EXHIBIT 10.65

FORM OF CODE OF CONDUCT

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2006

Code of

Professional Conduct

E*TRADE FINANCIAL

Corporate Policies and Procedures

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COPYRIGHT 2002, 2004, 2006 E*TRADE FINANCIAL Corporation

New York, NY

Revised November 2006

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Table of Contents

 

INTRODUCTION    1

PURPOSE OF THE CODE

   1

IMPLEMENTING THE CODE

   2

Exercising Sound Business Judgment

   2

Reporting Violations

   2

Investigating Violations

   3

Records Management

   3

THE CODE OF PROFESSIONAL CONDUCT AND YOUR EMPLOYMENT

   4

Code of Professional Conduct Is Not an Employment Contract

   4

Changes to the Code of Professional Conduct

   4

Consequences of Violating the Code of Professional Conduct

   5

Acknowledging the Code of Professional Conduct

   5

Questions

   6

STANDARDS OF CONDUCT

   7

GENERAL

   7

RESPONSIBILITIES UNDER THE LAW

   8

Securities Laws, Including Financial Reporting

   8

Exchange and Self-Regulatory Organization Rules

   9

Banking Laws and Regulations

   9

Licensing and Registration

   9

Company Books and Records

   9

Antitrust and Trade Regulation Laws

   10

Foreign Corrupt Practices Act and Anti-Bribery Statutes

   11

Economic Sanctions

   11

Anti-Boycott Laws

   12

Anti-Money Laundering Laws

   12

Intellectual Property Protection

   13

Privacy Laws and Regulations

   14

Reporting Inappropriate Activity

   15

Retaliation is Prohibited

   15

DEALING WITH THIRD PARTIES

   15

Authority to Act on Behalf of E*TRADE FINANCIAL

   15

Conflicts of Interest

   16

Gifts to and from Customers, Suppliers and Others

   17

Selecting Suppliers

   17

Standards of Conduct Demanded of Third Parties

   17

Requests for Legal, Financial or Tax Advice

   18

Advertising

   18

Charitable Contributions

   18

Political Action Committee

   18

Communications with the Media and other Third Parties

   18

Participation in Chat Rooms

   19

Blogging

   20

Outside Lawyers

   20

Treatment of Privileged Communications and Documents

   21

LITIGATION, INVESTIGATIONS, INQUIRIES AND COMPLAINTS

   21

Notification

   21

Cooperation

   22

Communication with Governmental and Regulatory Authorities

   23

Communication Relating to Legal and Regulatory Matters

   23

 

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DEALINGS WITH E*TRADE FINANCIAL

   24

Dealings with E*TRADE FINANCIAL’s Employees

   24

Protecting E*TRADE FINANCIAL’s Assets

   24

Use of E*TRADE FINANCIAL’s Information and Communications Systems

   25

Monitoring of Communications and Files

   26

Disputes with E*TRADE FINANCIAL

   26

Substance Abuse

   27

Post-Termination Obligations of Employees

   27

NON-DISCRIMINATION AND ANTI-HARASSMENT POLICY

   28

Equal Employment Opportunities

   28

Discrimination and Harassment Are Against Company Policy and Are Illegal

   28

Definition of Harassment

   29

Workplace Violence Is Prohibited

   30

Retaliation Is Prohibited

   30

Individuals Covered

   31

Reporting an Incident

   31

Important Notice to All U.S. Employees

   31

Investigation of Allegations

   31

Consequences of Inappropriate Behavior

   32

HANDLING PROPRIETARY AND CONFIDENTIAL INFORMATION

   33

Definition of Proprietary Information

   33

Definition of Confidential Information

   34

Guidelines for Accepting Proprietary or Confidential Information

   35

Confidentiality Agreements

   35

Using Proprietary or Confidential Information

   35

Handling Materials Containing Proprietary or Confidential Information

   36

Communicating Proprietary or Confidential Information

   36

Disposal of Proprietary or Confidential Waste

   37

Proprietary or Confidential Information Concerning Securities

   37

Confidentiality Obligations to Previous Employers and other Third Parties

   37

Ownership of Intellectual Property

   38

Post-Employment Use of Proprietary or Confidential Information

   38

Preventing Improper Use of Proprietary or Confidential Information

   38

TREATMENT OF INSIDE INFORMATION

   40

POLICY ON THE TREATMENT OF INSIDE INFORMATION

   40

Definition of Inside Information

   40

Prohibited Uses of Inside Information

   41

Guidelines for Information about E*TRADE FINANCIAL

   41

Handling Rumors

   41

Consequences of Misusing Inside Information

   41

The Restricted List

   42

OUTSIDE BUSINESS ACTIVITIES

   43

Obtaining Approval

   43

Industry-Related Organizations

   44

Residential Boards and Charities

   44

EMPLOYEE TRADING

   45

Trading Policies of Specific Business Units and Departments

   45

Accounts Covered by this Policy

   45

Maintenance of Securities Accounts at E*TRADE FINANCIAL

   46

 

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Exceptions to this Policy

   46

Consequences of Inappropriate Employee Trading

   46

GENERAL RULES FOR EMPLOYEE TRADING

   47

Trading on Inside Information

   47

Primary and Secondary Public Offerings

   47

Obtaining Significant Interests in Public Companies or Trading in Concert with
Other Employees

   47

Futures, Options on Futures and Other Derivative Securities

   48

Information about Customer or Company Orders

   48

The Restricted List

   48

RULES FOR PARTICULAR ACCOUNTS AND TRANSACTIONS

   48

Transactions in E*TRADE FINANCIAL’s Securities

   48

Managed Accounts

   49

Money Market and Open-End Mutual Fund Accounts

   49

Dividend Reinvestment Plans (“DRIPs”)

   49

Investment Clubs

   50

Direct Purchase of U.S. Treasury Bills, Bonds or Notes

   50

PROCEDURES FOR EMPLOYEE SECURITIES ACCOUNTS

   50

Entry of Orders

   50

Review of Employee Transactions

   50

ACKNOWLEDGEMENT

   52

 

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Introduction

Purpose of the Code

Our employees, customers, potential customers, and shareholders expect the
highest degree of ethics, honesty and fairness because they place their
financial assets in our care.

The purpose of the Code of Professional Conduct (the “Code”) is to protect and
enhance the reputation and franchise of E*TRADE FINANCIAL1 by setting standards
for our behavior as its employees, officers, directors and agents.

Although the financial services industry is heavily regulated, simple adherence
to the “letter of the law” is not what our employees, customers, potential
customers, and shareholders expect. They expect the highest degree of ethics,
honesty and fairness in all of our interactions because they place their
financial assets in our care.

It is the responsibility of every employee to comply with all applicable laws
and regulations and all provisions of the Code, as well as E*TRADE FINANCIAL’s
other corporate policies and procedures, and to exercise sound judgment. Such
compliance is critical to our continued success. All Company supervisors are
responsible and accountable for monitoring the compliance of employees they
manage.

Remember that E*TRADE FINANCIAL has a number of resources available for you to
help you work through situations where you may have questions. We have
experienced professionals in our Legal department, our Compliance

 

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1 Throughout the Code, the term “E*TRADE FINANCIAL” or the “Company” refers to
E*TRADE FINANCIAL Corporation and its subsidiaries and affiliated entities,
including, but not limited to, E*TRADE Clearing LLC, E*TRADE Securities LLC, and
all other broker-dealer subsidiaries, E*TRADE Funds, E*TRADE Bank and all of its
subsidiaries and all other non-U.S. entities, unless specified otherwise.

 

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department, our Corporate Security and Fraud Management department, our Internal
Audit department and our Human Resources department who all are here to help
you, in addition to your supervisors. You can find contact and other helpful
information about these groups on Channel E*.

Implementing the Code

Exercising Sound Business Judgment

E*TRADE FINANCIAL relies on you to exercise your best judgment and highest
ethics in performing your job. When the Code articulates a specific standard of
conduct, you must conform to it. However, no code of professional conduct can
anticipate every legal or ethical issue that might arise in the course of our
business.

In areas not specifically addressed in the Code, you must conduct yourself in
the spirit of the Code, with the highest degree of ethics and with the aim of
protecting E*TRADE FINANCIAL and its reputation. You should consider both
whether a proposed course of action complies with all applicable laws and
regulations and whether it could embarrass or otherwise harm you or
E*TRADE FINANCIAL.

You must therefore avoid not only actual misconduct but also the appearance of
impropriety. Assume that any action you take will ultimately be publicized and
consider how E*TRADE FINANCIAL (and you) would be perceived. When in doubt, seek
guidance from your supervisor or the appropriate E*TRADE FINANCIAL department.

Reporting Violations

You are E*TRADE FINANCIAL’s first line of defense against civil or criminal
liability and unethical business practices.

If you know of, observe, suspect or otherwise become aware of a violation of
applicable laws or regulations or of the Code or E*TRADE FINANCIAL’s other
policies and procedures, you must report that information immediately to your
direct supervisor or another appropriate representative of E*TRADE FINANCIAL’s
senior management or, as discussed below, to ListenUp, the third party service
the Company has engaged to receive anonymous reports. If appropriate or
necessary, you must also report that information to Security, a more senior
manager or to Human Resources, Legal or Compliance. If you believe that the
person to whom you have so reported has not taken appropriate action, you must
contact Human Resources, Legal, Compliance or Internal Audit directly.

If you believe that you may have violated the law or E*TRADE FINANCIAL’s
standards, you must report your behavior to Legal, Internal Audit, Corporate

 

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Security and Fraud Management or Compliance immediately. The fact that you
reported the violation, together with the degree of cooperation you display and
whether the violation is intentional or unintentional, will be given
consideration in an investigation and any resulting disciplinary action.

Upon learning of probable or actual misconduct, supervisors must notify Human
Resources, Legal, Compliance, or Security, as appropriate, and, in consultation
with the appropriate professional, take prompt, appropriate remedial action.
Supervisors who fail to take appropriate action may be held responsible.

The Company has engaged an outside firm with a service known as ListenUp (which
you can access at www.listenupreports.com) to provide a confidential method for
you to anonymously report any suspected violations of law or otherwise
inappropriate conduct, including, but not limited to, concerns related to
corporate governance, financial reporting (including Sarbanes-Oxley Act
compliance), sexual or other harassment, discrimination, theft, fraud, or
threats to the safety of E*TRADE FINANCIAL employees. Further information for
making reports through the ListenUp service is available on Channel E*.

Unless responsible Company management learns of a problem, we cannot resolve it
appropriately. Concealing improper conduct often compounds the problem and may
make impossible or delay or hamper responses that could prevent or mitigate
actual harm to the Company and any individuals who may be subjected to the
conduct. Remember, the Company does not tolerate retaliation against any
individual who makes a report in good faith.

You should contact your supervisor, Legal or Compliance with any questions about
this Code, E*TRADE FINANCIAL’s policies and procedures, or any legal, regulatory
or ethical issues.

Investigating Violations

All reported violations of applicable laws or regulations, the Code or E*TRADE
FINANCIAL’s related policies and procedures will be promptly investigated and
will be treated confidentially to the extent possible and practicable under the
circumstances and consistent with enforcing the Code and applicable law. Please
be aware that circumstances may prevent us from keeping any matter completely
confidential, as certain disclosures may be required to conduct a complete
investigation or comply with regulatory disclosure requirements.

