CODE OF ETHICS
ADOPTED BY
U.S. GLOBAL INVESTORS FUNDS
EFFECTIVE JANUARY 21, 1998
U.S. Global Investors Funds adopts this Code of Ethics pursuant to Rule 17j-1
under the Investment Company Act of 1940, as amended (the "1940 Act"), with
respect to certain types of personal securities transactions for the purpose of
establishing reporting requirements and enforcement procedures with respect to
such transactions.
I. DEFINITIONS
1. "Fund" shall mean U.S. Global Investors Funds and all series thereof.
2. "Access Person" shall have the same meaning as that set forth in Rule
17j-1(e)(1) under the 1940 Act.
3. "Adviser" shall mean U.S. Global Investors, Inc.
4. "Adviser's Code of Ethics" shall mean the Code of Ethics of U.S.
Global Investors, Inc. and U.S. Global Brokerage, Inc. with respect to
personal security transactions attached as Appendix I hereto.
5. "Beneficial Ownership" shall be interpreted in the same manner as it
would be in determining whether a person is subject to the provisions
of Section 16 of the Securities Exchange Act of 1934 and the rules and
regulations thereunder. Application of this definition is explained in
more detail in Appendix II hereto.
6. "Compliance Officer" shall mean the officer of the Adviser or
Distributor designated by the Adviser or Distributor to receive
reports and take certain actions as provided in the Adviser's Code of
Ethics.
7. A Security is being "considered for purchase or sale" by the Fund when
a recommendation that the Fund purchase or sell the Security has been
made by a member of the Adviser or any agent thereof.
8. "Control" shall have the same meaning as that set forth in Section
2(a)(9) of the 1940 Act. Generally it means the power to exercise a
controlling influence over the management or policies of a company,
unless such power is solely the result of an official position with
such company.
9. "Distributor" shall mean U.S. Global Brokerage, Inc.
10. "Interested Person" shall have the meaning as contained in Section
2(a)(19) of the 1940 Act.
11. "Independent Trustee" shall mean any trustee of the Fund who is not an
Interested Person of the Fund.
12. "Purchase" or "sale" of a security includes, among other things, the
writing of an option to purchase or sell a security.
13. "Security" shall have the same meaning as that set forth in Section
2(a)(36) of the 1940 Act (generally, all securities) except that it
shall not include securities issued by the Government of the United
States or an agency or instrumentality thereof (including all
short-term debt securities which are "government securities" within
the meaning of Section 2(a)(16) of the 1940 Act), bankers'
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Code of Ethics
Adopted: January 21, 1998
acceptances, bank certificates of deposit, commercial paper and shares
of registered open-end investment companies.
14. "Sub-advisor" shall mean any entity that is a party to or enters into
an agreement with the Advisor and/or the Fund pursuant to which such
entity provides investment advisory services to the Fund.
II. CODE PROVISIONS APPLICABLE ONLY TO INTERESTED PERSONS OF THE FUND
1. Code of Ethics.
(a) The provisions of the Adviser's Code of Ethics are hereby adopted
as the Code of Ethics of the Fund applicable only to officers and
trustees of the Fund who are Interested Persons of the Fund, the
Adviser or the Distributor. A violation of the Adviser's Code of
Ethics by any such Interested Person shall also constitute a
violation of this Code of Ethics.
(b) Any Access Person of the Fund who is also an Access Person of a
Sub-adviser shall not be subject to this Code, so long as such
Access Person is subject to a code of ethics duly adopted by the
relevant Sub-adviser relating to personal securities transactions
by such Access Person (each, a "Sub-adviser Code"), provided,
that such Sub-adviser Code is reasonably satisfactory in form and
substance to the Board of Trustees of the Fund.
2. Reports. Officers and trustees of the Fund who are Interested Persons
of the Adviser or the Distributor shall file the reports required by
the Adviser's Code of Ethics. Access Persons of the Fund who are
Access Persons of a Sub-adviser shall file the reports required by the
relevant Sub- adviser Code and such reports shall be available for
review by the Compliance Officer of the Advisor. Such filings shall be
deemed to be filings with the Fund under this Code of Ethics, and
shall at all times be available to the Fund.
3. Review. The Compliance Officer of the Adviser or Distributor shall
review or supervise the review of the personal securities transactions
reported pursuant to Section II.2. As part of that review, each such
reported securities transaction shall be compared against completed
and contemplated portfolio transactions of the Fund to determine
whether a violation of this Code may have occurred. Before making any
determination that a violation has been committed by any person, such
person shall be given an opportunity to supply additional explanatory
material. If the Compliance Officer of the Adviser or Distributor
determines that a material violation of this Code has or may have
occurred, he shall submit his written determination, together with the
transaction report and any additional explanatory material provided by
the individual, to the President of the Adviser or Distributor, who
shall make an independent determination of whether a material
violation has occurred.
4. Sanctions. If the President of the Adviser or Distributor finds that a
material violation has occurred, he shall report the violation and the
corrective action taken and any sanctions imposed by the Adviser or
Distributor to the trustees of the Fund. If a securities transaction
of the President or Compliance Officer of the Adviser or Distributor
is under consideration, another senior officer of the Adviser or
Distributor shall act in all respects in the manner prescribed herein
for the President or Compliance Officer of the Adviser or Distributor.
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Code of Ethics
Adopted: January 21, 1998
III. CODE PROVISIONS APPLICABLE ONLY TO INDEPENDENT TRUSTEES OF THE FUND
1. Prohibited Purchases and Sales. No Independent Trustee of the Fund
shall purchase or sell, directly or indirectly, any Security in which
he has, or by reason of such transaction acquires, any direct or
indirect beneficial ownership and which to his knowledge at the time
of such purchase or sale;
(a) is being considered for purchase or sale by the Fund; or
(b) is being purchased or sold by the Fund.
2. Exempted Transactions. The prohibitions of Section III.1 of this Code
shall not apply to:
(a) purchases or sales effected in any account over which the
Independent Trustee has no direct or indirect influence or
control;
(b) purchases or sales which are non-volitional on the part of the
Independent Trustee of the Fund;
(c) purchases which are part of an automatic dividend reinvestment
plan;
(d) purchases effected upon the exercise of rights issued by an
issuer pro rata to all holders of a class of its securities, to
the extent such rights were acquired from such issuer, and sales
of such rights so acquired;
(e) sales of securities held in a margin account to the extent
necessary in order to meet margin requirements;
(f) purchases or sale other than those exempted in (a) through (e)
above, (i) which will not cause the Independent Trustee to gain
improperly a personal profit as a result of his relationship with
the Fund, or (ii) which are only remotely potentially harmful to
a Fund because the proposed transaction would be unlikely to
affect a highly institutional market, or (iii) which, because of
the circumstances of the proposed transaction, are not related
economically to the Securities purchased or sold or to be
purchased or sold by the Fund, and in each case which are
previously approved by the Compliance Officer of the Adviser,
which approval shall be confirmed in writing.
