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Code of Ethics

l. Overview

Puerto Rico Farm Credit, ACA, the “Association” or “PRFC”, has adopted this code of ethical conduct (the “Code of Ethics”) which is applicable to every director, officer, and employee. The Code of Ethics reaffirms the high standards of business conduct required and provides guidance to the Association and its Directors, Officers, Employees, and Agents.1

ll. Objective

The Association is committed to conducting business in accordance with the highest ethical standards as set forth in the Standards of Conduct Policy. Moreover, the Association is responsible for preparation and distribution of its financial statements and related disclosures and for providing relevant information that is true, accurate and complete to the Funding Corporation for use in preparing the Farm Credit system financial statements and related disclosures.

Accordingly, the Association expects all of its Directors, Officers, Employees, and Agents to maintain the highest standards of personal and professional integrity in all aspects of their business transactions and activities. This includes complying with all applicable laws, rules, and regulations, deterring wrongdoing and abiding by its Standards of Conduct Policy and Procedure as well as other policies and procedures adopted by PRFC that govern the conduct of its Directors, Officers, Employees and Agents. To achieve these high ethical standards, all Directors, Officers, Employees, and Agents should, among other things, avoid Conflicts of Interest.

This Code of Ethics is intended to supplement PRFC’s Standards of Conduct Policy and Procedure.

lll. Requirements

A. All Directors, Officers, Employees, and Agents. Directors, Officers, Employees, and Agents are expected to comply with both the letter and spirit of this Code of Ethics and to conduct themselves in a manner that promotes public confidence in the Association and the Farm Credit System. Ethical conduct requires not only adherence to specific rules and requirements, but also the exercise of sound judgment, integrity, fairness, and accountability in all business activities and professional relationships. All Directors, Officers, Employees, and Agents are required to:

  1. Maintain high ethical standards, including high standards of honesty, integrity, and fairness.
  2. Act in the best interests of the institution.
  3. Preserve the reputation of the institution and the public’s confidence in the Farm Credit System.
  4. Exercise diligence and good business judgement in carrying out official duties and responsibilities.
  5. Report to the Standards of Conduct Official any Conflicts of Interest and/or circumstances or transactions that have the appearance of creating a Conflict of Interest, involving the Director, Officer, Employee, or Agent, the Director’s, Officer’s, Employee’s, or Agent’s, Family or Reportable Business Entity.
  6. Refrain from participating in official action or discussion on any matter if the Director, Officer, Employee, or Agent has an actual or perceived Conflict of Interest.
  7. Work with the Standards of Conduct Official to identify conflicts and resolve reported Conflicts of Interest and appearances of Conflicts of Interest.
  8. Avoid self-dealing or acceptance of gifts or favors that may be deemed as offered, or have the appearance of being offered, to influence official actions or decisions.
  9. Comply with all applicable laws, rules, and regulations, as well as the rules and regulations of self-regulatory agreements to which the Association is a party.
  10. Promptly report any possible illegal or unethical activity, or violation of the Standards of Conduct Policy and the Code of Ethics to the Standards of Conduct Official or through the anonymous reporting procedures.
  11. Take all reasonable measures to protect the confidentiality of non-public information about the Association and its customers obtained or created in connection with its activities and to prevent the unauthorized disclosure of this information unless required by applicable law or regulation, or legal or regulatory process.

B. Directors and Officers. In addition, Directors and Officers are required to fulfill their fiduciary duties to the institution and its stockholders. Additionally, Directors and Officers are required to produce full, fair, accurate, timely and understandable disclosures of Association financial statements and related financial reports or communications as well as reports and documents filed with, or submitted to, AgFirst Farm Credit Bank and the Farm Credit Administration(“FCA”). Directors and Officers are explicitly prohibited from taking any action to fraudulently, coerce, manipulate, or mislead the Association’s independent public accountant for the purposes of rendering the Association’s financial statements misleading.

C. Reporting. To comply with the reporting obligations, each person subject to this Code of Ethics shall make a report of illegal or unethical activity or a violation of the Standards of Conduct Policy and the Code of Ethics by either:

  1. Reporting to the Standards of Conduct Official (SOCO) using the contact information maintained on the Association’s intranet, website, or other official communication channels.
  2. To the Association’s Ethics Hotline, Ethics Point operated through Navex, by:
  3. Any individual who contacts the EthicsPoint may, at their election, remainanonymous when making a report pursuant to the Code of Ethics, to the extentpermitted by law. Retaliation against an individual for making a report in good faithis strictly prohibited. See Anonymous Reporting Policy for additional information.

