Exhibit 16.1
THE PURISMA FUNDS
FISHER INVESTMENTS, INC.
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CODE OF ETHICS
AND
POLICY ON PERSONAL TRADING
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September 1996
(last amended July 2000)
I. SCOPE AND SUMMARY
(a) Rule 17j-1 under the Investment Company Act of 1940, as amended (the
"1940 Act"), requires every investment company, as well as every investment
adviser to and principal underwriter of an investment company to have a written
Code of Ethics that specifically covers trading practices by "Access Persons."
Access Persons are defined to include (1) officers, directors and certain
shareholders of the mutual fund adviser (Fisher Investments, Inc.) as well as
(2) employees of Fisher Investments, Inc. who, in connection with their regulate
functions or duties, make, participate in, or obtain information regarding the
purchase or sale of securities by the mutual funds constituting series of The
Purisima Funds (each, a "Fund") or whose functions relate to the making of any
recommendations with respect to the purchases and sales (those employees are
also defined as "Advisory Persons"), and (3) each member of the Fund's Board of
Trustees. The Rule also requires that reasonable diligence be used and
procedures instituted to prevent violations of this Code of Ethics.
(b) In order to avoid duplicate personal trading rules and duplicate
reporting obligations, this Code of Ethics incorporates the policy on personal
trading set forth in the "Fisher Investments, Inc. Policy Regarding Personal
Securities Transactions" (the "Fisher Policy") (which applies to officers,
directors and employees of Fisher Investments, Inc.) However, for purposes of
this Code of Ethics the Fisher Policy should be read to include all Trustees of
The Purisima Funds, unless noted otherwise herein. All persons subject to the
Code of Ethics, including all officers, directors and employees of Fisher
Investments, Inc. and all Trustees of The Purisima Funds, are collectively
called "Access Persons." To the extent any provision of this Code of Ethics is
inconsistent with any provision of the Fisher Policy, this Code of Ethics shall
control.
(c) The "Blue Ribbon" Advisory Group on Personal Investing in its report to
the Investment Company Institute also articulated the following three general
fiduciary principles which that Advisory Group believes should govern the
personal investment activities of mutual fund advisory and distributor
personnel:
i. the duty at all times to place the interests of Fund shareholders
first;
ii. the requirement that all personal securities transactions be
conducted consistently with the Code of Ethics and in such a
manner as to avoid any actual or potential conflict of interest
or any abuse of an individual's position of trust and
responsibility; and
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iii. the fundamental standard that mutual fund advisory and
distributor personnel should not take inappropriate advantage of
their positions.
(d) This Code of Ethics is designed to satisfy the above-referenced legal
requirements and ethical principles as applicable to Fisher Investments, Inc. in
its role as adviser to the Fund. It is important that all shareholders,
officers, directors and employees of Fisher Investments, Inc. to whom this Code
of Ethics applies and all Trustees of The Purisima Funds observe the ethical
standards set forth in the Code of Ethics.
(e) This Code of Ethics is not intended to cover all possible areas of
potential liability under the 1940 Act or under the federal securities laws in
general. For example, other provisions of Section 17 of the 1940 Act prohibit
various transactions between a registered investment company and affiliated
persons, including the knowing sale or purchase of property to or from a
registered investment company on a principal basis, and joint transactions
(E.G., combining to achieve a substantial position in a security, concerted
market activity, or commingling of funds) between an investment company and an
affiliated person.
(f) It is expected that Access Persons will be sensitive to all areas of
potential conflict, even if this Code of Ethics does not address specifically an
area of fiduciary responsibility.
(g) Each shareholder, officer, director and employee of the Funds'
administrator, Investment Company Administration Corporation (the
"Administrator"), and distributor, First Fund Distributors, Inc. (the
"Distributor"), is required to comply with the reporting and other requirements
of the Administrator's and Distributor's Code of Ethics.
(h) Each member, officer and employee of the Funds' co-distributor,
Purisima Securities, LLC, is required to comply with the Code of Ethics of that
entity.
II. PROHIBITED TRADING PRACTICES
(a) GENERAL ANTI-FRAUD PROHIBITION AND PRECLEARANCE. No Access Person shall
purchase, sell or otherwise directly or indirectly acquire or dispose of any
direct or indirect beneficial ownership interest in a security unless the
transaction is not prohibited by the Fisher Policy and the procedures set forth
in the Fisher Policy have been complied with. Even so, such action is prohibited
if such action by such Access Person would defraud the Fund, operate as a fraud
or deceit upon the Fund, or constitute a manipulative practice with respect to
the Fund.
