History of the Firm In 1848, the Lazard brothers formed a dry goods company which eventually became the firm now known as Lazard Frères & Co. LLC (“LF&Co.”). On May 1, 1970, Lazard Asset Management was formally established as the investment management division of LF&Co. and registered with the SEC as an investment adviser. On January 13, 2003, LAM was established as a separate subsidiary of LF&Co. and succeeded to the entire investment management business previously conducted as a division of LF&Co. LAM is a Delaware limited liability company and a wholly-owned subsidiary of LF&Co., a New York limited liability company with one member, Lazard Group LLC, a Delaware limited liability company. Interests of Lazard Group LLC are indirectly held by Lazard, Inc., a Delaware corporation whose shares are publicly traded on the New York Stock Exchange (“NYSE”) under the symbol “LAZ.” Principal Owners The following organizational chart depicts the principal owners of LAM: LAM AUM LAZARD GROUP LLC LAZARD, INC. LLTD CORP II LLTD 2 SARL LLTD CORP I LLTD HOLDING SARL LAZARD FRÈRES & CO. LLC LAZARD ASSET MANAGEMENT LLC LAM’s Global Affiliates LAM conducts its distribution and investment activities through subsidiaries and other affiliates located outside of the United States, which are registered to offer investment advisory services in their local jurisdictions. Through the use of common systems and supervisory procedures, LAM and these affiliates operate as a global asset management business. Investment personnel employed by different LAM affiliates continuously collaborate on research and investment decisions that are applied to client accounts domiciled in various global jurisdictions. Similarly, sales personnel employed by one of LAM’s affiliates may offer to local clients investment strategies managed by personnel employed by another affiliate. In such situations, the local affiliate will delegate portfolio management responsibilities to the other affiliate. Such delegation will be disclosed to the relevant client, normally through the investment management agreement. LAM AUM As of December 31, 2023, LAM had regulatory assets under management of approximately $146 billion, $145.5 billion of which was discretionary and $491.6 million of which was non-discretionary. However, these figures do not capture assets that LAM manages via certain model portfolio arrangements, which are, by their nature, non-discretionary. LAM provides model portfolios to various financial intermediaries and institutional clients. As of December 31, 2023, LAM managed approximately $16.3 billion through such non-discretionary model portfolio arrangements. As of December 31, 2023, LAM, together with its global subsidiaries, managed a total of approximately $207 billion in assets under management. Description of Advisory Services For over fifty years, LAM has provided a wide array of investment advisory services and products to a variety of clients. LAM focuses on delivering exceptional client services and consistent application of its investment philosophies and processes. LAM takes a disciplined approach to investing on behalf of its clients and maintains a deep and creative team of investment professionals responsible for research and portfolio management. LAM actively manages assets according to a variety of equity, fixed income and alternative investment strategies, including among them investment strategies focusing on global, regional and international equity, U.S. equity, U.S. and global fixed income, and emerging markets equity and debt. LAM’s alternative investment products include convertible event, emerging market currency and debt, long/short equity and private equity strategies, among others. LAM provides investment advisory services to a variety of clients, including individuals, financial and other institutions, endowments, foundations, corporations, Taft-Hartley plans, public funds, wrap programs, model-based programs, mutual funds, private funds, alternative investment funds and other types of investment vehicles. LAM does not offer purely passive management investment strategies. LAM manages client assets, primarily on a fully discretionary basis, pursuant to an investment management agreement under which it advises each such client, according to LAM’s best judgment, as to the investment and reinvestment of the cash and securities in the client’s account(s). In exercising its judgment in managing client accounts, LAM takes into account the individual objectives, restrictions and guidelines of each client, as agreed with the client, and other factors deemed relevant by the client and disclosed to LAM, such as the nature and amount of other assets and income from other sources. In addition, LAM furnishes investment advisory services to registered open- and closed-end investment companies and private funds, including hedge funds and commingled funds and trusts, based on the investment objectives and restrictions as set forth in each fund’s prospectus or offering document. LAM will assist clients in the review, evaluation and/or formulation of investment guidelines for the account and may collect information about each client’s financial circumstances, objectives, risk tolerance and restrictions. Separately managed account clients may impose reasonable restrictions on investments in particular securities and/or types of securities. LAM has adopted policies and procedures designed to ensure compliance with such restrictions. LAM’s automated system is not capable of monitoring certain types of client-imposed guidelines. Consequently, while LAM may accept these types of restrictions, LAM will manually monitor such guidelines on a periodic basis. LAM does not have a firm-wide chief investment officer or a central