Records Management

E*TRADE FINANCIAL is required by law and by industry regulation to maintain its
books and records in good order and to memorialize the essential terms of its
business agreements. Details of our Records Management Policy are available

 

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on Channel E*. Every employee is required to be familiar with these policies and
procedures. Among other things, the policies and procedures require that you:

 

•   review files periodically to ensure that information is current, essential
and consistent with document retention policies and applicable law and
regulations; and

 

•   discard drafts, notes, notebooks, diaries, telephone logs, message slips and
other documents when they are no longer useful or current and not otherwise
required to be retained.

In conducting a review of your files, be careful not to discard:

 

•   documents that must be kept for specific periods of time under applicable
laws and regulations (guidance concerning which can be obtained from the Records
Management Policies and Procedures and Legal and Compliance);

 

•   documents that are the subject of a subpoena or document request; or

 

•   documents that are potentially relevant to a lawsuit or investigation that
has been or may be initiated or documents you have been instructed to retain as
part of any lawsuit or investigation.

The Code of Professional Conduct and Your Employment

Code of Professional Conduct Is Not an Employment Contract

The policies and procedures of the Code form part of the terms and conditions of
your employment. However, the Code is not a contract, express or implied,
guaranteeing progressive discipline or employment for any specific duration or
entitling you to bonuses or other forms of compensation. Except in certain
jurisdictions outside the United States, employment at E*TRADE FINANCIAL is “at
will”, meaning that either you or E*TRADE FINANCIAL may terminate this
relationship at any time, with or without cause.

Changes to the Code of Professional Conduct

E*TRADE FINANCIAL’s policies and procedures stated in this Code are subject to
change at the sole discretion of E*TRADE FINANCIAL. In addition,
E*TRADE FINANCIAL may implement additional policies and procedures with which
you must also comply. It is your responsibility to be familiar at all times with
the Code, as it may be revised or amended, and any other policies and procedures
relevant to your responsibilities as an employee of the Company.

 

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Consequences of Violating the Code of Professional Conduct

Violations of the Code may subject you to disciplinary action by E*TRADE
FINANCIAL including — without limitation — warnings, reprimands, temporary
suspensions, probation or termination of your employment. Disciplinary actions
may be taken:

 

•   against employees who authorize or participate directly, and in certain
circumstances indirectly, in actions which are a violation of applicable laws or
regulations, the Code or E*TRADE FINANCIAL’s policies and procedures;

 

•   against employees who fail to report or withhold information concerning
conduct that they knew or should have known was a violation of applicable laws
or regulations, the Code or E*TRADE FINANCIAL’s policies and procedures or
withhold information concerning a violation of which they become aware or should
have been aware;

 

•   against the violator’s supervisor(s), to the extent that the circumstances
of the violation reflect inadequate supervision or lack of diligence by the
supervisor(s);

 

•   against employees who attempt to retaliate, directly or indirectly, or
encourage others to do so, against an employee who reports an actual or
potential violation of applicable laws or regulations, the Code or E*TRADE
FINANCIAL’s policies and procedures;

 

•   against employees who knowingly make a false report of a violation.

E*TRADE FINANCIAL also must report certain activities to its regulators, which
could give rise to regulatory or criminal investigations. The penalties for
regulatory or criminal violations may include significant fines, permanent bar
from employment in the securities industry and, for criminal violations,
incarceration.

Acknowledging the Code of Professional Conduct

Abiding by the standards and procedures outlined in the Code and E*TRADE
FINANCIAL’s policies and procedures is a condition of continued employment with
E*TRADE FINANCIAL.

When you have concluded your review of this revised Code, you must complete an
acknowledgement form indicating that you have read the Code and that you
understand and agree to abide by its requirements. New employees will also be
required to acknowledge their receipt and understanding of the Code and their
commitment to comply with it. Failure to complete this acknowledgement may
result in termination of your employment. Regardless of whether you have
completed the acknowledgment, you must comply with the terms of the Code.

 

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Questions

If you have any questions at any time concerning the Code or E*TRADE FINANCIAL’s
policies and procedures, or feel the need to seek guidance with respect to a
legal or ethical question, you should consult your supervisor, Human Resources,
Internal Audit, Legal or Compliance.

 

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Standards of Conduct

General

Employees are responsible for reviewing and understanding the policies and
procedures related to their work activities and are advised that the following
summary is for general introductory purposes only.

The activities of E*TRADE FINANCIAL’s employees must always be in full
compliance with applicable laws and regulations and with the Code and
E*TRADE FINANCIAL’s related policies and procedures. If there is any doubt as to
the legality of any proposed activity, seek advice from Legal or Compliance
before the activity is undertaken.

This section of the Code outlines the general standards of conduct with respect
to specific additional issues confronting employees, such as:

 

•   E*TRADE FINANCIAL’s nondiscrimination and anti-harassment policies;

 

•   E*TRADE FINANCIAL’s policies on handling proprietary, confidential and
nonpublic (or “inside”) information;

 

•   E*TRADE FINANCIAL’s policies on participation in outside business activities
and private securities transactions;

 

•   E*TRADE FINANCIAL’s policies on political contributions;

 

•   E*TRADE FINANCIAL’s policies on employee stock trading.

 

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Responsibilities under the Law

The activities of E*TRADE FINANCIAL and its employees are regulated by
governmental entities (such as the Securities and Exchange Commission (“SEC”)
and the Office of Thrift Supervision (“OTS”)) and self-regulatory organizations
(“SROs”) (such as the NASD, Inc.). You must comply with all applicable laws and
regulations in the jurisdictions in which E*TRADE FINANCIAL does business. To
this end:

 

•   You must know and comply with the particular legal and regulatory
obligations related to your position at E*TRADE FINANCIAL, including those laws
and regulations applicable to the business unit(s) in which you work;

 

•   You must observe the highest standards of professional conduct when
conducting your business.

You may be held personally liable for improper or illegal acts committed during
your employment. Such liability could subject you to civil or criminal penalties
(fines or imprisonment), regulatory sanctions (censure, suspension or industry
bar) and disciplinary action by E*TRADE FINANCIAL, up to and including
termination of your employment.

The following is a general summary of certain laws and other rules that apply to
E*TRADE FINANCIAL. However, this summary cannot and does not address every
possible situation that could arise in the course of E*TRADE FINANCIAL’s
business. Ignorance of applicable laws, regulations or rules will excuse neither
E*TRADE FINANCIAL nor you from potential penalties or sanctions, including
internal disciplinary action. Therefore, if you are uncertain about the laws of
a particular jurisdiction or you are uncertain whether certain acts or practices
comply with the law, you must contact Legal or Compliance.

Securities Laws, Including Financial Reporting

Because E*TRADE FINANCIAL is licensed and regulated in a number of
jurisdictions, it is subject to numerous securities laws and rules, including
laws and rules regarding financial reporting, as set forth in more detail below.
You must understand and obey all applicable laws. Contact Legal or Compliance
for advice regarding any specific transactions or issues.

In particular, included among the many securities laws with which we must comply
are rules concerning the proper reporting of financial information regarding the
results of operations of E*TRADE FINANCIAL. We provide full, fair, accurate,
timely and understandable disclosure in reports that we file with or submit to
the SEC and other regulatory organizations and in other public communications.
In all of our filings we comply with generally accepted accounting principles.
Any intentional effort to violate those principles, provide

 

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misleading financial information, improperly report revenue recognition, create
“side letters”, avoid revenue recognition or expense recognition will not be
tolerated. Contact the Corporate Controller, Legal or Compliance as appropriate
for advice regarding any specific transactions or issues.

Exchange and Self-Regulatory Organization Rules

E*TRADE FINANCIAL is a member of many exchanges and SROs that issue and enforce
rules about trading in securities, commodities and related instruments, and
about other aspects of E*TRADE FINANCIAL’s business. You must be familiar with
and abide by the rules applicable to your business unit. Violations of exchange
or SRO rules can lead to fines and penalties against you and E*TRADE FINANCIAL.

Banking Laws and Regulations

Because of the nature of E*TRADE FINANCIAL’s business, including the operations
of its federally charted savings banks and the geographic reach of its business,
E*TRADE FINANCIAL is subject to numerous banking laws and regulations. You must
be familiar with and abide by the banking related laws and regulations
applicable to your business unit, if any. Violations of such rules can lead to
fines and penalties against you and E*TRADE FINANCIAL. Contact Legal or
Compliance for advice on specific transactions or issues.

Licensing and Registration

Many jurisdictions require licensing or registration of individuals who perform
certain activities in the financial services industry. These requirements apply
to many individual E*TRADE FINANCIAL employees. If you have any questions about
whether your activities require you to be licensed or registered, you should
consult with your supervisor or Compliance.

For those employees who are registered, any material changes to the information
provided at the time of registration (such as a change in name or residential
address) must be provided to Compliance immediately.

Company Books and Records

E*TRADE FINANCIAL books and records must be correct in all significant respects.
E*TRADE FINANCIAL expects you to be candid and accurate when providing
information for these books and records. Every business transaction undertaken
by E*TRADE FINANCIAL must be recorded correctly and in a timely manner in
E*TRADE FINANCIAL’s books and records. You may not make any false or misleading
entries or provide any false or misleading information.

 

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Any payment made at your request on E*TRADE FINANCIAL’s behalf must be supported
by appropriate and correct documentation. In addition, corporate records must
comply with regulatory requirements and Company policies.

Antitrust and Trade Regulation Laws

Many jurisdictions have enacted antitrust and trade regulation laws to ensure
fair competition. Generally, these laws prohibit monopolization, price-fixing,
overlapping boards of directors between certain types of companies, exclusive
dealing and “tying” arrangements, price or service discrimination that
diminishes competition, deceptive acts and unfair competition. Violations of
these laws may result in civil or criminal liability and disciplinary action by
E*TRADE FINANCIAL, up to and including termination of employment.

E*TRADE FINANCIAL operates in complex business environments and it is impossible
to anticipate each circumstance in which antitrust and trade regulation issues
may arise. Some forms of joint activities in the securities industry
(underwriting syndicates, for example) are legally permissible, but others are
not. You may confront antitrust and trade regulation issues in joint ventures,
strategic investments, revenue sharing agreements, trade industry associations,
and formal or informal meetings or conversations with competitors, suppliers and
other third parties.

Under no circumstances should you:

 

•   discuss price, product or service arrangements, or division of market share
with competitors, unless that information has previously been made publicly
available or such disclosure has been authorized by Legal and Compliance;

 

•   divulge the identity of E*TRADE FINANCIAL’s actual or potential customers or
any of the terms upon which E*TRADE FINANCIAL may work with those customers,
unless authorized by Legal and Compliance;

 

•   enter into any agreement obligating any customer either to work exclusively
with E*TRADE FINANCIAL or not to purchase securities or services from a
competitor, unless Legal and Compliance has reviewed and approved the agreement;

 

•   enter into any agreement with a third party that involves pricing
restrictions, unless Legal and Compliance has reviewed and approved the
agreement; or

 

•   illegally or improperly acquire market or competitive information.

You should contact Legal if you have questions about any antitrust or trade
regulation issue.

 

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Foreign Corrupt Practices Act and Anti-Bribery Statutes

If your job responsibilities include transactions with non-U.S. governments or
government-controlled entities, public international organizations or non-U.S.
political parties (including officials, employees or representatives of any of
these entities), you should assume that the U.S. Foreign Corrupt Practices Act
(“FCPA”) applies, regardless of where you are located.

The FCPA prohibits any payment or gift, or any offer or authorization of a
payment or gift, to these entities or individuals in order to secure any
improper business advantage, such as inducing the entity or individual to act
favorably on, or influence others to act favorably on, business proposals or
regulatory decisions. Such payments and gifts are forbidden even if they are
customary in a particular country.

