Morningstar, Inc. Securities Trading and Disclosure Policy
Amended and in effect on May 12, 2015
At Morningstar, we encourage our employees to be investors. However, because the people who use our
products and investment research hold us in a position of trust, we must also create an environment that minimizes
potential conflicts of interest, both real and perceived.
Therefore, Morningstar has established the following policy governing employees’ personal investments. This policy is
intended to contribute to an environment in which maintaining the integrity and reputation of our company is of utmost
importance. The policy is also intended to provide employees with guidelines on avoiding violations of insider trading
laws.
I.
Scope of Policy, Transition Situations, and Certain Terminology
This policy applies to each employee (including employees of Morningstar subsidiaries) and his or her immediate family. As used in this policy, an employee’s immediate family consists of his or her spouse or live-in partner,
each member of the employee’s household, and any other person or entity whose investment activity could reasonably
be attributed to the employee.
Subject to any more specific rules contained in this policy, when any part of this policy first becomes applicable to an
employee (for example, when a rule is first implemented in a country or in connection with a corporate acquisition) the
relevant group head will consult with the Global Chief Compliance Officer and the Chief Legal Officer to establish a reasonable transition period to allow the employee to come into compliance without undue hardship.
When this policy imposes any restrictions or other rules relating to a transaction in “any security” issued by a company,
those restrictions or rules apply without regard to whether the security is an equity or debt security and also apply to
each security that derives its value from a security issued by the company, such as puts, calls, or other derivatives
(without regard to the issuer of the put, call, or other derivative).
Specific provisions of this policy that are inconsistent with local laws will not apply in those jurisdictions and, in those
jurisdictions, Morningstar may substitute provisions that are reasonably designed to achieve the same goals while remaining consistent with local laws. Local laws may impose restrictions beyond those contained in this policy.
This policy contemplates the establishment of a Securities Trading and Disclosure Policy Committee. The members of
this committee will be Morningstar employees who are appointed to the committee, and who may be removed from
the committee, by Morningstar’s Chief Executive Officer. The committee shall have the authority to interpret this policy
and such other authority and responsibility described in this policy.
In addition, and except where otherwise expressly indicated, this policy does not apply under the following circumstances.
×
This policy does not apply to securities transactions by an employee’s immediate family member made in
connection with his or her principal occupation and that are not for the benefit of the employee or any member of his or her immediate family or any of their relatives, so long as the employee has not shared material
non-public information about the issuer of the securities in question with the immediate family member making the transaction. For the purpose of this exclusion, the fact that the immediate family member may earn a
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fee or commission in connection with the transaction does not render the transaction as being one for the
benefit of the immediate family member.
×
This policy does not apply to the purchase or sale of securities in a “blind” trust, separately managed accounts, wrap account or similar arrangement where the person covered by this policy does not direct the
trustee, money manager or other investment advisor who has discretion over the funds to make the particular
purchase or sale.
×
This policy does not apply to the purchase or sale of securities made through an automatic investment plan.
×
This policy does not apply to securities transactions by an employee’s immediate family member if the counterparty is the issuer of the securities. For example, the policy would not apply if the family member wishes to
exercise an employee stock option or participate in an issuer tender offer.
This policy is supplemented by policies that apply to employees of Morningstar subsidiaries that are subject to additional regulation as broker-dealers, credit rating agencies, or for providing investment advice under applicable law. If
there is a conflict between this policy and one of those other policies that would prevent someone from complying with
both, the other policy shall control.
II.
Policy and Rules Pertaining to Equity Analysts.
The rules in this Section II apply to Morningstar’s equity analysts (including any located outside of the United
States), to analysts overseeing stock portfolios in Morningstar newsletters (e.g., the Tortoise and the Hare), and to
copy editors responsible for equity content. For the purpose of this Section II, each group of equity analysts together
with each person who, directly or indirectly, supervises them, up to and including the relevant group head will constitute an equity research group, as the case may be. The Securities Trading and Disclosure Policy Committee is also authorized to identify other research groups to which some or all of the rules in this Section II should also apply.
