exv99wcodeeth
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F.II.1.B.
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Schwab Funds, Laudus Funds and Schwab ETFs |
Code of Business Conduct and Ethics for Principal Executive and Senior Financial Officers
Schwab Funds:
The Charles Schwab Family of Funds
Schwab Investments
Schwab Capital Trust
Schwab Annuity Portfolios
Laudus Funds:
Laudus Trust
Laudus Institutional Trust
Schwab ETFs:
Schwab Strategic Trust
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Effective Date
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October 10, 2012 |
Functional Applicability
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Business Conduct of Fund Officers |
Approver(s)
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Investment Company Board of Trustees |
Policy Owner
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Investment Company Board of Trustees |
Last Review/Update
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August 8, 2013 |
Next Approximate Review Date
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July 1, 2014 |
I. Scope
This Code of Business Conduct and Ethics (the Code) for the Schwab Funds, Laudus Funds and Schwab
ETFs (the Funds) covers the Principal Executive Officer and Principal Financial Officer and any
other officers who serve a similar function (each an Officer) of all of the investment companies
within the Funds complex and applies to their service to the Funds.
II. Introduction
The Funds are committed to the highest standards of ethical conduct. The Code consists of an
outline of policies regarding conduct pertaining to legal compliance, personal conflicts of
interest, confidentiality and privacy, and certain business practices. You are responsible for
reviewing the Code and for acting in compliance with the Code in your daily activities.
The Code is not exhaustive; it provides guidance for carrying out your responsibilities on behalf
of the Funds and observing the highest standards of ethical conduct. Because the Code does not
address every possible situation that may arise, you are responsible for exercising good judgment,
applying ethical principles, and raising questions when in doubt. Your integrity and good judgment
reflect on the Funds brand and reputation, and are the foundation of trust for our shareholder and
business relationships.
If you are unsure of what to do in any situation or how to interpret the provisions of the Code,
seek guidance before you act. Use the Funds resources, including the Chief Legal Officer or the
Chief Compliance Officer. If you feel that it is not appropriate to discuss a matter with the
Chief Legal Officer or the Chief Compliance Officer, you may contact the Ombudsperson for The
Charles Schwab Corporation.
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The information contained herein is the property of Charles
Schwab and may not be copied, used or disclosed in whole or in part,
stored in a retrieval system or transmitted in any form or by any
means (electronic, mechanical, reprographic, recording, or
otherwise) outside of Charles Schwab with prior permission of the
Mutual Funds Chief Compliance Officer or his/her designee.
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F.II.1.B.
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Schwab Funds, Laudus Funds and Schwab ETFs |
Contact Information
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Phone Number |
Chief Compliance Officer
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Michael F. Hogan
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415-667-1987 |
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Chief Legal Officer of CSIM,
Schwab Funds and Schwab
ETFs
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David Lekich
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415-667-0660 |
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Chief Legal Officer of Laudus
Funds
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Catherine MacGregor
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415-667-0650 |
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The Charles Schwab Corporation Ombudsperson
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Sam Scott Miller, Esq. Orrick Herrington & Sutcliffe LLP
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212-506-5130 |
III. Policies
In executing your responsibilities on behalf of the Funds, your conduct should reflect positively
on the Funds. A strong personal sense of ethics should always play a significant role in guiding
you towards a proper course of action. The appearance of impropriety can be as harmful to the
Funds reputation as improper conduct.
The Funds business is subject to various laws, rules and regulations, including federal securities
and state and local laws. Although you are not expected to know the details of the myriad of laws
governing our business, you are expected to be familiar with and comply with policies and
procedures that apply to your business unit and complete any required training that applies to you
(e.g., training regarding privacy or anti-money laundering).
A. Personal Conflicts of Interest
It is important that you do not place yourself in a position that would cloud your judgment in
carrying out the business affairs of the Funds. A personal conflict of interest occurs when your
private interest interferes in any way or even appears to interfere with the interests of the
Funds. You have a duty to report any material transaction or relationship to the Chief Compliance
Officer that reasonably could be expected to be or to create a conflict of interest with the Funds.
Officers, in addition to their obligation to the Funds, may also be an officer or employee of CSIM
or Schwab. As a result, this Code recognizes that the Officers will, in the normal course of their
duties (whether formally for the Funds or for CSIM, or for both), be involved in establishing
policies and implementing decisions that will have different effects on CSIM and the Funds. The
participation of the Officers in such activities is inherent in the contractual relationship
between the Funds and CSIM and is consistent with the performance by the Officers of their duties
as officers of the Funds. Thus, if performed in conformity with the provisions of the Investment
Company Act and the Investment Advisers Act, such activities will be deemed under the Code to have
been handled ethically. In addition, it is recognized by the Trustees that the Officers may also
be officers or employees of one or more other investment companies covered by this or other codes.
