Which form may an investment adviser may use to fulfill the disclosure requirements of Rule 204 3 under the Investment Advisers Act of 1940?

Introduction

Rule 204A-1 under the Investment Advisers Act of 1940 ("Advisers Act") requires all investment advisors registered with the Securities and Exchange Commission ("SEC") to adopt codes of ethics that set forth standards of conduct and require compliance with federal securities laws. Charles Schwab & Co., Inc. ("CS&Co.") is an investment adviser registered with the SEC with respect to various investment adviser products and services, such as the wrap programs or financial plans. To this end, CS&Co. hereby adopts this code of ethics ("Advisor Code"). This Advisor Code incorporates by reference the Charles Schwab Corporation ("CSC") Compliance Policies and Standards and the Charles Schwab & Co., Inc. Compliance Manual ("Compliance Policies")*, which set forth the standards of business conduct that are required of personnel of The Charles Schwab Corporation and its operating subsidiaries, including CS&Co.

This Advisor Code applies to all CS&Co. employees, any individuals registered with CS&Co. as Investment Adviser Representatives ("IAR"), or other persons identified by the Investment Advisor Chief Compliance Officer ("CCO"), or designee, who are considered "Supervised Persons" under the Advisers Act. The Advisers Act defines "Supervised Person" to mean any partner, officer, director (or other person occupying a similar status or performing similar functions), or employee of an investment advisor, or other person who provides investment advice on behalf of the investment advisor and is subject to the supervision and control of the investment advisor.

This Advisor Code is intended to reflect fiduciary principles that govern the conduct of CS&Co. and its Supervised Persons in those situations where CS&Co. acts as a Registered Investment Advisor as defined under the Advisers Act in providing investment advice to clients ("advisory clients"). This Advisor Code is supplementary to Supervised Persons' duty to comply with The Charles Schwab Corporation Code of Business Conduct and Ethics, as applicable.

*For Independent Branch Leaders ("IBL") and other IBS personnel, any reference to the Compliance Manual denotes the Independent Branch Services Compliance Manual.

A. Standard of Conduct and Compliance with Laws, Rules and Regulations

All Supervised Persons are responsible for, and have agreed as a requirement of their employment or registration as an Investment Advisor Representative ("IAR"), to review, be familiar with, and comply with this Advisor Code and the Compliance Policies.

Supervised Persons must comply with all of the laws, rules and regulations applicable to the business in which they engage, including among others, securities, banking and other federal, state and local laws. Although not expected to know the details of each law governing CS&Co.'s business, each Supervised Person is expected to be familiar with and comply with the company-wide policies and procedures, as they apply to his or her business unit and, when in doubt, to seek advice from supervisors, Compliance or other appropriate personnel.

The Advisor Code is based upon the principle that Supervised Persons owe a fiduciary duty to their clients to conduct their affairs in such a manner as to (i) avoid serving their own personal interests ahead of clients, (ii) avoid taking inappropriate advantage of their position with the firm and (iii) avoid, and, where appropriate, mitigate any actual or potential conflicts of interest or any abuse of their position of trust and responsibility. The provisions of the Advisor Code are not all-inclusive. Rather, they are intended as a guide for Supervised Persons in their conduct. In situations where there is uncertainty as to the intent or application of the Advisor Code, the Supervised Person is advised to consult with their supervisors, managers or other appropriate personnel.

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B. Protection of Material Non Public Information

Supervised Persons must review and comply with the Charles Schwab Corporation Misuse and Sharing of Information Policy, as well as references therein, including the related sections of The Charles Schwab Corporation Code of Business Conduct and Ethics and The Charles Schwab Corporation Information Security Policy. It is unlawful to trade in any security on the basis of material non-public (or inside) information or to disclose such information to others who may profit from it. This applies to all types of securities, including equities, options, debt, and mutual funds. Please refer to The Charles Schwab Corporation Misuse and Sharing of Information Policy for a definition of material non-public information.

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C. Personal Securities Trading, Pre-Approval & Disclosure Requirements

Rule 204A-1 of the Advisers Act requires all "Access Persons" of an investment advisor registered with the SEC to report, and the investment advisor to review, their personal securities transactions and holdings periodically. The Advisers Act defines "Access Person" to mean any supervised person of an investment advisor who (1) has access to nonpublic information regarding any advisory client's purchase or sale of securities, or nonpublic information regarding the portfolio holdings of any reportable fund (i.e., any mutual fund advised by an affiliate of CS&Co.), or (2) is involved in making securities recommendations to advisory clients in advisory accounts, or who has access to such recommendations that are nonpublic. The CCO, or designee, may designate other individuals as Access Persons as appropriate.

