California Code of Regulations › Title 2 - Administration › Division 1 - Administrative Personnel › Chapter 2 - Board of Administration of Public Employees' Retirement System › Subchapter 1 - Employees' Retirement System Regulations › Article 2 - Administration › Section 558.1 - Personal Trading Regulations

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
					 Definitions.
(1) Automatic Investment Plan. A
					 program in which periodic purchases or withdrawals are made automatically to or
					 from a Covered Account in accordance with a predetermined schedule and
					 allocation. Examples include Dividend Reinvestment Plans (DRIPs), Employee
					 Stock Purchase Plans (ESPPs), and automatic mutual fund investments or
					 withdrawals (PIPS/SWIPS).
(2)
					 Blackout Period. Blackout Period means the three-day period of time that
					 commences one market day before and ends one market day after a transaction in
					 Covered Securities by CalPERS.
(3)
					 Board Member. Board Member means the CalPERS Board members and their appointed
					 designee(s).
(4) Covered Account.
(A) Covered Account includes the following:
(i) An account, not identified as exempt in
					 subdivision (B), with the capability of trading Covered Securities to which a
					 Covered Person holds legal title or over which the Covered Person has the power
					 to place or direct trades;
(ii)
					 Self-directed brokerage accounts offered through 401(k) or 457 accounts or
					 sub-accounts from a current or previous employer of the Covered Person. An
					 employer sponsored retirement savings plan that offers a brokerage account as
					 an investment option is not a Covered Account (e.g., a Savings Plus Program
					 account that offers a self-directed Schwab 401(k) is exempt; however, the
					 brokerage account itself (e.g., the Schwab brokerage account) is a Covered
					 Account).
(B) Covered
					 Account does not include the following:
(i)
					 The accounts in which a spouse (by virtue of marriage under section
					 300 of the
					 California Family Code) or registered domestic partner (by virtue of domestic
					 partnership established under sections
					 297, et seq., of the California
					 Family Code) conducts trading activity by virtue of their employment (for
					 example: a money manager, a financial advisor, etc.) are exempt from the
					 regulation unless the spouse or registered domestic partner is employed by
					 CalPERS;
(ii) Bank
					 accounts;
(iii) Treasury direct
					 accounts;
(iv) Mutual fund-only
					 accounts;
(v) Employer sponsored
					 401(k) or 457 accounts limited to transactions in exempt securities, as
					 identified in subdivision (6)(B) (e.g., Non self-directed accounts in the State
					 of California's Savings Plus Program);
(vi) 403(b) accounts;
(vii) 529 accounts;
(viii) Managed Accounts; and
(ix) An account where CalPERS has investment
					 discretion or the ability to effect transactions.
(5) Covered Person. Covered Person means a
					 person holding any of the positions listed below.
(A) Board Members;
(B) The CalPERS Chief Executive
					 Officer;
(C) The CalPERS Deputy
					 Executive Officers;
(D) The CalPERS
					 Chief Financial Officer;
(E) The
					 CalPERS Chief Actuary;
(F) All
					 employees of the Enterprise Compliance and Enterprise Risk Management
					 Offices;
(G) All employees of the
					 CalPERS Investment Office;
(H) All
					 employees (and their direct supervisor or manager) of the Financial Office who
					 have access to planned trade information or related non-public information by
					 their job duties;
(I) All employees
					 of the CalPERS Office of Audit Services, except Senior Program Auditors (Public
					 Agency Team) and all employees directly reporting to the Senior Program Auditor
					 (Public Agency Team);
(J) All
					 employees (and their direct supervisor and/or manager) of the CalPERS
					 Information Technology Services Branch who have access to CalPERS planned trade
					 information and/or non-public investment related information by virtue of their
					 job duties;
(K) The CalPERS General
					 Counsel and Deputy General Counsel. The Assistant Chief Counsel (Investments)
					 and the Attorneys reporting to the Assistant Chief Counsel (Investments) or
					 working in the Investment Advice Unit.;
(L) All other employees (and their direct
					 supervisor or manager) who have access to planned trade information or related
					 non-public information by virtue of their job duties;
(M) The secretary, assistant, or an
					 individual, regardless of his or her formal job title, who serves in a
					 functional capacity of one who provides administrative assistance to any person
					 holding a position listed in (A) through (L), above;
(N) The spouse (by virtue of marriage under
					 section
					 300 of the
					 California Family Code) or registered domestic partner (by virtue of domestic
					 partnership established under sections
					 297, et seq., of the California
					 Family Code) of any person holding a position listed in (A) through (M),
					 above.
(6) Covered
					 Security(ies). Covered Securities means all securities as defined by Section
					 2(a)(1) of the
					 Securities Act of 1933, including all of the following except for the
					 securities excluded in subdivision (6)(B);
(A) Covered Securities include:
(i) All equity and debt securities, including
					 derivatives of securities (such as options, warrants, and American Depository
					 Receipts (ADR's)), with the exception of publicly traded instruments identified
					 in subsection (B)).
(ii) Any
					 option, future, forward contract or other obligation involving securities or
					 indices thereof, including an instrument whose value is derived or based on any
					 of the above;
(iii) Any separate
					 security which is convertible into or exchangeable for, or which confers a
					 right to purchase, a Covered Security;
(iv) Shares of a closed-end investment
					 company (e.g., closed-end mutual funds);
(v) Shares of exchange-traded funds (ETF's)
					 or notes (ETN's);
(vi) Private
					 placement offerings;
(vii) Initial
					 Public Offerings;
(viii) Interests
					 in real estate (limited to transactions made through a Private Placement
					 Offering); and
(ix) Exchange traded
					 futures and options on futures.