B. Inside Information
Do not trade on inside information or disclose inside information to anyone except those who have a
need to know it in order to fulfill their responsibilities for the Funds and in accordance with the
Funds policy. This applies to information regarding the Funds, The Charles Schwab Corporation and
its subsidiaries, and any other publicly traded company.
Generally, material information is any information that an investor would likely consider important
in deciding whether to buy, sell or hold securities or that could affect the market price of the
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The information contained herein is the property of Charles
Schwab and may not be copied, used or disclosed in whole or in part,
stored in a retrieval system or transmitted in any form or by any
means (electronic, mechanical, reprographic, recording, or
otherwise) outside of Charles Schwab with prior permission of the
Mutual Funds Chief Compliance Officer or his/her designee.
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F.II.1.B.
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Schwab Funds, Laudus Funds and Schwab ETFs |
securities. Examples include actual or estimated financial results or change in dividends;
significant discoveries or product developments; possible mergers, acquisitions or divestitures;
major changes in business strategies; obtaining or losing significant contracts; and threatened
major litigation or related developments. If you have or receive information and are unsure
whether it is within the definition of inside information or whether its release might be contrary
to a fiduciary or other obligation, contact the Chief Compliance Officer prior to disclosing any
such information.
You must not use the Funds non-public holdings or transactions information in any way to influence
your trades or the trades of other shareholders, including those of other employees, officers and
directors. Trading ahead of shareholder or the Funds transactions (frontrunning) and following
shareholder or the Funds transactions (piggybacking or shadowing) is prohibited.
C. Acceptance of Gifts or Entertainment
You must not accept gifts or entertainment from shareholders, vendors, suppliers, competitors or
other employees where they present a conflict of interest or create the appearance of impropriety.
You must adhere to the CSIM and The Charles Schwab Corporation policies regarding gifts and
entertainment, and apply the more stringent restrictions.
D. Confidentiality of Information and Privacy
Information concerning the identity of the Funds underlying shareholders and their transactions
and accounts is confidential. Such information may not be disclosed to persons working on behalf
of the Funds except as they may need to know it in order to fulfill their responsibilities to the
Funds. You may not disclose such information to anyone or any firm outside the Funds unless (i)
the outside firm needs to know the information in order to perform services for the Funds and is
bound to maintain its confidentiality; (ii) when the shareholder has consented or been given an
opportunity to request that the information not be shared; (iii) as required by law; or (iv) as
authorized by the Chief Legal Officer or Chief Compliance Officer.
The Funds are committed to safeguarding its customers privacy. We do not sell any personally
identifiable customer information. Sharing of such information with third parties is limited to
situations related to the processing and servicing of customer accounts, and to specifically
delineated exceptions in the federal privacy law. We share information with our affiliates to the
extent permitted by federal law. You must be familiar with the procedural and systemic safeguards
we maintain to protect this information.
You have the responsibility to safeguard the Funds proprietary information. Proprietary
information includes intellectual property (copyrights, trademarks or patents or trade secrets),
particular know-how (business or organizational designs, or business, marketing or service plans or
ideas) and sensitive information about the Funds (databases, records, salary information or
unpublished financial reports).
E. Protection and Use of Funds Assets
You are obligated to protect the Funds assets and ensure their efficient use. Theft, carelessness
and waste have a direct impact on the Funds. The Funds equipment should not be used for
non-Funds business, though incidental personal use may be permitted.
F. Financial Disclosures
The Funds are committed to providing full, fair, accurate, timely and understandable disclosure in
reports and documents that the Funds file with, or submit to, the Securities and Exchange
Commission and other regulatory agencies and in other public communications made by the
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The information contained herein is the property of Charles
Schwab and may not be copied, used or disclosed in whole or in part,
stored in a retrieval system or transmitted in any form or by any
means (electronic, mechanical, reprographic, recording, or
otherwise) outside of Charles Schwab with prior permission of the
Mutual Funds Chief Compliance Officer or his/her designee.
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F.II.1.B.
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Schwab Funds, Laudus Funds and Schwab ETFs |
Funds. You are required to comply with the Funds policies and procedures to provide such
full, fair, accurate, timely and understandable disclosure.
G. Conduct of Audits
Neither you nor any other person acting under your direction shall directly or indirectly take any
action to fraudulently influence, coerce, manipulate, or mislead any independent public or
certified public accountant engaged in the performance of an audit or review of the Funds
financial statements.