Internal Disclosure of Holdings. A new member of an equity research group must provide Morningstar’s
Compliance department or, outside the United States, as otherwise directed by the Compliance department, within ten
business days of his or her date of hire a list of all of his or her and his or her immediate family’s investment holdings
and the brokerage firms they have accounts with. Investment holdings include, but are not limited to, stocks, bonds,
options, open-end mutual funds, ETFs, hedge funds, closed-end funds, and any managed or separate account programs
he or she or his or her immediate family members participate in. This information is to be submitted in such form and in
such manner (which may include via a web-based system) as shall be specified by the Compliance department. Ac-
cess to an individual’s information is limited to that individual and the Compliance department.
Trade Information. Members of an equity research group and their immediate family members must submit
brokerage account trade information in such form and in such manner (which may include, among other things, a direct
electronic data feed from a brokerage firm or direct delivery of duplicate hard-copy trade confirmations) as shall be
specified by the Compliance department. This applies to any accounts, including purchases made within the brokerage
window of Morningstar’s 401(k) plan or similar retirement plans outside of the United States, where the equity analyst
or his or her immediate family member has beneficial ownership. If a brokerage firm charges a fee for complying with
the requirements of this paragraph, the employee may inform the Compliance department of this fact and discuss alternative delivery methods.
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Morningstar Equity Analysts Cannot Ow n Securities Issued By Companies They Cover. Subject to
the limited exceptions described in the next paragraph, an equity analyst and his or her immediate family members
may not own any security of a company on the analyst’s coverage list or any of that company’s close competitors.
Notwithstanding anything else contained in this policy to the contrary, the requirements of this rule apply to securities
in a “blind” trust, separately managed account, wrap account or similar arrangement and also to the purchase or sale
of securities made through an automatic investment plan.
The restriction with respect to a covered company may be waived by the Securities Trading and Disclosure Policy
Committee based on finding that the company is large, liquid and well-covered, and that there is an absence of suitable
alternative companies within the analyst’s local market.
The restriction with respect to securities of a close competitor may be waived by the Securities Trading and Disclosure
Policy Committee based on a finding that the analyst’s coverage is not reasonably likely to influence the price of the
competitor’s securities. The Securities Trading and Disclosure Policy Committee will notify the Compliance department
whenever it has granted either waiver.
Any security purchased upon the grant of a waiver permitted by this section must be held for at least six months. While
the analyst holds the security, all of his or her reports regarding the company or concerning the competitor, as the case
may be, must disclose that the analyst holds securities issued by the company or competitor.
While the restrictions contained in this section of this policy apply to equity analysts with respect to companies on their
coverage lists and the competitors of those companies, all other Morningstar personnel (including those who manage
or supervise equity analysts) must be mindful that if they own a security and seek to influence the covering analyst’s
work with respect to the issuer, their motivation may be called into question and they may need to demonstrate that
they were not promoting personal interests at the expense of the integrity of Morningstar’s analysis.
New Coverage. Subject to the exceptions described in the preceding section of this policy, if an equity analyst is assigned a company that he or she previously did not cover, and that analyst owns any security issued by that
company or any close competitor, the analyst must sell the security before initiating coverage. In addition, but subject
to the exceptions described in the preceding section of this policy, if any member of the analyst’s immediate family
own any security issued by the company or any close competitor, the immediate family member will have six months
from the date the company was assigned to the analyst in which to sell that security. Notwithstanding anything else
contained in this policy to the contrary, the requirements of this rule apply to securities in a “blind” trust, separately
managed account, wrap account or similar arrangement and also to the purchase or sale of securities made through an
automatic investment plan.
The Restricted List. Members of an equity research group and their immediate family members may not
execute transactions in any security issued by a company contained on Morningstar’s Restricted List.
