35-393.02. Required actions

(Conditionally Rpld.)

A. The public fund shall adhere to the following procedures for companies on the scrutinized companies with activities in the Iran petroleum energy sector list on an annual basis:

1. The public fund shall make reasonable efforts to determine the companies on the list in which the public fund owns direct holdings.

2. For each company identified pursuant to paragraph 1 with only inactive business operations, the public fund shall send a written notice informing the company of this article and encouraging it to continue to refrain from initiating active business operations in Iran until it is able to avoid scrutinized business operations. The public fund shall continue such correspondence on an annual basis.

3. For each company newly identified pursuant to paragraph 1 with active business operations, the public fund shall send a written notice informing the company of its scrutinized company status and that it may become subject to divestment by the public fund. the notice shall offer the company the opportunity to clarify its Iran-related activities and shall encourage the company, within one hundred eighty days, to either cease its scrutinized business operations or convert such operations to inactive business operations in order to avoid qualifying for divestment by the public fund.

4. If, within one hundred eighty days following the public fund's first engagement with a company pursuant to paragraph 3, that company ceases scrutinized business operations, the company shall be removed from the list and this section shall cease to apply to it unless it resumes scrutinized business operations. If, within one hundred eighty days after the public fund's first engagement, the company converts its scrutinized active business operations to inactive business operations, the company shall be subject to paragraph 2.

5. If, after one hundred eighty days following the public fund's first engagement with a company pursuant to paragraph 3, the company continues to have scrutinized active business operations, and only while such company continues to have scrutinized active business operations, the public fund shall sell, redeem, divest or withdraw all publicly traded securities of the company according to the following schedule:

(a) At least fifty per cent of assets shall be removed from the public fund's assets under management within twelve months after the company's most recent appearance on the list.

(b) One hundred per cent of assets shall be removed from the public fund's assets under management within eighteen months after the company's most recent appearance on the list.

(c) If a company that ceased scrutinized active business operations following engagement pursuant to paragraph 3 resumes such operations, subdivision (a) shall immediately apply, and the public fund shall send a written notice to the company. The company shall also be immediately reintroduced onto the list.

6. The public fund shall not acquire securities of companies on the scrutinized companies with activities in the Iran petroleum energy sector list that have active business operations, except as provided in paragraphs 7 and 8.

7. A company for whom the United States president exercises his waiver authority or the United States government affirmatively declares to be excluded from its present or any future federal sanctions regime relating to Iran shall not be subject to divestment or investment prohibition pursuant to paragraphs 5 and 6.

8. Notwithstanding any other law, paragraphs 5 and 6 do not apply to indirect holdings in actively or passively managed investment funds or direct holdings in passively managed investment funds. The public fund shall annually submit letters to the managers of such investment funds containing companies with scrutinized active business operations requesting that they consider removing such companies from the fund or create a similar actively or passively managed fund devoid of such companies. If the manager creates a similar fund, the use of which would not require increased fees on the part of the public fund, the public fund shall replace all applicable investments with investments in the similar fund in a reasonable time frame consistent with prudent investing standards.

B. For the purposes of this section, private funds shall be deemed to be indirect holdings in actively managed investment funds.

35-393.02. Required actions

(Conditionally Rpld.)

A. The public fund shall adhere to the following procedures for companies on the scrutinized companies with activities in the Iran petroleum energy sector list on an annual basis:

1. The public fund shall make reasonable efforts to determine the companies on the list in which the public fund owns direct holdings.

2. For each company identified pursuant to paragraph 1 with only inactive business operations, the public fund shall send a written notice informing the company of this article and encouraging it to continue to refrain from initiating active business operations in Iran until it is able to avoid scrutinized business operations. The public fund shall continue such correspondence on an annual basis.

3. For each company newly identified pursuant to paragraph 1 with active business operations, the public fund shall send a written notice informing the company of its scrutinized company status and that it may become subject to divestment by the public fund. the notice shall offer the company the opportunity to clarify its Iran-related activities and shall encourage the company, within one hundred eighty days, to either cease its scrutinized business operations or convert such operations to inactive business operations in order to avoid qualifying for divestment by the public fund.

4. If, within one hundred eighty days following the public fund's first engagement with a company pursuant to paragraph 3, that company ceases scrutinized business operations, the company shall be removed from the list and this section shall cease to apply to it unless it resumes scrutinized business operations. If, within one hundred eighty days after the public fund's first engagement, the company converts its scrutinized active business operations to inactive business operations, the company shall be subject to paragraph 2.

5. If, after one hundred eighty days following the public fund's first engagement with a company pursuant to paragraph 3, the company continues to have scrutinized active business operations, and only while such company continues to have scrutinized active business operations, the public fund shall sell, redeem, divest or withdraw all publicly traded securities of the company according to the following schedule:

(a) At least fifty per cent of assets shall be removed from the public fund's assets under management within twelve months after the company's most recent appearance on the list.

(b) One hundred per cent of assets shall be removed from the public fund's assets under management within eighteen months after the company's most recent appearance on the list.

(c) If a company that ceased scrutinized active business operations following engagement pursuant to paragraph 3 resumes such operations, subdivision (a) shall immediately apply, and the public fund shall send a written notice to the company. The company shall also be immediately reintroduced onto the list.

6. The public fund shall not acquire securities of companies on the scrutinized companies with activities in the Iran petroleum energy sector list that have active business operations, except as provided in paragraphs 7 and 8.

7. A company for whom the United States president exercises his waiver authority or the United States government affirmatively declares to be excluded from its present or any future federal sanctions regime relating to Iran shall not be subject to divestment or investment prohibition pursuant to paragraphs 5 and 6.

8. Notwithstanding any other law, paragraphs 5 and 6 do not apply to indirect holdings in actively or passively managed investment funds or direct holdings in passively managed investment funds. The public fund shall annually submit letters to the managers of such investment funds containing companies with scrutinized active business operations requesting that they consider removing such companies from the fund or create a similar actively or passively managed fund devoid of such companies. If the manager creates a similar fund, the use of which would not require increased fees on the part of the public fund, the public fund shall replace all applicable investments with investments in the similar fund in a reasonable time frame consistent with prudent investing standards.

B. For the purposes of this section, private funds shall be deemed to be indirect holdings in actively managed investment funds.