3. Reporting.
(a) Whether or not one of the exemptions listed in Section III.2
hereof applies, each Independent Trustee of the Fund shall file
with the President of the Fund a written report containing the
information described in Section III.3(b) of this Code with
respect to each transaction in any Security in which such
Independent Trustee has, or by reason of such transaction
acquires, any direct or indirect beneficial ownership, if such
Independent Trustee, at the time he entered into that
transaction, knew or, in the ordinary course of fulfilling his
official duties as a trustee of the Fund should have known, that
during the 15-day period immediately preceding or after the date
of that transaction:
(i) such Security was or is to be purchased or sold by the Fund,
or
(ii) such Security was or is being considered for purchase or
sale by the Fund;
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Code of Ethics
Adopted: January 21, 1998
provided, however, that such Independent Trustee shall not be
required to make a report with respect to any transaction
effected for any account over which he does not have any direct
or indirect influence or control. Each such report shall be
deemed to be filed with the Fund for purposes of this Code, and
may contain a statement that the report shall not be construed as
an admission by the Independent Trustee that he has any direct or
indirect Beneficial Ownership in the Security to which the report
relates;
(b) Such report shall be made not later than 10 days after the end of
the calendar quarter in which the transaction to which the report
relates was effected, and shall contain the following
information:
(i) the date of the transaction, the title of and the number of
shares, and the principal amount of each Security involved;
(ii) the nature of the transaction (i.e., purchase, sale or any
other type of acquisition or disposition);
(iii)the price at which the transaction was effected; and
(iv) the name of the broker, dealer or bank with or through whom
the transaction was effected.
Any report concerning a purchase or sale prohibited under Section
III.1 hereof with respect to which the Independent Trustee relies
upon one of the exemptions provided in Section III.2 shall contain a
brief statement of the exemption relied upon and the circumstances of
the transaction.
4. Review. The President of the Fund shall review or supervise the review
of the personal securities transactions reported pursuant to Section
III.3. As part of that review, each such reported securities
transaction shall be compared against completed and contemplated
portfolio transactions of the Fund to determine whether a violation of
this Code may have occurred. If the President of the Fund determines
that a violation may have occurred, he shall submit the pertinent
information regarding the transaction to counsel for the Fund. Such
counsel shall evaluate whether a material violation of this Code has
occurred, taking into account all the exemptions provided under
Section III.2. Before making any determination that a violation has
occurred, such counsel shall give the person involved an opportunity
to supply additional information regarding the transaction in question
and shall consult with counsel for the Independent Trustee whose
transaction is in question.
5. Sanctions. If Fund's counsel determines that a material violation of
this Code has occurred, such counsel shall so advise the President of
the Fund. The President shall provide a written report of counsel's
determination to the Board of Trustees for such further action and
sanctions as said Board deems appropriate, which sanctions may in the
Board's discretion include removal of the Independent Trustee.
IV. MISCELLANEOUS PROVISIONS
1. Amendment or Revision of Adviser's Code of Ethics. Any amendment or
revision of the Adviser's Code of Ethics shall be deemed to be an
amendment or revision of Section II.1 of this Code, and such amendment
or revision shall be promptly furnished to the Independent Trustees of
the Fund.
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Code of Ethics
Adopted: January 21, 1998
2. Records. The Fund shall maintain records in the manner and to the
extent set forth below, which records may be maintained on microfilm
under the conditions described in Rule 31a-2(f)(1) under the 1940 Act
and shall be available for examination by representatives of the
Securities and Exchange Commission:
(a) A copy of this Code and any other code which is, or at any time
within the past five years has been, in effect shall be preserved
in an easily accessible place;
(b) A record of any violation of this Code and of any action taken as
a result of such violation shall be preserved in an easily
accessible place for a period of not less than five years
following the end of the fiscal year in which the violation
occurs;
(c) A copy of each report made by an officer or trustee pursuant to
this Code shall be preserved for a period of not less than five
years from the end of the fiscal year in which it is made, the
first two years in an easily accessible place; and
(d) A list of all persons who are, or within the past five years have
been, required to make reports pursuant to this Code shall be
maintained in an easily accessible place.
3. Confidentiality. All reports of securities transactions and any other
information filed with the Fund or furnished to any person pursuant to
this Code shall be treated as confidential, but are subject to review
as provided herein and by representatives of the Securities and
Exchange Commission.
4. Interpretation of Provisions. The trustees of the Fund may from time
to time adopt such interpretation of this Code as they deem
appropriate.
5. Effect of Violation of this Code. In adopting Rule 17j-1, the
Commission specifically noted in Investment Company Act Release No.
11421 that a violation of any provision of a particular code of
ethics, such as this Code, would not be considered a per se unlawful
act prohibited by the general anti-fraud provisions of the Rule. In
adopting this Code of Ethics, it is not intended that a violation of
this Code is or should be considered to be a violation of Rule 17j-
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Code of Ethics
Adopted: January 21, 1998
APPENDIX I
CODE OF ETHICS OF U.S. GLOBAL INVESTORS, INC.
AND U.S. GLOBAL BROKERAGE, INC.
CODE OF ETHICS
ADOPTED BY
U.S. GLOBAL INVESTORS, INC.
U.S. GLOBAL BROKERAGE, INC.
Effective June 28, 1989
As Amended November 13, 1989
As Amended May 17, 1993
As Amended February 14, 1994
As Amended December 5, 1994
As Amended March 1, 1996
As Amended May 24, 1996
As Amended June 2, 1997
As Amended October 29, 1997
As Amended December 12, 1997
As Amended December 3, 1999
<PAGE>
TABLE OF CONTENTS
STATEMENT OF GENERAL PRINCIPLES..............................................1
I. DEFINITIONS...............................................................2
II. PROHIBITED PURCHASES AND SALES...........................................4
III. THE ADVISER'S TRANSACTIONS..............................................5
IV. TRADE ALLOCATION PROCEDURES .............................................6
V. INSIDER TRADING PROCEDURES................................................7
VI. PRE-CLEARING PERSONAL SECURITIES TRANSACTIONS............................8
VII. SECURITIES REPORTING REQUIREMENTS.......................................8
VIII. EXEMPTED TRANSACTIONS.................................................11
IX. GIFTS...................................................................11
X. SERVICE AS A DIRECTOR....................................................11
XI. REVIEW..................................................................12
XII. SANCTIONS..............................................................13
XIII. EXEMPTIONS FROM THE CODE..............................................13
XIV. MISCELLANEOUS PROVISIONS...............................................13
APPENDIX A..................................................................15
APPENDIX B .................................................................16
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Code of Ethics
Adopted by
U.S. Global Investors, Inc.