Types of conduct that constitute improper influence include, but are not limited to, directly or
indirectly:
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Offering or paying bribes or other financial incentives, including offering future
employment or contracts for non-audit services |
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Providing an auditor with inaccurate or misleading legal analysis |
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Threatening to cancel or canceling existing non-audit or audit engagements if the
auditor objects to the issuers accounting |
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Seeking to have a partner removed from the audit engagement because the partner objects
to the Funds accounting |
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Blackmailing |
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Making physical threats |
H. Recordkeeping
You must be familiar with the Funds record retention policies and always retain or destroy records
according to them. In the event of litigation, governmental investigation or the threat of such
action, you should consult the Chief Legal Officer or the Chief Compliance Officer regarding record
retention.
The Funds books, records and accounts must conform both to applicable legal requirements and to
the Funds internal controls and policies.
Unrecorded or off-the-books funds or assets are prohibited unless permitted by applicable law or
regulation. Business records must not contain exaggeration, derogatory remarks, guesswork, or
inappropriate characterizations of people and companies. This applies equally to email, internal
memoranda, formal reports, and all other forms of business records.
I. Sales Practices
If you transact business for shareholders, you are required to know and observe the Funds specific
policies and procedures for shareholder sales and transactions, such as the content and use of
sales materials, documentation for transactions, quotations and suitability. Likewise, if you
transact business with third parties (such as vendors or suppliers), you will be required to know
and observe the Funds policies and procedures for such transactions, such as marketing policies,
procedures for performing due diligence on third parties, and obtaining proper authorizations for
any agreements. You must be familiar with any enumerated policies and procedures governing your
sales activities and use good judgment in complying with them.
J. Competition and Fair Dealing
We operate our business fairly and honestly. We seek competitive advantage through performance and
never through unethical or illegal business practices. It is our policy to comply with anti-trust
laws. These laws are complex and not easily summarized, but at a minimum require that there be no
agreement or understanding between the Funds and their competitors that affect prices, terms or
conditions of sale or that unreasonably restrain full and fair competition. You must always
respect the rights of and deal fairly with the Funds shareholders
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The information contained herein is the property of Charles
Schwab and may not be copied, used or disclosed in whole or in part,
stored in a retrieval system or transmitted in any form or by any
means (electronic, mechanical, reprographic, recording, or
otherwise) outside of Charles Schwab with prior permission of the
Mutual Funds Chief Compliance Officer or his/her designee.
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F.II.1.B.
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Schwab Funds, Laudus Funds and Schwab ETFs |
and competitors. You must never take unfair advantage of anyone through manipulation,
concealment, abuse of privileged information, misrepresentation of material facts, or any other
unfair dealing practice.
K. Prohibition of Bribery and Kickbacks
Our policies prohibit bribery or kickbacks of any kind and to anyone in the conduct of our
business. The U.S. government has a number of laws and regulations applicable specifically to
business gratuities that may be offered to or accepted by U.S. and foreign government personnel.
The promise, offer or delivery to an official or employee of the U.S. government or an official,
employee or candidate of a foreign government of a gift, favor, payment or other gratuity in
violation of these rules would not only violate the Funds policy but could also be a criminal
offense. Similarly, federal law, as well as the laws of many states, prohibits engaging in
commercial bribery. Commercial bribery involves soliciting, demanding or agreeing to accept
anything of value from any person intending to influence or be rewarded in connection with any
business or transaction, and prohibits all such behavior, for example, with respect to vendors,
competitors, shareholders, and government employees.
L. Waivers
Waivers of the Code may be made only by the Trustees, and will be promptly disclosed publicly as
required by law.
M. Code Amendments
This Code may not be amended except in written form, which is specifically approved or ratified by
a majority of the Trustees including a majority of the independent Trustees. Any amendments will,
to the extent required, be disclosed in accordance with law.
N. Confidentiality
All reports and records prepared or maintained pursuant to this Code will be considered
confidential and shall be maintained and protected accordingly. Except as otherwise required by
law or this Code, such matters shall not be disclosed to anyone other than the Trustees, CSIM, The
Charles Schwab Corporation and their respective counsel.
III. Escalation and Prohibition against Retaliation
If you know of, or reasonably believe there is, a violation of this Code, you must report that
information immediately to the Funds Chief Compliance Officer. Depending on the possible
violation, you may also be required to report it pursuant to The Charles Schwab Corporation Code of
Business Conduct and CSIM compliance policies and procedures. You should not conduct preliminary
investigations unless authorized to do so by the Compliance Department.
No Officer will be retaliated against for making a good faith complaint or for bringing
inappropriate conduct to the attention of the Funds personnel, Ombudsperson or Trustees, for
assisting another employee or applicant in making a good faith report, for cooperating in an
investigation, or for filing an administrative claim with a state or federal governmental agency.