investment committee that directs on a firm-wide basis how LAM’s portfolios or investment strategies are implemented. LAM also does not require investment personnel to conduct research according to a singular approach, nor does LAM try to formulate a firm-wide investment view on particular securities, sectors or industries. Rather, LAM encourages an “integrated knowledge” approach whereby its investment personnel generate and share a diversity of investment opinions. Each portfolio management team makes investment decisions for the accounts under its discretion based upon its own views (and subject to its strategies and client guidelines), even if those decisions are inconsistent with the views or decisions of other portfolio management teams. This model allows LAM to meet the needs of its global clients, and LAM has adopted procedures designed to address conflicting trades and other potential conflicts that may result from LAM’s investment activities. Lazard Family Office Partners provides wealth management services to sophisticated families with complex balance sheets, on both a discretionary and non-discretionary basis. The chief investment officer and other investment professionals of this division provide clients with strategic advice and planning, full investment management and private direct investment opportunities. The Lazard Family Office Partners global investment platform is open architecture and spans all asset classes, both public and private. Lazard Family Office Partners may invest or recommend the investment of client assets in strategies and funds managed and/or sponsored by LAM. For information relating to the wealth management services provide by Lazard Family Office Partners, please refer to the Form ADV Part 2A of Lazard Family Office Partners (the “LFOP Brochure”). LAM has adopted a Sustainable Investment and ESG Integration Policy (the “ESG Policy”) which recognizes that an issuer’s ESG practices, whether good or bad, can affect its valuation and financial performance. The ESG Policy also includes the firm’s criteria for labeling a LAM-managed portfolio or strategy “ESG Integrated” or “Sustainability Focused.” LAM also is a signatory to the United Nations Principles for Responsible Investment (the “UN PRI”), which seeks to incorporate six ESG principles into investment-decision making by participating asset managers. Portfolio management teams at LAM have discretion to incorporate financially material ESG considerations into their investment processes, and to what degree. Information concerning a particular investment strategy’s utilization of ESG considerations (including the strategy’s potential status as “ESG Integrated” or “Sustainability Focused” under our procedures) is set forth in LAM’s description of the strategy in its offering materials. Examples of how LAM investment professionals may incorporate financially material ESG considerations in their research and company engagement are set forth on LAM’s Sustainable Investing website available here. Proxy Voting Generally, LAM is granted proxy voting authority under its client agreements. However, it is the responsibility of the custodian appointed by the client to ensure that LAM receives notice of the relevant proxies sufficiently in advance of the relevant meeting to allow LAM to vote. This is especially true with respect to wrap programs in which LAM serves as an investment adviser. LAM is not responsible for voting proxies if it does not receive timely notice from the client’s custodian, or in the case of wrap programs, the program sponsor. Please refer to Item 17 for more information on LAM’s proxy voting policy. Proxy voting information relating to Lazard Family Office Partners can be found in Item 17 of the LFOP Brochure. Cash Management Each client account or fund managed by LAM may keep a portion of its assets in cash reserves. Depending on the individual objectives, restrictions and guidelines of each client account or fund, LAM may actively manage such cash reserves and either enter into repurchase agreements or “sweep” them temporarily into one or more money market mutual funds or other short-term investment vehicle. In the case of client accounts, generally, sweep arrangements are made between the client and the client’s custodian, typically with the client responsible for selecting the sweep vehicle. In cases in which LAM does not actively manage the residual cash in client accounts, LAM’s sole responsibility in this regard is to issue standing instructions to the custodian to sweep excess cash in the client’s account into the sweep vehicle. In circumstances where the client has not made arrangements with its custodian, LAM will consult with the client regarding an appropriate sweep vehicle from those made available by the custodian, with the ultimate decision being made by the client. In exceptional circumstances, LAM will select an appropriate sweep vehicle from those made available by the custodian. However, where LAM does not actively manage the residual cash in a client account, LAM will not be responsible for monitoring the sweep vehicle into which such residual cash is swept. In cases in which LAM actively manages the residual cash in a client account, LAM may charge a fee for such cash management service, in addition to its regular advisory fee. Any client whose assets are “swept” into a money market mutual fund or other short-term investment vehicle or other unaffiliated fund will continue to pay LAM’s regular advisory fee plus a management fee to the manager of such fund or short- term investment vehicle on the portion of the account assets invested in the money market mutual fund, short-term investment vehicle or other unaffiliated fund. Except to the extent prohibited by applicable