IV. Policy Compliance

The Association shall maintain on its public website either (i) the complete Code of Ethics or (ii) a statement indicating that it has adopted a Code of Ethics, describing the purpose of the Code, and advising that a copy is available upon request at no cost. Each Director, Officer, Employee, and Agent is responsible for reading and understanding this policy and conducting their activities and business transactions accordingly.

PRFC reserves the right to audit/monitor systems on a periodic basis to ensure compliance with this policy. Compliance may be measured through various means, including but not limited to business tool reports, internal and external audits, and feedback.

Any requested exception to this Code of Ethics shall be rare and only permitted when consistent with applicable law, FCA regulations, and the best interests of the Association. The SOCO shall review all requests and provide a recommendation to the Board of Directors or an authorized Board committee for approval. All approved exceptions shall be documented, including the basis for the exception, any mitigating controls, and any conditions imposed.

V. Violations of the Code of Ethics

All Directors, Officers, Employees, and Agents will be held accountable for adherence to this Code of Ethics. A failure to observe the terms here contained may result in disciplinary action, up to and including termination of employment, termination of the relationship or contract, or removal from the board of directors, as applicable.

Violations of the Code of Ethics may constitute violations of law and may result in civil or criminal penalties. Pursuant to 12 C.F.R. § 612.2180 and 12 U.S.C. § 2267a, FCA has jurisdiction and authority to initiate certain actions and enforcement authority for up to six years following the separation of an Institution-Affiliated Party from a Farm Credit institution. This allows FCA to ensure the safety and soundness of the System in appropriate circumstances and to enforce its regulations, regardless of when the relationship with an individual or entity was terminated.

If you have any questions regarding the best course of action in a particular situation, contact the Standard of Conduct Officer.

VI. Acknowledgement

Each Director, Officer, and Employee shall be required to sign a statement annually that he or she has read and understands this Code of Ethics.

VII. Definitions

Agent: Any person, other than a Director or Employee of the Association, with the power to act for the institution either by contract or apparent authority and who currently either represents the Association in contacts with third parties or provides professional or fiduciary services to the Association.

Conflicts of Interest: A set of circumstances or the appearance thereof where a person has a financial interest in a transaction, relationship, or activity that could or does actually affect (or has the appearance of affecting) that person’s ability to perform official duties and responsibilities in a totally impartial manner and in the best interest of the Association when viewed from the perspective of a reasonable person with knowledge of the relevant facts.

Director: A member of the Association’s board of directors (the “board”).

Employee: Any individual employed on a part-time, full-time, or temporary basis by the Association, including those identified as officers of the institution. However, persons not maintained on the institution’s payroll (i.e., independent contractors and temporary workers provided through temporary services agencies) are not employees for purposes of this definition.

Family: Parents, spouses or civil union partners, children, siblings, uncles, aunts, nephews, nieces, grandparents, grandchildren, and the spouses of the foregoing, whether arising from biological, adoptive, marital, or other legal means (e.g., stepparents, stepchildren, half-siblings, in-laws). The term also includes anyone residing in the household or who is a legal or financial dependent, regardless of any familial relationship.

Institution-Affiliated Party (as defined in 12 C.F.R. § 612.2180(d)):

  • A Director, Officer, Employee, shareholder, or Agent of a System institution;
  • An independent contractor (including an attorney, appraiser, or accountant) who knowingly orrecklessly participates in:
    • A violation of law (including regulations) that is associated with the operations and activities of one or more System institutions;
    • A breach of fiduciary duty; or
    • An unsafe practice that causes or is likely to cause more than a minimum financial loss to, or a significant adverse effect on, a System institution; or
  • Any other person as determined by the Farm Credit Administration (by regulation or on a caseby-case basis) who participates in conduct of the affairs of a System institution.

Officer: The salaried Chief Executive Officer, President, vice president, secretary, treasurer, general counsel, Chief Financial Officer, and Chief Lending Officer of the System institution, and any person not so designated but who holds a similar position of authority.

Reportable Business Entity: An entity in which the reporting individual, directly, or indirectly, or acting through or in concert with one or more persons:

  • Owns a Material Percentage of the equity;
  • Owns, controls, or has the power to vote a Material Percentage of any class of voting securities; or
  • Has the power to exercise a Material influence over the management of policies of such entity from their status as a partner, director, officer, or majority shareholder in the entity.
  1. The Code of Ethics is intended to comply with FCA Regulation Part 612, Subpart A, including 12 C.F.R. § of 612.2137(c), and terms used herein are defined in 12 C.F.R. § 612.2130 ↩︎

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