Code of Ethics
Investment Advisers are fiduciaries that owe their undivided loyalty to their clients. Investment Advisers are trusted to represent clients’ interests in many matters, and Lattices must hold themselves to the highest standard of fairness in all such matters.
Rule 204A-1 under Advisers Act requires each registered Investment Adviser to adopt and implement a written code of ethics that contains provisions regarding:
- The Lattice’s fiduciary duty to its clients;
- Compliance with all applicable Federal Securities Laws;
- Reporting and review of personal Securities transactions and holdings;
- Reporting of violations of the code; and
- The provision of the code to all Supervised Persons.
Policies and Procedures
Code of Conduct, Fiduciary Standards, and Compliance with the Federal Securities Laws
This Code of Ethics (the “Code”) sets forth standards of conduct expected for any partner, officer, director (or other person occupying a similar status or performing similar functions), or Supervised Person of Lattice Capital Management, LLC (“Lattice” or the “Firm”) or any other person who provides investment advice on behalf of the Firm and is subject to the Firm’s supervision and control (each an “Supervised Person”)At all times, Lattice and its Supervised Persons must comply with the spirit and the letter of the Federal Securities Laws and the rules governing the capital markets. The CCO administers the Code of Ethics (or the “Code”). Lattice has engaged the services of an independent compliance consulting firm, Optima Partners LLC (“Optima”), to assist the CCO with the management of his compliance duties. All questions regarding the Code should be directed to the CCO. Supervised Persons must cooperate to the fullest extent reasonably requested by the CCO to enable (i) Lattice to comply with all applicable Federal Securities Laws and (ii) the CCO to discharge her duties under the Manual.
All Supervised Persons will act with competence, dignity, integrity, and in an ethical manner, when dealing with Clients, the public, prospects, third-party service providers and fellow Supervised Persons. Supervised Persons must use reasonable care and exercise independent professional judgment when conducting investment analysis, making investment recommendations, trading, promoting Lattice’ services, and engaging in other professional activities.
We expect all Supervised Persons to adhere to the highest standards with respect to any potential conflicts of interest with Clients. As a fiduciary, Lattice must act in its Clients’ best interests. Neither Lattice, nor any Supervised Person should ever benefit at the expense of any Client. Notify the CCO promptly about any practice that creates, or gives the appearance of, a material conflict of interest.
Supervised Persons are generally expected to discuss any perceived risks or concerns about Lattice’ business practices with the CCO.
Improper actions by Lattice or its Supervised Persons could have severe negative consequences for Lattice, its Clients and its Supervised Persons. Impropriety, or even the appearance of impropriety, could negatively impact all Supervised Persons, including people who were not involved in the problematic activities.
Supervised Persons must promptly report any improper or suspicious activities, including any suspected violations of the Code of Ethics or the Federal Securities Laws to the CCO. Issues can be reported to the CCO in person, or by telephone, email, or written letter. Reports of potential issues may be made anonymously. Any problems identified during the review will be addressed in ways that reflect Lattice’ fiduciary duty to its Clients.
A Supervised Person’s identification of a material compliance issue will be viewed favorably by Lattice’ CCO. Retaliation against any Supervised Person who reports a violation of the Code of Ethics in good faith is strictly prohibited and will be cause for corrective action, up to and including dismissal. If a Supervised Person believes that he or she has been retaliated against, he or she should notify the CCO directly.
Violations of this Code of Ethics, or the other policies and procedures set forth in the Manual, may warrant sanctions including, without limitation, requiring that personal trades be reversed, requiring the disgorgement of profits or gifts, issuing a letter of caution or warning, suspending personal trading rights, imposing a fine, suspending employment (with or without compensation), making a civil referral to the SEC, making a criminal referral, terminating employment for cause, and/or a combination of the foregoing. Violations may also subject a Supervised Person to civil, regulatory or criminal sanctions. No Supervised Person will determine whether he or she committed a violation of the Code of Ethics or impose any sanction against himself or herself. All sanctions and other actions taken will be in accordance with applicable employment laws and regulations.