U.S. Global Brokerage, Inc.
Effective June 28, 1989
As Amended November 13, 1989
As Amended May 17, 1993
As Amended February 14, 1994
As Amended December 5, 1994
As Amended March 1, 1996
As Amended May 24, 1996
As Amended June 2, 1997
As Amended October 29, 1997
As Amended December 12, 1997
As Amended December 3, 1999
STATEMENT OF GENERAL PRINCIPLES
As an investment adviser, U.S. Global Investors, Inc. (the "Adviser") and U.S.
Global Brokerage, Inc. have a fiduciary duty to all its clients. It is the
Adviser's policy that officers, directors, employees and consultants of the
Adviser, and the Adviser when trading for its own account (together, "Covered
Persons"), conduct themselves so as to avoid not only any conflict of interest
with clients, but also to refrain from any conduct that could create an
appearance of conflict of interest.
Every officer, director, employee and consultant must read and retain this Code
and should consult the Compliance Officer about any question arising under this
Code.
This Code is designed to ensure, among other things, that covered persons
conduct their personal securities transactions while adhering to the following
principles:
(1) The interest of U.S. Global clients should be placed first and
foremost;
(2) All personal securities transactions should be conducted in a manner
consistent with this Code and in such a manner as to avoid any actual,
potential or appearance of a conflict of interest or any abuse of a
covered person's position of trust and responsibility; and
(3) Covered persons should not take inappropriate advantage of their
positions.
In translating these principles into day-to-day guidance, covered persons
should:
o be ethical
o act professionally
o exercise independent judgment
o when in doubt, consult compliance personnel or legal counsel
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The securities markets and the regulations guiding investment professionals are
continually changing. The Adviser will regularly review this Code to determine
if any changes are necessary in order to maintain the highest ethical standards
and at the same time maximize investment performance of clients' assets
entrusted to the Adviser.
For the purposes of Code provisions dealing with Pre-Clearing and Trade
Allocation Procedures, the Adviser and Independent Sub-Advisers shall be treated
as separate unrelated entities and shall not be required to coordinate their
efforts.
I. DEFINITIONS
(a) "Access Person" means any director, officer, or Advisory Person of the
Adviser, and the Adviser itself when it is trading for its own
account.
(b) "Adviser's Code of Ethics" means the Code of Ethics of U.S. Global
Investors, Inc. and U.S. Global Brokerage, Inc. as amended from time
to time.
(c) "Advisory Person" means:
(1) any employee or consultant of the Adviser (or of any company
controlled by the Adviser) who, in connection with his or her
regular functions or duties, makes, participates in, or obtains
information about the purchase or sale of a Security by a
registered investment company, or whose functions relate to the
making of any recommendations about such purchases or sales; and
(2) any natural person in a control relationship to the Adviser who
obtains information about recommendations made to clients about
the purchase or sale of a Security.
Advisory Persons include Access Persons who are not portfolio
managers or other investment personnel, such as officers, and
legal, compliance, and accounting personnel who in connection
with their regular duties obtain information about investment
decisions.
(d) "Beneficial Ownership" is interpreted in the same manner as it would
be in determining whether a person is subject to the provisions of
Section 16 of the Securities Exchange Act of 1934 and the rules and
regulations thereunder. This definition is explained in more detail in
Appendix A.
(e) "Client" means any person (including an investment company) who has a
current advisory agreement with the Adviser. "Client" shall include
any partnership or limited liability company of which the Adviser is a
general partner or managing member.
(f) "Compliance Officer" means the officer of the Adviser designated by
vote of the Board of Directors of the Adviser to receive reports and
take certain actions as provided in this Code of Ethics.
(g) "Considered for purchase or sale" means a Security is being
"considered for purchase or sale" for a Client's account when the
Security is discussed at a portfolio manager team meeting and the
Security is added to the Recommended List.
(h) "Control" generally means the power to exercise a controlling
influence over the management or policies of a company, unless such
power is solely the result of an official position with such company.
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(i) "Covered Persons" means any officer, director, employee or consultant
of the Adviser, and the Adviser when trading for its own account.
(j) "Independent Director" means any director (or trustee) of a registered
investment company advised by the Adviser who is not an "Interested
Person" of the investment company as defined in section 2(a)(19) of
the 1940 Act.
(k) "Independent Sub-Adviser" is any sub-adviser with which the Adviser
has contracted to manage the investment portfolios of one or more
clients and which the Adviser's Review Committee has designated as
independent. Independence is a question of fact. Factors include, but
are not limited to, performance of securities research, analysis,
selection, and trading which are conducted independently and
separately from the Adviser. The fact that the Adviser or its
subsidiaries provides administrative services for a Client advised by
a sub-adviser will not by itself prevent the sub-adviser from being
independent.
(l) "Investment Person" means any employee of the Adviser or any
investment company advised by the Adviser who in connection with his
regular functions or duties makes or participates in making investment
decisions for a client; provides information, analysis, or advice to
employees who make investment decisions for a Client; or helps such
employees execute investment decisions. "Investment Person" also means
any natural person who controls the Adviser or any investment company
advised by the Adviser who obtains information about recommendations
made to clients about the purchase or sale of a Security. Investment
Persons include securities analysts and traders.
(m) "1940 Act" means the Investment Company Act of 1940 as amended from
time to time.
(n) "Liquid Market" is a securities market which is sufficiently large and
liquid that neither an Access Person's nor a Client's securities
transaction would have a material impact on the price or availability
of the Security purchased or sold in that market. The party
determining that a securities market is a Liquid Market must
reasonably conclude that it highly unlikely that an Access Person's
proposed transaction would either harm any Client or be materially
benefitted by any subsequent Client transaction. Examples of Liquid
Markets include, but are not limited to, Treasury Securities and
equity Securities included in the S&P 500 Index.