Any Officer who in good faith raises an issue regarding a possible violation of law, regulation or
company policy or any suspected illegal or unethical behavior will be protected from retaliation.
If you have violated the Code, however, making a report will not protect you from the consequences
of your actions. You can be subject to discipline up to and including termination of employment if
you violate the Code or fail to report violations that come to your attention.
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The information contained herein is the property of Charles
Schwab and may not be copied, used or disclosed in whole or in part,
stored in a retrieval system or transmitted in any form or by any
means (electronic, mechanical, reprographic, recording, or
otherwise) outside of Charles Schwab with prior permission of the
Mutual Funds Chief Compliance Officer or his/her designee.
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F.II.1.B.
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Schwab Funds, Laudus Funds and Schwab ETFs |
Any employee who engages in retaliatory conduct in violation of our policies will be subject to
disciplinary action, up to and including termination of employment. If you reasonably believe
retaliatory conduct has occurred, you must report such conduct to the Funds Chief Compliance
Officer.
IV. Procedures
A. Officers
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Read and be familiar with conduct rules outlined in the Code, and periodically review them. |
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Affirm in writing to the Trustees that you have received, read and understand the Code. |
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Annually affirm to the Trustees that you have complied with the requirements of the Code. |
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Comply with the conduct standards outlined in this Code in all dealings and actions,
including those with shareholders, the public, and vendors. |
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Report any material transaction or relationship to the Chief Compliance Officer that
reasonably could be expected to be or to create a personal conflict of interest with the Funds. |
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Report in a timely manner to the Chief Compliance Officer any conduct that may constitute a
violation of the Code, the Funds policies, or laws, rules and regulations. |
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Raise questions or concerns about conduct issues with your supervisor, the Chief Legal
Officer or Chief Compliance Officer, and seek advice when in doubt. |
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Cooperate with management during fact-finding investigations and comply with any
confidentiality rules imposed. |
B. Chief Compliance Officer
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The Chief Compliance Officer, upon becoming notified of potential violation of this Code,
will conduct, facilitate or delegate a review of the matter and will report to the Chairperson of
affected Funds Audit and Compliance Committee any violations of this Code that he or she believes
to be material. |
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The Chief Compliance Officer, upon becoming notified of a personal conflict of interest
between an Officer and the Funds that the Chief Compliance Officer deems to be material, will
report the issue to the Chairperson of the affected Funds Audit and Compliance Committee and will
work with legal and other appropriate parties to ensure that any required disclosures are made. |
C. Trustees
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The Board of Trustees will consider appropriate action to address any violations of the
Code that they deem to be material, which may include review of and appropriate modification to
applicable policies and procedures, notification to appropriate personnel of CSIM or its board,
notification to appropriate personnel of The Charles Schwab Corporation or its board, or a
recommendation to dismiss the Officer. |
VI. Regulatory Authority
This Code constitutes the sole code of ethics adopted by the Funds for purposes of Section 406 of
the Sarbanes-Oxley Act of 2002 and the rules and forms applicable to registered investment
companies thereunder. Insofar as other policies or procedures of the Funds, CSIM, Charles Schwab &
Co., Inc., The Charles Schwab Corporation or other Fund service providers govern or purport to
govern the behavior or activities of an Officer who is subject to this Code, they are superseded by
this Code to the extent that they conflict with the provisions of this Code. CSIMs, the Funds
and Charles Schwab & Co. Inc.s (as distributor) joint code of ethics under Rule 17j-1 pursuant to
the Investment Company Act of 1940 and Rule 204A-1 of the Investment Advisers Act of 1940 and
CSIMs, Charles Schwab & Co., Inc.s, and The Charles Schwab Corporations policies
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The information contained herein is the property of Charles
Schwab and may not be copied, used or disclosed in whole or in part,
stored in a retrieval system or transmitted in any form or by any
means (electronic, mechanical, reprographic, recording, or
otherwise) outside of Charles Schwab with prior permission of the
Mutual Funds Chief Compliance Officer or his/her designee.
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F.II.1.B.
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Schwab Funds, Laudus Funds and Schwab ETFs |
and procedures set forth in their respective compliance manuals and elsewhere are separate
requirements applying to the Officers and are not part of this Code.
Policy and Procedure History
Board approval dates
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Schwab Funds: June 15, 2011 |
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Laudus Funds: June 15, 2011 |
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Schwab ETFs: August 4, 2011 |
end
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The information contained herein is the property of Charles
Schwab and may not be copied, used or disclosed in whole or in part,
stored in a retrieval system or transmitted in any form or by any
means (electronic, mechanical, reprographic, recording, or
otherwise) outside of Charles Schwab with prior permission of the
Mutual Funds Chief Compliance Officer or his/her designee.
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