law, LAM receives and retains all or a portion of the 12b-1 distribution/servicing fees paid by such vehicles or other unaffiliated fund. Clients whose assets are entered into repurchase agreements or “swept” into a money market mutual fund, other short-term investment vehicle or other unaffiliated fund should be aware that their investment may significantly be affected depending on the interest rate environment and other factors. Foreign Currency Exchange (“FX”) Transactions Clients may delegate the execution of FX transactions to LAM. In such cases, LAM (as agent) will arrange for its FX Advisory Group to execute spot FX transactions in unrestricted currencies on the terms that LAM has negotiated through the FX Advisory Group at the client’s custodian bank or through a third-party broker, depending upon the instructions LAM receives from the client. When actively managing FX trades across numerous accounts, LAM may (through instructions to counterparties or on its own) net client purchases and client sales in the same currency to reduce LAM’s clients’ transaction costs. Because of various limitations imposed by non-U.S. authorities and other parties, transactions in restricted currencies will continue to be effected by each client’s custodian pursuant to standing instructions. Each client’s custodian also will be responsible for executing all other types of FX transactions pursuant to standing instructions, such as those related to dividend and interest repatriation. In cases where a client has not requested that LAM handle arrangements for the settlement of transactions in non-base currency securities, LAM will instruct the client’s custodian to effect the necessary FX transaction. This is done either through standing instructions communicated to the custodian bank when the account is established or at the time settlement instructions are sent to the custodian bank for a particular transaction. In those cases, the custodian bank is responsible for executing FX transactions, including the timing and applicable rate of such execution pursuant to its own internal processes. Where custodian banks execute FX transactions based on standing instructions, LAM will not know the precise execution time of the FX trade and cannot influence the exchange rates applied to those trades. Currently, for clients who have requested that LAM handle spot FX, with direction to execute through their custodian, the rates for FX transactions are generally negotiated in an active manner by LAM utilizing the custodian bank’s institutional FX desk at LAM’s instruction, multiple times throughout the day. For certain other clients who have approved LAM to execute without specific custodian bank direction, LAM may execute the FX trades through approved counterparties other than the client’s custodian bank. These FX transactions are also generally negotiated in an active manner, multiple times throughout the day. Open execution (trades executed at banks other than the client’s custodian, either in a negotiated or standing instruction format) may involve incremental settlement risk and costs in that trades executed with other counterparties will involve wiring funds to counterparties and certain trade-away fees for third-party executions. However, LAM may determine that the execution benefits from trading with other counterparties outweigh the incremental risks and costs. In addition to executing spot FX transactions in unrestricted currencies, LAM’s FX Advisory Group may assist clients with both passive and active FX hedging. In the case of passive FX hedging, the FX Advisory Group manages currency exposure employing a rules-based approach based on the client’s guidelines, which may specify exposure targets, tolerance bands, the hedging approach (e.g., portfolio overlay, share class or benchmark) and rebalancing. In the case of active FX hedging, the FX Advisory Group actively manages currency exposure on a discretionary basis based on the client’s goals and limits. LAM may charge a fee for FX services, in addition to its regular advisory fee. Wrap Fee Programs From time to time, clients of broker-dealers or other financial institutions retain LAM under so-called “wrap fee” programs offered by those institutions where LAM is selected as an investment adviser for the client’s program account. The broker-dealer or financial institution generally arranges for payment of LAM’s advisory fee on behalf of the client, monitors and evaluates LAM’s performance and, in certain cases, provides custodial services for the client’s assets, all for a single fee paid by the client to the broker or other financial institution. In addition, LAM participates in programs where it enters into advisory agreements directly with the clients of wrap program sponsors, which are sometimes known as “dual contract” wrap arrangements. Under both types of arrangements, LAM often has the ability to execute all trades. In such cases, LAM expects that a substantial percentage, if not all, of the wrap client’s transactions will be executed with a broker selected by LAM and then “stepped-out” to the wrap program sponsor, which may incur additional fees for the client. Although this is generally descriptive of the manner in which these programs operate and LAM’s role, an individual wrap program may contain terms and conditions that cause it to operate somewhat differently than the descriptions above. In general, LAM’s role as a portfolio manager participating in wrap programs is substantially

