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EXHIBIT 23(p)(1)
CODE OF ETHICS
CNI CHARTER FUNDS
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CODE OF ETHICS
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Adopted Under Rule 17j-1
While affirming its confidence in the integrity and good faith of all of
its officers and trustees, CNI CHARTER FUNDS (the "Trust") recognizes that the
knowledge of present or future portfolio transactions and, in certain instances,
the power to influence portfolio transactions which may be possessed by certain
of its officers, employees and trustees could place such individuals, if they
engage in personal transactions in securities which are eligible for investment
by the Trust, in a position where their personal interest may conflict with that
of the Trust.
In view of the foregoing and of the provisions of Rule 17j-1(b)(1) under
the Investment Company Act of 1940 (the "1940 Act"), the Trust has determined to
adopt this Code of Ethics to specify and prohibit certain types of transactions
deemed to create conflicts of interest (or at least the potential for or the
appearance of such a conflict), and to establish reporting requirements and
enforcement procedures.
I. STATEMENT OF GENERAL PRINCIPLES.
In recognition of the trust and confidence placed in the Trust by its
shareholders, and to give effect to the Trust's belief that its operations
should be directed to the benefit of its shareholders, the Trust hereby adopts
the following general principles to guide the actions of its trustees, officers
and employees.
(1) The interests of the Trust's shareholders are paramount, and all of
the Trust's personnel must conduct themselves and their operations
to give maximum effect to this tenet by assiduously placing the
interests of the shareholders before their own.
(2) All personal transactions in securities by the Trust's personnel
must be accomplished so as to avoid even the appearance of a
conflict of interest on the part of such personnel with the
interests of the Trust and its shareholders.
(3) All of the Trust's personnel must avoid actions or activities that
allow (or appear to allow) a person to profit or benefit from his
or her position with respect to the Trust, or that otherwise bring
into question the person's independence or judgment.
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II. DEFINITIONS.
(1) "Access Person" shall mean: (i) each trustee or officer of the
Trust; (ii) each employee of the Trust (or of any company in a
control relationship to the Trust) who, in connection with his or
her regular functions or duties, makes, participates in, or obtains
information regarding the purchase or sale of a security by the
Trust or any series thereof (herein a "Fund"), or whose functions
relate to the making of any recommendations with respect to such
purchases or sales; (iii) each officer, director or general partner
of each adviser or sub-adviser to the Trust and any employee of any
such adviser or sub-adviser who, in connection with his or her
regular functions or duties, makes, participates in, or obtains
information regarding the purchase or sale of a security by the
Trust, or whose functions relate to the making of any
recommendations with respect to such purchases or sales; (iv) each
director, officer or general partner of any principal underwriter
for the Trust, but only where such person in the ordinary course
either makes, participates in, or obtains information regarding the
purchase or sale of securities by the Trust's Fund(s), or whose
functions relate to the making of recommendations regarding
securities to the Trust's Fund(s); and (v) any natural person in a
control relationship with the Trust or any of the Trust's advisers
or sub-advisers who obtains information concerning recommendations
made to the Trust's Fund(s) with regard to the purchase or sale of
a security.
(2) "Beneficial ownership" of a security is to be determined in the
same manner as it is for purposes of Section 16 of the Securities
Exchange Act of 1934 and Rule 16a-1(a)(2) thereunder. This means
that a person should generally consider himself or herself the
beneficial owner of any securities in which he or she has a direct
or indirect pecuniary interest. In addition, a person should
consider himself or herself the beneficial owner of securities held
by his or her spouse, his or her minor children, a relative who
shares his or her home, or other persons by reason of any contract,
arrangement, understanding or relationship that provides him or her
with sole or shared voting or investment power.
(3) "Control" shall have the same meaning as that set forth in
Section 2(a)(9) of the 1940 Act. Section 2(a)(9) provides that
"control" 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.
Ownership of 25% or more of a company's outstanding voting security
is presumed to give the holder thereof control over the company.
Such presumption may be countered by the facts and circumstances of
a given situation.
(4) "Independent Trustee" means a Trustee of the Trust who is not an
"interested person" of the Trust within the meaning of
Section 2(a)(19) of the 1940 Act.
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(5) "Initial Public Offering" ("IPO") means an offering of Securities
registered under the Securities Act of 1933, the issuer of which,
immediately before registration, was not subject to the reporting
requirements of Section 13 or Section 15(d) of the Securities
Exchange Act of 1934.
(6) "Private Placement" means an offering that is exempt from
registration under the Securities Act of 1933 pursuant to
Section 4(2) or Section 4(6) in the Securities Act of 1933.