For the avoidance of doubt, nothing in this Manual prohibits Supervised Persons from reporting potential violations of federal law or regulation to any governmental agency or entity, including but not limited to the Department of Justice, the SEC, or any agency’s inspector general, or from making other disclosures that are protected under the whistleblower provisions of federal law or regulation. Supervised Persons do not need prior authorization from the CCO, or any other person or entity affiliated with Lattice to make any such reports or disclosures and do not need to notify Lattice that they have made such reports or disclosures. Additionally, nothing in this Manual prohibits Supervised Persons from recovering an award pursuant to a whistleblower program of a government agency or entity.
Distribution of the Code and Acknowledgement of Receipt
Lattice will distribute this Manual, which contains the Code of Ethics, to each Supervised Person upon the commencement of employment, annually, and upon any material change to the Code of Ethics or any material change to any another portion of this Manual.
All Supervised Persons must acknowledge that they have received, read, understood, and agree to comply with the Company’s policies and procedures described in this Manual, including this Code of Ethics. Attestations will be sent out via email.
Conflicts of Interest
Conflicts of interest may exist between various individuals and entities, including Lattice, Supervised Persons, and current or prospective Clients. Any failure to identify or properly address a conflict can have severe negative repercussions for Lattice, its Supervised Persons, Clients. In some cases, the improper handling of a conflict could result in litigation and/or disciplinary action.
Lattice’ policies and procedures have been designed to identify and properly disclose, mitigate, and/or eliminate applicable conflicts of interest. However, written policies and procedures cannot address every potential conflict, so Supervised Persons must use good judgment in identifying and responding appropriately to actual or apparent conflicts. Conflicts of interest that involve Lattice and/or its Supervised Persons on one hand, and Clients on the other hand, will generally be fully disclosed and/or resolved in a way that favors the interests of Clients and/over the interests of Lattice and its Supervised Persons. If a Supervised Person believes that a conflict of interest has not been identified or appropriately addressed, that Supervised Person should promptly bring the issue to the CCO’s attention.
In some instances, conflicts of interest may arise between Clients. Responding appropriately to these types of conflicts can be challenging and may require robust disclosures if there is any appearance that one or more Clients have been unfairly disadvantaged. Supervised Persons should notify the CCO promptly if it appears that any actual or apparent conflict of interest between Clients and Lattice or its affiliated persons have not been appropriately addressed.
It may sometimes be beneficial for Lattice to be able to retroactively demonstrate that it carefully considered particular conflicts of interest. The CCO may use the attached Conflicts of Interest Log to document Lattice’ assessment of, and response to, such conflicts.
Personal Securities Transactions
Supervised Person trades should be executed in a manner consistent with our fiduciary obligations to our Clients: trades should avoid actual improprieties, as well as the appearance of impropriety. Supervised Persons’ trades must not be timed to precede orders placed for any Client, nor should trading activity be so excessive as to conflict with the Supervised Person’s ability to fulfill daily job responsibilities.
Accounts Covered by the Policies and Procedures
Lattice’ Personal Securities Transactions policies and procedures apply to all accounts holding any Securities over which Supervised Persons have any beneficial ownership interest, which typically includes accounts held by immediate family members sharing the same household, or non-Clients over which Supervised Persons exercise investment discretion. Immediate family members include children, stepchildren, grandchildren, parents, stepparents, grandparents, spouses, domestic partners, siblings, parents-in-law, and children-in-law, as well as adoptive relationships that meet the above criteria. For purposes of this Personal Securities Transactions section, the term “ Supervised Person” includes: (1) any Supervised Person who has access to nonpublic information regarding any Client’s trading, who is involved in making securities recommendations to Clients, or who has access to nonpublic securities recommendations; (2) all of Lattice’ directors, officers, and partners; (3) any other person so designated by the CCO by notice to such person; and (4) any consultant, intern, or independent contractor hired or engaged by Lattice that has access to Lattice’ nonpublic securities recommendations.