(o) "Material" information is "material" with respect to trading in a
Security if its disclosure would affect or influence a reasonable
investor's decisions to purchase or sell the Security or would
reasonably be expected to affect the price of the Security. A partial
list of situations that likely would be considered material includes:
o Mergers, acquisitions or takeovers
o Increases or decreases in dividends
o Financial forecasts, especially estimates of earnings o Changes
in previously disclosed financial information o Proposed issuance
of new securities o Significant changes in operations
o Significant increases or declines in backlog orders or the award
of a significant contract o Significant new products to be
introduced; significant discoveries of oil and gas, minerals or
the like
o Extraordinary borrowings
o Major litigation
o Financial liquidity problems
o Significant changes in management
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o The purchase or sale of substantial assets
o Significant changes in capital structure
(p) "Non-public" information is "non-public" when it has not been filed in
publicly-available SEC reports, announced in press releases, carried
on leading business wire services or printed in business publications.
However, it may be advisable for a person in possession of material,
nonpublic information to wait a reasonable period of time after such
information has been published before making or recommending a trade
in the related Securities. The length of this waiting period depends
upon the nature of the information disclosed as well as how quickly
and thoroughly the information was disseminated. For example, if the
effect of the information or an investment decision is readily
understandable, as in the case of an earnings decline, the waiting
period may be shorter than if the information must be carefully
evaluated before its bearing on an investment decision can be
discerned.
(q) "Purchase" or "sale" of a Security includes, among other things, the
writing of an option to purchase or sell a Security.
(r) "Security" has the same meaning as that set forth in Section
202(a)(18) of the Investment Advisers Act of 1940 (generally, all
securities) except that it shall not include securities issued or
guaranteed as to principal or interest by the Government of the United
States or an agency or instrumentality thereof (including all
short-term debt securities which are "government securities" within
the meaning of Section 2(a)(16) of the Investment Company Act of
1940), bankers' acceptances, bank certificates of deposit, commercial
paper and shares of registered open-end investment companies.
(s) "Review Committee" consists of the Adviser's Chief Executive Officer,
Chief Investment Officer (or Assistant Chief Investment Officer) and
General Counsel. Should the Review Committee meet to discuss a
transaction involving the Adviser's proprietary account or a
transaction involving any of the committee members, a director of the
Adviser, as nominated by the board of directors, will take the place
of that committee member.
II. PROHIBITED PURCHASES AND SALES
(a) Because of the sensitive fiduciary nature of the work performed by
Covered Persons, they may not engage in any practice which would take
unfair advantage of the person's relationship with a Client or the
Adviser when executing personal securities transactions. Examples of
prohibited trading include, but are not limited to, front running,
appropriation of an investment opportunity that properly belongs to a
Client, buying or selling a Security that has been considered for
purchase for a Client in the previous 15 days without notification of
this fact on the Request to Pre-Clear, and buying or selling a
Security when the Covered Person knows that an Independent Sub-Adviser
to a Client is buying or selling that Security for a Client.
(b) An Advisory Person may not purchase or sell the same (or substantially
similar) Security that trades on a Liquid Market for his or her
personal account if he or she knows or should have known that the
Security had been, or will be, bought or sold for any Client on the
same day as the Advisory Person's trade. An Advisory Person may not
purchase or sell the same (or substantially similar) Security that
does NOT trade on a Liquid Market for his or her personal account
within five business days before or after any Client.
(c) No person that is an "affiliated person," or an affiliated person of
an affiliated person, of the investment company as defined in Section
2(a)(3) of the 1940 Act shall enter into any personal securities
transaction in which a Client is the counterparty in violation of
Section 17 of the 1940 Act or Rule 17j-1 of the 1940 Act. A copy of
each provision is attached as Appendix B.
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(d) All Covered Persons are prohibited from trading in (either personally,
including Securities that such persons are deemed to beneficially own,
or on behalf of others) or recommending any Securities at any time
that they are in possession of material, nonpublic information about
the issuer of those Securities.
In addition, all Covered Persons must maintain in strict confidence
any material, nonpublic information about the issuer of any Securities
in accordance with the procedures in Section V of this Code of Ethics.
(e) All Covered Persons with access to financial data about the Adviser
are prohibited from purchasing or selling shares of any class of the
Adviser's capital stock from fifteen (15) days before the end of a
reporting period until twenty-four (24) hours after the earnings
release for the period is published. The Adviser's fiscal year ends
June 30; accordingly, the "trading window" is closed from June 15
until twenty-four (24) hours after the annual earnings are released.
Similarly, for the fiscal quarters ending September 30, December 31
and March 31, the "trading window" closes on the 15th or 16th of those
months. The Adviser's General Counsel may allow written exceptions to
this prohibition for good cause. Further, Covered Persons' purchases
through the Adviser's 401(k) plan are exempted from this prohibition,
provided the purchases are effected on a regular basis (that is, lump
sum purchases or exchanges in the 401(k) plan are subject to this
prohibition).
NOTE: Officers, directors and 10 percent shareholders of the Adviser
are subject to the short-swing profit restrictions in Section 16(b) of
the Securities Exchange Act of 1934. The Adviser is legally required
to recover all gains or avoided losses from these persons' purchases
and sales of the Adviser's capital stock within a six-month period.
III. THE ADVISER'S TRANSACTIONS
Because of its fiduciary relationship to Clients, when the Adviser executes
Securities transactions for its own account, the Adviser may not engage in any
practice which would take unfair advantage of its relationship with a Client.
(a) The Adviser may not purchase a Security (liquid or illiquid) for its
own account when a Client owns the same (or substantially similar)
Security or when the Adviser is in the process of acquiring that
Security for a Client's account. The portfolio manager for the Adviser
shall notify at least one member of each portfolio team for each
appropriate Client account of the intended purchase and each
appropriate Client will be given the opportunity to purchase the
Security (in which case the Adviser will not purchase the Security for
its own account). Each team declining to purchase the Security will
explain in writing its reason(s) for declining to purchase the
Security.
If the Adviser has purchased a Security for its own account, then no
team shall direct a Client to purchase the same (or substantially
similar) Security without first obtaining permission of the Chief
Investment Officer (or his designated agent) or the Assistant Chief
Investment Officer (someone other than the person who purchased the
Security for the Adviser's account must give permission). Each such
purchase shall be accompanied by a memorandum signed by a team member
describing material changes in circumstances between the time of the
Adviser's purchase and the Client's purchase.
When the Adviser proposes to sell a Security from its own account, and
one or more Client accounts also hold the same Security, the Adviser
will notify at least one member of the Client's team before the sale
and each Client will be given the opportunity to sell its holdings
before the Adviser sells the same Security for its own account. Each
team declining to sell the Security shall explain in writing its
reason(s) for declining to sell the Security.
