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CODE OF ETHICS
OF THE
ALLIANCE INSTITUTIONAL FUNDS, INC.
This Code of Ethics ("Code"), has been adopted by the
Fund on January 19, 2000. This Code shall apply to all Access
Persons of the Fund, except as noted in Section 3 below.
1. Statement of General Principles.
This Code does not attempt to identify all possible
conflicts of interests and literal compliance with each of the
specific procedures will not shield Access Persons from liability
for personal trading or other conduct which violates their
fiduciary duties to the Fund. In addition to the specific
prohibitions contained in this Code, Access Persons are also
subject to a general requirement not to engage in any act or
practice that would defraud the Fund. This general prohibition
includes, in connection with the purchase or sale of a Security
Held or to be Acquired (as this phrase is defined below in 2(m))
by the Fund:
(i) employing any device, scheme or artifice to
defraud the Fund;
(ii) making to the Fund any untrue statement of
material fact or omitting to state to the Fund a
material fact necessary in order to make the
statements made, in light of the circumstances
under which they are made, not misleading;
(iii) engaging in any act, practice or course of
business which would operate as a fraud or deceit
upon the Fund; or
(iv) engaging in any manipulative practice with
respect to the Fund.
2. Definitions.
(a) "Access Person" means any director, trustee,
officer or Advisory Person of the Fund or
Adviser. "Access Person" shall also include all
trustees, officers and Advisory Persons of the
Fund who are "Investment Personnel" (as defined
herein).
(b) "Adviser" means Alliance Capital Management L.P.
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(c) "Advisory Person" means any employee of the Fund
or Adviser, or of any company in a Control
relationship to the Fund or Adviser, who, in
connection with his regular functions or duties,
makes, participates in, or obtains information,
regarding the purchase or sale of a Security by
the Fund, or whose functions relate to the making
of any recommendations with respect to such
purchases or sales.
(d) "Beneficial Ownership" shall be interpreted in
the same manner as it would be in determining
whether a person is subject to the provisions of
Rule 16a-1(a)(2) of the Securities Exchange Act
of 1934, except that the determination of direct
or indirect beneficial ownership shall apply to
all securities which an Access Person has or
acquires.
(e) "Control" shall have the same meaning as that set
forth in section 2(a)(9) of the Investment
Company Act of 1940 ("Investment Company Act").
(f) "Disinterested Director" means a director or
trustee of the Fund who is not an "interested
person" of the Fund within the meaning of Section
2(a)(19) of the Investment Company Act.
(g) "Distributor" means Alliance Fund Distributors,
Inc.
(h) "Fund" means: Alliance Institutional Funds, Inc.
(i) "Initial Public Offering" means an offering of
securities registered under the Securities Act of
1933, the issuer of which, immediately before the
registration, was not subject to the reporting
requirements of Sections 13 or 15(d) of the
Securities Exchange Act of 1934.
(j) "Investment Personnel" means: (i) Any employee
of the Fund or Adviser (or of any company in a
Control relationship to the Fund or Adviser) who,
in connection with his or her regular functions
or duties, makes or participates in making
recommendations regarding the purchase or sale of
securities by the Fund; (ii) any natural person
who Controls the Fund or Adviser and who obtains
information concerning recommendations made to
the Fund regarding the purchase or sale of
securities by the Fund.
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(k) "Purchase or sale of a security" includes, inter
alia, the writing of an option to purchase or
sell a security, including any security that is
convertible into or exchangeable for any security
that is held or to be acquired by a Fund.
(l) "Security" shall have the meaning set forth in
Section 2(a)(36) of the Investment Company Act,
except that it shall not include shares of
registered open-end investment companies,
securities issued by the Government of the United
States, short-term debt securities which are
"government securities" within the meaning of
Section 2(a)(16) of the Investment Company Act,
repurchase agreements and other high quality
short term debt instruments (any instrument with
a maturity at issuance of less than 366 days and
that is rated in one of the two highest rating
categories by a nationally recognized rating
organization), bankers' acceptances, bank
certificates of deposit, commercial paper, and
such other money market instruments as designated
by the board of directors or trustees of the
Fund.
