Aetna Variable Fund
Aetna Variable Encore Fund
Aetna Income Shares
Aetna GET Fund
Aetna Balanced VP, Inc.
Aetna Generation Portfolios, Inc.
Aetna Variable Portfolios, Inc.
Aetna Series Fund, Inc.
CODE OF ETHICS
Effective
June 15, 2000
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Introduction
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This Code of Ethics (the "Code") is adopted for each of the Funds (as defined
below) in accordance with Section 17(j) of the Investment Company Act of 1940
(the "1940 Act") and Rule 17j-1 thereunder. Rule 17j-1 prohibits fraudulent,
deceptive or manipulative acts by Fund personnel in connection with their
personal transactions in "securities held or to be acquired" by a Fund.
"Security held or to be acquired" by a Fund includes any option to purchase or
sell, and any security that is exchangeable for or convertible into, any
security that is held or to be acquired by a Fund. The Code is being adopted by
each of the Funds and applies to directors/trustees ("Directors") and officers
of each Fund.
The Boards of Trustees/Directors ("Board") of the Funds, including a majority of
Directors who are not interested persons of the Funds, must approve the Code
annually. The Board must also approve any material change to the Code no later
than six months after adoption of the change. Before approving the Code or any
amendment to the Code, the Board must receive a certification from the Fund that
it has adopted procedures reasonably necessary to prevent its Reporting Persons
from violating the Code.
Persons who are affiliated with the Funds and Aeltus Investment Management, Inc.
("Aeltus") are prohibited from using non-public information obtained in the
course of their business for their personal benefit. This would include
profiting at the expense of a Fund, purposefully trading ahead of a Fund and
using his or her relationship with a Fund to obtain favors that would otherwise
be unavailable to whomever receives them. This Code is designed to prevent such
improper conduct.
Administration of the Code is the responsibility of the Chief Compliance Officer
of Aeltus. Questions concerning the Code or any transactions that may be subject
to provisions of the Code may be directed to the Chief Compliance Officer.
Enforcement of Code provisions is the responsibility of the Code of Ethics
Review Committee ("Committee"). The Committee is comprised of Aeltus' Chief
Compliance Officer, the President of the Funds, and legal counsel to the Funds.
The Committee is responsible for investigating any reported or suspected
violations of the Code. If the investigation discloses that a violation has
occurred, the Committee has been given the authority by the Board to determine
the appropriate sanction and to direct the Chief Compliance Officer to
administer the sanction. The President of the Funds will provide the Board with
a written report annually describing any issues arising under the Code since the
last report to the Board, including material violations of the Code, the
investigations conducted and any resulting sanctions.
Definitions
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Whenever used in the Code, the following terms have the following
meanings:
1. "Pre-Clearance Officers" are those persons designated to pre-clear
personal securities transactions and whose names are shown on
Appendix A.
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2. "Reporting Person" (Appendix B) includes every person who is an
officer or director of any Fund who meets the definition of
"interested person" set forth in Section 2(a)(19) of the 1940 Act,
but does not include any person meeting the above criteria who is
subject to a code of ethics adopted by the Fund's adviser.
3. "Disinterested Director" means those directors of the Fund who fall
outside the definition of Reporting Person.
4. "Restricted List" means the list, produced by the investment
department of Aeltus for the Aeltus Compliance Department, that
identifies those securities being purchased or sold for client
(including Fund) accounts (unless pursuant to a program trading
program) and other securities that are prohibited from purchase or
sale by Fund accounts or employees for various reasons (e.g., large
concentrated ownership positions or possession of material,
non-public information).
5. "Security" means any security EXCEPT:
o shares of registered open-end investment companies (mutual funds);
o securities issued by the U.S. government (but not its agencies or
instrumentalities);
o bankers' acceptances;
o bank certificates of deposit;
o commercial paper;
o money market instruments, including repurchase agreements and
other high quality, short-term debt.
These exceptions will hereinafter be referred to as "exempt securities."
6. "Fund" means the following registered investment companies: Aetna
Variable Fund, Aetna Variable Encore Fund, Aetna Income Shares, Aetna
GET Fund, Aetna Balanced VP, Inc., Aetna Generation Portfolios, Inc.,
Aetna Variable Portfolios, Inc., and Aetna Series Fund, Inc.
Policy
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Prohibited Conduct.