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(b) The Adviser may pre-clear its own Securities transactions either
through the Compliance Officer (as described in Section VI) or orally
through the Trading Desk or appropriate team(s) (each, a "Responsible
Party"). Immediately upon pre-clearing a transaction, the Trading Desk
or team shall memorialize the clearance by completing the Request to
Pre-Clear and giving it to the Compliance Officer.
When clearing a proposed transaction, the Responsible Party shall make
a good faith effort to determine whether the proposed transaction will
be executed in a Liquid Market, and if not, whether any Client has a
purchase or sell order in the same (or a substantially similar)
Security currently pending or is contemplating a purchase or sale of
the same (or a substantially similar) Security.
(c) When the Chief Executive Officer serves on the board of directors of a
publicly traded company, the Adviser may not trade for its own account
in Securities of that company, except as provided in Section X(c).
IV. TRADE ALLOCATION PROCEDURES
(a) When more than one Client intends to purchase or sell the same (or
substantially similar) Security, then the following Trade Allocation
procedures will apply:
(1) If all requests are executed in their entirety, then each party
will be allocated the amount of Securities which it submitted.
(2) If all requests are not executed in their entirety, then the
following Objective Formula will be used to allocate the
transaction (subject to minor adjustments for rounding and odd
lots) in so far as it is practical:
Client A = (Dollar Amount Executed/Aggregate Dollar Amount of All
Requests Combined) *Dollar Amount Requested by Client A.
Client B = (Dollar Amount Executed/Aggregate Dollar Amount of All
Requests Combined) *Dollar Amount Requested by Client B.
(3) The actual allocations to each party based upon the objective
formula may be modified to reflect market conditions in any
manner which can be articulated and is equitable. Relevant
factors include, but are not limited to, the Client's investment
objectives and restrictions, pattern of investment, the dollar
amount of the offering relative to the dollar amount of the
account (an investment may be immaterial to a large Client or
result in excessive concentration in a small Client), the cost of
initial and continuing due diligence and compliance, whether
trading problems are created by splitting an order, whether the
Security is subject to contractual or statutory minimums or
maximums, and whether each requesting party should be allocated a
pre-determined minimum percentage of their bid. There shall be no
presumption that any Client should receive an allocation simply
because the Security in question represents an eligible
investment for that Client. The Trading Desk shall negotiate
among the affected parties to attempt to assign partial fills to
achieve a just and equitable allocation over time.
(4) A written report of all partial fills involving the above
parties, including the initial requests and the final allocation,
shall be maintained.
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(b) If the investment opportunity is a private placement with limited
availability, then the investment opportunity does not have to be
offered to all Clients for which the investment opportunity would be
appropriate. The Investment Person discovering the investment
opportunity may offer it exclusively to Clients for whom he or she has
responsibility. This exception to the general rule that investment
opportunities must be shared with all Clients recognizes the
difficulty of allocating small private placements. If the available
allotment of a private placement is $500,000.00 or less, it is
presumed to have limited availability.
V. INSIDER TRADING PROCEDURES
(a) Covered Persons may at times come into possession of material,
nonpublic information about the Adviser, its Clients or other
companies with which Adviser has a business relationship (E.G.,
serving on the board of a company) . These persons must not trade in
or recommend any Securities of any company while they are in
possession of material, nonpublic information about these Securities.
The following procedures have been established to aid Covered Persons
in avoiding insider trading, and to aid the Adviser in preventing,
detecting and imposing sanctions against insider trading. If an
individual believes that certain information in his or her possession
is material and nonpublic, or if the individual has questions as to
whether the information is material or nonpublic, the individual
should take the following steps:
(1) Report the matter immediately to the Compliance Officer,
(2) Do not purchase or sell the Securities on behalf of the
individual or others, including investment companies or private
accounts the Adviser manages,
(3) Do not communicate the information inside or outside the Adviser,
other than to the Compliance Officer, and
(4) After the Compliance Officer has reviewed the issue, the
individual will be instructed to either continue the prohibitions
against trading and communication, or trade and communicate the
information.
(b) To prevent insider trading, the Compliance Officer should:
(1) Regularly educate Covered Persons about the Adviser's policies
and procedures on insider trading; misuse of material, nonpublic
information; securities trading reporting requirements; and
related matters.
(2) Answer questions from Covered Persons about the Adviser's
policies and procedures.
(3) Resolve issues of whether information received by a Covered
Person is material and nonpublic.
(4) Review on a regular basis and update as necessary the Adviser's
policies and procedures.
(5) When it has been determined that a Covered Person has material
nonpublic information,
(i) Ensure that such information is not disseminated, and
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(ii) If necessary, restrict Covered Persons from trading in
Securities to which the information relates, either for
their own accounts, for the accounts of Clients or for the
Adviser's proprietary trading accounts.
(6) Designate a restricted access location for the receipt of
facsimile transmissions and establish appropriate procedures for
controlling the circulation and distribution of facsimile
transmissions received by the Adviser.
(c) To minimize the chance of misuse of material, nonpublic information,
all Covered Persons should adhere to the following procedures:
(1) Material nonpublic information relating to a Client should be
limited to those who have a "need to know" the information. Such
information should not be discussed even with other employees
unless it is necessary to serve the client. Material, nonpublic
information generally should not be sent from one department to
another department of the Adviser.
(2) Files and other documents containing material, nonpublic
information should be properly secured. This information should
not be left in the open or in an unattended office.
(3) All documents of a confidential nature should be stamped
"Confidential" on their face.
(4) All Covered Persons should be extremely careful about discussing
nonpublic information relating to the Adviser or its Clients in
public areas, such as elevators, reception areas and restaurants.
VI. PRE-CLEARING PERSONAL SECURITIES TRANSACTIONS
Advisory Persons shall pre-clear all personal securities transactions in writing
by completing a "Request to Pre- Clear," submitting the form to the Compliance
Officer before executing any personal securities transaction, and receiving
permission to execute the trade. If granted, the Request to Pre-Clear is good
for 24 hours. The Advisory Person, if authorized to execute a personal
securities transaction, either must execute the transaction within this time
period or complete a new "Request to Pre-Clear" if he or she still wishes to
execute the transaction after the 24 hour period has expired.