(m) "Security Held or to be Acquired" by the Fund
means: (i) any Security which, within the most
recent 15 days: (A) is or has been held by the
Fund; or (B) is being or has been considered by
the Fund or the Adviser for purchase by the Fund;
and (ii) any option to purchase or sell, and any
security convertible into or exchangeable for, a
Security described in Section 2(m)(i) of this
Code.
(n) A security is "being considered for purchase or
sale" when a recommendation to purchase or sell a
security has been made and communicated and, with
respect to the person making the recommendation,
when such person seriously considers making such
a recommendation.
3. Application. Certain of the officers and directors or
trustees of the Fund are officers and/or directors of the Adviser
and/or officers and/or directors of the Distributor. The Adviser
reviews and determines investment policies for the Fund and
manages the day-to-day investment affairs of the Fund, including
selecting securities to be purchased, held and sold, and placing
orders for portfolio transactions. The Adviser, the Distributor
and their affiliates have their own Code of Ethics pursuant to
Rule 17j-l under the Investment Company Act. Any person, who is
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subject to the Adviser's or the Distributor's Code of Ethics and
who complies with such Code, shall not be subject to the
provisions of this Code. This exemption shall only apply if the
directors or trustees of the Fund and the Disinterested Directors
of the Fund have approved such Adviser's or Distributor's Code of
Ethics pursuant to Rule 17j-1.
4. Exempted Transactions. The prohibitions of Section 5(a)
of this Code shall not apply to:
(a) Purchases or sales effected in any account over
which the Access Person has no direct or indirect
influence or control.
(b) Purchases or sales of securities which are not
eligible for purchase or sale by the Fund.
(c) Purchases or sales which are non-volitional on
the part of the Access Person or the Fund.
(d) Purchases which are part of an automatic dividend
reinvestment plan.
(e) 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.
(f) Purchases or sales of any of the following
Securities, if at the time of the transaction,
the Access Person has no actual knowledge that
the Security is being considered for purchase or
sale by the Fund, or that the Security is being
purchased or sold by the Fund:
(i) Fixed income securities transaction
involving no more than 100 units or having
a principal amount not exceeding $25,000;
(ii) Non-convertible debt securities and non-
convertible preferred stocks which are
rated by at least one nationally recognized
statistical rating organization ("NRSRO")
in one of the three highest investment
grade rating categories; or
(iii) Any equity Securities transaction, or
series of related transactions, involving
shares of common stock and excluding
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options, warrants, rights and other
derivatives, provided:
a. any orders are entered after 10:00
a.m. and before 3:00 p.m. and are not
designated as "market on open" or
"market on close"; and
b. the aggregate value of the
transactions does not exceed (1)
$10,000 for securities with a market
capitalization of less than $1
billion; (2) $25,000 for securities
with a market capitalization of $1
billion to $5 billion and (3) $50,000
for securities with a market
capitalization of greater than $5
billion.
(g) Purchases or sales of Securities for which the
Compliance Officer in its discretion on a case-
by-case basis has granted an "extreme hardship"
exception, provided:
(i) The individual seeking the exception
furnishes to the Compliance Officer:
a. a written statement detailing the
efforts made to comply with Section
5(a);
b. a written statement containing a
representation and warranty that (1)
compliance with the requirement would
impose a severe undue hardship on the
individual and (2) the exception would
not, in any manner or degree, harm or
defraud the Fund or compromise the
individual's fiduciary duty to the
Fund; and
c. any supporting documentation that the
Compliance Officer may request;
(ii) The Compliance Officer conducts an
interview with the individual or takes such
other steps the Compliance Officer deems
appropriate in order to verify that
granting the exception will not in any
manner or degree, harm or defraud the Fund
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or compromise the individual's fiduciary
duty to the Fund; and
(iii) The Compliance Officer maintains, along
with statements provided by the individual,
a written record that contains:
a. the name of the individual;
b. the name of the Security involved, the
number of shares or principal amount
purchased or sold, and the date or
dates on which the Securities were
purchased or sold;
c. the reason(s) the individual sought an
exception from the requirements of
Section 5(a);
d. the efforts the individual made to
comply with the requirements of
Section 5(a); and
e. the independent basis upon which the
Compliance Officer believes that the
exemption should be granted.