It is unlawful for any Reporting Person or Disinterested Director:
(1) to employ any device, scheme or artifice to defraud any Fund;
(2) to make to a Fund any untrue statement of a material fact or omit to
state to a Fund a material fact necessary in order to make the statements
made, in light of the circumstances under which they are made, not
misleading;
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(3) to engage in any act, practice, or course of business which operates
or would operate as a fraud or deceit upon any Fund; or
(4) to engage in any manipulative practice with respect to any Fund.
Priority of Client Interests.
Each Reporting Person must give priority to the interests of the Funds
over his or her own interest in making or maintaining a personal
investment.
To effect this policy, Reporting Persons may not execute a transaction in
a security listed on the Restricted List on a day during which Aeltus has
a pending order for that same security.
Conflict with Clients.
No Reporting Person may, on behalf of a personal account, buy, sell or
transfer securities where such transaction would cause, or appear to
cause, a conflict with the interests of a Fund.
Responsibility to Disclose Possible Conflict Before Client Transaction.
Before a Reporting Person recommends, directs, executes or participates
in any security transaction involving a Fund, such Reporting Person will
disclose to a Pre-Clearance Officer all relevant details concerning any
possible conflict, or appearance of conflict, between his or her personal
investments and the interests of a Fund. For example, the capitalization
and trading volume of a security owned by a Reporting Person may be
relevant in determining whether there is a possible conflict of interest
if that Reporting Person participates in a decision to buy or sell that
security for a Fund.
Full Disclosure of Personal Securities Investments.
Every Reporting Person, when requested by a Compliance Officer, will
disclose all information about his or her personal securities
investments.
Within ten (10) calendar days of their employment start date, every
Reporting Person must complete and return to the Aeltus Compliance
Department the New Hire Holdings Report (see Appendix C), which describes
all Securities holdings as of their employment start date.
Within thirty (30) days of the end of the calendar year, every Reporting
Person must complete and return to the Aeltus Compliance Department the
Annual Report of Holdings (see Appendix D) which lists all Securities
holdings.
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Change in Portfolio of a Fund.
No Reporting Person may engage in any personal securities transaction on
the basis of knowledge of: (i) a Fund's intention to buy or sell a
Security; or (ii) a change or possible change in a Fund's investment
strategy.
Pre-Clearance of Trades.
No Reporting Person may buy, sell or transfer by gift any Security unless
the Reporting Person has obtained "Pre-Clearance" in accordance with the
pre-clearance procedures described in the Procedures section of the Code.
The foregoing pre-clearance requirement does not apply to Reporting
Persons who are not employees of Aetna Inc. or any of its subsidiaries.
Material Non-Public Information.
No Reporting Person will trade or recommend trading in securities on the
basis of material non-public information.
Founder's Stock.
No Reporting Person will purchase, or otherwise acquire in any manner,
founder's stock of any corporation.
Initial Public Offerings.
No Reporting Person will purchase any security in an initial public
offering.
Non-Public Securities.
Personal investments in non-public Securities or Securities obtained
pursuant to a private placement offering are subject to the same rules as
personal investments in publicly traded securities, including the
Pre-Clearance process described in the Procedures section of the Code.
In the event that a Reporting Person is granted permission to make a
personal investment in non-public Securities or Securities obtained
pursuant to a private placement, that Reporting Person will not
participate in the consideration of whether the Funds should invest in
that issuer's public or non-public Securities. Such investment decisions
will be made exclusively by investment personnel with no personal
investment in that issuer.
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Receipt of Gifts.
No Reporting Person may receive any gift or other thing of more than de
minimus value from any person or entity that does business with Aeltus, a
Fund, or any other affiliates of Aeltus. A Reporting Person who receives
a gift or other thing of more than de minimus value from any such person
or entity should immediately contact Aeltus' Chief Compliance Officer to
determine the proper disposition of such gift.
Short-Term Trading.
Reporting Persons should not engage in more than thirty securities
transactions within a calendar quarter.
Sanctions.
Reporting Persons who breach the above policies may be subject to
sanctions including, but not limited to, reprimand, disgorgement of
profits, suspension and termination.
Service as a Director or Officer.
Absent prior approval of the Code of Ethics Review Committee, a Reporting
Person may not serve as a director or an officer of a public or private
company.
Trading Restrictions for Disinterested Directors.
Disinterested Directors are required to pre-clear and report a
transaction in a security only if the Director knows, or in the ordinary
course of fulfilling his official duties as a Director of a Fund, should
have known, that during the 15 day period immediately preceding the date
of the transaction in a Security by the Director that Security is or was
purchased or sold by a Fund, such a purchase or sale is or was considered
by a Fund or such a purchase or sale is being considered by a Fund within
15 days after the Director proposes to engage in a transaction in such
Security.