VII. SECURITIES REPORTING REQUIREMENTS
(a) For EVERY personal securities transaction, even if defined as an
Exempted Transaction under this Code, each Access Person shall:
(1) instruct the broker-dealer executing any personal securities
transaction to send a duplicate confirmation statement of the
transaction to the Compliance Officer and file a quarterly
affirmation with the Compliance Officer stating that this was
done; and
(2) file with the Compliance Officer a "Securities Transaction
Report" for each transaction in any Security in which such Access
Person has participated. Each report may contain a statement that
the report shall not be construed as an admission by the Access
Person that he or she has any direct or indirect Beneficial
Ownership in the Security to which the report relates.
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A report must be provided no later than 10 days after the end of
the CALENDAR QUARTER in which the transaction to which the report
relates was effected, and shall contain the following
information:
o the date of the transaction, the title of and the number of
shares, and the principal amount of each Security involved;
o the nature of the transaction (i.e., purchase, sale or any
other type of acquisition or disposition);
o the price at which the transaction was effected; and
o the name of the broker, dealer or bank with or through whom
the transaction was effected.
Access Persons are not required to provide a duplicate
confirmation statement or make a report for any transaction:
(1) effected for any account over which he or she does not have any
direct or indirect influence or control;
(2) in shares of registered open-end investment companies; and
(3) in U.S. Government or agency obligations, bankers' acceptances,
commercial paper or bank certificates of deposit.
(b) Each Access Person must complete an Initial Holdings report within 10
days of becoming an Access Person. The report must include the name of
each Security owned and the number of shares and principal amount of
each Security owned at the time the person becomes an Access Person.
The report also must disclose the name of any broker, dealer, or bank
with whom the Access Person maintained an account in which any
Securities were held for the Access Person's direct or indirect
benefit at the time the person became an Access Person. The report
must contain the date on which it is submitted to the Adviser.
(c) Each Access Person including the Adviser must complete an Annual
Holdings report. The report must include the name of each Security
owned and the number of shares and principal amount of each Security
owned as of a date no more than 30 days before the report is
submitted. The report also must disclose the name of any broker,
dealer, or bank with whom the Access Person maintained an account in
which any Securities were held for the Access Person's direct or
indirect benefit. The report must contain the date on which it is
submitted to the Adviser. The Annual Holdings Report shall be
submitted no later than January 20 of each year.
(d) An Access Person will be deemed to have participated in, and must
report under this Code, any securities transaction participated in by:
(1) The person's spouse, minor children, or any other relatives
sharing the person's household;
(2) A trust in which the person has a beneficial interest, unless
such person has no direct or indirect control over the trust;
(3) A trust as to which the person is a trustee;
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(4) A revocable trust as to which the person is a settlor;
(5) A corporation of which the person is an officer, director or 10%
or greater stockholder, or
(6) A partnership of which the person is a partner (including most
investment clubs) unless the person has no direct or indirect
control over the partnership.
With respect to subparagraph "(5)," officers, directors and employees
of the Adviser are not required to report transactions effected for
the Adviser's account. These persons shall cause the Adviser to
provide the Compliance Officer with duplicate confirmations.
(e) In addition to the reporting requirements listed above, each officer,
director and 10 percent shareholder of the Adviser shall file with the
Securities and Exchange Commission an Initial Statement of Beneficial
of Ownership of Securities on Form 3 within ten days of becoming an
officer, director or 10 percent shareholder of the Adviser. In
addition, each officer, director and 10 percent shareholder of the
Adviser shall file with the Securities and Exchange Commission a
Statement of Changes in Beneficial Ownership on Form 4 within 10 days
after the close of any calendar month in which there is a change in
the Beneficial Ownership of Securities of the Adviser by such person.
(f) The Adviser shall prepare and submit to the Boards of Directors of
investment company Clients the reports required by Rule 17j-1 under
the 1940 Act.
(g) ANNUALLY, the Compliance Officer shall provide a written report to the
Review Committee containing:
(1) A summary of existing procedures to detect and prevent insider
trading.
(2) Full details of any investigation, either internal or by a
regulatory agency, of any suspected insider trading and the
results of such investigation,
(3) An evaluation of the current procedures and any recommendations
for improvement, and
(4) A description of Adviser's continuing efforts to educate all
Covered Persons regarding insider trading, including the dates of
any educational programs presented since the last report to
management.
(h) All Covered Persons shall annually certify that they have read and
understand the Code of Ethics and acknowledge that they are subject to
the Code.
(i) All Covered Persons shall annually certify that they have complied
with the requirements of the Code and they have disclosed or reported
all personal securities transactions required to be disclosed or
reported under the Code.
(j) All reports of Securities transactions and any other information filed
with the Adviser or furnished to any person pursuant to this Code
shall be treated as confidential, but are subject to review as
provided herein and by representatives of the Securities and Exchange
Commission or any other regulatory or self-regulatory organization to
the extent legally required.
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VIII. EXEMPTED TRANSACTIONS
Sections II(b), II(d), III, IV and VI of this Code shall not apply to:
(a) purchases or sales effected in any account over which the Covered
Person has no direct or indirect influence or control;
(b) purchases or sales which are non-volitional on the part of the Covered
Person; or
(c) purchases which are part of an automatic dividend reinvestment plan.
Sections III, IV and VI of this Code shall not apply to:
(d) purchases effected upon a Covered Person's exercise of rights issued
by an issuer pro rata to all holders of a class of its Securities, to
the extent these rights were acquired from the issuer; and sales
effected upon a Covered Person's tender of Securities to an issuer or
other party, to the extent the tender offer is made by the issuer or
third party pro rata to all holders of a class of the issuer's
Securities.
Sections II(b) and VI of this Code shall not apply to:
(e) any Securities transaction, or series of related transactions
amounting to $25,000 or less in the aggregate, if the issuer has a
market capitalization (outstanding shares multiplied by the current
price per share) greater than $500 million. Any private placement of
securities by such an issuer and all IPOs must be pre-cleared.
IX. GIFTS
No Advisory Person shall accept any gift of material value from any person or
entity that does business with the Adviser or on behalf of any Client. For
purposes of this provision, "material value" shall include but not be limited to
gifts amounting in value to more than $100 per person per year. Items of
material value shall not include an occasional dinner, ticket to a sporting
event or the theater, or comparable entertainment which is not conditioned on
doing business with the Adviser or on behalf of any Client and is neither so
frequent nor so extensive as to raise any question of propriety.
X. SERVICE AS A DIRECTOR
(a) No Advisory Person except the Chief Executive Officer shall serve on
the board of directors of a publicly traded company ("Public Company")
(other than the Adviser, its subsidiaries and affiliates, including
investment companies).