similar to its role in managing other separately managed accounts in that LAM will manage each account in accordance with the model portfolio utilized by the LAM investment strategy chosen by the client or sponsor, subject to client-imposed guidelines; however, LAM may not always manage wrap program accounts identically to the way it manages separate accounts. For example, wrap program accounts generally will not participate in initial public offerings, and wrap program accounts may have a different amount of holdings and different positions than accounts LAM manages directly. LAM cannot, and does not attempt to, determine the suitability of an investment strategy for a wrap account holder. A client who participates in a wrap fee arrangement with a wrap fee program sponsor should consider that, depending on the level of the wrap fee charged by the wrap fee program sponsor, the amount of portfolio activity in the client’s account, the value of custodial and other services which are provided under the arrangement, and other factors, the wrap fee may or may not exceed the aggregate cost of such services if they were to be provided separately. Model Portfolios LAM also participates in programs, sometimes referred to as “model programs” or “UMA programs,” where it provides a model securities portfolio to another asset management firm, which then executes trades for retail client accounts based upon the model. LAM also enters into non-discretionary investment advisory agreements with other types of clients, typically institutional clients, to provide models that those clients may use to construct securities portfolios (together with a model program sponsor or overlay manager receiving model portfolio holdings, each, a “Model Recipient”). In these situations, LAM typically does not have discretion to manage accounts for the Model Recipient, and LAM cannot determine the suitability of the investment strategy for the Model Recipient. Rather, LAM generally is responsible only for providing the updated model portfolio on a periodic basis and is compensated based on a percentage of total assets of the accounts of, sponsored or managed by, the Model Recipients. In some cases, LAM will effect trades for the Model Recipient, consistent with the final investment decisions made by the Model Recipient. Typically, the Model Recipient (and not LAM) is responsible for effecting trades recommended under the model. Please refer to Item 12 for additional information about LAM’s model portfolio arrangements and for information regarding how LAM communicates model portfolio holdings to clients under different circumstances and LAM’s trading processes. Asset Class Allocation Recommendations LAM also offers asset class allocation recommendations to clients. Under a particular non-discretionary investment advisory engagement, LAM provides advice on a periodic basis regarding the allocation of the client’s assets across various asset classes using a LAM Multi-Asset investment strategy, subject to specific allocation parameters communicated by the client to LAM. LAM may offer these services to other clients, and in these engagements, LAM is responsible only for providing recommendations across asset classes (and not with respect to individual securities), which the client may either accept and implement on behalf of its portfolio or reject. LAM does not have discretion to manage any of the client’s assets that are the subject of the arrangement, nor does it have any other duties or responsibilities, such as proxy voting, with respect to the client. Accordingly, transactions in securities by the client may be in the market at the same time as transactions by LAM in the same securities. As noted earlier, LAM characterizes assets managed pursuant to these asset allocation strategies as “assets under advisement.” Third-Party Service Providers and Other Relationships LAM’s services to clients rely in part on services received from third-party vendors, especially with respect to certain technology and operations functions. LAM monitors the services received from these providers and has developed practices to escalate issues so they are resolved in a timely manner. Despite LAM’s efforts, there is risk that errors by or interruptions impacting these vendors could affect LAM and its clients. LAM believes that its controls mitigate, but cannot eliminate, this risk. Some of LAM’s important service providers are described below. LAM outsources certain back and middle office administrative functions to State Street Bank and Trust Company (“State Street”). These services include portfolio accounting, client reporting, settlement, data administration, billing and reconciliation. In addition, LAM has implemented State Street’s Front-to-Back investment servicing platform and Charles River Development’s software-as-a-solution (together, the “Front-to-Back Platform”). LAM also outsources several operational functions relating to its wrap fee arrangements to SEI Global Services, Inc. (“SEI”) as well as to State Street. SEI and State Street both utilize their own internal systems to provide administrative services with respect to the wrap accounts that LAM manages. SEI, in particular, is responsible for performing the following functions: new client account initialization and maintenance; trade order generation and routing; client account asset and cash reconciliation; client-imposed guideline monitoring and recordkeeping. Institutional Shareholder Services, Inc. (“ISS”) provides proxy voting, maintenance, reporting, analysis and record keeping services for LAM with respect to proxies for companies whose securities are held by LAM on behalf of clients. Glass Lewis & Co., LLC (“Glass Lewis”) also provides analysis with respect to such proxies. LAM has entered into an agreement with Pershing Advisor Solutions LLC and Pershing LLC (together, “Pershing”) whereby Pershing provides custodial, brokerage and certain other services for certain clients of LAM. Clients who choose to use Pershing’s