(7) "Special Purpose Investment Personnel" means each Access Person
who, in connection with his or her regular functions (including,
where appropriate, attendance at Board meetings and other meetings
at which the official business of the Trust or any Fund thereof is
discussed or carried on), obtains contemporaneous information
regarding the purchase or sale of a security by the Trust or any
Fund. Special Purpose Investment Personnel shall occupy this status
only with respect to those securities as to which he or she obtains
such contemporaneous information.
(8) "Purchase or sale of a security" includes, among other things, the
writing of an option to purchase or sell a security.
(9) "Security" shall have the same meaning as that set forth in Section
2(a)(36) of the 1940 Act, except that it shall not include
securities issued by the Government of the United States or an
agency thereof, bankers' acceptances, bank certificates of deposit,
commercial paper, shares of registered, open-end mutual funds and
high quality short-term debt instruments, including repurchase
agreements.
(10) A "Security held or to be acquired" by the Trust (or any Fund)
means (A) any Security which, within the most recent fifteen days,
(i) is or has been held by the Trust or any Fund thereof, or (ii)
is being or has been considered by the Trust's investment
adviser(s) for purchase by the Trust (or any Fund); (B) and any
option to purchase or sell, and any Security convertible into or
exchangeable for any Security described in (A) above.
(11) A Security is "being purchased or sold" by the Trust (or any Fund)
from the time when a purchase or sale program has been communicated
to the person who places the buy and sell orders for the Trust (or
any Fund) until the time when such program has been fully completed
or terminated.
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III. PROHIBITED PURCHASES AND SALES OF SECURITIES.
(1) No Access Person shall, in connection with the purchase or sale,
directly or indirectly, by such person of a Security held or to be
acquired by the Trust (or any Fund thereof):
(A) employ any device, scheme or artifice to defraud the Trust or
any Fund;
(B) make to the Trust or any such Fund any untrue statement of a
material fact or omit to state to the Trust or any Fund a
material fact necessary in order to make the statements made,
in light of the circumstances under which they are made, not
misleading;
(C) engage in any act, practice or course of business which would
operate as a fraud or deceit upon the Trust or any Fund; or
(D) engage in any manipulative practice with respect to the Trust
or any Fund.
(2) No Access Person who, in connection with his or her regular duties,
makes, participates in, or obtains information regarding the
purchase or sale of Securities by a Fund or whose functions relate
to the making of any recommendations with respect to such purchases
or sales shall execute a transaction in a Security on a day during
which any Fund has a pending "buy" or "sell" order in that same
Security until that order is executed or withdrawn; provided,
however, that any such Access Person who is subject to a code of
ethics described in Section VII hereof shall not be subject to this
Section III(2).
(3) No Special Purpose Investment Personnel may purchase or sell,
directly or indirectly, any Security as to which such person is a
Special Purpose Investment Personnel in which he or she had (or by
reason of such transaction acquires) any Beneficial Ownership at
any time within seven calendar days before or after the time that
the same (or a related) Security is being purchased or sold by the
Trust or any Fund.
(4) No Special Purpose Investment Personnel may sell a Security as to
which he or she is a Special Purpose Investment Personnel within 60
days of acquiring beneficial ownership of that Security.
IV. ADDITIONAL RESTRICTIONS AND REQUIREMENTS.
(1) Pre-approval of IPOs and Private Placements - Each Access Person
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 a Fund or obtains information
concerning recommendations made to a Fund regarding the
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purchase or sale of securities must obtain written approval from
the Review Officer before acquiring beneficial ownership of any
securities offered in connection with an IPO or a Private
Placement.
(2) Pre-approval of personal securities transactions - Each Access
Person who, in connection with his or her regular duties, makes,
participates in, or obtains information regarding the purchase or
sale of Securities by a Fund or whose functions relate to the
making of any recommendations with respect to such purchases or
sales must obtain written approval from the Review Officer before
he or she purchases or sells, directly or indirectly, any Security
in which he or she has, or by reason of such transaction acquires,
any direct or indirect Beneficial Ownership; provided, however,
that any such Access Person who is required to obtain such
pre-approval pursuant to a code of ethics described in Section VII
hereof shall not also be required to obtain pre-approval under this
Section IV(2).
(3) No Access Person shall accept or receive any gift of more than DE
MINIMUS Value from any person or entity that does business with or
on behalf of the Trust.
(4) Each Access Person (other than the Trust's Independent Trustees and
its Trustees and officers who are not currently affiliated with or
employed by the Trust's investment adviser(s) or principal
underwriter) who is not required to provide such information under
the terms of a code of ethics described in Section VII hereof must
provide to the Review Officer a complete listing of all securities
owned by such person as of December 31 of the previous year.