The FCPA also prohibits payments to agents or intermediaries who would use the
funds for prohibited purposes (and generally prohibit doing indirectly what may
not be done directly). Therefore, E*TRADE FINANCIAL must select only reputable
agents and must exercise due care in determining the amount of any compensation
it will pay to such agents. You must not hire an agent before you have obtained
approval from Legal.

Many countries in the world are now adopting statutes similar to the FCPA. In
addition, virtually every country has a domestic anti-bribery statute, and many
government agencies have their own rules governing the acceptance of gifts,
travel or entertainment. Be aware that in some cases these statutes and rules
may prohibit conduct that the FCPA would permit. Check with Legal and Compliance
if you have any questions as to the permissibility of particular conduct under
the FCPA or under the statutes or rules of any country in which you are doing
business.

Economic Sanctions

The U.S. Office of Foreign Assets Control (“OFAC”) administers the economic
sanctions imposed by the United States against certain groups and countries, in
order to further U.S. foreign policy and national security objectives. These
trade restrictions vary depending on the nature of the particular sanction, and
may involve an absolute prohibition from doing business with a particular
country, a partial ban that covers certain types of transactions, or
transactions with specific individuals or groups. Countries that have been the
subject of such sanctions include Belarus, Cote d’Ivoire, Cuba, North Korea,
Iraq, Iran, Sudan, Syria, Liberia, Burma (Myanmar) and Zimbabwe. Persons or
groups that have been the subject of such sanctions (also known as specifically
designated nationals (“SDNs”)) include terrorists, narcotics traffickers and
certain political figures. OFAC publishes and regularly updates the lists of all
countries, groups and SDNs that are subject to trade sanctions. You may access
the current lists at http://www.treas.gov/ofac.

 

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Under no circumstances may you open an account or undertake a transaction with a
person, group or country on any OFAC list. If any person or entity on the OFAC
list attempts to open an account or conduct a transaction with E*TRADE
FINANCIAL, you must report this activity to Compliance, Security or Risk
Management. No business with any person or entity on the OFAC list will be
permitted. Countries, groups and persons subject to sanctions are periodically
added to or removed from the OFAC list. Therefore, you must keep current as to
which countries, groups and persons are subject to OFAC sanctions.

If you are located outside the U.S., different sanctions may apply. You should
consult your local Legal, Compliance or Risk Management about potential
sanctions.

Anti-Boycott Laws

U.S. law prohibits E*TRADE FINANCIAL from complying with or supporting a foreign
country’s boycott of a country “friendly” to the United States. Accordingly,
employees who are U.S. residents or nationals, wherever located, may not refuse
to do business with anyone for boycott-related reasons, furnish information
requested for boycott reasons, or otherwise support a foreign boycott not
sanctioned by the U.S.

If you are located outside the U.S., there may be local law that is the reverse
of or different from the U.S. anti-boycott law. You should consult local Legal
and Compliance with any questions about the existence or effect of such laws.

Currently, the best-known boycott with which U.S. law prohibits compliance is
the Arab boycott of Israel and its nationals. With respect to this boycott,
E*TRADE FINANCIAL is required to report annually all operations in or related to
the boycotting countries – which may include Bahrain, Egypt, Jordan, Oman, Iraq,
Qatar, Saudi Arabia, Kuwait, Syria, Lebanon, United Arab Emirates, Libya,
Republic of Yemen and others – to the U.S. Government. E*TRADE FINANCIAL must
also report promptly any request to support or furnish information about this
boycott, including any oral request received during a transaction.

Requests to support or furnish information about a boycott often arise during
negotiations of contract terms. If you receive or learn of such a request,
report it immediately to Legal.

Anti-Money Laundering Laws

U.S. anti-money laundering laws aim to prevent, detect and deter money
laundering and terrorist financing. The term “money laundering” covers any
process designed to conceal the true origin and ownership of the proceeds of

 

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criminal activities that changes the identity of illegally obtained money so
that it appears to have originated from a legitimate source. The term “terrorist
financing” covers activities that are ideological rather than profit-based,
which can include providing, collecting or using funds – whether legitimately or
illegally obtained – to carry out a terrorist act. The Bank Secrecy Act (as
amended by the USA PATRIOT Act) and other federal laws require E*TRADE FINANCIAL
to implement comprehensive anti-money laundering compliance programs, including
procedures to verify our customers’ identities, maintain records and to report
any attempts to launder funds or conduct other suspicious or unusual activities.

Money laundering and terrorist financing may occur not only in connection with
new clients but also with new or existing accounts of established clients. Thus,
you must be mindful of the problem of money laundering and terrorist financing
issues and vigilantly watch for signs of such activity. You must make every
effort to know E*TRADE FINANCIAL’s customers and to be aware at all times of
what might constitute suspicious or unusual transactions or behavior.

If you have grounds for suspecting suspicious or unusual activity relating to an
E*TRADE FINANCIAL customer or employee, you should immediately inform
Compliance, Corporate Security & Fraud Management, Legal or Risk Management. Any
act by or on behalf of E*TRADE FINANCIAL or its employees that assists in money
laundering could be a serious criminal offense. Failure to report suspicions of
money laundering to the relevant authorities also may constitute an offense and
could involve significant penalties for the Company, as well as the individuals
involved. Finally, you are prohibited from alerting a customer or other E*TRADE
FINANCIAL employees (outside of those responsible for managing the situation) of
your suspicion, as this may also be an offense in certain jurisdictions.

If you have any questions concerning these issues, contact Compliance, Corporate
Security and Fraud Management, Legal or Risk Management.

Intellectual Property Protection

Most jurisdictions have some form of legal protection for intellectual property,
including copyrights, patents, trademarks and trade secrets.

Copyright laws govern the display and reproduction of copyrighted material,
which includes most books, magazines, newspapers, websites, research reports and
software. You cannot display or reproduce copyrighted material without the
permission of the copyright owner. Because copyright laws are complex, you
should contact Legal with questions about displaying or reproducing material
subject to copyright protection.

 

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Patent laws govern the right to make, use and sell a patented invention. Certain
software applications and business methods may be subject to patent protection.
If you develop a software application, business method or invention during the
course of your employment with E*TRADE FINANCIAL, you should document the
development and consult with your direct supervisor and Legal concerning its
patentability. Similarly, before introducing a software application, business
method or invention that is similar to that of another company, particularly in
the financial services industry, you should consult with Legal about possible
infringement risks.

Trademark laws govern the use of product or brand names, service marks, and
trade names that the public associates with a particular product or service. You
must obtain prior approval of all uses of E*TRADE FINANCIAL’s trademarks,
service marks and trade names from Legal or Compliance-Advertising Review as
appropriate. In addition, before adopting any new names for product or service
offerings, you must have the approval of Legal.

Trade secret protection governs the disclosure and use of information that the
owner has endeavored to hold secret, usually because the information provides
the owner with a competitive advantage. It is not necessary that the information
be subject to copyright, patent or trademark protection in order to constitute a
trade secret.

E*TRADE FINANCIAL’s policies govern situations in which you develop, create or
receive any materials subject to intellectual property protection in the course
of your employment by E*TRADE FINANCIAL. If you have any questions concerning
these policies, review E*TRADE FINANCIAL’s policy on “Handling Proprietary and
Confidential Information,” outlined in this Code, and consult with Legal.

Privacy Laws and Regulations

E*TRADE FINANCIAL employees are required as a term of their employment to agree
to maintain the confidentiality of sensitive nonpublic customer and employee
information to which they may be exposed from time-to-time during the course of
their employment. Prior to disclosing any such information to business partners
and/or any third party, you should review internal policies and procedures, such
as E*TRADE FINANCIAL’s privacy policy and any opt-out provisions which may be
applicable. Should there still be questions about the release of the
information, you should obtain the advice of the Legal and Compliance
departments. In addition to privacy policies, laws and regulations require that
E*TRADE FINANCIAL maintain the confidentiality of customer information. Under
certain circumstances, laws may prohibit sharing of customer data even among
E*TRADE FINANCIAL entities. For questions regarding privacy, contact Legal,
Compliance or the Company’s Privacy Officer.

 

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Reporting Inappropriate Activity

If at any time you become aware of activity of any employee (including yourself)
which you believe is or may be a violation of any law, rule or regulation, or
that is a breach of our customers’ faith in our integrity, you have an
obligation to report that activity to your supervisor, Human Resources, Legal or
Compliance immediately.

Any reported incident of inappropriate activity may be investigated. Such
investigation may include individual interviews with the parties involved and,
when necessary, with individuals who may have observed the alleged conduct or
may have other relevant knowledge. The investigation may also involve the review
of any systems utilized in the alleged transaction and any relevant electronic
or written information.

Retaliation is Prohibited.

E*TRADE FINANCIAL prohibits retaliation against any individual who, in good
faith, reports any inappropriate activity or any individual who participates in,
or otherwise supports an investigation of such reports. Anyone who retaliates
against an individual under such circumstances will be subject to disciplinary
actions up to and including termination of employment.

Dealing with Third Parties

Authority to Act on Behalf of E*TRADE FINANCIAL

Do not commit E*TRADE FINANCIAL to any obligations unless you have the authority
to do so. Except with respect to trading activities performed by registered
brokers and customer service representatives on behalf of our brokerage
customers in the regular course of business, only certain individuals (typically
Members of the entity’s Board of Directors, and its Officers, Managing
Directors, EVPs, SVPs or VPs) may enter into commitments on behalf of
E*TRADE FINANCIAL, which includes signing contracts on behalf of any
E*TRADE FINANCIAL entity. All contracts must be reviewed and approved by
Procurement and/or Legal (depending on the subject of the agreement) before they
are signed. Certain contracts also require approval of the Technology
Infrastructure Committee, Procurement, Vendor Management or Finance. In
addition, various business units and departments have special approval
requirements for commitments of a certain size. You should consult with your
supervisor to learn of any such policies. The Company’s Contract Signing
Authority Policy is posted on Channel E* and you should contact Legal with any
additional questions regarding authority to bind E*TRADE FINANCIAL to
obligations with third parties.

 

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Conflicts of Interest

Separate and apart from applicable laws and regulations, you have a primary
business and ethical responsibility to E*TRADE FINANCIAL to avoid any activity
or relationship that may interfere, or have the appearance of interfering, with
the performance of your duties in a loyal, efficient manner to the best of your
ability. Such activities and relationships, called “conflicts of interest,”
include any interest, relationship or activity that is incompatible or has the
appearance of being incompatible with the best interests of E*TRADE FINANCIAL,
or which potentially affects or has the appearance of affecting your objectivity
as an employee.

Depending on your particular responsibilities, potential conflict of interest
situations may include, but are not limited to:

 

•   using E*TRADE FINANCIAL’s premises, assets, information or influence for
personal gain;

 

•   causing E*TRADE FINANCIAL to purchase services or products from family
members or businesses in which you or your family have or may have an interest,
unless approved to do so after disclosing the pertinent facts to your direct
supervisor, Legal and Compliance;

 

•   serving as a director, officer, employee, partner, consultant or agent of an
enterprise that is a present or potential supplier, or a competitor of E*TRADE
FINANCIAL; or that engages or may engage in any other business with E*TRADE
FINANCIAL;

 

•   owning a material amount of stock, being a creditor or having any other
financial interest in an enterprise described above;

 

•   having any other significant direct or indirect personal interest in a
transaction involving E*TRADE FINANCIAL;

 

•   obtaining or using for personal benefit confidential information regarding
an enterprise described above, or providing confidential information regarding
E*TRADE FINANCIAL or its business to such an enterprise;

 

•   appropriating for personal benefit a business opportunity that E*TRADE
FINANCIAL might reasonably have an interest in pursuing, without first making
the opportunity available to E*TRADE FINANCIAL; or

 

•   engaging in outside activities that detract from or interfere with the full
and timely performance by an employee of all of his or her duties for the
Company.

