Consistent with its fiduciary duties, Loomis Sayles’ policy is to take the utmost care in making and implementing investment decisions for client accounts. To the extent that trade errors or investment guideline breaches occur, Loomis Sayles seeks to ensure that its clients’ best interests are served when correcting such errors and that the client will be reimbursed for any loss caused by our error. Loomis Sayles’ Trade Error and Investment Guideline Breach Policies and Procedures ("Procedures") guide the resolution of, and help to prevent the recurrence of, such errors.
If it appears that a trade error or investment guideline breach has occurred, Loomis Sayles will review all relevant facts and circumstances to determine an appropriate course of action. When it is determined that Loomis Sayles has caused or contributed to a trade error or investment guideline breach, the client will be reimbursed by Loomis Sayles for any net loss attributable to our error or will retain any net gain realized in connection with the error correction, except as described below. Clients are informed in writing of all errors unless the error is an operational error (e.g., overdraft charge for failed trades) involving a small reimbursement amount or the error is corrected pre-settlement.
If an error is discovered after the settlement of the transaction (thus having occurred in the client’s account), the “correcting” transactions will be executed in the client’s account and the client will either be reimbursed for the loss or will retain any gain realized in connection with the error correction as described above. However, if an error is discovered prior to the settlement of the transaction, the trade will be moved to the error account of the executing broker or Loomis Sayles’ error account and will not be reflected on the client’s account statement. In this latter circumstance, Loomis Sayles and the broker-dealer, custodian or other parties involved in the transaction (other than the client) will determine who among them is obligated to bear any loss or entitled to retain any gain realized in connection with the error correction. Additionally, securities purchased in error for one client’s account may be reallocated to another client’s account if Loomis Sayles determines that it would be appropriate to do so under the facts and circumstances. Such reallocations require the approval of the Chief Investment Officer and Chief Compliance Officer.
All trade errors or investment guideline breaches will be resolved with the approval of the Chief Compliance Officer and other legal/compliance, portfolio management, trading, or other personnel, as appropriate, in accordance with the Procedures. The party responsible for the trade error will complete the Trade Error Correction Form in an automated system implemented for this purpose, and submit the form to the Chief Compliance Officer for final approval as required by the Procedures. Such errors and their resolutions are reported to Loomis Sayles’ Risk Management Committee, Trading Oversight Committee and Audit Committee on a quarterly basis.
As a policy matter we do not provide outside parties with information regarding violations of client mandates unless the violation has been in their account.