840 CMR 17.00: STANDARDS OF CONDUCT FOR FIDUCIARIES AND QUALIFIED
INVESTMENT MANAGERS

      840 CMR 17.00, establishing standards of conduct for fiduciaries and qualified
investment managers is promulgated by the Public Employee Retirement
Administration Commission pursuant to M.G.L. c. 7, § 50 and M.G.L. c. 32, §§ 21
and 23. Except as may otherwise be provided by the Commission, or by
supplementary rules of a particular retirement board approved by the Commission
pursuant to 840 CMR 14.02, or by statute,
840 CMR 17.00 shall govern the conduct of all retirement board fiduciaries and
qualified investment managers. No person who is not a qualified investment
manager as defined by 840 CMR 16.01 shall provide investment advice on the
purchase and sale of investments to or manage the funds on behalf of any retirement
system.

17.01: Bonding of Persons Having Access to Retirement Board Funds

      All board members and retirement system staff shall be bonded in an amount
sufficient to provide reasonable protection against losses due to fraud and dishonesty
and each shall be bonded for no less than 10% of the amount of the fund or
$500,000. The Commission may prescribe a bond in excess of $500,000, provided
that such bond shall not exceed 10% of the amount of the fund.

17.02: Code of Ethics for Fiduciaries

      Fiduciaries shall subscribe and conform to the following code of ethics:

(1) Fiduciaries shall conduct themselves with integrity and act in an ethical manner
in their dealings with the public, retirement board, employers, employees, and
fellow fiduciaries.

(2) Fiduciaries shall conduct themselves and shall encourage other fiduciaries to
perform their functions in a professional and ethical manner that will reflect credit
on themselves and their profession.

(3) Fiduciaries shall act with competence and shall strive to maintain and improve
their competence and that of others in their profession.

(4) Fiduciaries shall use proper care and exercise independent professional
judgment.

17.03: Standards of Conduct for Fiduciaries

      Every fiduciary shall know and comply with all applicable provisions of M.G.L.
c. 268A governing the conduct of public officials and employees and shall conform
to the standards of conduct prescribed by M.G.L. c. 268A, § 23.

(1) Every fiduciary shall:
      (a) Comply with the standards set forth in 840 CMR 1.00
      (b) operate in accordance with retirement system procedures, documents and
      instruments; and
      (c) inform each retirement system qualified investment manager of the Code of
      Ethics and Standards of Conduct applicable to qualified investment managers
      pursuant to 840 CMR 17.02 and 17.04.

(2) No fiduciary shall:
      (a) receive additional compensation for services as a retirement board fiduciary
      if he or she is employed full- time by an employer whose employees are
      members of that retirement system except as otherwise provided by law;
      (b) deal with retirement system assets for his or her own account or in his or her
      own interest;
      (c) act in any manner affecting a retirement system on behalf of any person or
      organization whose interests are adverse to the interests of the system, its
      members or beneficiaries;
      (d) receive anything of value for his or her own personal account from any
      person or organization in connection with a transaction involving retirement
      system assets; or
      (e) cause a retirement system to engage in a transaction which involves, directly
      or indirectly, a sale, exchange, lease or transfer of assets to or from, or the use of
      assets by or for the benefit of, or the furnishing of goods, services or facilities to
      or by, or the lending of money or extension of credit to or by, a party in interest.
      A party in interest includes:
            1. any board member, fiduciary, employee, broker, agent or person
            providing services to the board;
            2. any organization of members of the retirement system;
            3. any corporation, partnership, or trust or estate of which or in which 10%
            or more of:
                  a. the voting stock or value of all stock of such corporation;
                  b. the interest in capital or profits of such partnership; or
                  c. the beneficial interest of such trust or estate is owned directly or
                  indirectly by persons described in 840 CMR 17.03(2)(e)1.; and
            4. any spouse, ancestor, lineal descendant, or spouse of a lineal descendant
            of any individual described in 840 CMR 17.03(2)(e)1.

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