It may be possible for Supervised Persons to exclude accounts held personally or by immediate family members sharing the same household if the Supervised Person does not have any direct or indirect influence or control over the accounts, or if the Supervised Person can rebut the presumption of beneficial ownership over family members’ accounts. Supervised Persons should consult with the CCO before excluding any accounts held by immediate family members sharing the same household.
Lattice requires Supervised Persons to provide periodic reports regarding transactions and holdings in all “Reportable Securities,” which include any Security, except:
- Direct obligations of the Government of the United States;
- Bankers’ acceptances, bank certificates of deposit, commercial paper and high-quality short-term debt instruments, including repurchase agreements;
- Shares issued by money market funds;
- Shares issued by open-end investment companies registered under the Investment Company Act of 1940, other than investment companies advised or underwritten by Lattice or an affiliate;
- Interests in 529 college savings plans; and
- Shares issued by unit investment trusts that are invested exclusively in one or more open-end investment companies registered under the Investment Company Act of 1940, none of which are advised or underwritten by Lattice or an affiliate.
Exchange-traded funds, or ETFs and exchange traded notes, or ETNs, are somewhat similar to open-end registered investment companies. However, ETFs and ETNs are Reportable Securities and are subject to the reporting requirements contained in Lattice’ Personal Securities Transactions policy.
Any Supervised Person who purchases or sells virtual currency or cryptocurrency coins or tokens that are being offered, or previously were offered, as part of an initial coin offering (“ICO”), should consult with the CCO as to whether such coins or tokens would be considered Securities for purposes of this policy. If the CCO determines, based on the structure of the ICO and relevant SEC guidance, that such coins or tokens should be considered Securities, the coins or tokens will be considered Reportable Securities for purposes of this policy. For the avoidance of doubt, virtual currency or cryptocurrency coins or tokens that were created outside the context of an ICO are not deemed Securities under this policy.
Supervised Persons must pre-clear all transactions in Reportable Securities, including Initial Public Offerings (‘”) and Private Placements. Lattice may disapprove any proposed transaction, particularly if the transaction appears to pose a conflict of interest or otherwise appears improper or is on the Firm’s restricted list. Pre-clearance approval is only effective for the trading day the approval is granted.
Lattice’ investment management personnel maintain a Watch List of securities that Lattice are actively evaluating for purchase or sale in Client accounts, or about which Lattice might have received Material Nonpublic Information. The Watch List is reviewed during the weekly Investment Committee meetings and maintained as part of the meeting minutes.
The CCO will not pre-clear any personal transactions in Securities that are associated with issuers on the Watch List.
Pursuant to Lattice’s “Private Placement Policy,” Supervised Persons and their immediate family members must obtain the CCO’s written pre-approval before entering into “Private Placements.” Private Placements include investments in private investment partnerships, interests in oil and gas ventures, real estate syndications, participations in tax shelters, and shares issued prior to a public distribution.
Prior to making the initial or any follow-on investment, the Supervised Person must arrange for the CCO to review and obtain any private placement memorandum, subscription agreements or other like documents pertaining to the investment. Where confirmations and statements or other like documents are not available from the issuer, the Supervised Person must promptly inform the CCO of any changes in the investment and provide the CCO with a brief written yearly update.
Lattice must collect information regarding the personal trading activities and holdings of all Supervised Persons. Supervised Persons must submit quarterly reports regarding Securities transactions and newly opened accounts, as well as annual reports regarding holdings and existing accounts.
Quarterly Transaction Reports
Each quarter, Supervised Persons must report all Reportable Securities transactions in accounts in which they have a Beneficial Interest. Supervised Persons must also report any accounts opened during the quarter that hold any Securities (including Securities excluded from the definition of a Reportable Security). Reports regarding Securities transactions and newly opened accounts must be submitted to the CCO within 30 days of the end of each calendar quarter.