5. Prohibited Purchases or Sales.1
(a) Access Persons. An Access Person shall not
purchase or sell, directly or indirectly, any
Security in which he or she has, or by reason of
such transaction acquires, any direct or indirect
Beneficial Ownership and which he or she knows or
should have known at the time of such purchase or
sale:
(i) is being considered for purchase or sale by
the Fund;
(ii) is being purchased or sold by the Fund.
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1 Because Sections 5(b) and 6 apply only to
Investment Personnel, Sections 5(b) and 6 will not apply to
a Disinterested Director unless that Disinterested Director
Controls the Fund (i.e., is the beneficial owner of more
than 25% of the shares of the Fund) and obtains information
concerning recommendations made to the Fund.
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(b) Investment Personnel. Unless the purchase or
sale is pre-approved as provided in Section 6,
Investment Personnel shall not purchase or sell,
directly or indirectly, any Security in which he
or she has, or by reason of such transaction
acquires, any direct or indirect Beneficial
Ownership:
(i) that is issued pursuant to an "initial
public offering"; or
(ii) that is issued pursuant to a "limited
offering" that is exempt from registration
under the Securities Act of 1933 pursuant
to Section 4(2) or Section 4(6) or pursuant
to Rule 504, Rule 505, or Rule 506 under
the Securities Act of 1933.
6. Pre-Clearance of Participation in Offerings.1
Investment Personnel shall obtain approval from the
Compliance Officer of the Fund prior to the acquisition of
Securities issued pursuant to a "limited offering" or "initial
public offering" ("Offering Security") in which they, their
families (including those of immediate family sharing the same
household as the Investment Personnel) or trusts of which they
are trustees or in which they have a beneficial interest are
parties. The Compliance Officer shall promptly notify the person
of approval or denial for the transaction. Notification of
approval or denial for the transaction may be given verbally;
however, it shall be confirmed in writing within 72 hours of
verbal notification. In reviewing the request, the Compliance
Officer shall consult with the President of the Fund, and shall
take into account, among other factors, whether the investment
opportunity should be reserved for the Fund, and whether the
opportunity is being offered to such person as a result of his or
her position with the Fund or Adviser. Investment Personnel who
are Beneficial Owners of any Offering Security shall be required
to disclose such ownership to the Compliance Officer prior to
making any recommendation regarding the purchase or sale of the
Offering Security by the Fund or participating in the
determination of which recommendations shall be made to the Fund.
Under such circumstances, the Investment Personnel's decision to
purchase the Offering Securities shall be subject to an
independent review by Investment Personnel with no personal
interest in the Offering Securities.
7. Reporting.
(a) Every Access Person shall report to the
Compliance Officer (as that person is designated
from time to time by the Fund) the information
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described in Sections 7(b) and 7(c) of this Code
with respect to transactions in any Security in
which such Access Person has, or by reason of
such transaction acquires, any direct or indirect
Beneficial Ownership in the Security; provided,
however, than an Access Person shall not be
required to make a report with respect to
transactions effected for any account over which
such person does not have any direct or indirect
influence.
