EX-99.23.p.ii
CODE OF ETHICS OF
THE NORTHERN TRUST COMPANY AND NORTHERN
TRUST QUANTITATIVE ADVISERS, INC.
AS INVESTMENT ADVISERS TO
REGISTERED INVESTMENT COMPANIES
This Code of Ethics ("the Code") has been adopted by The Northern Trust Company
and Northern Trust Quantitative Advisers, Inc. (collectively, "Northern") in
compliance with Rule 17j-1(b)(1) promulgated by the Securities and Exchange
Commission ("SEC") under the Investment Company Act of 1940. That rule requires
each investment adviser of a registered investment company to adopt a written
code of ethics. In certain respects the Code imposes requirements that exceed
those imposed by law.
The purpose of the Code is to establish general principles governing the conduct
of Northern's employees in connection with Northern's services as investment
adviser to registered investment companies, and to establish procedures to
enhance compliance with those general principles and, in particular, to prevent
Access Persons from engaging in any act, practice, or course of business
prohibited by SEC Rule 17j-1(a).
For the purposes of the Code, an Access Person is a Northern employee who, with
respect to any registered investment company for which Northern serves as
investment adviser (an "Investment Company"), (1) makes any recommendation,
participates in the determination of which recommendation shall be made, or
whose principal function or duties relate to the determination of which
recommendation shall be made to an Investment Company; or (2) who, in connection
with his or her duties, obtains any information concerning securities
recommendations being made by Northern to an Investment Company. For purposes of
the Code, an "Investment Person" -- which is a subcategory of all Access Persons
- is a Northern employee who (1) is engaged in the management of securities held
by an Investment Company as a portfolio manager, co-manager or member of the
portfolio management team, whether or not that person is primarily engaged in
the management of other accounts (hereinafter a "Portfolio Manager"); or (2) is
engaged in investment research or fixed income research activities related to
securities held or to be acquired by an Investment Company; or (3) is engaged in
trade execution activities for Investment Company securities.
Rule 17j-1(a) renders it unlawful for any affiliated person of an investment
adviser of a registered investment company, in connection with the purchase or
sale, directly or indirectly, by such person of a security held or to be
acquired1 by such registered investment company --
1. To employ any device, scheme or artifice to defraud such registered
investment company;
To make to such registered investment company any untrue statement of a
material fact or omit to state to such registered investment company a
material fact necessary in order to make the statements made, in light
of the circumstances under which they were made, not misleading;
2. To engage in any act, practice, or course of business which operates or
would operate as a fraud or deceit upon such registered investment
company; or
3. To engage in any manipulative practice with respect to such registered
investment company.
Part I
General Principles
A. The Code governs the conduct of each Access Person of Northern.
B. All Access Persons shall act at all times to give priority to the interests
of each Investment Company and to the interests of the shareholders of each
Investment Company. All Access Persons shall conduct all personal securities
transactions consistent with the Code and in such manner as to avoid any actual
or potential conflict of interest or any abuse of the Access Person's position
of trust and responsibility with respect to any Investment Company. A
fundamental principle underlying the Code is that no Access Person should take
any inappropriate advantage of his or her position. In addition, Access Persons
are generally discouraged from engaging in short-term speculative trading,
excessive trading and trading which interferes with an employee's job
responsibilities. Compliance with the Code is a condition of employment of each
Access Person. Violation of any of the foregoing principles or of any other
specific provision of the Code is grounds for disciplinary action, including
termination of employment.
C. No Access Person shall engage in any of the conduct prohibited by Rule
17j-1(a), quoted above, in connection with an Investment Company.
D. Access Persons are subject to and must comply with the policy on Gifts,
Bequests, Meals, Entertainment and Loans from Client or Vendors to Staff Members
contained in the Northern Trust Corporation Guidelines Relating to Standards of
Conduct.
E. An Access Person should not serve as a member of a board of directors of a
publicly-held company. Exceptions to this policy require the written approval of
the Access Person's Business Unit Head or President.
F. Each Access Person shall certify annually on the prescribed form that he or
she has read and understood the Code, recognizes that he or she is subject
thereto, has complied with the Code, including the securities trading provisions
in Part II thereof, and will continue to comply with the Code so long as he or
she remains an Access Person.
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G. The Chief Investment Officer of Northern shall designate a Review Officer who
shall review all reports of securities holdings and securities transactions
submitted pursuant to the Code or to Rule 17j-1 in order to seek to identify any
possible violation of the Code. The Review Officer shall report any apparent
violation of the Code to Northern's Chief Compliance Officer for appropriate
action.
H. Northern shall preserve in an easily accessible place:
o (i) a copy of the predecessor of the Code, of the Code and of any
amendments to the Code for a period of five years after it was last in
effect;
o (ii) a record of any violation of the Code and of any action taken as a
result of such violation, for a period of five years from the end of
the fiscal year in which the violation occurred;
o (iii) a copy of each report made by an Access Person pursuant to Rule
17j-1 for a period of five years from the end of the fiscal year in
which the report was made; and
o (iv) a list of all persons who are, or within the prior five years have
been, required to make reports pursuant to Rule 17j-1 and a list of all
persons responsible for reviewing such reports.