 

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Your involvement in certain outside activities may require the prior approval of
E*TRADE FINANCIAL. If you have any questions, consult E*TRADE FINANCIAL’s
policies on “Outside Business Activities” and contact Compliance.

Gifts to and from Customers, Suppliers and Others

You and your family members may not accept gifts or special favors (other than
of nominal value) from any person or organization with which E*TRADE FINANCIAL
has a current or potential business relationship. In addition, Company policy,
applicable laws, regulations or SRO rules may prohibit you from giving gifts in
excess of specified monetary levels (or of any value) to third parties,
including persons employed with a stock exchange, regulatory authority,
financial institution, broker, dealer, or the news or financial information
media. Contact Compliance about specific restrictions or the meaning of “nominal
value.”

When permitted by law and consistent with accepted business practices and
ethical standards, you may give gifts of nominal value to customers, suppliers
and persons who have referred business to E*TRADE FINANCIAL. No gifts should be
given if public disclosure of the circumstances would embarrass you or E*TRADE
FINANCIAL. Special restrictions often apply to gifts to and entertainment of
government employees, even of nominal value.

Customer entertainment expenses are generally not considered gifts if employees
are present, the provision of the entertainment is not routine, and the expense
is not excessive. Contact your supervisor or Compliance for further details.

You must provide complete and accurate expense reports for all gifts and
entertainment expenses paid for by E*TRADE FINANCIAL.

Selecting Suppliers

Evaluate competing suppliers by their long-term financial stability and the
price and quality of the product or service. Personal relationships should not
be (or be perceived to be) a factor in the decision to use a particular
supplier. However, you may consider E*TRADE FINANCIAL’s interest in developing
mutually productive business relationships.

Standards of Conduct Demanded of Third Parties

The Company’s vendors, suppliers, contractors and agents should be made aware
that E*TRADE FINANCIAL expects all individuals and companies with whom it does
business to operate with the same standards of ethics and compliance with the
law that we demand of ourselves, and that the Company will not tolerate the
failure to follow those standards. While no single process for such notification
is appropriate in all circumstances, Company employees should make it clear in
their dealings with third parties that we expect full compliance with ethics and
the law.

 

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Requests for Legal, Financial or Tax Advice

Customers may request legal, financial or tax advice about securities or other
issues because they assume that you are knowledgeable about those areas. Company
policy generally prohibits customer service representatives, relationship
managers, and brokers from giving legal, financial or tax advice to a customer
unless you are specifically approved and licensed to give investment advice.
Customers should be advised to consult their own counsel for legal advice and to
consult their own tax advisors for tax guidance.

Advertising

Only Marketing is authorized to arrange for advertising on E*TRADE FINANCIAL’s
behalf. All advertising must be coordinated, approved and placed by Marketing.

Charitable Contributions

E*TRADE FINANCIAL coordinates all of its charitable contribution programs
including sponsorship or participation in charity events through local Site
Leadership committees with oversight by the CEO, President and Chief
Administrative Officer and in conjunction with Board guidelines and/or
approvals.

Political Action Committee

E*TRADE FINANCIAL supports a Political Action Committee (the “E*TRADE PAC”) as
authorized by, and in accordance with, federal law. E*TRADE PAC funds are used
to make contributions to candidates for federal office. Participation or
membership in the E*TRADE PAC is completely voluntary. E*TRADE FINANCIAL does
not require any of its employees to participate in the E*TRADE PAC and no
employee should ever feel obligated in any way to participate. Participation in
the E*TRADE PAC will not help or hinder the employee in any way, and
E*TRADE FINANCIAL will not tolerate any reprisal, including physical force, job
discrimination or any threat of employment retaliation or financial disadvantage
to any employee who chooses not to participate. Any employee who feels that
anyone has placed any undue pressure on them to participate in the E*TRADE PAC
should immediately report the situation to a Human Resources representative,
Legal or the Company’s General Auditor.

Communications with the Media and other Third Parties

E*TRADE FINANCIAL values its relationships with the press and maintains routine,
ongoing contact with key publications and broadcast outlets around the world.

 

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Because our corporate communications strategy is coordinated across the
Company’s various business lines, and because our corporate messaging must be
closely managed to ensure that it is concise and consistent, only trained and
approved spokespersons, working in coordination with Corporate Communications,
are authorized to represent the Company to the Media. Refer all unsolicited
press inquiries to Corporate Communications. Do not initiate contact with the
press without consulting Corporate Communications. This includes “letters to the
editor” or comments to journalists about specific matters that relate to
E*TRADE FINANCIAL’s businesses and those that identify you as an employee of
E*TRADE FINANCIAL. With respect to press inquiries about legal or regulatory
matters or customer complaints, you should follow the procedures in the Code
entitled “Your Duties Regarding Litigation, Investigations, Inquiries and
Complaints”.

Corporate Communications must authorize participation in personal profiles or
stories about “lifestyle” in which E*TRADE FINANCIAL is referenced. If you wish
to appear in articles regarding your activities outside E*TRADE FINANCIAL
(philanthropic activities or hobbies, for example), you may do so. However, do
not identify yourself as an employee of E*TRADE FINANCIAL or use the name or
facilities of E*TRADE FINANCIAL in any way without approval from Corporate
Communications.

All press releases mentioning E*TRADE FINANCIAL must be approved by Corporate
Communications and Legal and Compliance before being released by
E*TRADE FINANCIAL, its customers, suppliers or any other organization.

You may not endorse the products or services of suppliers or customers on behalf
of E*TRADE FINANCIAL unless expressly authorized by Corporate Communications.
This includes commenting in press articles (including in-house publications),
broadcasts (including internet, radio and television) and participating in
testimonial advertising, promotional brochures or annual reports. In addition,
you may not permit third parties to use E*TRADE FINANCIAL’s name for
endorsements of their products or services without the approval of Corporate
Communications.

Participation in Chat Rooms

You may not participate in any chat room or bulletin board discussions (whether
in real-time or not in real-time) during your assigned work hours or from any
E*TRADE FINANCIAL equipment at any time without specific approval from your
supervisor. Whether at work or outside of work, you may not in any way purport
to represent the business, activities and/or opinions of E*TRADE FINANCIAL.

 

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Blogging

E*TRADE FINANCIAL understands that some employees may wish to create and
maintain personal Web logs or “blogs.” While the Company respects employees’
right to personal expression and views blogs as a personal project, employees
must also understand that a personal blog can impact the Company. Guidelines
regarding the posting to a personal blog are included in a Blogging Policy
available on Channel E*, but, in general you must be aware that you may not in
any way purport to represent the business, activities and/or opinions of
E*TRADE FINANCIAL. If you choose to discuss your employment or identify yourself
as a Company employee in any way, you must include a disclaimer that the views
expressed are not authorized by the Company nor do they necessarily reflect the
views of the Company.

Further, as more fully described elsewhere in this Code and the “Agreement
Regarding Employment and Proprietary Information and Inventions,” you must
refrain from disclosing confidential, proprietary, sensitive and/or trade secret
information of the Company and third-parties in any form, including a blog.

Harassment of other employees will not be tolerated. Blogs must not violate any
of the Company’s polices, including this Code and the Company’s Equal Employment
Opportunity and Anti-Harassment Policies. When posting to your blog, be
respectful of others. Assume that people, including co-workers and customers,
are reading your blog. Even after you delete your blog, certain technology may
still make that content available to readers. Since you can be held personally
liable for content of your blog which is deemed to be libelous, obscene,
harassing and/or defamatory, be sure to exercise common sense at all times.

The Company’s Electronic Communications Policy governs all uses of Company
computer equipment. You may not use the Company’s computers or other Company
systems to create or update your blog and you may not do so while at work or
working for the Company. Further, as described in that policy, the Company
reserves the right to monitor the use of Company computer equipment.

The Company, in its sole discretion, will determine whether a particular blog
violates Company policies. The Company further reserves the right to request
that employees refrain from commenting on topics related to the Company (or, if
necessary, suspend the blog altogether), particularly if securities or other
laws are implicated.

Should you have any questions about this policy or how it may apply to your
blog, please contact Human Resources.

Outside Lawyers

Our corporate legal strategy is coordinated across the lines of our business
units to control costs and maintain consistent legal positions. For that reason
you must

 

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obtain clearance from Legal before speaking to an outside lawyer or law firm on
behalf of E*TRADE FINANCIAL. Only Legal can retain outside lawyers or law firms
on E*TRADE FINANCIAL’s behalf.

Treatment of Privileged Communications and Documents

Treat all communications and documents seeking or receiving legal advice and
preparing for litigation as confidential and subject to attorney-client and/or
work product privileges. This includes communications with, and documents
created at the direction of, by or for, Legal or E*TRADE FINANCIAL’s outside
counsel. Communicate such information and documents within E*TRADE FINANCIAL on
a strict need-to-know basis and only at the direction of Legal. Do not disclose
such information or documents to anyone outside E*TRADE FINANCIAL unless
specifically directed to do so by the Company’s legal counsel.

Documents that are prepared for, or at the direction of, Legal or outside
counsel, should be marked “Attorney-Client Communication, Privileged and
Confidential.” Note, however, that merely marking documents “Privileged” or
“Confidential” does not provide legal protection from disclosure to a regulatory
authority or a litigation adversary unless the document satisfies the legal
requirements for the relevant privilege. Documents are not protected from
disclosure to a regulator or in litigation merely because the author copies
someone in Legal or because the author believes the documents are personal or
private. Moreover, some foreign jurisdictions do not recognize the legal concept
of privilege.

If you have any questions about whether a communication or document is
privileged, consult Legal.

Litigation, Investigations, Inquiries and Complaints

Notification

You must notify your direct supervisor and Legal and Compliance immediately in
the event any of the following incidents occur:

 

  •   At any time during your employment you are indicted, convicted of, or
plead guilty or no contest to, any felony in a domestic, military or foreign
court;

 

  •   At any time during your employment you are indicted, convicted of, or
plead guilty or no contest to, any misdemeanor that involves the purchase or
sale of any security, the taking of a false oath, the making of a false report,
bribery, perjury, burglary, larceny, theft, robbery, extortion, forgery,
counterfeiting, fraudulent concealment, embezzlement, fraudulent

 

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conversion, misappropriation of funds or securities, conspiracy to commit any of
these offenses, or any substantially equivalent activity in a domestic, military
or foreign court;

 

  •   At any time during your employment you are named as a defendant or
respondent in any securities or commodities-related civil litigation;

 

  •   At any time during your employment you are named as a defendant or
respondent in any proceeding brought by a governmental agency or self-regulatory
organization alleging a violation of any securities law or regulation;

 

  •   At any time during your employment you are found by any governmental
agency or self-regulatory organization to have violated any provision of any
securities law or regulation;

 

  •   At any time during your employment you receive a subpoena, inquiry or
request from a governmental, regulatory or administrative agency or a claimant,
plaintiff or outside attorney that involves, or has the potential for involving,
E*TRADE FINANCIAL; or

 

  •   At any time during your employment you receive a customer complaint,
whether made orally or in writing.