Supervised Persons must send via email all quarterly reporting statements Supervised Person Supervised Persons may use the attached Letter to a Broker-Dealer to instruct the institution hosting their accounts to send duplicate account statements automatically and directly to Lattice. The CCO must receive all such statements within 30 days of the end of each calendar quarter. Any trades that did not occur through a broker-dealer, such as the purchase of a private fund, must be reported on the Quarterly Reporting Forms.
If a Supervised Person did not have any transactions or account openings to report, this should be indicated to the CCO via email within 30 days of the end of each calendar quarter.
Initial and Annual Holdings Reports
Supervised Persons must periodically report the existence of any account that holds any Securities (including Securities excluded from the definition of a Reportable Security), as well as all Reportable Securities holdings. Reports regarding accounts and holdings must be submitted to the CCO on or before February 14th of each year, and within 10 days of an individual first becoming a Supervised Person. Annual reports must be current as of December 31st; initial reports must be current as of a date no more than 45 days prior to the date that the person became a Supervised Person.
Initial and annual reports must disclose the existence of all accounts that hold any Securities, even if none of those Securities fall within the definition of a “Reportable Security.”
If a Supervised Person does not have any holdings and/or accounts to report, this should be indicated as part of the compliance attestations within 10 days of becoming a Supervised Person and as part of the annual attestations by February 14th of each year.
Supervised Person Supervised Person Exceptions from Reporting Requirements
There are limited exceptions from certain reporting requirements. Specifically, a Supervised Person is not required to submit:
- Quarterly reports for any transactions effected pursuant to an Automatic Investment Plan; or
- Any reports with respect to Securities held in accounts over which the Supervised Person had no direct or indirect influence or control, such as an account managed by an Investment Adviser on a discretionary basis.
Any investment plans or accounts that may be eligible for either of these exceptions should be brought to the attention of the CCO who will, on a case-by-case basis, determine whether the plan or account qualifies for an exception. In making this determination, the CCO may ask for supporting documentation, such as a copy of the Automatic Investment Plan, a copy of the discretionary account management agreement and/or a written certification from the unaffiliated Investment Adviser and may provide Supervised Persons with the exact wording and a clear definition of “no direct or indirect influence or control” that the Lattice consistently applies to all Supervised Persons. On a sample basis, the CCO may request reports on holdings and/or transactions made in the trust or discretionary account to identify transactions that would have been prohibited pursuant to Lattice’ Code, absent reliance on the reporting exception. Supervised Persons who claim they have no direct or indirect influence or control over an account are also required to complete the attached Exempt Accounts Certification upon commencement of their employment and on an annual basis thereafter.
Reliance on this independent or separately managed account exception is conditioned on Lattice’ receipt of satisfactory documentary evidence (e.g., copy of advisory agreement, letter from the Broker Managing the account, etc.) as directed by the CCO. Supervised Persons should consult with the CCO before excluding any accounts, especially those held by immediate family members sharing the same household.
Personal Trading and Holdings Reviews
Lattice’ Personal Securities Transactions policies and procedures are designed to mitigate potential material conflicts of interest associated with Supervised Persons’ personal trading activities. Accordingly, the CCO will closely monitor Supervised Persons’ investment patterns to detect the following potentially abusive behavior:
- Frequent and/or short-term trades in any Security;
- Personal trading in Securities also held in a Client’s account managed by Lattice;
- Trading opposite of Client trades;
- Trading ahead of Clients; and
- Trading that appears to be based on Material Nonpublic Information.
The CCO will review all reports submitted pursuant to the Personal Securities Transactions policies and procedures for potentially abusive behavior and will compare Supervised Person trading with Clients’ trades as necessary. The CCO maintains a log of such reviews and will include a written description of any issues noted. Any personal trading that appears abusive may result in further inquiry by the CCO and/or sanctions, up to and including dismissal.
Disclosure of the Code of Ethics
Lattice will describe its Code of Ethics in Part 2A of Form ADV and, upon request, furnish Clients with a copy of the Code of Ethics. All requests for Lattice’s Code of Ethics should be directed to the CCO.