Members of the equity research group are responsible for checking the Restricted List prior to making a transaction and
are also responsible for checking the Restricted List on behalf of their immediate family members. If an equity analyst
does not have access to the Restricted List he or she must contact the Compliance department prior to the execution
of the trade. If a member of the Compliance department is unavailable, the equity analyst must leave a message indicating the security to be purchased or sold.
Morningstar, Inc. – Securities Trading and Disclosure Policy
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×
A company will be added to the Restricted List when Morningstar issues a report on a security issued by that
company for the first time and when the equity analyst who covers that security indicates that his or her opinion on the security may change. The company is typically removed from the Restricted List two business days
after the analysis has been published.
×
If an equity analyst is to give an interview or speech in which recently released information about a company
is expected to be covered or the analyst wishes to address, the company will be added to the Restricted List
when the analyst begins preparation for the interview or speech, and removed from the Restricted List typically two business days after the interview or speech.
×
The Restricted List is updated throughout each business day. Therefore, it is important that the list be reviewed prior to making a transaction. The Restricted List is available on The Pond. Any member of an equity
research group who is unable to access the Restricted List because of telecommuting arrangements or technical problems is still responsible for determining whether or not a particular security is on the Restricted List
prior to making any transactions.
×
Members of the equity research group are responsible for ensuring that companies are posted on the Restricted List in a timely manner.
×
Morningstar’s newsletter editors may restrict companies for longer periods in order to ensure that print subscribers receive the information before members of the equity research group can trade.
Trades in Securities that Track a Sector or Industry. If an equity analyst or a member of his or her immediate family wishes to buy or sell a security whose investment objective is to track a sector or industry that the analyst covers, the trade must be consistent with the opinion he or she is publishing. For example, if the equity analyst’s
current published analysis indicates that he or she is bullish on the semiconductor sector, trades in an ETF, hedge fund,
or closed-end fund whose investment objective is to track the semiconductor sector must be purchases. A transaction
that is contrary to this rule may be executed if there is an unanticipated significant change in the personal financial
situation of the employee or immediate family member and a request to make the transaction has been approved in
advance by the Securities Trading and Disclosure Policy Committee.
Staff Managing Equity P ortfolios. The following additional rule applies to equity staff employees who
manage equity portfolios for Morningstar (e.g., the Tortoise and Hare portfolios for the Morningstar® StockInvestor™
newsletter). An employee who manages such a portfolio cannot make personal trades that conflict with the transactions in the Morningstar portfolio unless there is an unanticipated significant change in the personal financial situation
of the employee or immediate family member and a request to make the transaction has been approved in advance by
the Securities Trading and Disclosure Policy Committee.
III.
Policy and Rules Pertaining to Manager Research Analysts.
The rules in this Section III apply to Morningstar’s manager research group (including any located outside of
the United States) and to copy editors responsible for manager research content. For the purpose of this Section III,
each group of manager research analysts together with each person who, directly or indirectly, supervises them, up to
and including the relevant group head, will constitute a manager research group. Outside the United States, in those
instances where manager research analysts ultimately report to a country manager, the Securities Trading and Disclosure Policy Committee shall designate the extent of the relevant manager research group. The Securities Trading and
Disclosure Policy Committee is also authorized to identify other persons or teams to which some or all of the rules in
this Section III should also apply.
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Internal Disclosure of Holdings. A new member of a manager research group must provide Morningstar’s
Compliance department or, outside the United States, as otherwise directed by the Compliance department, within ten
business days of his or her date of hire a list of all of his or her and his or her immediate family’s investment holdings
and the brokerage firms they have accounts with. Investment holdings include, but are not limited to, stocks, bonds,
options, open-end mutual funds, ETFs, hedge funds, closed-end funds, and any managed or separate account programs
he or she or his or her immediate family members participate in. This information is to be submitted in such form and in
such manner (which may include via a web-based system) as shall be specified by the Compliance department. Ac-
cess to an individual’s information is limited to that individual and the Compliance department.