The "Personal Activities and Disclosures Standards" details the disclosure obligations surrounding employee securities accounts and the in-house requirements for all employees. This includes a prohibition on participation in an IPO and limitations on private placements including the requirement to receive pre-clearance prior to the purchase or sale in a private securities transaction. In addition to the policies outlined in the above-referenced standards, CS&Co. Access Persons are required to disclose all outside securities accounts, which may include Schwab 529s, HSA accounts and employer sponsored retirement plan accounts. Access Persons are prohibited from using nonpublic information regarding portfolio holdings, model changes, or client transactions for their personal benefit. Specifically, Access Persons are prohibited from using advance knowledge to trade ahead of or otherwise benefit from such knowledge.

The Investment Advisor Chief Compliance Officer or designee maintains a list of each CS&Co. Access Person and will promptly notify any new Access Person of their responsibilities under the Advisor Code.

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 1. Access Persons Requirements

Once identified, each Access Person must disclose and regularly provide Holdings Reports and Transaction Reports for any account held outside of CS&Co. in which they have a direct or indirect beneficial ownership1 and through which reportable securities can be purchased, sold or held.

Access Persons are subject to personal trade reviews as determined by the Investment Advisor Chief Compliance Officer or designee.

Access Persons are not required to separately submit Holdings Reports, Transaction Reports, trade confirms or statements for accounts held at CS&Co.

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2. Holdings Reports

This report must be submitted to the Investment Advisor Chief Compliance Officer or designee:

• no later than 10 days after the person becomes an Access Person, and the information must be current as of a date no more than 45 days prior to the date the person becomes an Access Person, and
• thereafter, within 45 calendar days of the end of each calendar year.

The report must reflect current holdings, and, at a minimum, include:

• the title and type of security, and, as applicable, the exchange ticker symbol or CUSIP number, number of shares, and principal amount;
• the name of any firm in which any securities are held; and
• the date the Access Person submits the report.

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3. Transaction Reports (Account Statements)

This report must be submitted to the Investment Advisor Chief Compliance Officer or designee no later than 30 days after the end of each calendar quarter.

Monthly or quarterly account statements can be used to satisfy the Transaction Report disclosure requirements, provided the account statement(s) includes all transactions effected during the period and includes, at a minimum, all of the following:

• the date of each transaction, the title, and as applicable the exchange ticker symbol or CUSIP number, interest rate and maturity date, number of shares and principal amount of each security involved;
• the nature of the transaction (i.e., purchase, sale or any other type of acquisition or disposition);
• the price of security at which the transaction was effected;
• the name of the firm with or through which the transaction was effected; and the date the Access Person submits the report.

All Access Persons with outside accounts must certify each quarter whether any transaction was executed in those accounts.

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4. Review of Transactions

Personal securities transactions and holdings of all Access Persons will be reviewed periodically, but no less than quarterly. 

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D. Compliance Certification

Each Supervised Person will be provided with a copy of this Advisor Code and any material amendments, and all Supervised Persons are required to provide Compliance with an acknowledgment of their receipt of the Advisor Code and any material amendments. This is generally completed as part of the annual disclosure process. 

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E. Consequences for Failure to Comply and Reporting Certain Conduct

A Supervised Person can be subject to discipline, up to and including termination of employment (or in instances involving franchisees, termination of the franchise agreement), if he or she violates this Advisor Code. (IBLs and their employees who violate this Code may be subject to recourse by Schwab, up to and including termination of the Franchise Agreement ("FA")). Any Supervised Person who knows of, or reasonably believes there is, a violation of applicable laws or this Advisor Code, must report that information immediately to the CCO, Corporate Responsibility Officer or the Ombudsperson. A Supervised Person should not conduct preliminary investigations, unless authorized to do so by the Compliance Department. Anyone who in good faith raises an issue regarding a possible violation of law, regulation or company policy or any suspected illegal or unethical behavior will be protected from retaliation. If you have violated this Advisor Code, however, making a report will not protect you from the consequences of your actions. You can be subject to discipline up to and including termination of employment, or termination of your franchise agreement, if you violate this Advisor Code or fail to report violations that come to your attention.

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F. Recordkeeping

Rule 204-2(a) (12) and (13) of the Advisers Act requires advisors to keep copies of all relevant material relating to the Advisor Code. Supplemental policies are reflected in the CS&Co. Investment Advisor Compliance Program Procedures.

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