Please note that employees who maintain registrations with the NASD or other
SRO’s are also responsible for promptly notifying Compliance of any changes in
the information that appears on the Forms U-4. Changes in U-4 information must
be made within 30 days of the date of the change in information.

You must contact Legal or Compliance concerning the above matters at the
earliest opportunity and provide updates and reports on the status of such
matters on a regular basis. You must not take any action concerning E*TRADE
FINANCIAL in the above matters without first contacting Legal or Compliance.
Failure to do so may lead to disciplinary action, up to and including
termination of your employment.

Cooperation

During litigation, an internal investigation, or a governmental, regulatory or
administrative inquiry, audit or exam involving E*TRADE FINANCIAL, you may be
asked to provide information, including documents, testimony or statements to
Legal, Compliance, E*TRADE FINANCIAL’s outside counsel, or a governmental,
regulatory or administrative authority. You may also be asked to meet with these
entities or persons. As a term and condition of your employment, you must
consider such a request your top priority and you must cooperate fully with any
such request, in coordination with Legal and Compliance, and you must provide

 

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truthful information. You are not permitted to discuss any such request, or the
substance of any discussions or requests, with any third party, especially
including an individual who is the subject of an investigation or inquiry,
without prior approval from Legal and Compliance. If you are contacted by an
individual who is the subject of an investigation and are requested to provide
information about the investigation, you must inform the individual that you are
not permitted to disclose any information and you must contact Legal and
Compliance to inform them of the contact. Failure to do so may subject you to
civil or criminal liability and may be grounds for termination of your
employment. In addition, E*TRADE FINANCIAL may provide information, including
documents, testimony or statements, concerning you or your activities at
E*TRADE FINANCIAL in connection with requests or inquiries by governmental,
regulatory or administrative authorities. E*TRADE FINANCIAL strictly complies
with all laws relating to the privacy of your personal information and will
ordinarily provide you notice prior to producing any such information. However,
it may not be appropriate or possible to provide such notice in every
circumstance. E*TRADE FINANCIAL retains the discretion to provide any
information in accordance with applicable law.

Communication with Governmental and Regulatory Authorities

Legal and Compliance supervise all contacts with governmental and regulatory
bodies and attorneys regarding subpoenas, investigations, inquiries and
requests. Do not initiate any contacts with a governmental or regulatory body or
attorney regarding such matters without the permission of Legal or Compliance.
If you are contacted about a subpoena, investigation, inquiry or request, follow
the procedures outlined above.

E*TRADE FINANCIAL, working with the Legal Department and its outside government
affairs representatives, supervises all other contacts with government and
legislative officials. Do not initiate any contacts with such entities or
individuals without the prior consent of Legal and the Company’s designated
government affairs representatives. If you are contacted about public policy or
political matters, do not make any commitments or provide any substantive
information unless and until Legal and the government affairs representatives
have approved the response.

Communication Relating to Legal and Regulatory Matters

Litigation, investigations, inquiries and complaints involving E*TRADE FINANCIAL
or its employees may be the subject of press coverage or inquiries and
discussion inside and outside E*TRADE FINANCIAL. Consistent with the procedures
in the Code entitled “Communications with the Media,” you are not permitted to
discuss such matters with the media, unless authorized by Corporate
Communications, Legal or Compliance.

 

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Do not communicate with claimants, their attorneys, or any other third party
about Company litigation or regulatory matters. If a claimant, attorney,
regulator or government agency contacts you, you should indicate that the matter
is being handled by Legal and that you cannot discuss the matter without prior
authorization from Legal. Direct the claimant, attorney, regulator or government
agent to Legal and inform the relevant department of the contact as soon as
possible. Be aware that your conversations might be recorded or monitored
without your knowledge or consent. If asked for permission by a third party, do
not consent to the recording of any conversation without prior authorization
from Legal.

Dealings with E*TRADE FINANCIAL

Dealings with E*TRADE FINANCIAL’s Employees

When interacting with fellow employees, it is critically important to be honest,
forthcoming and fair. Each and every employee must be treated with the dignity
and respect that each of us deserves.

To help employees manage their performance, it is very important that those who
supervise them give clear direction, feedback and support to their employees.
E*TRADE FINANCIAL commits that all employees will receive performance reviews in
accordance with our current performance review policy.

Protecting E*TRADE FINANCIAL’s Assets

E*TRADE FINANCIAL’s assets include, but are not limited to, its cash and
securities, its premises, its technology, its proprietary and confidential
information, its legally privileged materials, its intellectual property (such
as software, business plans, nonpublic financial information, ideas for new
products or services, and employee and customer lists), its brand and
reputation. Specific policies with respect to protecting these assets are in
E*TRADE FINANCIAL’s policy on “Handling Proprietary and Confidential
Information,” which is outlined in this Code, as well as the “Agreement
Regarding Employment and Proprietary Information and Inventions” signed by
employees at the beginning of their employment.

In general, you must use E*TRADE FINANCIAL’s assets solely for the benefit of
E*TRADE FINANCIAL or its customers. In addition, you must safeguard these assets
by adhering to E*TRADE FINANCIAL’s security policies and procedures. Be alert to
incidents that could lead to the loss, misuse or theft of Company property.
Report all such occurrences immediately to your direct supervisor and, as
appropriate, to Security.

 

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Use of E*TRADE FINANCIAL’s Information and Communications Systems

E*TRADE FINANCIAL maintains certain systems, including telephones, voicemail,
electronic mail, computer networks, personal digital assistants and remote
access capabilities to further E*TRADE FINANCIAL’s business objectives. Any
systems to which you are provided access are to be used for Company business
purposes. You must adhere to all Company policies and any policies that your
business unit or department may set governing such usage.

Generally, you should use E*TRADE FINANCIAL’s systems only for Company business.
You may use the systems for limited personal use in accordance with E*TRADE
FINANCIAL policies governing communications and conduct generally. However, any
use for personal profit or contrary to law or Company policies is prohibited. In
addition, you may not use E*TRADE FINANCIAL’s systems to send, store, view or
forward unlawful, offensive, harassing, discriminatory or other inappropriate
materials or messages, including pornography, inappropriate jokes, political or
religious materials, violent or obscene language or images. Furthermore, you may
not send, store or forward advertisements, solicitations or promotions not
related to Company business except as expressly authorized by the Company.

Use sound judgment when composing or forwarding electronic mail, keeping in mind
that email is just as valid a form of communication as a formal business letter,
and should be crafted with the same level of decorum and formality. Such
communications could be retained on E*TRADE FINANCIAL’s systems even after you
have deleted them. In addition, such communications could be copied and
distributed widely by the recipient. Such distributions will likely include your
name, e-mail address, e-mail signature and other information that would connect
the distribution to you and E*TRADE FINANCIAL.

Generally, information made available through E*TRADE FINANCIAL’s intranet is
intended for internal use only. Please refer to the policies of your business
unit or department and contact Legal or Compliance with any questions on the use
of this information.

All software transmitted over, downloaded onto or installed on
E*TRADE FINANCIAL’s systems must be done in compliance with applicable laws and
licenses and must be approved in advance by the E*TRADE FINANCIAL Technology
Department. Unapproved software is strictly prohibited for a number of reasons,
including prevention of unauthorized or unlawful use and transmission of
computer viruses. Contact Legal with any questions.

 

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Monitoring of Communications and Files

E*TRADE FINANCIAL reserves the right to monitor and review all written and
electronic communications that employees send or receive at work or using
E*TRADE FINANCIAL’s systems, including electronic mail, voicemail, envelopes,
packages or messages delivered to the Company, including items marked “Personal
and Confidential.” Authorized persons may, as permitted by applicable law,
access your desk or workspace files, electronic mail, voicemail messages,
internet usage records, telephone records, word processing files and other
information files (for example, to monitor compliance with applicable laws,
regulations or Company policies). In addition, E*TRADE FINANCIAL may, subject to
applicable law, record and monitor conversations on Company telephones, for
example, to ensure the accuracy of transaction records, to comply with
applicable laws and regulations, to evaluate the quality of customer service or
to check compliance with Company policies.

All information stored on or transmitted using E*TRADE FINANCIAL’s systems and
all recordings and transcripts of telephone conversations are Company property.
Subject to applicable law, you have no expectation of privacy regarding the use
of any of these systems. In addition, under appropriate circumstances,
regulators may gain access to this information and material.

E*TRADE FINANCIAL records certain telephone calls with customers in many
circumstances; however you may not otherwise record any conversation, whether
over the telephone or in person, or participate in any conversation that you
know is being recorded, that relates to E*TRADE FINANCIAL’s business or
employees without the prior written approval from Legal or Compliance. You
should also be aware that third parties may record your conversations without
seeking your permission or giving prior notice.

Disputes with E*TRADE FINANCIAL

If you have a dispute with E*TRADE FINANCIAL relating to or arising out of your
employment, your first course of action should be to bring that dispute to the
attention of your supervisor, Human Resources, or any member of the Company’s
management team with whom you feel comfortable. The vast majority of issues can
be addressed by simply talking them through. You should consult with Human
Resources or Legal concerning any formal dispute resolution procedures that you
may be required to use to resolve any dispute relating to your employment,
including the termination of your employment. For example, U.S. registered
employees who have signed a Form U4 are required to arbitrate many such disputes
with E*TRADE FINANCIAL in accordance with the rules of the organizations with
which they are registered. In addition, at the beginning of their employment,
most employees signed a separate agreement specifically agreeing to arbitrate
any dispute that may arise with E*TRADE FINANCIAL. If your dispute involves
claims of discrimination or harassment, you should review the “Nondiscrimination
and Anti-Harassment Policy” outlined in this Code.

 

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Even if you are not required by contract to arbitrate a dispute with E*TRADE
FINANCIAL, you should consult with Human Resources or Legal concerning the
availability of any arbitration or mediation procedures that may have been
established by E*TRADE FINANCIAL.

Substance Abuse

E*TRADE FINANCIAL seeks to maintain a safe work environment. Therefore, you may
not sell, purchase, use, possess, or be under the influence of any illegal
substance while on E*TRADE FINANCIAL’s premises or while conducting Company
business. In addition, you must abide by any Company policies concerning the use
of alcohol at Company related or sponsored events, whether or not on
E*TRADE FINANCIAL’s premises. You should contact Human Resources with any
questions concerning such policies.

Post-Termination Obligations of Employees

You must return all identification badges and building access cards on or before
your last day of work. Personal computers, laptops, personal digital assistants,
printers and other peripheral devices, and any other equipment provided to you
in the course of your employment are and remain the property of E*TRADE
FINANCIAL and must be returned on or before the last day of your employment.

You must continue after the end of your employment to abide by E*TRADE
FINANCIAL’s policies concerning the handling of proprietary and confidential
information, the treatment of inside information and the handling of privileged
materials, as outlined in this Code and in any specific policies of your
business unit or department. If you have downloaded such information onto any
personal computer equipment, including a personal digital assistant, you are
required to delete that information permanently from the equipment.

Each business unit or department may have its own policies and procedures for
departing employees. Your supervisor and Human Resources can advise you of any
policies and procedures that apply to your particular situation. If you have any
questions about your post-termination obligations, please consult Human
Resources, Legal or Compliance.

 

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Non-Discrimination and

Anti-Harassment Policy

E*TRADE FINANCIAL promotes equal employment opportunity for all employees in
connection with recruitment, hiring, placement, selection, training,
development, promotion, transfer, demotion, discipline, compensation and
termination of employees. E*TRADE FINANCIAL is committed to providing a
workplace that is free of sexual or other harassment.

