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Generally, you are not permitted to invest in audit clients or their affiliates,

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also referred to as restricted entities. However, in certain instances,

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your immediate family members may be permitted to hold a restricted

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investment through their employee benefit plan with their current

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employer when certain criteria are met.

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To determine if this exception applies, you must identify whether you are

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a Covered Person for the restricted investment offered

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through your immediate family member’s current employer’s benefit plan.

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If you are not a Covered Person for the investment, your immediate

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family members may invest in those restricted investments and may hold them

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as long as they continue to be employed by that employer

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and the investments continue to be held by the plan.

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However, if you are a Covered Person for the restricted investment,

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you need to further evaluate the reason for your Covered Person status to

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determine whether the investment is permissible.

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Why are you a Covered Person for the restricted entity?

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If you are a Covered Person by virtue of being a member of the audit

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engagement team for the restricted entity or a member of the chain of command

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to the audit engagement, your immediate family member is not

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permitted to invest in that entity.

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If you are a Covered Person because you are a partner or member of the

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management group providing non-audit services to the restricted entity,

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or a partner or audit managing director in the office where the lead

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audit engagement partner or lead audit managing director primarily

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practices with respect to the audit, your immediate family member is

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permitted to hold these restricted investments if there are no

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other available investment options in unrestricted entities

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(or in restricted entities for which you are not a Covered Person).

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Determining the permissibility of investments in current employee benefit plans

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If the investment is publicly traded, you may use the ticker symbol

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to search for it in KICS. If there is no ticker symbol for the investment,

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or you cannot find it in KICS,

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additional research is needed to confirm the restriction status.

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In these cases, you should contact Risk Management - Independence

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for assistance in determining the restriction status before making any

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benefit elections or investments.

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You must timely manually record the individual investments

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held through the employee benefit plans in your KICS account.

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The requirement to manually record the investments in KICS

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is because most benefit plan accounts cannot be enrolled in the KICS

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Broker Import Program. Pay attention to statements and notifications

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informing you of changes—including changes that you or your

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immediate family member may not have initiated—so you can

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timely report any updates in KICS.

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Disposing of restricted investments

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Keep your independence responsibilities in mind and take action

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right away when an immediate family member changes employers.

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Remember, these exceptions apply only to investments held in an

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employee benefit plan with a current employer, not those

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held in employee benefit plans with any former employers.

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Therefore, you must ensure that any restricted investments held

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via this exception are disposed of as soon as the immediate family

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member has the right to do so – for example, upon leaving their employer

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or retiring - and no later than 30 days thereafter.

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Roll over former employee benefit plans

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Any qualified defined contribution plans, such as 401(k) plans,

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that you and your immediate family members hold with a former employer

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are required to be rolled over into an employee benefit plan with

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a current employer, or an IRA with a participating broker that

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has been activated for KICS Broker Import, within

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three months of terminating employment.

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