(b) Within ten (10) days of becoming an Access Person
(except persons who would be included in this
subsection solely because of their capacity as a
Disinterested Director of the Fund), such person
shall disclose to the Compliance Officer all
Security holdings Beneficially Owned by the
Access Person. Annually, within ten (10) days of
December 21 in any given year, all Access Persons
(except persons who would be included in this
subsection solely because of their capacity as a
Disinterested Director of the Fund), shall
disclose to the Compliance Officer all Security
holdings Beneficially Owned by them (which
information must be current as of a date no more
than thirty (30) days before the report is
submitted). Such annual or initial report shall
contain the date of the report, name, number of
shares and principal amount of all securities
owned by the Access Person and all securities
accounts the Access Person maintains with a
broker, dealer or bank (or any account in which
the Access Person may have a beneficial
interest).
(c) A quarterly report shall be made by all Access
Persons not later than ten (10) days after the
end of each calendar quarter and shall contain
the following information:
(1) the date of the transaction, the title and
the number of shares, and the principal
amount of each Security involved;
(2) the nature of the transaction (i.e.,
purchase, sale or any other type of
acquisition or disposition);
(3) the price at which the transaction was
effected;
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(4) the name of the broker, dealer or bank with
or through whom the transaction was
effected; and
(5) the date of the report.
Notwithstanding the foregoing requirement, a
Disinterested Director of the Fund need only make
a quarterly report with respect to a transaction
in any Security if such Disinterested Director,
at the time of that transaction, knew, or in the
ordinary course of fulfilling his official duties
as a director or trustee of the Fund should have
known, that during the 15-day period immediately
preceding the date of the transaction by the
Disinterested Director, such Security was
purchased or sold by the Fund or Adviser or was
being considered by the Fund or Adviser for
purchase or sale by the Fund or Adviser.
(d) Any such report may contain a statement that the
report shall not be construed as an admission by
the person making such report that he has any
direct or indirect Beneficial Ownership in the
Security to which the report relates.
(e) All such reports, account statements, and all
related information described in this Section 7
of the Code shall be reviewed by the Designated
Compliance Officer.
8. Records.
(a) The Fund shall maintain records in the manner and
to the extent set forth below that shall be
available for appropriate examination by
representatives of the Securities and Exchange
Commission.
(i) 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.
(ii) 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.
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(iii) A copy of each report made pursuant to this
Code by any Access Person shall be
preserved by the Fund 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.
(iv) 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.
(v) A record of any decision, and the reasons
supporting the decision, to approve the
acquisition by Investment Personnel of
securities under Sections 5(b) and 6 of
this Code, for at least five years after
the end of the fiscal year in which the
approval is granted.
(b) Confidentiality. All reports of securities
transactions and any other information filed with
the Fund pursuant to this Code shall be treated
as confidential, except as regards appropriate
examinations by representatives of the Securities
and Exchange Commission.
9. Sanctions. Upon discovering a violation of this Code,
the board of directors or trustees of the Fund may impose such
sanctions as it deems appropriate, including inter alia, a letter
of censure or suspension or termination of the employment of the
violator. All material violations of this Code and any sanctions
imposed with respect thereto shall be reported periodically to
the board of trustees of the Fund.
10. Report and Certification of Adequacy to the Board of
Trustees. On an annual basis, the Compliance Officer shall
prepare a written report to the management and the board of
directors or trustees of the Fund setting forth the following:
(a) Certifying on behalf of the Fund that the Fund
has adopted procedures reasonably necessary to
prevent access persons from violating the Code;
(b) a summary of existing procedures concerning
personal investing and any changes in procedures
made during the past year;
(c) describing any issues arising under the Code or
procedures since the last report to the board
including, but not limited to, information about
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material violations of the Code or procedures and
sanctions imposed in response to the material
violations; and
(d) identifying any recommended changes in existing
restrictions or procedures based upon the Fund's
experience under the Code, evolving industry
practices, or developments in applicable laws or
regulations.
11. Board Approval. Following the report and certification
by the Compliance Officer, the board of directors or trustees of
the Fund (including a majority of the Disinterested Directors)
must approve this Code of Ethics on an annual basis. Any
material change to this Code must be approved within six months.
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