all exhibits, and any and all other documents required to be filed with any regulatory authority, federal or state, relating to the registration thereof, or the issuance of shares thereof, without limitation, granting unto said attorneys, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises in order to effectuate the same as fully to all intents and purposes as he might or could do if personally present, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned director/trustee of the above-referenced organizations has hereunto set his hand this 11th day of October 2018.
/s/ Terence J. Toth |
Terence J. Toth |
N UVEEN C LOSED -E ND F UNDS
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENT, that the undersigned, in her capacity as a director/trustee of the above-referenced organizations listed on Appendix A hereto (the Funds), hereby constitutes and appoints MARK CZARNIECKI, DIANA R. GONZALEZ, KEVIN J. McCARTHY, CHRISTOPHER M. ROHRBACHER, MARK L. WINGET, GIFFORD R. ZIMMERMAN and ERIC F. FESS, and each of them (with full power to each of them to act alone) her true and lawful attorney-in-fact and agent, for her and on her behalf and in her name, place and stead, in any and all capacities, to sign, execute and file the Funds Registration Statements on Form N-2 under the Securities Act of 1933 and the Investment Company Act of 1940 registering shares of the Funds, including any pre-effective and post-effective amendments thereto, with all exhibits, and any and all other documents required to be filed with any regulatory authority, federal or state, relating to the registration thereof, or the issuance of shares thereof, without limitation, granting unto said attorneys, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises in order to effectuate the same as fully to all intents and purposes as she might or could do if personally present, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned director/trustee of the above-referenced organizations has hereunto set her hand this 11th day of October 2018.
/s/ Margaret L. Wolff |
Margaret L. Wolff |
N UVEEN C LOSED -E ND F UNDS
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENT, that the undersigned, in his capacity as a director/trustee of the above-referenced organizations listed on Appendix A hereto (the Funds), hereby constitutes and appoints MARK CZARNIECKI, DIANA R. GONZALEZ, KEVIN J. McCARTHY, CHRISTOPHER M. ROHRBACHER, MARK L. WINGET, GIFFORD R. ZIMMERMAN and ERIC F. FESS, and each of them (with full power to each of them to act alone) his true and lawful attorney-in-fact and agent, for him and on his behalf and in his name, place and stead, in any and all capacities, to sign, execute and file the Funds Registration Statements on Form N-2 under the Securities Act of 1933 and the Investment Company Act of 1940 registering shares of the Funds, including any pre-effective and post-effective amendments thereto, with all exhibits, and any and all other documents required to be filed with any regulatory authority, federal or state, relating to the registration thereof, or the issuance of shares thereof, without limitation, granting unto said attorneys, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises in order to effectuate the same as fully to all intents and purposes as he might or could do if personally present, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned director/trustee of the above-referenced organizations has hereunto set his hand this 11th day of October 2018.
/s/ Robert L. Young |
Robert L. Young |
APPENDIX A
N UVEEN A LL C AP E NERGY MLP O PPORTUNITIES F UND (JMLP) |
N UVEEN AMT-F REE M UNICIPAL V ALUE F UND (NUW) |
N UVEEN A RIZONA Q UALITY M UNICIPAL I NCOME F UND (NAZ) |
N UVEEN C ALIFORNIA AMT-F REE Q UALITY M UNICIPAL I NCOME F UND (NKX) |
N UVEEN C ALIFORNIA Q UALITY M UNICIPAL I NCOME F UND (NAC) |
N UVEEN C ALIFORNIA M UNICIPAL V ALUE F UND , I NC . (NCA) |
N UVEEN C ALIFORNIA S ELECT T AX -F REE I NCOME P ORTFOLIO (NXC) |
N UVEEN C ORE E QUITY A LPHA F UND (JCE) |
N UVEEN C REDIT S TRATEGIES I NCOME F UND (JQC) |
N UVEEN D OW 30 D YNAMIC O VERWRITE F UND (DIAX) |
N UVEEN E NERGY MLP T OTAL R ETURN F UND (JMF) |
N UVEEN E NHANCED M UNICIPAL V ALUE F UND (NEV) |
N UVEEN F LOATING R ATE I NCOME F UND (JFR) |
N UVEEN F LOATING R ATE I NCOME O PPORTUNITY F UND (JRO) |
N UVEEN H IGH I NCOME 2020 T ARGET T ERM F UND (JHY) |
N UVEEN M INNESOTA Q UALITY M UNICIPAL I NCOME F UND (NMS) |
N UVEEN M UNICIPAL H IGH I NCOME O PPORTUNITY F UND (NMZ) |
N UVEEN M UNICIPAL I NCOME F UND , I NC . (NMI) |
N UVEEN M UNICIPAL V ALUE F UND , I NC . (NUV) |
N UVEEN NASDAQ 100 D YNAMIC O VERWRITE F UND (QQQX) |
N UVEEN R EAL E STATE I NCOME F UND (JRS) |
N UVEEN S&P B UY -W RITE I NCOME F UND (BXMX) |
N UVEEN S&P 500 D YNAMIC O VERWRITE F UND (SPXX) |
N UVEEN S ELECT T AX -F REE I NCOME P ORTFOLIO (NXP) |
N UVEEN S ELECT T AX -F REE I NCOME P ORTFOLIO 2 (NXQ) |
N UVEEN S ELECT T AX -F REE I NCOME P ORTFOLIO 3 (NXR) |
N UVEEN S ENIOR I NCOME F UND (NSL) |
N UVEEN S HORT D URATION C REDIT O PPORTUNITIES F UND (JSD) |
N UVEEN T EXAS Q UALITY M UNICIPAL I NCOME F UND (NTX) |
N UVEEN V IRGINIA Q UALITY M UNICIPAL I NCOME F UND (NPV) |