If the Chief Executive Officer intends to serve as a director of a
Public Company (or if he serves as a director for a private company
that proposes to become public), he shall first notify the boards of
directors of the Adviser and of each investment company registered
under the 1940 Act for which the Adviser serves as investment adviser.
Each Board shall be given an opportunity to ask questions and discuss
the Chief Executive Officer's proposed service as a director.
(b) When the Chief Executive Officer serves on the board of directors of a
Public Company, he (trading for his own account) and the Adviser
(trading for its own account or on behalf of Clients) are prohibited
from trading in the Securities of the Public Company (except during
the "Trading Window") for as long as the Chief Executive Officer
serves as a director and continuing until the
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Public Company issues a Form 10-K, 10-Q, or otherwise makes a public
announcement which discloses any material nonpublic information which
the Chief Executive Officer may possess. The Trading Window begins 24
hours after the Public Company issues a Form 10-K, 10-Q, or otherwise
makes a public announcement which discloses any material nonpublic
information which the Chief Executive Officer may be in possession of
and continues for a period of 30 days after publication. If the Public
Company has an insider trading policy that is in whole or in part more
restrictive than this Code of Ethics, the more restrictive provision
shall apply to the Chief Executive Officer or the Adviser.
(c) The Chief Executive Officer (trading for his own account) and the
Adviser (trading for its own account or on behalf of Clients) may
trade in the Securities of the Public Company during the "Trading
Window" after the Chief Executive Officer notifies the Compliance
Department of his intention to trade and the Compliance Department has
made a reasonable inquiry to determine that the Chief Executive
Officer is not in possession of material inside information.
XI. REVIEW
(a) The Compliance Officer shall regularly review or supervise the review
of the personal securities transactions of Access Persons. The
Compliance Officer shall quarterly issue a written report of his or
her review to the Review Committee. The review will include:
(1) Matching all reported personal securities transactions against
transactions in the same (or substantially similar) Securities in
a Client account within 15 business days before or 5 business
days after the date of the Client's transaction;
(2) A review of all partial fills involving more than one Client to
ensure that allocations are made before execution and that
partial fills are equitably allocated based upon the Objective
Formula; and
(3) A review of all reported transactions in the Advisor's capital
stock to ensure compliance with the blackout period and testing
for short-swing profits.
(b) If the Compliance Officer determines that a violation may have
occurred, he or she shall promptly submit the pertinent information
about the transaction to the Review Committee, which shall evaluate
whether a violation of this Code has occurred and whether the
violation was material, taking into account all facts and
circumstances. Before determining that a violation has occurred, the
Review Committee shall give the person involved an opportunity to
supply additional information about the transaction in question. The
Review Committee shall consider all relevant factors, including but
not limited to:
(1) whether the investment would have been appropriate for a Client
(considerations shall include the Client's investment objectives
and restrictions, pattern of investment, whether the Client has
sufficient liquid resources at the time, the dollar amount of the
offering relative to the dollar amount of the account (an
investment may be immaterial to a large Client or result in
excessive concentration in a small Client) and, the cost of
initial and continuing due diligence and compliance);
(2) whether or not a Client was harmed or compromised (considerations
shall include whether the security was traded on a Liquid Market
and the time of the Access Person's (or Adviser's) trade
execution relative to the time of the Client's trade execution);
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(3) whether an investment opportunity was available primarily because
of investments made by a Client (or the Adviser) or because of a
relationship with the Client (or Adviser);
(4) the relationship which the broker executing the transaction has
with the Adviser and the Adviser's Clients (considerations
include the dollar volume of transactions which the Adviser
directs to the broker);
(5) whether the investment opportunity was brought to the attention
of, and declined by, at least one member of the team of each
appropriate Client;
(6) whether the transaction was pre-cleared; and
(7) in the case of the Adviser trading for its own account, whether
the person investing for the Adviser's account learned of the
investment opportunity independently of work performed by
Investment Persons researching investment opportunities for
Clients.
XII. SANCTIONS
(a) If the Review Committee determines that a material violation of this
Code has occurred, the Chief Executive Officer shall provide a written
report of the Review Committee's determination to the Adviser's Board
of Directors for such further action and sanctions as the Board deems
appropriate. In the event the violation involves the Chief Executive
Officer, the director of the Adviser serving on the Review Committee
shall issue the report. The Board may, among other things, censure
(orally or in writing), suspend or dismiss the individual. Sanctions
also may include the unwinding of personal trades or the suspension of
trading privileges.
(b) Failure to follow pre-clearing procedures may subject the Advisory
Person, at the discretion of management, to a penalty of up to $100
per infraction plus any profits on the uncleared transaction.
XIII. EXEMPTIONS FROM THE CODE
The Review Committee may exempt any transaction or class of transactions from
this Code if it finds that the exemption is consistent with the intent and
purposes of the Investment Advisers Act of 1940 and the 1940 Act. The exemption
shall be in writing and signed by each member of the Review Committee. No member
of the Review Committee shall participate in any discussion or decision
involving a potential exemption from this Code for a transaction in which the
member has any direct or indirect beneficial interest.
XIV. MISCELLANEOUS PROVISIONS
(a) The directors of the Adviser may from time to time amend this Code and
adopt interpretations of this Code as they deem appropriate. The Board
of Directors/Trustees of any Client which previously has received a
copy of this Code immediately shall be provided with a copy of the
Code as amended.
(b) Nothing in this Code shall be interpreted as relieving any Covered
Person from acting in accordance with the provisions of any applicable
law, rule or regulation or any other statement of policy or procedure
governing the conduct of such person adopted by the Adviser, its
affiliates or subsidiaries. The policies and procedures described in
this Code of Ethics supplement, and do not replace, any other policies
and procedures adopted by the Adviser or codes of ethics adopted by
affiliated investment companies under Rule 17j-1. Every Covered Person
must read and retain this Code and should consult the Compliance
Officer about any question arising under this Code.
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(c) In adopting Rule 17j-1, the Securities and Exchange Commission
specifically noted in Investment Company Act Release No. 11421 that a
violation of any provision of a particular Code of Ethics, such as
this Code, would not be considered a per se unlawful act prohibited by
the general anti-fraud provisions of Rule 17j-1. Violations of this
Code do not necessarily violate Section 17(j) or Rule 17j-1
thereunder.
(d) This Code shall not be applied retroactively to events or transactions
occurring before a change in the laws or regulations or their
interpretation governing the Adviser.