Equal Employment Opportunities

It is the policy of E*TRADE FINANCIAL to ensure equal employment opportunity
without discrimination or harassment because of race, color, national origin,
religion, sex, age, disability, citizenship, marital status, sexual orientation,
military status or any other characteristic protected by applicable law. E*TRADE
FINANCIAL is committed to a work environment in which all individuals are
treated with respect and dignity. Each individual should have the ability to
work in a professional atmosphere that promotes equal employment opportunities
and prohibits discriminatory practices, including harassment. E*TRADE FINANCIAL
expects that all relationships among persons in the workplace be businesslike
and free of bias, prejudice and harassment. If you have any questions, please
contact Human Resources.

Discrimination and Harassment Are Against Company Policy and Are Illegal

E*TRADE FINANCIAL prohibits and will not tolerate any discrimination or
harassment, whether committed by any employee (management or non-supervisory),
temporary agency employee, vendor, contractor or guest. In

 

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addition, U.S. law and the laws of most U.S. states and jurisdictions outside
the U.S. prohibit discrimination and harassment. Conduct prohibited by E*TRADE
FINANCIAL’s policy, as set forth herein, or under the law is unacceptable in the
workplace and in any work-related setting outside the workplace, such as during
business trips, business meetings and social events related to
E*TRADE FINANCIAL’s business.

Definitions of Harassment

Both sexual harassment and harassment because of any protected characteristic
are prohibited. SEXUAL HARASSMENT is defined as unwelcome sexual advances,
requests for sexual favors and other verbal or physical conduct of a sexual
nature when, for example:

 

•   submission to such conduct is made either explicitly or implicitly a term or
condition of someone’s employment;

 

•   submission to or rejection of such conduct by someone is used as the basis
for employment decisions affecting that person; or

 

•   such conduct has the purpose or effect of interfering unreasonably with
someone’s work performance or creating an intimidating, hostile or offensive
work environment.

Sexual harassment may include subtle behavior and may involve people of the same
or different sex. Depending on the circumstances, this behavior may include, but
is not limited to:

 

•   unwanted sexual advances or requests for sexual favors;

 

•   sexual jokes and innuendo;

 

•   verbal abuse of a sexual nature;

 

•   commentary about an individual’s body, sexual prowess or deficiencies;

 

•   leering, “catcalls” or touching;

 

•   obscene gestures;

 

•   display or circulation (including through electronic mail) in the workplace
of pornography or any other form of sexually suggestive written or graphic
material, objects or pictures; and

 

•   other physical, verbal or visual conduct of a sexual nature.

 

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HARASSMENT BECAUSE OF A PROTECTED CHARACTERISTIC is defined as verbal or
physical conduct that denigrates or shows hostility or aversion toward a person
(or that person’s relatives, friends or employees) because of race, color,
religion, sex, national origin, age, disability, citizenship, marital status,
military status, sexual orientation, or any other characteristic protected by
law and that:

 

•   has the purpose or effect of creating an intimidating, hostile or offensive
work environment;

 

•   has the purpose of interfering unreasonably with someone’s work performance;
or

 

•   otherwise adversely affects someone’s employment opportunities.

Harassing conduct includes, but is not limited to:

 

•   epithets, slurs or stereotyping;

 

•   threatening, intimidating or hostile acts;

 

•   denigrating jokes; and

 

•   display or circulation (including through electronic mail) in the workplace
of written or graphic material that denigrates or shows hostility or aversion
toward an individual or group.

Workplace Violence Is Prohibited

E*TRADE FINANCIAL also is committed to responding appropriately to provide its
employees with a work environment that is free of threats, intimidation and
violence. E*TRADE FINANCIAL expressly forbids any such behavior or the
possession of firearms or any other weapons when conducting Company business,
whether on or off E*TRADE FINANCIAL’s premises. Further guidance on determining
what conduct or behavior is inappropriate and in violation of Company policy, is
available from Human Resources, Security or Legal.

Retaliation Is Prohibited

E*TRADE FINANCIAL also prohibits retaliation against any individual who, in good
faith, reports discrimination, harassment, violence or concerns about
affirmative action, or any individual who participates in, or otherwise
supports, an investigation of such reports. Anyone who retaliates against an
individual under such circumstances will be subject to disciplinary action, up
to and including termination of employment.

 

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Individuals Covered

This policy applies to all applicants and employees, and prohibits harassment,
discrimination, violence and retaliation whether engaged in by fellow employees,
a supervisor or a manager. Persons not directly connected to E*TRADE FINANCIAL
(for example, outside vendors, consultants, or customers) also are expected to
comply with the policy in all respects.

Reporting an Incident

You are strongly urged to report all incidents of discrimination, harassment,
violence or retaliation, regardless of the offender’s identity or position, so
that an effective remedial action can be taken as appropriate. You may make
complaints in writing or orally.

If you believe that you have experienced conduct that is contrary to this policy
or have concerns about such matters, remember that often the first and most
effective resource is to tell the individual who engaged in the conduct that you
felt the behavior was inappropriate. Often such open communication can clear up
an innocent misunderstanding. Of course, at any time you may report the matter
to your direct supervisor, Human Resources, Legal or Security or any Business
Leader or Officer with whom you feel comfortable. You may also report the
situation anonymously through an independent third party service, ListenUp. You
can find instructions for reporting through this service on Channel E* or you
may access the site directly at www.listenupreports.com. If the problem involves
your supervisor or if there are other reasons for not approaching your
supervisor, you should bring the complaint to Human Resources, Security, or
Legal.

Important Notice to All U.S. Employees

If you are a U.S. employee who has experienced conduct you believe is contrary
to this policy and you plan to pursue legal action concerning such conduct, you
could have a legal obligation to take advantage of E*TRADE FINANCIAL’s complaint
procedure. Your failure to fulfill this obligation could affect your right to
pursue legal action. Employees outside the U.S. should consult with their local
Human Resources representative familiar with the law governing their
jurisdiction with respect to any obligation to use E*TRADE FINANCIAL’s complaint
procedure.

Investigation of Allegations

All reported allegations of discrimination, harassment, violence or retaliation
will be investigated promptly. The investigation may include individual
interviews with the parties involved and with individuals who may have observed
the alleged conduct or may have other relevant knowledge.

 

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Confidentiality will be maintained throughout the investigation process to the
greatest extent possible consistent with the Company’s need to investigate or
take appropriate corrective action. Accordingly, you cannot ask or expect that a
complaint will be maintained in complete confidence or that you may report an
allegation of inappropriate behavior and expect the Company to not do anything
about it. E*TRADE FINANCIAL will take all appropriate action to protect you from
any retaliation for reporting any inappropriate activity.

Consequences of Inappropriate Behavior

Misconduct, including harassment, discrimination, violence, retaliation, any act
of moral turpitude or any other form of unprofessional, illegal or criminal
behavior, may subject you to disciplinary action by E*TRADE FINANCIAL, up to and
including immediate termination. In addition, unlawful conduct may subject you
to civil, and in some cases criminal, liability.

 

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Handling Proprietary and

Confidential Information

Handling proprietary and confidential information in the appropriate manner
safeguards E*TRADE FINANCIAL’s assets and ensures compliance with regulations.

In this Code, we refer to “proprietary information” and “confidential
information.” Regardless of the terminology used, any information that meets
either of the definitions described below may be considered “trade secrets” and
is protected by the applicable law in your jurisdiction.

Definition of Proprietary Information

PROPRIETARY INFORMATION is Company information not known to the public that may
have intrinsic value or that may provide E*TRADE FINANCIAL with a competitive
advantage. Proprietary information includes, but is not limited to:

 

•   computer programs and other systems information;

 

•   algorithms;

 

•   business, product or marketing plans;

 

•   sales forecasts;

 

•   customer lists;

 

•   intellectual property; and

 

•   business practices.

 

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Proprietary information also includes the information derived from public
sources but which becomes proprietary through E*TRADE FINANCIAL’s aggregation or
interpretation of that information.

Proprietary information may be present in various media and forms, including
written documents, computer files, diskettes, videotapes, audiotapes and oral
communications.

Definition of Confidential Information

CONFIDENTIAL INFORMATION is information that is not generally known to the
public about E*TRADE FINANCIAL, its customers, its counterparties or other
parties with which the Company has a relationship. Like proprietary information,
confidential information may be present in various media and forms. The same
information can be both confidential and proprietary.

Examples of confidential information concerning E*TRADE FINANCIAL and its
employees, customers and counterparties include, but are not limited to:

 

•   personal information;

 

•   financial information;

 

•   securities trades or holdings;

 

•   business plans or projections;

 

•   acquisition or divestiture plans;

 

•   securities issuance, buyback or tender plans;

 

•   restructuring or reorganization plans;

 

•   legally privileged communications and materials;

 

•   the identities of customers or counterparties of E*TRADE FINANCIAL;

 

•   the existence and terms of agreements with customers or counterparties; and

 

•   programs and materials on E*TRADE FINANCIAL’s information systems.

Confidential information also may concern individuals or entities that are not
customers or counterparties. You should treat as confidential any nonpublic
information about individuals, companies or transactions if:

 

•   it has not been publicly disseminated; and

 

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  •   it has been acquired directly or indirectly from an individual or company
involved in an actual or potential transaction or a business relationship in
which E*TRADE FINANCIAL may have a role, or anyone acting on behalf of the
foregoing.

Guidelines for Accepting Proprietary or Confidential Information

Before accepting proprietary or confidential information from any third party,
evaluate the consequences to E*TRADE FINANCIAL. The decision to accept such
information may preclude E*TRADE FINANCIAL from doing other business involving
the customer or counterparty. In general, do not accept information from a
customer or counterparty beyond that which is necessary for the customer or
counterparty to conduct its business with E*TRADE FINANCIAL. In addition, you
should comply with any policies and pre-clearance procedures of your business
unit or department concerning the acceptance of proprietary or confidential
information. If you have any questions about this, you should contact Legal.

Confidentiality Agreements

No E*TRADE FINANCIAL employee is authorized to enter into any confidentiality or
nondisclosure agreement without prior review and approval of the agreement by
Legal. When presented with information from a third party you believe may be
“confidential” to the third party, determine if the party intends for the
information to be protected by a confidentiality agreement. If so, do not accept
the confidential information until the agreement has been reviewed and approved
by Legal and signed by an E*TRADE FINANCIAL employee with proper authority.

You must comply with the terms of any confidentiality agreement governing
proprietary or confidential information in your possession or control, including
procedures that call for the return or destruction of such information,
consistent with E*TRADE FINANCIAL’s records management policies and applicable
law.

Using Proprietary or Confidential Information

Use proprietary or confidential information solely to perform your duties for
E*TRADE FINANCIAL and not for your own personal benefit. Do not use proprietary
or confidential information to engage in trading for your own account or to
advise relatives, friends or other persons trading in securities or engaged in
other financial services.

Confidential information learned from one customer cannot be used for any other
purpose or for any other customer.

 

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Handling Materials Containing Proprietary or Confidential Information

Do not display, review or discuss proprietary or confidential information in
public places (such as elevators, restaurants, airplanes or other areas where
you may be overheard) or in front of outside vendors or other third parties.
Remember that conversations conducted on a mobile phone are not always secure.
Conversations dealing with confidential or proprietary information should be
held on a land-line.

Proprietary or confidential information in physical form, including on
electronic media such as a diskette, should not be left unattended unless it is
secured behind a locked door or in locked office furniture. Do not leave
proprietary or confidential information in conference rooms, in wastebaskets, on
desks or anywhere else where it might be picked up and reviewed. Erase white and
chalk boards thoroughly.