Aetna Inc. Securities
All Reporting Persons may transact in Aetna Inc. securities without
pre-clearance by Aeltus Compliance Department. All Reporting Persons must
report transactions in Aetna Inc. securities on their Quarterly
Securities Transactions Report and holdings of Aetna Inc. securities on
their Annual Report of Holdings.
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Procedures
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Pre-Clearance of Investments.
Reporting Persons who are required to pre-clear transactions in
Securities (other than Exempt Securities) must obtain approval from a
Pre-Clearance Officer prior to entering an order to buy, sell or transfer
by gift all Securities, except where such transaction is $50,000 or less
in value or less than 1,000 shares. Reporting Persons effecting
transactions in the same Security within 5 business days of the last
transaction in that Security must obtain pre-clearance approval
regardless of the size of the transaction.
Account For Which Pre-Clearance Is Required.
Reporting Persons must obtain pre-clearance of trades for:
1. His or her own account;
2. An account in which he or she has a beneficial interest and can
influence investment decisions; and
3. A personal account of a member of his or her household.
It is not necessary to obtain pre-clearance for investments that are made
by an independent fiduciary (i.e., a discretionary account) on behalf of
a Reporting Person or members of his or her household, securities
purchased through an automatic payroll deduction program where the timing
of purchases is controlled by someone other than the Reporting Person,
purchases that are part of an automatic dividend reinvestment plan, and
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. Sales of Securities obtained as a
result of the exercise of such rights however, must be pre-cleared.
Evaluation of Request for Pre-Clearance.
A Pre-Clearance Officer will evaluate a request for Pre-clearance and
consider whether the transaction would violate any provisions of the
Code. In making such determination, a Pre-Clearance Officer may consider
the following information:
1. The information regarding the transaction;
2. Previously submitted requests for pre-clearance of personal
trades;
3. Information from the portfolio managers regarding securities
currently under consideration for purchase or sale by the Funds;
4. The Aeltus electronic trading system as to all securities owned by
Aeltus' clients;
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5. The Restricted List; and
6. Other appropriate sources.
Response to Request for Pre-Clearance.
A Pre-Clearance Officer's response to the request for Pre-clearance will
include:
1. Making a telephone call to the Reporting Person who requested
Pre-clearance to either approve or deny the request, and
2. Filing a copy of the Pre-Clearance form with the Aeltus Compliance
Department (a sample copy of which is included as Appendix E).
Time for which a Transaction is Approved.
A Reporting Person who is required to obtain pre-clearance may authorize
his or her broker to execute a transaction only on the day on which
approval for that transaction is given. If the transaction is not
completed on that day, the Reporting Person must once again obtain
Pre-clearance for the transaction.
Post-Execution Reporting.
At the close of each calendar quarter, the Aeltus Compliance Department
will forward a copy of the Personal Securities Transactions Quarterly
Report (see Appendix F) to every Reporting Person. Within ten (10)
calendar days of the end of each calendar quarter, every Reporting Person
must complete and return to the Aeltus Compliance Department the
Quarterly Report, which describes all reportable Securities transactions
of personal investments executed during the preceding three months.
Brokerage account statements may serve as a substitute for the Quarterly
Report, if the information required to be disclosed on the Quarterly
Report is contained in the brokerage account statements.
Confidentiality.
All information submitted to the Aeltus Compliance Department pursuant to
Pre-clearance and Post-execution reporting procedures will be treated as
confidential information. It may, however, be made available to
governmental and securities industry self-regulatory agencies with
regulatory authority over Aeltus as well as to Aeltus' and the Funds'
auditors and legal advisors, if appropriate.
Exceptions to Policy and Procedures.
Because all fact situations cannot be contemplated, Aeltus' Chief
Compliance Officer retains the authority to permit an exception to the
above policies and procedures requested by persons subject to this Code
when to do so is consistent with the interests of the Funds and is
approved in writing.
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Distribution.
This Code will be distributed to all Reporting Persons.
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APPENDIX A
Pre-Clearance Officers
William Bartol (860) 275-2266
Marlene Brigham (860) 275-2110
Patricia Carabino (860) 275-4069
Brian Kawakami (860) 275-3599
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APPENDIX B
Reporting Persons
Shaun P. Mathews
Therese M. Hogan
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APPENDIX C
NEW HIRE HOLDINGS REPORT
Date of Hire: _____________, 200_
Filing of Report is required as of your employment start date of hire. You must
file this report within ten (10) days of your association with a Fund. Please
note that you do not have to report holdings of Exempt Securities (as defined in
the Code of Ethics).