services enter into separate custodial and/or brokerage agreements with Pershing. Generally, Pershing services are utilized by clients of LAM’s Private Client Group and Lazard Family Office Partners or other clients who do not already utilize their own third-party custodian. LAM does not require that such clients use Pershing for these services, and clients are free to work with other custodians. Each client who considers retaining Pershing is provided with certain agreements and applicable fee schedules. Generally, LAM directs to Pershing most, if not all, trades for clients that retain Pershing to provide such services due to the nature of the clients’ fee structure with Pershing and other services that Pershing provides to the clients. Use of Derivative Instruments Certain investment strategies managed by LAM utilize over-the-counter (“OTC”) derivatives, such as interest-rate swaps, credit default swaps, forward currency contracts and other instruments. Regulatory changes have created significant operational and legal requirements for trading OTC derivatives, including FX forwards. These requirements include, but are not limited to, complying with the relevant regulatory regimes and entering into certain derivative trading documents commonly referred to as “ISDA Master Agreements” or “ISDAs.” Parties to “swap” transactions must enter into written swap documentation (i.e., ISDAs) pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”). In order to satisfy these documentation requirements, LAM typically recommends that clients elect to use the non-negotiated 2002 ISDA Master Agreement (the “Dodd-Frank ISDA”) and/or negotiates ISDAs and credit support annexes (“CSAs”) to govern OTC transactions (each, a “Negotiated ISDA”). In addition, LAM may also trade OTC derivatives under a client’s existing ISDA documentation. LAM will only act as agent (and not as principal) when it trades OTC derivatives on a client’s behalf. There are risks and benefits associated with entering into the Dodd-Frank ISDA and/or a Negotiated ISDA that each client must carefully consider, and LAM requests that each client consult with its advisors as necessary to ensure that it understands the risks and benefits of entering into such documents and the terms of OTC derivative documentation in general. If a client chooses to invest in a LAM-sponsored pooled vehicle, LAM, as investment manager of the pooled vehicle, will be responsible for establishing all derivative documentation. The use of the Dodd-Frank ISDA or a Negotiated ISDA is determined by the type of OTC derivative traded and client requirements. The Dodd-Frank ISDA Generally, to trade an OTC derivative that does not require a collateral agreement (i.e., a CSA) with counterparties (e.g., FX deliverable forwards), LAM requires each client account to adhere to the Dodd- Frank protocols and elect the Dodd-Frank ISDA. The Dodd-Frank ISDA is elected via Markit, a website portal that enables clients to incorporate by reference the form Dodd-Frank ISDA and execute it with multiple counterparties. LAM, upon a client’s request, performs this process on behalf of the client. The election of the Dodd-Frank ISDA has potential benefits and risks that clients should consider. By electing the Dodd-Frank ISDA, a client’s account will be set up to trade in a few days. However, by electing the Dodd-Frank ISDA, which is a non-negotiated “form document”, counterparties cannot include additional events of default or termination events, key man clauses, credit terms or financial delivery obligations which may be adverse to a client. These types of terms typically increase the ability of counterparties to place a client in default or increase its obligations. The Dodd-Frank ISDA is a “form document,” as indicated above, which means that it is a generic non- negotiated document and, in certain circumstances, may contain terms that may not be as favorable as a Negotiated ISDA. For example, certain tax language which is generally customized to parties, entity types and jurisdictions would not be included in a Dodd-Frank ISDA. Certain other provisions, such as a dispute resolution provision, limited recourse, notice periods, additional termination events for net asset value declines, etc. might be included in a Negotiated ISDA but are not in the Dodd-Frank ISDA. Although the Dodd-Frank ISDA does not include a CSA to enable the posting of collateral, LAM may enter into CSAs on behalf of clients who trade under a Dodd-Frank ISDA. In this way, collateral may be posted for certain trading where clients have only entered into a Dodd-Frank ISDA. Dodd-Frank requires that the prudential regulators and other regulatory bodies impose margin requirements for uncleared OTC derivative trades on dealers, banks, asset managers and other financial institutions. The U.S. Commodity Futures Trading Commission (the “CFTC”) and other prudential regulators have adopted rules that mandate the posting of collateral for uncleared OTC derivatives. The rules have phased-in compliance dates. In an effort to comply with these rules, as well as certain regulations outside the U.S., LAM has implemented processes and procedures designed to allow it to post variation margin for accounts trading FX as required pursuant to relevant regulatory guidance and timelines. Negotiated ISDAs Generally, to trade OTC derivatives that require collateral (e.g., interest rate swaps, FX options, CDS on indices, etc.), LAM will seek to negotiate, on each client account’s behalf, Negotiated ISDAs with several counterparties. For strategies that trade FX forwards and OTC derivatives that require collateral, LAM will work with each client to determine the proper derivative documentation. In certain cases, LAM may require accounts to elect