Information stored in computers, including personal digital assistants, laptops
and workstations must be protected by passwords, encryption or other mechanisms
that ensure only authorized individuals can access the information. Do not leave
your computer(s) unattended unless you have locked it or signed off, and do not
disclose your computer or voicemail passwords to anyone at or outside
E*TRADE FINANCIAL.

Whenever possible, mark confidential or proprietary documents with “E*TRADE
FINANCIAL Confidential” and/or “E*TRADE FINANCIAL Proprietary.”

Do not remove proprietary or confidential information from Company premises
unless absolutely necessary. E*TRADE FINANCIAL reserves the right to deny you
permission to remove any proprietary and confidential information from Company
premises. If you take such information out of the office for business purposes,
keep it on your person or in a secure place at all times and return it promptly
to Company premises.

Communicating Proprietary or Confidential Information

Exercise care when sending or discussing proprietary or confidential data on
voicemail, electronic mail, mobile or cordless phones, fax machines or message
services. Make sure you use correct electronic mail addresses, telephone
extension numbers, fax numbers and, when applicable, use project and code names.

Within E*TRADE FINANCIAL, communicate proprietary or confidential information
only to employees who have a legitimate business reason to know the information
and who have no responsibilities or duties that could give rise to a conflict of
interest.

 

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Do not disclose proprietary or confidential information to any person outside
E*TRADE FINANCIAL (including family members), or use it or permit any third
party to use it without first obtaining Legal and Compliance approval.

Disposal of Proprietary or Confidential Waste

When no longer of use, proprietary or confidential information must be disposed
of in a manner that renders it unreadable and non-reconstructable, using means
and methods approved by E*TRADE FINANCIAL (for example, approved shredders or
confidential waste bins), consistent with E*TRADE FINANCIAL’s records management
and information security policies and applicable law. Information contained on
electronic storage media (for example, a diskette or zip cartridge) should be
destroyed in a manner that renders it unreadable and unrecoverable.

Proprietary or Confidential Information Concerning Securities

When proprietary or confidential information might affect the price of a
security or other financial instrument, or the decision to buy or sell
securities or other financial instruments, the laws concerning insider trading
also govern your responsibilities, regardless of whether you are given specific
instructions or reminders that particular information may be “inside”
information. E*TRADE FINANCIAL has developed strict procedures to ensure
compliance with the laws of each jurisdiction in which it does business. These
procedures are critical to the protection of the E*TRADE FINANCIAL franchise and
are described in E*TRADE FINANCIAL’s policy on the “Treatment of Inside
Information”, which is outlined in this Code. Remember that these restrictions
apply to information relating to the stock of third parties as well as to the
Company’s stock.

Confidentiality Obligations to Previous Employers and other Third Parties

As provided in your “Agreement Regarding Employment and Proprietary Information
and Inventions”, upon commencing your employment with E*TRADE FINANCIAL, you
must disclose and provide a copy of any confidentiality, noncompete or
nondisclosure agreements or obligations between you and any third party (for
example, a former employer) to which you are subject. You also must disclose any
inventions developed by you or intellectual property owned by you prior to your
employment or as part of any outside business activity during your employment,
to the extent that you are permitted to do so.

You may not use proprietary or confidential information gained elsewhere,
including inventions developed in any employment outside of E*TRADE FINANCIAL,
to benefit E*TRADE FINANCIAL or its employees, customers or business partners
without written consent from Legal.

 

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Ownership of Intellectual Property

E*TRADE FINANCIAL owns all rights in any intellectual property developed by you
during your employment that relate to E*TRADE FINANCIAL’s business, even if
invented or otherwise developed outside E*TRADE FINANCIAL premises and even if
no E*TRADE FINANCIAL equipment was used in the process. For this purpose,
E*TRADE FINANCIAL’s intellectual property includes any invention or design
(whether or not patentable or reduced to practice) and all related patents and
patent applications, any copyrightable work, any trademarks or service marks
(and related registrations or applications for registration) and any trade
secrets. Some E*TRADE FINANCIAL intellectual property is proprietary information
that should be treated in accordance with the standards set forth in this Code.

Post-Employment Use of Proprietary or Confidential Information

You may not disclose proprietary or confidential information of E*TRADE
FINANCIAL or any third party outside of the Company at any time, including after
termination of employment. You may not take such proprietary or confidential
information when leaving E*TRADE FINANCIAL or use or disclose such information
for your own personal benefit or for the benefit of your new employer or
prospective new employer. You may not permit its disclosure or use by any third
party.

In exceptional circumstances, the Company may grant a written waiver of the
prohibitions on post-employment disclosure. The grant of a waiver is at the sole
discretion of E*TRADE FINANCIAL and will occur only if, among other things, the
party receiving the proprietary or confidential information signs a formal
nondisclosure agreement prepared by Legal.

This policy does not restrict you from obtaining employment in any capacity
elsewhere, provided you do not use or disclose proprietary or confidential
information.

E*TRADE FINANCIAL reserves the right to review all materials you plan to take
with you when you leave E*TRADE FINANCIAL and to remove any proprietary or
confidential information that you may have stored on your personal computer
equipment, including personal digital assistants.

Preventing Improper Use of Proprietary or Confidential Information

E*TRADE FINANCIAL will vigorously enforce its rights to prevent any current or
former employee from improperly taking, disclosing or using proprietary or
confidential information, or permitting others to do the same. You should report

 

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violations or suspected violations of this policy or the policy of any specific
business unit or department to an appropriate supervisor, to Legal and, if
necessary or appropriate, Security.

 

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Treatment of Inside Information

Inside information is proprietary or confidential information about a securities
issuer that is subject to special Company policies.

Policy on the Treatment of Inside Information

Definition of Inside Information

INSIDE INFORMATION (also called material nonpublic or price-sensitive
information) is defined under federal, state and other jurisdictional laws as
non-public information about a securities issuer (e.g., a public company) that
may have an impact on the price of a security or other financial instrument or
that a reasonable investor would be likely to consider important in making an
investment decision. Inside information may include but is not limited to, the
following:

 

•   financial or business information (for example, nonpublic company earnings
information or estimates, dividend increases or decreases, liquidity problems or
changed projections);

 

•   operating developments (for example, new product developments, changes in
business operations or extraordinary management developments or large increases
or decreases in orders); or

 

•   proposed corporate transactions or reorganizations (for example, proposed or
agreed mergers, acquisitions, divestitures, major investments or
restructurings).

 

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Consider all facts and circumstances in determining whether an item is inside
information. Contact Legal or Compliance if you have any questions as to whether
an item is, or may be, inside information.

Prohibited Uses of Inside Information

You may not trade, encourage others to trade, or recommend securities or other
financial instruments based on inside information. In most jurisdictions,
securities laws require those with inside information about a securities issuer
to refrain from disclosing such information to others and desist from trading in
or recommending the purchase or sale of securities or other financial
instruments based upon such information. It is a violation of Company policy
and, in certain instances, the law, for insiders to communicate inside
information to others, and it is a violation of policy and the law for the
person who receives a “tip” to disclose such information to others or to trade
in or recommend securities or other financial instruments based on the inside
information.

Guidelines for Information about E*TRADE FINANCIAL

Publicly disclosed information about E*TRADE FINANCIAL must be accurate and not
misleading. Do not discuss any inside information about E*TRADE FINANCIAL’s
business outside the Company. Refer all shareholder or securities analyst
inquiries to Investor Relations.

Handling Rumors

You may be violating the law if you trade based on a rumor.

If you believe that a rumor or piece of unsubstantiated information may have
been circulated deliberately, potentially to influence the market for securities
or other financial instruments of a publicly trade company, you must report the
situation promptly to Legal, Risk Management or Compliance. Do not trade based
on the rumors or take any other action, without the prior approval of
Compliance.

Consequences of Misusing Inside Information

The misuse of inside information may result in, among other things, regulatory
inquiry, litigation, adverse publicity for E*TRADE FINANCIAL (and you) and
disciplinary action by E*TRADE FINANCIAL, up to and including termination of
your employment. Misusing inside information may also end your career in the
securities industry and result in civil and criminal penalties, including
incarceration.

 

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The Restricted List

The Restricted List, which is maintained by Compliance, is one of the tools
E*TRADE FINANCIAL uses to monitor and ensure that regulatory requirements are
met. Employees are not permitted to trade in the securities (or other
instruments) of issues on the Restricted List except in accordance with any
guidelines set forth on the Restricted List. Consult Compliance when questions
arise or when you believe an exception is warranted. If you become aware of a
violation, notify Compliance immediately. Corrective action should not be taken
without Compliance approval.

A company may be on the Restricted List for many reasons. Therefore, you should
not make any assumptions as to why an issuer has been listed. Similarly, a
company may not be on the Restricted List even though you (and others) may be in
possession of material non-public information about the company. The fact that a
company is not on the Restricted List does not in any way convey permission or
approval to trade on the information. The Restricted List changes so you should
consult the list before trading.

The Restricted List constitutes proprietary and confidential information. You
may not distribute the Restricted List, or any portion thereof, outside
E*TRADE FINANCIAL. If you have a joint account or an account in your name that
is managed by another pursuant to a power of attorney, it is your responsibility
to ensure that no trades of securities on the Restricted List are made in these
accounts. It is always your responsibility to avoid trading on any inside
information.

 

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Outside Business

Activities

Laws and regulations restrict your ability to become an officer, director or
employee of a company not affiliated with E*TRADE FINANCIAL or to engage in
certain outside business activities.

Before you engage in any outside business activities, you must obtain written
approval in accordance with the Company’s outside business activities policies,
which are posted on Channel E*. Failure to obtain such approval may subject
E*TRADE FINANCIAL to severe regulatory penalties and civil liability. You may
also be subject to disciplinary action, up to and including termination of
employment.

Even if an outside activity has been approved, you may not engage in that
acitivity during your working hours at E*TRADE FINANCIAL nor use Company
facilities to further those outside activities except in accordance with
E*TRADE FINANCIAL’s policies. Activities on behalf of trade associations are not
included in this prohibition. In no event, however, may you participate in any
outside activity that interferes with your duties at E*TRADE FINANCIAL.

Obtaining Approval

In accordance with the Company’s Outside Business Activities policies and as set
forth in the Employee Agreement Regarding Confidentiality and Proprietary
Information, you must request and receive prior approval from Legal and
Compliance before you may:

 

•   engage in any business other than that of E*TRADE FINANCIAL;

 

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•   accept employment or compensation from any person or organization other than
E*TRADE FINANCIAL;

 

•   serve as an officer, director, member, partner, or employee of a business
organization other than E*TRADE FINANCIAL, whether that business is for profit
or not-for profit; or

 

•   except as provided below, own any stock or have any financial interest,
directly or indirectly, in any other business organization.

Prior written consent of E*TRADE FINANCIAL is not necessary if the organization
in which you will obtain stock or a financial interest is publicly owned and no
control relationship exists between you and the organization (for example, you
may purchase shares in the market, although all other employee trading policies
and restrictions apply). Similarly, you do not need approval to purchase
products or services of certain financial service companies, such as insurance
policies.

Note that your involvement in an outside business activity that begins
permissibly may evolve into one that is no longer acceptable (and may even be in
violation of laws, rules or regulations) if the nature or scope of that business
or your participation changes. If you have obtained approval to undertake an
outside business activity, you must notify Legal and Compliance promptly of any
changes to the business plan or business lines of the outside business activity
or of any changes in your participation.