Trade Information. Members of a manager research group and their immediate family members must submit brokerage account trade information in such form and in such manner (which may include, among other things, a
direct electronic data feed from a brokerage firm or direct delivery of duplicate hard-copy trade confirmations) as shall
be specified by the Compliance department. This applies to any accounts, including purchases made within the brokerage window of Morningstar’s 401(k) plan or similar retirement plans outside of the United States, where the manager
research analyst or their immediate family member have beneficial ownership. If a brokerage firm charges a fee for
complying with the requirements of this paragraph, the employee may inform the Compliance department of this fact
and discuss alternative delivery methods.
Manager Research Analysts P rohibited from Ow ning Money Management Firms. Members of a
manager research group and their family members are prohibited from holding securities issued by publicly traded
companies that derive a significant portion of their revenue from managing mutual funds and which are included on a
list of such companies assembled by the Securities Trading and Disclosure Policy Committee. The list is available on
The Pond (Restricted List for Manager Research Analysts). Manager research analysts who are unable to access the
Restricted List for Manager Research Analysts because of telecommuting arrangements or technical problems are still
responsible for determining whether or not a particular security is on the Restricted List prior to making any transactions. The committee shall have authority to develop such guidelines for identifying companies to be included on that
list as it deems appropriate.
IV.
Insider Trading: Trading based on inside information is STRICTLY PROHIBITED.
Insider trading rules apply to all Morningstar employees. Failure to adhere to these guidelines may result in
dismissal from Morningstar, possible criminal prosecution under federal and/or state securities laws, and the imposition
of money damages, both against the employee and Morningstar.
A.
Overview
The term “insider trading” is generally considered to include both the use of material, nonpublic information to trade
securities and the communication of material, nonpublic information to others.
×
Information is material if there is a substantial likelihood that a reasonable investor would consider it important in making an investment decision.
×
Positive or negative information may be material.
×
Information is nonpublic if it has not been disseminated in a manner making it available to investors generally.
Morningstar, Inc. – Securities Trading and Disclosure Policy
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×
As a general rule, information is not considered public until it is considered absorbed and evaluated by the
investment market after completion of the second trading day after the information is released to the public.
Insider trading rules apply to purchases and sales of Morningstar securities, as well as securities of other entities, including customers or suppliers of Morningstar, companies whose securities Morningstar covers, and entities with
which Morningstar may be negotiating significant transactions.
Awareness Standard: An employee may be found liable for effecting securities transactions while being “aware” of
inside information, except in the following three situations:
×
The employee can demonstrate that before becoming aware of the inside information, he or she entered into
a binding contract to trade that security;
×
The employee provided instructions to another person (i.e., broker) to execute a trade before becoming aware
of inside information; or
×
The employee adopted, and had previously adhered to, a written plan specifying purchases or sales of a security prior to becoming aware of inside information.
Duties of Trust/Confidence: Employees should not ignore the duty of trust they have with their clients and family members. Therefore, employees are prohibited from placing any trade based on any inside information that may have been
communicated to them by their clients or family members.
B.
In order to reduce the possible misuse of inside information, Morningstar employees must adhere to the following rules.
×
No “tipping”: Employees may not communicate inside information to others.
×
No trading on inside information: Employees may not trade, or direct any other person to trade, in a security
while in possession of material, nonpublic information about that security or the issuer of that security.
×
Any employee who is a member of a public company’s board of directors must notify the Chief Legal Officer.
C.
Limits on Trades In Morningstar Securities – “Blackout” Periods.
A “blackout” period is a period during which a Morningstar employee may not execute transactions in Morningstar securities.
Even if a blackout period is not then in effect, an employee may not trade in Morningstar securities if the employee is
aware of material, nonpublic information about Morningstar. For example, if Morningstar issues a quarterly earnings
press release and an employee is aware of other material, nonpublic information concerning Morningstar not disclosed
in the earnings press release, the employee may not trade in Morningstar securities. The prohibition on trading while
being aware of material, nonpublic information about Morningstar extends to sales of shares issued upon exercise of
stock options or upon vesting of restricted stock units granted under a Morningstar stock incentive plan.