the Dodd-Frank ISDA so that it can trade FX forwards with numerous counterparties immediately while it finalizes the Negotiated ISDAs. Once LAM finalizes a Negotiated ISDA with a counterparty, all OTC derivatives (including FX forwards) are traded for that account under that client’s Negotiated ISDA. Counterparties that enter into Negotiated ISDAs with LAM may conduct due diligence on, and a credit review of, LAM’s clients that wish to trade OTC derivatives prior to entering into a Negotiated ISDA. This can be a very lengthy process which typically does not begin until a client’s investment management agreement is executed and delivered to the counterparty. The length of the process will be driven by several factors, including but not limited to, the ability to add a client account to an existing LAM-Negotiated ISDA, the client’s guidelines, the client’s cooperation and the counterparty’s willingness to expedite negotiations. Negotiated ISDAs may vary from account to account and, therefore, there may be different credit terms and other risks associated with a client’s account that may not be relevant to other accounts managed by LAM. The Negotiated ISDA may require a client to make certain representations and warranties. LAM may not have the information necessary in order to make such representations and warranties. Therefore, LAM may require that the client provide the information necessary in order for LAM to execute the Negotiated ISDA. If this information is not obtained, it may delay the launch of the client’s account. Negotiated ISDAs, as mentioned above, may also have additional provisions that may not necessarily benefit a client’s account. For example, many Negotiated ISDAs include additional termination events that would not otherwise be included in the Dodd-Frank ISDA, making it more likely that an adverse event will allow the counterparty to terminate the Negotiated ISDA. Conversely, Negotiated ISDAs may include provisions that are generally helpful to the client, such as an extension of notice and cure periods, dispute resolution provisions, limited recourse and the expiration of the right to declare a default with respect to an account if the counterparty does not take action within a certain period of time. Currently, accounts that enter into Negotiated ISDAs may post collateral for all OTC derivatives (including FX forwards), while accounts that solely elect the Dodd-Frank ISDA without a CSA cannot post collateral for FX forwards. Accounts that post collateral may have different returns than accounts that do not post collateral. In addition, accounts that post collateral may be permitted to enter into transactions that accounts that do not post collateral cannot (i.e., FX options, CDX, etc.). Furthermore, if a client’s account has certain cash restrictions and collateral is required to be posted, the ability to utilize several counterparties may be limited. It is possible that accounts that post collateral obtain better pricing for OTC derivative transactions. Collateral is often referred to as “initial margin” and “variation margin.” Initial margin is typically a fixed amount that is required to be designated and maintained at a specified level, regardless of whether the mark- to-market exposure on the derivative instrument, if closed, would require a payment to the client. Variation margin is a daily-calculated amount established by the counterparty and depends on a number of factors, including the type of derivative transaction, the mark-to-market exposure of the client and the credit risk associated with the client. The variation margin will therefore change from day to day. Any client on whose behalf LAM may enter into derivative transactions will need to cooperate with LAM, and instruct its custodian to cooperate with LAM, to establish the necessary arrangements to satisfy collateral requirements. Any action taken by the client or the custodian that causes insufficient collateral to be posted may cause the counterparty to issue a margin call, seize the collateral, close out the related derivative transaction or take other action as permitted by the transaction documents. Any of these actions could result in a loss to the client. In situations where a client is required to post collateral with a counterparty, the counterparty may fail to segregate the collateral or may commingle the collateral with assets of other clients of the counterparty. As a result, in the event of the counterparty’s bankruptcy or insolvency, the client’s excess collateral may be subject to the conflicting claims of the counterparty’s creditors, and the client may be exposed to the risk of a court treating the client’s account as a general unsecured creditor of the counterparty, rather than as the owner of such collateral. The CFTC has enacted rules and regulations requiring counterparties to notify their clients of their right to elect the segregation of initial margin. Should a client make this election, it would need to put in place a collateral account control agreement with its counterparty and custodian which may take significant time to negotiate and may therefore cause disruption to trading. In addition, there may be additional costs associated with making an initial margin segregation election. However, should a client elect to segregate initial margin it posts, its excess collateral could be awarded greater protection in the event of a counterparty’s bankruptcy or insolvency. Currently, LAM does not exercise the right to segregate initial margin on behalf of its accounts, unless required by applicable law. Investments in derivative transactions involve other risks. Please refer to Item 8 herein for a description of certain other risks relating to the use of derivative transactions.