I. All questions of interpretation of provisions of the Code shall be submitted
in writing to and resolved by the General Counsel or his designee2 ("Legal
Counsel") and resolved by Legal Counsel. Pending resolution of any issue
submitted to Legal Counsel, any uncertainty about the scope of any provision of
the Code should be resolved in favor of a broader rather than narrower
interpretation. The General Counsel also reserves the right in appropriate
circumstances to grant waivers from any requirements under this Code.
Part II
Provisions Regarding Personal Securities Transactions
The following provisions pertain to securities transactions in all accounts of
an Access Person (including accounts of an Investment Person or a Portfolio
Manager whenever specifically indicated). For purposes of these provisions, the
accounts of a person include all accounts in the name of the person, all
accounts of the person's spouse, all accounts of any minor children or other
relatives (by marriage or otherwise) living in the person's home and all such
accounts in which any of the foregoing persons has any beneficial ownership
interest or over which he or she exercises control or investment influence.
References in this Part II to transactions by a person refer to transactions in
any account of the person as defined in this paragraph. Limitations on the scope
of the meaning of "all accounts of an Access Person" in the circumstances of a
particular person may be made in writing by Legal Counsel upon the written
request of an Access Person. Any such request shall set forth in reasonable
detail the facts and circumstances, and shall include an explanation why the
requested limitations will not enable the person to circumvent the objectives of
the Code.
A. All securities accounts of an Access Person shall be maintained at Northern
Trust Securities, Inc. ("NTSI"), or at another brokerage firm selected by the
Access Person, provided that notice pursuant to the prescribed form has been
provided by the Access Person to the Review Officer before placing any orders.
B. Duplicate confirmations for all transactions and duplicate statements for all
accounts of an Access Person, whether or not all such accounts are maintained at
NTSI, shall be provided by the broker/dealer directly to the Review Officer, who
shall review all such information to assure that each Access Person has complied
with the Code in all respects.
C. Each Access Person shall inform the Review Officer, using the prescribed
form, of all securities (whether or not publicly traded) in which the Access
Person has any beneficial ownership not later than ten (10) days after
commencing employment. Not later than January 30 each year, each Access Person
shall provide the Review Officer with a list of all securities (whether or not
publicly traded) in which the Access Person had any beneficial ownership as of
the preceding December 31. In lieu of a separate listing of holdings, where all
securities in question are held in an account with a broker-dealer, another bank
or other custodian, the Access Person may provide written certification of the
accuracy and completeness of statements provided by the Investment Person's
agent(s). An Access Person may exclude from such lists all securities of the
types described in footnote 4. The concept of beneficial ownership is defined in
footnote 5.
D. No Access Person shall engage in any securities transaction without prior
approval by the Review Officer. Requests for approval shall be submitted on the
prescribed form. The purpose of this "preclearance" requirement is to foster
compliance with other provisions of the Code. The preclearance requirement does
not apply to purchases of debt obligations issued or guaranteed by the United
States Government, its agencies or instrumentalities; high quality short-term
debt instruments, including but not limited to, bankers' acceptances, bank
certificates of deposit, commercial paper and repurchase agreements; shares of
registered open-end investment companies; and securities issued by Northern
Trust Corporation. Each approval for a proposed transaction shall be valid until
5 p.m. Central Time on the first day the financial markets are open for trading
following the day of approval.
E. The foregoing prohibition on the purchase of securities without prior
approval does extend to securities purchased in a private placement. The
purchase of securities in a private placement by an Investment Person must be
approved in writing by the Chief Investment Officer ("CIO"). In determining
whether an Investment Person's purchase of privately placed securities will be
approved, the CIO shall take into account, among other factors, whether the
investment opportunity should be reserved for an Investment Company and whether
the investment opportunity is being offered to the Investment Person by virtue
of his or her relationship to an Investment Company. The purchase of securities
in a private placement by the CIO must be approved in writing by the CIO's
immediate supervisor.
F. The fact of an Investment Person's ownership of privately placed securities
shall be disclosed to the CIO at any time when, to the knowledge of the
Investment Person, an Investment Company is considering the purchase or sale of
other securities issued by the issuer of the privately placed securities. This
separate disclosure must be made even though the Investment Person has
previously disclosed the ownership of the privately placed securities in
compliance with Parts II.C and II.E of the Code. No Investment Person may
participate in any investment decision on behalf of an Investment Company which
involves the issuer of securities whose privately placed securities are held by
the Investment person without first disclosing in writing the fact of his or her
ownership of the privately placed securities to the CIO and the Review Officer.
The CIO shall determine whether the proposed investment is consistent with the
Investment Company's investment objectives and is consistent with the best
interests of the Investment Company before the Investment Company may purchase
the security. The CIO's determination shall be in writing and forwarded to the
Review Officer.