(B) Covered Securities do not include:
(i) Cash and cash-like securities (e.g.,
					 banker's acceptances, bank certificates of deposit, money market funds,
					 commercial paper, repurchase agreements);
(ii) Investment grade, short-term debt
					 instruments, including repurchase agreements or any instrument that has a
					 maturity at issuance of fewer than 366 days that is rated in one of the two
					 highest categories by nationally recognized statistical rating
					 organizations);
(iii) Collective
					 trust funds;
(iv) Direct
					 obligations of the U.S. Government (e.g., Treasury bonds, notes,
					 etc.);
(v) Open-end mutual
					 funds;
(vi) Debt securities issued
					 by state and municipal governments and agencies of the United States
					 government;
(vii) Variable and
					 fixed rate annuity insurance products and life insurance; and
(viii) Company stock held in a bona fide
					 employee benefit plan of an organization on behalf of an employee of the
					 organization who is a Covered Person by virtue of being a spouse or registered
					 domestic partner of a Covered Person.
(7) Designated Brokerage. Designated
					 Brokerage means a broker or broker-dealer approved by CalPERS in accordance
					 with subdivision (b).
(8) Holding
					 Period. Holding Period is a period of time designated by CalPERS and means the
					 30 calendar day period between the acquisition and sale, and the 30 calendar
					 day period between sale and re-acquisition, of a Covered Security, on a last-in
					 first-out basis.
(9) Managed
					 Account. Managed Account means an account with the capability of trading
					 Covered Securities that meets all of the following criteria:
(A) It is managed by a third party who is not
					 a Covered Person,
(B) No Covered
					 Person has the power to affect or ability to control or influence investment
					 decisions in the account, and
(C)
					 No Covered Person communicates (directly or indirectly) with the person(s) with
					 investment discretion regarding specific trade activity in the
					 account.
(10) Managed
					 Account Certification. A Managed Account Certification, provided by a
					 third-party money manager, that certifies annually in writing the arrangement
					 whereby a third-party Managed Account provider has full discretion to act as
					 investment advisor and manage any investment or trading account for another
					 person.
(11) Market Day. Market Day
					 means a trading day when U.S. markets are open for executing trades during the
					 regular market session (Monday through Friday 9:30 a.m. to 4 p.m. Eastern
					 Time).
(12) Money Market Fund. A
					 mutual fund that invests in short-term debt instruments where its portfolio is
					 valued at amortized cost so as to seek to maintain a stable net asset value
					 (typically of $1 per share).
(13)
					 Non-Volitional Transaction. A transaction in which the Covered Person does not
					 determine price or time of the transaction. Such transactions include:
(A) Acquisitions of securities through stock
					 dividends, automatic dividend reinvestment plans, stock splits, reverse stock
					 splits, mergers, consolidations, spin-offs, or other similar corporate
					 reorganizations or distributions generally applicable to all holders of the
					 same class of such securities.
(B)
					 Acquisition of securities through the exercise of rights by an issuer pro rata
					 to all holders of securities, to the extent the rights were acquired in the
					 issue; and
(C) Transactions in an
					 approved managed account made by an independent third party
					 adviser.
(14) On-Line
					 Platform. On-Line Platform means a web-based, on-line compliance platform
					 provided by CalPERS to all Covered Persons.
(15) Option. A security which gives the
					 investor the right, but not the obligation, to buy or sell a specific security
					 at a specified price within a specified period of time. A covered person who
					 buys or sells an option is deemed to have correspondingly bought or sold the
					 underlying security, as follows.
(A) Call
					 Options
(i) The Covered Person buying a call
					 option shall be deemed to have purchased the underlying security on the date
					 the option was purchased.
(ii) The
					 Covered Person selling a call option shall be deemed to have sold the
					 underlying security on the date the option was sold.
(B) Put Options
(i) The Covered Person buying a put option
					 shall be deemed to have sold the underlying security on the date the option was
					 purchased.
(ii) The Covered Person
					 selling a put option shall be deemed to have bought the underlying security on
					 the date the option was purchased.
(16) Private Placement Offering. A Private
					 Placement Offering means an offering of securities which are exempt from
					 registration under Section
					 3(a)(11), Section
					 4(2), Regulation A
					 or Rules 504, 505 or 506 of Regulation D of the Securities Act of 1933 or
					 Section
					 25102 of
					 the California Corporations Code. Examples include limited partnerships,
					 certain cooperative investments in real estate, and co-mingled investment
					 offerings such as hedge funds. Time shares and cooperative investments in real
					 estate used as a primary or secondary residence are not considered Private
					 Placement Offerings.
(17)
					 Restricted List. A Restricted List means the list of Covered Securities that
					 identifies companies which Covered Persons have information that may be
					 material and non-public.
(18)
					 Transfer of a Security. Transfer of a security means to move a Covered Security
					 to a different account(s) whereby the Covered Person continues to hold legal
					 title, or a change in ownership from the Covered Person to a different
					 party.
(19) Transfer of an Account.
					 Transfer of an account means the transfer of one Covered Account to another
					 account. An example of this would be the consolidation of Individual Retirement
					 Accounts (IRAs). This activity is permissive; however, the accounts and their
					 securities are still considered covered after the transfer.