[ ] No Holdings To Report (Check if applicable)
Print Name ________________________________________
<TABLE>
<CAPTION>
Principal Broker
Title of Security* Number of Shares Amount or Bank * Disclaimer (Check if applicable, give reasons)
------------------ ---------------- ------- ------- ----------
<S> <C> <C> <C> <C>
</TABLE>
* The undersigned declares that the recording of the holding checked in
this column shall not be construed as an admission that he/she had any
direct or indirect ownership in the security described.
IF YOU WISH, YOU MAY ATTACH A COPY OF YOUR MOST RECENT ACCOUNT STATEMENT(S) AS
PROVIDED TO YOU BY YOUR BROKER, BANK, OR CUSTODIAN.
Date: ______________________
Signature: ________________________
PLEASE FORWARD TO THE CHIEF COMPLIANCE OFFICER, SH11.
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APPENDIX D
ANNUAL REPORT OF PERSONAL SECURITIES HOLDINGS
Filing of Report is required within thirty (30) days of calendar year-end.
Please note that you do not have to report holdings of Exempt Securities.
[ ] No Holdings To Report (Check if applicable)
Print Name ___________________________________
<TABLE>
<CAPTION>
Title of Quantity Principal Broker
Security Held Amount or Bank *Disclaimer (Check if applicable, give reasons)
-------- ------- ------- ------- ----------
<S> <C> <C> <C> <C>
</TABLE>
* The undersigned declares that the recording of the transaction listed in
this column shall not be construed as an admission that he/she has or had
any direct or indirect ownership in the security described in the
transaction.
PLEASE FORWARD TO THE CHIEF COMPLIANCE OFFICER, SH11.
IF YOU WISH, YOU MAY ATTACH A COPY OF YOUR ACCOUNT STATEMENTS AS PROVIDED TO YOU
BY YOUR BROKER, BANK, OR CUSTODIAN.
Date: ______________________
Signature: ________________________
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APPENDIX E
REQUEST FOR PERSONAL SECURITIES TRANSACTION
PRE-CLEARANCE FORM
Name: _________________________________________________________________________
Department: ___________________________________________________________________
Date: _________________________________________________________________________
Time: _________________________________________________________________________
Security: _____________________________________________________________________
Type of Account
Individual _______ Joint ______ Spousal _____ Other: ___________________
Type of Transaction
Purchase ____________ Sale _____ Gift ___________ Other/Describe __________
Have you bought/sold the same or an equivalent security within the past 60 days?
Yes __ No __
If yes, please discuss this transaction with the Compliance Department prior to
entering into the transaction.
Transaction is Approved Denied
If Approved, approval valid for TRADE DATE:
Pre-Clearance Officer:
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APPENDIX F
QUARTERLY SECURITIES TRANSACTIONS REPORT
For Quarter Ending ____________, 200_
Filing of Report is required whether or not transactions occurred. Please note
that you do not have to report transactions in Exempt Securities. If you have
opened a new account this quarter, please check and complete below. This form
must be filed within ten (10) days of the end of the calendar quarter.
[ ] No Transactions To Report (Check if applicable)
[ ] I opened a new account this quarter. Name of Broker or Bank ____________
Date Opened ____________________
Print Name _____________________________________
<TABLE>
<CAPTION>
Trade ** Quantity ** Quantity Principal Broker
Date Title of Security* Purchased Sold Price Amount or Bank ***Disclaimer
------ ------------------ --------- --------- ----- ------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
(including interest (If applicable, give reasons)
rate and maturity
date, if applicable)
</TABLE>
* The undersigned declares that the recording of the transaction checked in
this column shall not be construed as an admission that he/she had any
direct or indirect ownership in the security described in the transaction.
** If you have acquired or disposed of a security in a transaction other than
a purchase or sale (e.g., by gift), please describe the nature of the
transaction.
*** The undersigned declares that the recording of the transaction listed in
this column shall not be construed as an admission that he/she has or had
any direct or indirect ownership in the security described in the
transaction.
IF YOU WISH, YOU MAY ATTACH A COPY OF YOUR ACCOUNT STATEMENTS AS PROVIDED TO YOU
BY YOUR BROKER, BANK, OR CUSTODIAN.
Date: ______________ Signature: ______________________________________
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