G. Restrictions Applicable to all Access Persons
1. No Access Person shall purchase any equity securities issued as part of
an initial public offering until three business days after the public
offering date.
2. No Access Person shall engage in a securities transaction at a time
when an Investment Company has a pending "buy" or "sell" order in that
same security until that order is executed or withdrawn.
3. No Access Person shall purchase or sell any security for a period of
five business days after the security has been added to the Guidance
List, the Institutional List or the International List. In addition, no
Access Person shall purchase or sell any security for a period of five
business days after the internal rating on a security within the
Guidance List has moved away from Neutral in either direction.
4. No Access Person shall engage in a securities transaction when the
Access Person knows at the time of the transaction that such security
is being considered for purchase or sale by an Investment Company.
H. In addition to the restrictions contained in Part II. G. above, no Portfolio
Manager shall engage in a securities transaction during the period beginning
seven calendar days before and ending seven calendar days after the day on which
an Investment Company managed, co-managed or for which the individual is part of
the portfolio management team has purchased or sold that same security.
I. The foregoing prohibitions on transactions by Access Persons and by Portfolio
Managers do not apply where the Investment Company in question limits its
investments to purchases of securities or derivatives for the purpose of
replicating a major stock or bond index.3
J. For purposes of the foregoing prohibitions, "securities transaction" does not
include a transaction in debt obligations issued or guaranteed by the United
States Government, its agencies or instrumentalities; high quality short-term
debt instruments, including but not limited to bankers' acceptances, bank
certificates of deposit, commercial paper and repurchase agreements, and shares
of registered open-end investment companies.
K. Personal securities transactions by Access Persons in stocks of companies
with market capitalization of $50 billion or more at the time of purchase or
sale are not subject to the blackout periods or pending buy or sell order
restrictions noted in Parts II G 2, 3 and 4 and H, above. However, such
transactions are still subject to the preclearance requirement noted in Part II
D, above.
L. Any profit realized as a result of any transaction that is not in compliance
with Part II of the Code must be disgorged to the Northern Trust Company
Charitable Trust for such disposition as such Charitable Trust determines in its
sole discretion.
M. In addition to the disgorgement penalty and consistent with the general
principles set forth in Part I, above, if review of an Access Person's personal
trading activity detects any abuse, appropriate disciplinary action may be
taken. Such action may include, but is not limited to, restricting the Access
person's ability to conduct personal securities transactions, imposing holding
periods on securities acquired by the Access Person or terminating the employee.
N. SEC Rule 17j-1(c) requires that each Access Person shall provide Northern
with the following information with respect to transactions in any security4 in
which such Access Person has, or by reason of such transaction acquires, any
direct or indirect beneficial ownership5 in the security:
o (i) The date of the transaction, the title and the number of shares,
and the principal amount of each security involved;
o (ii) The nature of the transaction (i.e., purchase, sale or any other
type of acquisition or disposition)
o (iii) The price at which the transaction was effected; and
o (iv) The name of the broker, dealer or bank with or through whom the
transaction was effected.
Northern shall inform each Access Person who is under a duty to make such
reports. These reports must state the date the report is submitted and must be
submitted within 10 days after the end of the calendar quarter in which the
transaction to which the report relates was effected. Northern will accept in
lieu of such report duplicate trade confirmations and monthly accounts
statements, provided they contain the required information and are received
within the required time frame.
Revised December 1999
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Footnotes
1 For these purposes, a security held or to be acquired by a registered
investment company is a security which, within the most recent 15 days, is or
has been held by the investment company or is being or has been considered by
it, or by Northern as adviser, for purchase by the investment company, and
includes an option to purchase or sell such a security.
2 Any written communication provided for under the Code may be accomplished by
facsimile or electronic transmission.
3 It should be noted, however, that the "blackout" periods specified in Part II
do not supersede, but rather supplement, the general prohibitions against
deceptive, fraudulent and manipulative practices in connection with securities
held or to be acquired by a registered investment company. See footnote 1 on
page 1.
4 For purposes of this requirement, "security" does not include securities
issued by the Government of the United States, bankers' acceptances, bank
certificates of deposit, commercial paper and shares of registered open-end
investment companies.
5 A person is a "beneficial owner" of a security for purposes of the Code and
Rule 17j-1 if he or she, directly or indirectly, through any contract,
arrangement, understanding, relationship or otherwise, has or shares a direct or
indirect pecuniary interest in the securities. A pecuniary interest means the
opportunity, directly or indirectly, to profit or share in any profit derived
from a transaction in the subject securities. An indirect pecuniary interest
includes, but is not limited to: (1) securities held by members of a person's
immediate family sharing the same household; (2) a general partner's
proportionate interest in the portfolio securities held by a general or limited
partnership; (3) a person's right to dividends that is separated or separable
from the underlying securities; (4) a person's interest in securities held by a
trust; and (5) a person's right to acquire securities through the exercise or
conversion of any derivative security, whether or not presently exercisable. An
indirect pecuniary interest would include, for example, the right of a Northern
employee to acquire Northern stock pursuant to an employee stock option.