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(b) TRADES IN SHARES OF THE FUNDS. Please note that purchases and sales of
shares of the Funds do not need preclearance, but the possibility of appearance
of conflict of interest in such transactions is high. Accordingly, all purchases
and sales of shares of the Funds that are not part of a systematic or periodic
purchase or sale program:
i. should be coordinated through compliance channels,
ii. should be made well in advance of the closing price calculation
each day, and
iii. must not be made when in possession of material nonpublic
information about the Funds.
III. REPORTING
(a) INITIAL HOLDINGS REPORTS AND ANNUAL HOLDINGS REPORTS. Within 10 days
after becoming an Access Person and annually thereafter, Access Persons are
required to report the following to the Compliance Officer (or the Compliance
Officer's designee) with respect to each security covered by the Fisher Policy:
i. The title, number of shares and principal amount of each security
in which the Access Person had any direct or indirect beneficial
ownership when the person became an Access Person;
ii. The name of any broker, dealer or bank with whom the Access
Person maintained an account in which any securities were held
for the direct or indirect benefit of the Access Person as of the
date the person became an Access Person; and
iii. The date that the report is submitted by the Access Person to the
Compliance Officer (or the Compliance Officer's designee).
(b) QUARTERLY TRANSACTION REPORT. Within 10 days after each quarter, each
Access Person is required to report the following information regarding his or
her personal securities transactions.
i. The date of the transaction, the title 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.
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v. The name of any broker, dealer or bank with whom the Access
Person opened an account in which the Access Person intends to
hold or transact securities.
(c) No reports need to be filed by an independent Trustee unless such
Trustee knows or should have known that the security traded by the Trustee was
being considered for purchase or sale or was being purchased or sold by a Fund
within 15 days on either side of the Trustee's transaction (see Section IV
below).
(d) For periods in which no reportable transactions were effected, the
report shall contain a representation that no transactions subject to the
reporting requirements were effected during the relevant time period.
(e) 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.
(f) Copies of brokerage or account statements or confirmations containing
the information specified in paragraphs (a) and (b) above may be submitted to
the Compliance Officer (or the Compliance Officer's designee) in lieu the
quarterly report listing the transactions. The brokerage account statements may
substitute for the annual report only if the Access Person provides an annual
certification confirming that all accounts and holdings of securities have been
disclosed in those statements.
IV. EXCEPTIONS TO REPORTING REQUIREMENTS
(a) An independent Trustee, I.E., a Trustee of the Trust who is not an
"interested person" (as defined in Section 2(a)(19) of the 1940 Act) of the
Trust, is not required to file a report on a transaction in a security provided
such Trustee neither knew nor, in the ordinary course of fulfilling his or her
official duties as a trustee of the Trust, should have known that, during the
15-day period immediately preceding or after the date of the transaction by the
Trustee, such security is or was purchased or sold by the Trust or is or was
being considered for purchase by its investment adviser.
(b) Shareholders, officers and employees of the Funds' distributor or
administrator who comply with a separate code of ethics of those entities are
exempted from the reporting requirements of this Code of Ethics.
(c) Access Persons need not make a report where the report would duplicate
information recorded pursuant to Rules 204-2(a)(12) or 204-2(a)(13) under the
Investment Advisers Act of 1940, provided a copy of such Rule 204 reports is
sent either to the Compliance Officer or to his substitute.
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(d) Access Persons need not make a report with respect to an exempted
transaction or investment as described in the Fisher Policy. However, personal
investment transactions involving shares of any of the Funds shall be reported.
V. IMPLEMENTATION
This Code of Ethics is to be implemented in the same manner as the Fisher
Policy.
VI. REVIEW AND SANCTIONS
(a) The Compliance Officer shall be responsible for maintaining a current
list of all Access Persons and for identifying all reporting Access Persons on
such list, and shall take steps to ensure that all reporting Access Persons have
submitted reports, confirmations or statements in a timely manner. The
Compliance Officer may delegate the compilation of this information to
appropriate persons.
(b) If a material violation of this Code of Ethics occurs or a preliminary
determination is made that a violation may have occurred, a report of the
alleged violation shall be made to the Board of Trustees.
(c) The Board of Trustees may impose such sanctions as it deems
appropriate, including a letter of censure, suspension, termination of
employment, and/or a disgorging of any profits made.
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