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APPENDIX A
For purposes of the attached Code of Ethics, "beneficial ownership" shall
be interpreted in the same manner as it would be in determining whether a person
is subject to the provisions of Section 16 of the Securities Exchange Act of
1934 and the rules and regulations thereunder, except that the determination of
direct or indirect beneficial ownership shall apply to all securities that an
officer, director, employee or consultant has or acquires. The term "beneficial
ownership" of securities would include not only ownership of securities held by
an officer, director, employee or consultant for his own benefit, whether in
bearer form or registered in his name or otherwise, but also ownership of
securities held for his benefit by others (regardless of whether or how they are
registered) such as custodians, brokers, executors, administrators, or trustees
(including trusts in which he has only a remainder interest), and securities
held for his account by pledgees, securities owned by a partnership in which he
is a member if he may exercise a controlling influence over the purchase, sale
or voting of such securities, and securities owned by any corporation that he
should regard as a personal holding corporation. Correspondingly, this term
would exclude securities held by an officer, director, employee or consultant
for the benefit of someone else.
Ordinarily, this term would not include securities held by executors or
administrators in estates in which an officer, director, employee or consultant
is a legatee or beneficiary unless there is a specific legacy to such person of
such securities or such person is the sole legatee or beneficiary and there are
other assets in the estate sufficient to pay debts ranking ahead of such legacy,
or the securities are held in the estate more than a year after the decedent's
death.
Securities held in the name of another should be considered as
"beneficially" owned by an officer, director, employee or consultant where such
person enjoys "benefits substantially equivalent to ownership". The Securities
and Exchange Commission has said that although the final determination of
beneficial ownership is a question to be determined in the light of the facts of
the particular case, generally a person is regarded as the beneficial owner of
securities held in the name of his or her spouse and their minor children.
Absent special circumstances such relationship ordinarily results in such person
obtaining benefits substantially equivalent to ownership, e.g., application of
the income derived from such securities to maintain a common home, to meet
expenses that such person otherwise would meet from other sources, or the
ability to exercise a controlling influence over the purchase, sale or voting of
such securities.
An officer, director, employee or consultant also may be regarded as the
beneficial owner of securities held in the name of another person, if by reason
of any contract, understanding, relationship, agreement, or other arrangement,
he obtains therefrom benefits substantially equivalent to those of ownership.
Moreover, the fact that the holder is a relative or relative of a spouse and
sharing the same home as an officer, director, employee or consultant may in
itself indicate that the officer, director, employee or consultant would obtain
benefits substantially equivalent to those of ownership from securities held in
the name of such relative. Thus, absent countervailing facts, it is expected
that securities held by relatives who share the same home as an officer,
director, employee or consultant will be treated as being beneficially owned by
the officer, director, employee or consultant.
An officer, director, employee or consultant also is regarded as the
beneficial owner of securities held in the name of a spouse, minor children or
other person, even though he does not obtain therefrom the aforementioned
benefits of ownership, if he can vest or revest title in himself at once or at
some future time.
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APPENDIX B
SEC. 2(A)
(3) "Affiliated person" of another person means (A) any person directly or
indirectly owning, controlling, or holding with power to vote, 5 per centum
or more of the outstanding voting securities of such other person; (B) any
person 5 per centum or more of whose outstanding voting securities are
directly or indirectly owned, controlled, or held with power to vote, by
such other person; (C) any person directly or indirectly controlling,
controlled by, or under common control with, such other person; (D) any
officer, director, partner, copartner, or employee of such other person;
(E) if such other person is an investment company, any investment adviser
thereof or any member of an advisory board thereof; and (F) if such other
person is an unincorporated investment company not having a board of
directors, the depositor thereof.
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U.S. Global Investors Funds Page 7 of 7
Code of Ethics
Adopted: January 21, 1998
APPENDIX II
For purposes of the attached Code of Ethics, "beneficial ownership" shall be
interpreted in the same manner as it would be in determining whether a person is
subject to the provisions of Section 16 of the Securities Exchange Act of 1934
and the rules and regulations thereunder, except that the determination of
direct or indirect beneficial ownership shall apply to all securities that an
officer, director, employee or consultant has or acquires. The term "beneficial
ownership" of securities would include not only ownership of securities held by
an officer, director, employee or consultant for his own benefit, whether in
bearer form or registered in his name or otherwise, but also ownership of
securities held for his benefit by others (regardless of whether or how they are
registered) such as custodians, brokers, executors, administrators, or trustees
(including trusts in which he has only a remainder interest), and securities
held for his account by pledgees, securities owned by a partnership in which he
is a member if he may exercise a controlling influence over the purchase, sale
or voting of such securities, and securities owned by any corporation that he
should regard as a personal holding corporation. Correspondingly, this term
would exclude securities held by an officer, director, employee or consultant
for the benefit of someone else.
Ordinarily, this term would not include securities held by executors or
administrators in estates in which an officer, director, employee or consultant
is a legatee or beneficiary unless there is a specific legacy to such person of
such securities or such person is the sole legatee or beneficiary and there are
other assets in the estate sufficient to pay debts ranking ahead of such legacy,
or the securities are held in the estate more than a year after the decedent's
death.
Securities held in the name of another should be considered as "beneficially"
owned by an officer, director, employee or consultant where such person enjoys
"benefits substantially equivalent to ownership". The Securities and Exchange
Commission has said that although the final determination of beneficial
ownership is a question to be determined in the light of the facts of the
particular case, generally a person is regarded as the beneficial owner of
securities held in the name of his or her spouse and their minor children.
Absent special circumstances such relationship ordinarily results in such person
obtaining benefits substantially equivalent to ownership, e.g., application of
the income derived from such securities to maintain a common home, to meet
expenses that such person otherwise would meet from other sources, or the
ability to exercise a controlling influence over the purchase, sale or voting of
such securities.
An officer, director, employee or consultant also may be regarded as the
beneficial owner of securities held in the name of another person, if by reason
of any contract, understanding, relationship, agreement, or other arrangement,
he obtains therefrom benefits substantially equivalent to those of ownership.
Moreover, the fact that the holder is a relative or relative of a spouse and
sharing the same home as an officer, director, employee or consultant may in
itself indicate that the officer, director, employee or consultant would obtain
benefits substantially equivalent to those of ownership from securities held in
the name of such relative. Thus, absent countervailing facts, it is expected
that securities held by relatives who share the same home as an officer,
director, employee or consultant will be treated as being beneficially owned by
the officer, director, employee or consultant.
An officer, director, employee or consultant also is regarded as the beneficial
owner of securities held in the name of a spouse, minor children or other
person, even though he does not obtain therefrom the aforementioned benefits of
ownership, it he can vest or revest title in himself at once or at some future
time.