×
Quarterly Earnings Blackout Periods. Employees may not buy or sell Morningstar securities during the period
beginning with the close of business on the last business day of a fiscal quarter or year and ending at the
open of business on the third business day after the date of the public release of the financial results for the
fiscal quarter or year (for example, by means of a press release or a government filing). Morningstar’s Legal
Morningstar, Inc. – Securities Trading and Disclosure Policy
6
department will provide notification to employees alerting them of when a quarterly earnings release period
begins and ends. However, absence of that notification does not relieve employees from compliance with this
section.
×
Event-Specific Blackout Periods. Morningstar reserves the right to impose trading blackout periods from time
to time when, in the judgment of Morningstar’s Chief Legal Officer, a blackout period is warranted. A blackout
period may be imposed for any reason, including Morningstar’s involvement in a material transaction or other
material public announcements. The existence of an event-specific blackout period may not be announced, or
may be announced only to those who are aware of the transaction or event giving rise to the blackout period.
If an employee is made aware of the existence of an event-specific blackout period, that employee should not
disclose the existence of such blackout period to any other person. Individuals that are subject to eventspecific blackout periods will be contacted when these periods are instituted from time to time.
D.
Rules Regarding Stock Options and Other Stock-Related Awards
Employees may exercise stock options during a blackout period if none of the shares issued upon the exercise
are sold during the blackout period. Accordingly, an employee may exercise stock options during a blackout period if he
or she pays the exercise price, tax withholding, and any other exercise-related fees in cash and not through a “cashless
exercise” where a broker sells shares issued upon exercise to raise those funds.
The use of share withholding that does not involve a market transaction in order to satisfy tax obligations related to the
vesting of an award made under any of Morningstar’s stock-based incentive plans is not prohibited by this policy.
E.
Rule 10b5-1 Plans
Transactions in Morningstar securities under a plan that complies with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are not subject to the prohibition on trades during blackout
periods or the prohibition on trading while being aware of material, nonpublic information described above.
In general, a Rule 10b5-1 plan must be entered into before the employee is aware of material, nonpublic information
and may not be adopted during a blackout period. Once the plan is adopted, the employee must not exercise any influence over the amount of securities to be traded, the price at which they are to be traded or the date of the trade. In
addition, the plan must either specify (including by formula) the amount, pricing and timing of transactions in advance
or delegate discretion on those matters to an independent third party.
Morningstar requires that all Rule 10b5-1 plans be approved in writing and in advance by the Chief Legal Officer. Morningstar also requires that Rule 10b5-1 plans include such terms and reflect the policies pertaining to the same established by its board of directors.
F.
Other Trading Restrictions Applicable to Morningstar Securities.
We consider it improper and inappropriate for our employees to engage in short-term or speculative transactions in Morningstar securities or in other transactions in Morningstar securities that may lead to inadvertent violations
of insider trading laws. Accordingly, employee transactions in Morningstar securities are subject to the following guidance:
Morningstar, Inc. – Securities Trading and Disclosure Policy
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×
Short Sales. Employees may not engage in short sales of Morningstar securities (sales of securities that are
not then owned), including a “sale against the box” (a sale with delayed delivery).
×
Publicly Traded Options. Employees may not engage in transactions in publicly traded options on Morningstar
securities (such as puts, calls, and other derivative securities) on an exchange or in any other organized market.
×
Standing Orders. Standing orders should be used only for a brief period of time. A standing order placed with
a broker to sell or purchase stock at a specified price leaves the seller with no control over the timing of the
transaction. A standing order transaction executed by the broker when an employee is aware of material,
nonpublic information may result in unlawful insider trading even if the standing order was placed at a time
when the employee did not possess material, nonpublic information.