Industry-Related Organizations

You are required to request approval for directorships in industry-related
organizations, such as trade associations. E*TRADE FINANCIAL generally will not
grant approval of any outside business activity related to the financial
services industry.

Residential Boards and Charities

You may be required to obtain approval to become a director or officer of a
residential cooperative or condominium board or charity. Approval will depend
upon the nature of your responsibilities at E*TRADE FINANCIAL and whether you
will be compensated by, or render investment advice to, the board. Consult Legal
and Compliance for further information.

 

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Employee Trading

The Employee Trading policy is designed to prevent legal, business and ethical
conflicts and to guard against the misuse of proprietary or confidential
information.

All of your securities trading activities must strictly comply with all federal,
state and other jurisdictional laws, rules and regulations and must be in
accordance with the very highest ethical standards. You must not engage in
trading that is or may appear to be improper. You may not engage in personal
trading on a scale or of a kind that would distract you from your daily
responsibilities. The policy described below reflects these governing
principles.

Trading Policies of Specific Business Units and Departments

This policy consists of general rules that you are required to follow with
respect to all of your trading activities and specific rules for particular
types of transactions and accounts. You must also be familiar with and abide by
any trading policies applicable to your business unit or department because
those policies may contain restrictions beyond those imposed by this policy.

Accounts Covered by this Policy

This policy applies to all Employee Securities Accounts. For these purposes, an
EMPLOYEE SECURITIES ACCOUNT is any securities account owned or controlled, in
whole or part, directly or indirectly, by you, whether for securities or other
financial instruments, including joint accounts, family accounts, and
self-directed IRA accounts that hold, or can hold, securities other than mutual
fund shares or bank certificates of deposit.

This rule governs accounts in your own name and other accounts you could be
expected to influence or control, including:

 

•   accounts of your spouse or domestic partner;

 

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•   accounts of children or other relatives of yours or your spouse or domestic
partner who reside in the same household or to whom you or your spouse or
domestic partner contribute substantial support;

 

•   trust accounts for which you act as trustee or you otherwise guide or
influence;

 

•   corporate accounts controlled, directly or indirectly, by you; or

 

•   arrangements similar to trust accounts that benefit you directly or
indirectly.

Some business unit or department policies may define Employee Securities
Accounts more broadly and you must be aware of and abide by any such policies.

Maintenance of Securities Accounts at E*TRADE FINANCIAL

To help implement this policy and to aid in meeting regulatory requirements,
employees must, with limited exceptions, maintain all brokerage or trading
accounts in which they have an interest (including the types of accounts listed
above) with E*TRADE FINANCIAL and not with an outside broker. No employee may
maintain a brokerage or trading account with an outside broker without prior
approval from Compliance

When you begin your employment at E*TRADE FINANCIAL and periodically thereafter
on request, you must disclose in writing all accounts that could be used as
brokerage accounts and make other certifications. You are required to complete
this certification accurately. You need not list checking, savings, money
market, mutual fund or IRA accounts that cannot be used as brokerage accounts.

If you are a new employee and still maintain non-Company brokerage accounts or
have worked at E*TRADE FINANCIAL for some time and have an outside account
without appropriate approval, you must disclose this to Compliance immediately.

Further procedures for opening accounts, entering employee orders and reviewing
employee trading are set forth below.

Exceptions to this Policy

Exceptions to E*TRADE FINANCIAL’s Employee Trading policy are rare and granted
only by the express written approval of Compliance.

Consequences of Inappropriate Employee Trading

E*TRADE FINANCIAL reserves the right to cancel any trade (without prior notice
and at your expense) or to instruct you to cancel a trade executed in an account

 

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maintained away from E*TRADE FINANCIAL (at your expense). E*TRADE FINANCIAL may
freeze your positions to avoid potential conflicts of interest or the appearance
of impropriety. In addition, E*TRADE FINANCIAL may suspend or revoke your
trading privileges at any time.

Employee trading violations can result in penalties ranging from cancellation of
an offending trade to termination of your employment. Any loss from an
impermissible trade will be charged to you and any profits may be forfeited.
Violations may also lead to civil or criminal proceedings and penalties.

General Rules for Employee Trading

Trading on Inside Information

You are strictly prohibited from trading using inside information. For further
guidelines, including a definition of inside information, see E*TRADE FINANCIAL
policy on the “Treatment of Inside Information” outlined in Section 5 of this
Code.

Primary and Secondary Public Offerings

Unless otherwise notified, you may not purchase any security that is part of a
primary or secondary offering that E*TRADE FINANCIAL is underwriting or selling
until the distribution has been completed.

Subject to certain exceptions, Company policy and industry regulations in
certain jurisdictions may prohibit you from purchasing either equity or debt
securities in any initial public offering, whether or not E*TRADE FINANCIAL is
participating in that offering. Before entering an order in an initial public
offering or secondary offering, you must obtain approval from Compliance.

Obtaining Significant Interests in Public Companies or Trading in Concert with
Other Employees

Unless permitted in writing in advance by Legal and Compliance, you may not,
individually or in concert with other employees or other persons, directly own,
or control a position in a public company that would require a filing under the
securities laws and regulations. Filing obligations in some jurisdictions may
start with a position of 3% or more of the outstanding equity of a public
company.

You also are prohibited from trading in concert with other employees, even if
taken together you and other employees control less than 3% of the outstanding
equity in question.

 

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Futures, Options on Futures and Other Derivative Securities

Generally you may not trade in futures, options on futures, forward contracts,
non-listed warrants, physical commodities, options on physical commodities and
currencies. Exceptions must be approved by Compliance.

You may trade listed equity options, index options, listed foreign currency
options and equity warrants, subject to Company and business unit or
departmental trading policies. Employees in non-U.S. locations should also
consult local policies.

Information about Customer or Company Orders

If you have information about customer or Company orders, you may not “front
run” customer or Company orders (for example, trade for your own account before
a customer or Company order in the same security or a derivative based on that
security) based on your knowledge of such orders.

You may not “piggyback” or “shadow” on customer trades (for example, engage in
trades identical to those that a customer has completed).

The Restricted List

You generally may not trade in securities of issuers on the Restricted List as
outlined in this Code. Consult with Compliance if you have any questions about a
restricted security. While the Restricted List is an important tool to help the
Company’s management protect against insider trading, it is not meant as a
substitute for your own careful behavior. Regardless of whether a security has
been placed on the Restricted List, you may not trade any security using inside
information.

Rules for Particular Accounts and Transactions

Transactions in E*TRADE FINANCIAL’s Securities

E*TRADE FINANCIAL has specific rules, as set forth below, that govern your
transactions in E*TRADE FINANCIAL’s securities.

You must follow these specific rules:

 

•   The window period for transactions in E*TRADE FINANCIAL’s securities
generally begins or “opens” on the second business day following E*TRADE
FINANCIAL’s earnings announcement and ends at the close of market on the 15th of
the last month (or, if the 15th is not a market day, the next earlier market
day) of each fiscal quarter. However, circumstances relating to the Company’s
operations or plans may cause the Company to close the trading window at any
time, with or without any prior notice;

 

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•   Even during an open window period, you may not transact in any of E*TRADE
FINANCIAL’s securities if you have inside information about E*TRADE FINANCIAL
(and any questions about whether a proposed transaction is appropriate should be
resolved by seeking guidance from Compliance);

 

•   You are not permitted to sell short or trade in derivatives involving any
Company securities.

Managed Accounts

With prior written approval of Compliance, you may appoint outside managers (for
example, trust companies, banks or registered investment advisers) who exercise
full discretion. If an outside manager handles an account, complete investment
discretion must be granted. You may not participate, directly or indirectly, in
individual investment decisions or be made aware of such decisions before
transactions are executed. Trading in this account must still avoid any issuer
on the Restricted List and there may be no trading in the Company’s securities
except during an open window period.

This restriction does not preclude you from establishing investment guidelines
for the manager, such as indicating industries in which you desire to invest,
the types of securities you want to purchase or your overall investment
objectives. However, those guidelines may not be changed so frequently as to
give the appearance that you are actually directing account investments.

Money Market and Open-End Mutual Fund Accounts

You may maintain money market and mutual fund accounts away from
E*TRADE FINANCIAL as long as the accounts have no brokerage facilities. However,
you are strongly encouraged to maintain those accounts at E*TRADE FINANCIAL. You
may trade money market and open-end mutual funds freely in your Company account,
provided you do not engage in any “market timing” of such funds or attempt to
engage in “late trading” practices or otherwise engage in unethical or illegal
activities.

Dividend Reinvestment Plans (“DRIPs”)

You may open a dividend reinvestment plan account with an issuer. Your business
unit or department employee trading policies and the Restricted List policy
apply to the initial investment in a DRIP and any additional cash contributions
to a DRIP.

 

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So long as the issue is not on the Restricted List, you may liquidate the plan
directly with the issuer.

Investment Clubs

You may not participate in investment clubs in which members pool their funds to
make investments in securities without approval from Compliance.

Direct Purchase of U.S. Treasury Bills, Bonds or Notes

You may purchase U.S. Treasury bills, bonds or notes through E*TRADE FINANCIAL
or directly from the U.S. Treasury through the TreasuryDirect program. You may
not purchase these instruments through other financial institutions.

Procedures for Employee Securities Accounts

Entry of Orders

All orders for Employee Securities Accounts must be entered through the web site
or automated telephone system, and with rare exception (only if a problem
arises), via a “live broker” through the Company’s systems. You may not enter
orders yourself or by another employee in any other way.

You may not view, or ask another employee to view, any other employee account
for any reason without the express approval of Compliance. Except in accordance
with our customer service procedures, you may not ask any other employee to view
your account for any reason without express approval of Compliance.

Review of Employee Transactions

Every transaction in an Employee Securities Account is or may be reviewed by
Legal, Compliance or Security for, among other reasons, the purpose of:

 

•   reviewing the nature of the transaction and the relationship it may have to
previous transactions or E*TRADE FINANCIAL’s activities;

 

•   evaluating compliance with E*TRADE FINANCIAL’s policies on employee trading
and the handling of proprietary and confidential information;

 

•   considering the suitability of the transaction;

 

•   considering whether transactions are of a frequency or nature to distract
the employee from his or her responsibilities to E*TRADE FINANCIAL; and

 

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•   determining whether the employee’s trade is in conflict with trading
activity of customer accounts.

E*TRADE FINANCIAL also may provide information and materials concerning
transactions in Employee Securities Accounts to regulatory and governmental
authorities.

 

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ACKNOWLEDGEMENT

I hereby acknowledge that I have received a copy of the E*TRADE FINANCIAL Code
of Professional Conduct (the “Code”) and that I have reviewed the contents of
the Code.

I understand that as an E*TRADE FINANCIAL employee I am responsible for
complying with all laws and regulations applicable to our business and all
provisions of the Code, as well as all other corporate policies and procedures
and that it is not an excuse to claim that I did not read or understand a
provision of the Code.

After reviewing the Code, if I realize there are any provisions with which I
have not complied (for example, maintaining a brokerage or trading account with
an outside broker without prior approval from Compliance, participating in an
investment club or serving on the board of directors of an outside entity
without prior approval from Compliance), I will promptly notify the appropriate
department so that the matter can be brought in line with the requirements of
the Code.

I understand that if I have any questions about the application of the Code in
any situation, I should immediately seek guidance from my supervisor, Legal or
Compliance.

 

Dated:                         

 

      Employee’s Signature      

 

      Employee’s Name Printed

 

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