×
Margin Accounts and Pledges. Securities held in a margin account or pledged as collateral for a loan may be
sold by the broker if an employee fails to meet a margin call or by the lender in foreclosure if the employee
defaults on the loan. Employees may not have control over these transactions as the securities may be sold
at certain times without the employee’s consent. A margin or foreclosure sale that occurs when an employee
is aware of material, nonpublic information may, under some circumstances, result in unlawful insider trading.
Because of this danger, employees should exercise caution in holding Morningstar securities in a margin account or pledging Morningstar securities as collateral for a loan.
V.
Section 16 Reporting.
Directors and executive officers of Morningstar must file periodic reports regarding their ownership of Morningstar securities pursuant to Section l6(a) of the Exchange Act and are subject to disgorgement of “short-swing” profits pursuant to Section l6(b) of the Exchange Act. Violations of or failure to comply with these requirements can result
in SEC enforcement action.
Morningstar’s board of directors has adopted an Addendum to this policy that applies to its directors and executive
officers. The Addendum is attached as Annex A. Directors and executive officers must pre-clear all transactions in
Morningstar securities with Morningstar’s Chief Legal Officer prior to executing such transactions. Morningstar will
notify employees who are subject to Section 16.
VI.
Equity Guidelines.
Each director and executive officer of Morningstar, Inc. is required to hold either (a) an aggregate number of
shares of Morningstar common stock with a value of $5,000,000, or (b) an aggregate number of shares of Morningstar
common stock, exercisable Morningstar stock options, and vested deferred Morningstar restricted stock units that is
greater than or equal to the sum of:
(1) 12.5% of the total number of shares of Morningstar common stock subject to exercisable stock options held by him
or her on May 2, 2005 or, in the case of an individual becoming a director or an executive officer after May 2, 2005,
12.5% of the number of shares of Morningstar common stock subject to exercisable stock options held by him or her
on the date that he or she became a director or an executive officer,
(2) 12.5% of the total number of shares of Morningstar common stock subject to exercisable Morningstar stock options
held by him or her that became exercisable after May 2, 2005 or, if later, the date on which he or she became a director or an executive officer, and
Morningstar, Inc. – Securities Trading and Disclosure Policy
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(3) 25% of the total number of shares of Morningstar common stock attributable to Morningstar restricted stock units
or performance shares that became vested after May 2, 2005 or, if later, the date on which he or she became a director or an executive officer.
When calculating the aggregate number of shares of Morningstar common stock subject to exercisable Morningstar
stock options, an exercisable Morningstar stock option is considered the equivalent of one half of a share of Morningstar common stock.
For the purpose of these equity guidelines, directors and executive officers shall be deemed to hold any shares of
Morningstar common stock that they beneficially own for purposes of Section 16(b) under the Securities Exchange Act.
VII.
Enforcement of Policies.
A.
Equity and Manager Research Analysts/Editors
The Compliance department has the authority to request additional information and/or documentation from an
analyst about a particular trade or his or her overall trading activity. Any finding that the Compliance department determines is a conflict with Morningstar’s Securities Trading and Disclosure Policy will be presented to the analyst, his or
her supervisor, and the Securities Trading and Disclosure Policy Committee. All parties will discuss the matter and the
Securities Trading and Disclosure Policy Committee will determine a resolution. If need be, the relevant group head or
Morningstar’s Chief Executive Officer will be consulted. Possible resolutions include, but are not limited to, unwinding a
transaction or contributing to a charity determined by Morningstar an amount equal to the profit made on a trade or
trades in question.
B.
All Other Employees
The Compliance department has the authority to request information and/or documentation (e.g., brokerage
account statements) from an employee. Any finding that the Compliance department determines is a conflict with
Morningstar’s Securities Trading and Disclosure Policy will be presented to the employee and his or her supervisor. All
parties will discuss the matter and the employee’s supervisor will determine a resolution. If need be, the head of the
employee’s business group or Morningstar’s Chief Executive Officer will be consulted and make the final determination
as to the appropriate resolution. Possible resolutions include, but are not limited to, unwinding a transaction or contributing to a charity determined by Morningstar an amount equal to the profit made on a trade or trades in question.
C.
All Employees – Insider Trading Violations
Upon determining that a violation or possible insider trading violation has occurred, the Compliance department will report its recommendation for resolution to the employee’s supervisor. The supervisor will then review the
Compliance department’s findings and both will discuss the matter with the employee believed to have violated the
policy.
The matter will then be reported to Morningstar’s Chief Executive Officer and Chief Legal Officer. The Chief Executive
Officer in consultation with the Chief Legal Officer may impose sanctions against the employee, as he or she deems
appropriate under the circumstances.
Morningstar, Inc. – Securities Trading and Disclosure Policy
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D.
Appropriate sanctions may include without limitation:
×
The immediate unwinding of the transaction.
×
A forfeiture of any profit from the transaction.
×
Termination of employment.
×
Notification by Morningstar to the CFA Institute or other professional standards bodies for employees who are
CFA charter holders or candidates in the CFA program.
×
For insider trading violations, notification by Morningstar to the SEC or other local authority, if deemed appropriate, of the alleged violation and cooperation with the SEC or other local authority in any enforcement action
and/or prosecution of the individual(s) involved.
VIII.
Post-Employment Transactions.
If an employee is aware of material, nonpublic information concerning Morningstar when his employment or
service relationship terminates, the former employee may not trade in Morningstar securities until that information has
been publicly released.
IX.
Attestation.
Periodically, Morningstar will redistribute this Policy to all employees. Each employee will be required to attest
that he or she has read this Policy, understands its contents, and agrees to comply with it.
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Acknowledgement of Receipt of Morningstar, Inc.’s Securities Trading and Disclosure Policy
As Amended May 12, 2015
I hereby represent and affirm that I have read the Morningstar, Inc. Securities Trading and Disclosure Policy in
its entirety, understand its contents, and agree to comply with it.
Signature
Print Name
Date
Morningstar, Inc. – Securities Trading and Disclosure Policy
11
Annex A
Addendum to Morningstar Inc.’s
Securities Trading and Disclosure Policy
Scope of Addendum
This Addendum to Morningstar’s Securities Trading and Disclosure Policy applies to Insiders. For purposes of
this Addendum “Insiders” are those persons listed as Executive Officers and Board of Directors in Morningstar’s Annual
Report on Form 10-K and Proxy Statement, respectively. Morningstar may from time to time designate other individuals
who are subject to this Addendum. The Insiders are required by Section 16(a) of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), to file reports of their holdings of and transactions in Morningstar securities (including employee stock options). Further, Insiders are subject to trading limitations and disgorgement of “short-swing” profits under Sections 16(b) with respect to transactions in Morningstar securities.
In this Addendum, references to “you” or “Insiders” include:
×
your family members who reside with you;
×
anyone else who lives in your household;
×
any family members who do not live in your household but whose transactions in securities are directed by
you or are subject to your influence or control (such as parents or children who consult with you before they
trade in securities);
×
any person to whom you have disclosed material, nonpublic information; and
×
any person acting on your behalf or on behalf of any individual listed above.
You are responsible for making sure that the purchase or sale of any security covered by this Addendum by any such
person complies with this Addendum.
Pre-clearance Procedures
These pre-clearance procedures are designed to prevent violations of Section 16(a) and Section 16(b) of the
Exchange Act. Section 16(a) of the Exchange Act requires that certain transactions in Morningstar securities be reported on Form 4 and filed with the SEC within two (2) business days following the date of the transaction. You may not
engage in any transaction involving Morningstar securities (including a stock plan transaction such as an option exercise, a gift, loan, pledge or hedge, contribution to a trust or any other transfer) without first obtaining pre-clearance of
the transaction from Morningstar’s Chief Legal Officer or, in the absence of the Chief Legal Officer (or for transactions
to be made by the Chief Legal Officer) Morningstar’s Chief Financial Officer. A request for pre-clearance should be submitted to the Chief Legal Officer or the Chief Financial Officer, as the case may be, at least two business days in advance of the proposed transaction. Your request for pre-clearance should contain a brief description of the proposed
transaction with sufficient details of the transaction to give Morningstar the ability to prepare and file the required reports. The Chief Legal Officer or Chief Financial Officer, as the case may be, is under no obligation to approve a transaction submitted for pre-clearance and may determine not to permit the transaction. You may not execute a transaction
in Morningstar securities unless Morningstar’s Chief Legal Officer or Chief Financial Officer has approved the transaction(s) in accordance with the procedures set forth in this Addendum.
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Morningstar requires one business day to prepare the Form 4 and one business day to transmit the Form 4 to the SEC.
As a result, you must report the details of the transaction to us by the close of business on the date the transaction
occurred. Due to the short, two-business day period within which it must file the reports, Morningstar may have the
Form 4 executed on your behalf using a power of attorney that you have granted to Morningstar for this purpose and
will file the completed Form 4 with the SEC. Please contact Morningstar’s Chief Legal Officer immediately if you believe
there may be any errors in a filing.
Section 16(b) provides that Insiders are liable to Morningstar for any “short-swing profits” resulting from a non-exempt
purchase and/or sale of Morningstar securities that occur within a period of less than six months. The SEC may cause
Morningstar to contribute these disgorged profits into a public fund to be used for restitution to the victims of such
violations.
Although compliance with Section 16(a), Section 16(b) and other restricted trading periods is your responsibility, the
pre-clearance of all trades will allow Morningstar to assist you in preventing any inadvertent violations.
Exception for Approved Rule 10b5-1 Plans
Transactions by Insiders in Morningstar securities that are executed pursuant to a plan that complies with
Rule 10b5-1 under the Exchange Act are not subject to the prohibition on trading during blackout periods or to the prohibition on trading on the basis of material, nonpublic information contained in Morningstar’s Securities Trading and
Disclosure Policy or to the restrictions set forth above relating to pre-clearance procedures.
In general, a Rule 10b5-1 plan must be entered into before you are aware of material, nonpublic information and may
not be adopted during a blackout period. Once the plan is adopted, you must not exercise any influence over the
amount of securities to be traded, the price at which they are to be traded or the date of the trade. In addition, the plan
must either specify (including by formula) the amount, pricing and timing of transactions in advance or delegate discretion on those matters to an independent third party.
Morningstar requires that all Rule 10b5-1 plans be approved in writing and in advance by the Chief Legal Officer or, in
the absence of the Chief Legal Officer (or for plans to be entered into by the Chief Legal Officer) Morningstar’s Chief
Financial Officer.
Certification
All Insiders subject to the procedures set forth in this Addendum must certify their understanding of, and intent to comply with, Morningstar’s Securities Trading and Disclosure Policy and this Addendum on the Certification
attached to this Addendum.
Morningstar, Inc. – Securities Trading and Disclosure Policy
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Morningstar, Inc.
Securities Trading and Disclosure Policy Addendum Certification
TO: Morningstar, Inc.
RE: Securities Trading and Disclosure Policy Addendum Certification
I, ________________________, have received and read a copy of the Addendum to the Securities Trading and
Disclosure Policy of Morningstar, Inc., as amended May 12, 2015, and understand the terms and provisions of the Addendum. I hereby certify and agree to comply with the requirements and procedures of the Addendum in all respects.
I understand that my failure to observe and comply with the terms and provisions contained in the Addendum may
subject me to civil and/or criminal penalties and that a violation of the terms of the Addendum may subject me to discipline by Morningstar, or any of its subsidiaries, up to, and including, discharge.
Signature
Print Name
Title
Date
Morningstar, Inc. – Securities Trading and Disclosure Policy
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