Thereafter, each such person shall submit a revised list of such
holdings to the Review Officer as of December 31st of each
subsequent year. The initial listing must be submitted within 10
days of the date upon which such person first becomes an Access
Person of the Trust, and each update thereafter must be provided no
later than 30 days after the start of the subsequent year.
V. REPORTING OBLIGATION.
(1) Each Access Person (other than the Trust's Independent Trustees)
shall report all transactions in Securities as well as any
securities accounts established in which the person has, or by
reason of such transaction acquires, any direct or indirect
beneficial ownership. Reports shall be filed with the Review
Officer quarterly. The Review Officer shall submit confidential
quarterly reports with respect to his or her own personal
securities transactions or securities accounts established to an
officer designated to receive his or her reports ("Alternate Review
Officer"), who shall act in all respects in the manner prescribed
herein for the Review Officer.
(2) Every 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:
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(A) The date of the transaction, the title and the number of
shares or the principal amount of each security involved;
(B) The nature of the transaction (i.e., purchase, sale or any
other type of acquisition or disposition);
(C) The price at which the transaction was effected;
(D) The name of the broker, dealer or bank with or through whom
the transaction was effected; and
(E) The date the report was signed.
(3) In the event no reportable transactions or did not open any
securities accounts during the quarter, the report should be so
noted and returned signed and dated.
(4) An Access Person who would otherwise be required to report his or
her transactions under this Code shall not be required to file
reports pursuant to this Section VI where such person is required
to file reports pursuant to a code of ethics described in Section
VII, hereof.
(5) An Independent Trustee shall report transactions in Securities as
well as any securities accounts established only if the Trustee
knew at the time of the transaction or, in the ordinary course of
fulfilling his or her official duties as a Trustee, should have
known, that during the 15 day period immediately preceding or
following the date of the transaction, such security was purchased
or sold, or was being considered for purchase or sale, by the Trust
or any Fund. (The "should have known" standard implies no duty of
inquiry, does not presume there should have been any deduction or
extrapolation from discussions or memoranda dealing with tactics to
be employed meeting the Trust's investment objectives, or that any
knowledge is to be imputed because of prior knowledge of the
Trust's portfolio holdings, market considerations, or the Trust's
investment policies, objectives and restrictions.)
(6) 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 or she has any direct or indirect beneficial ownership in the
security to which the report relates.
(7) Each Independent Trustee shall report the name of any
publicly-owned company (or any company anticipating a public
offering of its equity securities) and the total number of its
shares beneficially owned by him or her if such total ownership is
more than 1/2 of 1% of the company's outstanding shares. Such
report shall be made promptly after the date on which the Trustee's
ownership interest equaled or exceeded 1/2 of 1%.
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(8) The Trust shall identify such Access Persons and inform them of
their reporting obligation under this Code.
VI. REVIEW AND ENFORCEMENT.
(1) The Review Officer shall compare all reported personal securities
transactions with completed portfolio transactions of the Trust (or
any Fund) and a list of securities being considered for purchase or
sale by the Trust's adviser to determine whether a violation of
this Code may have occurred. Before making any determination that a
violation has been committed by any person, the Review Officer
shall give such person an opportunity to supply additional
explanatory material.
(2) If the Review Officer determines that a violation of this Code may
have occurred, he or she shall submit his or her written
determination, together with the confidential monthly report and
any additional explanatory material provided by the individual, to
the President of the Trust and outside counsel, who shall make an
independent determination as to whether a violation has occurred.
(3) If the President and outside counsel find that a violation has
occurred, the President shall impose upon the individual such
sanctions as he or she deems appropriate and shall report the
violation and the sanction imposed to the Board of Trustees of the
Trust.
(4) No person shall participate in a determination of whether he or she
has committed a violation of the Code or of the imposition of any
sanction against himself or herself. If a securities transaction of
the President is under consideration, any Vice President shall act
in all respects in the manner prescribed herein for the President.
VII. INVESTMENT ADVISER'S, ADMINISTRATOR'S OR PRINCIPAL UNDERWRITER'S CODE OF
ETHICS.
Each investment adviser (including, where applicable, any sub-adviser),
administrator or manager (where applicable) and principal underwriter of the
Trust shall:
(1) Submit to the Board of Trustees of the Trust a copy of its code of
ethics adopted pursuant to Rule 17j-1, including any amendments
thereto, which code shall comply with the recommendations of the
Investment Company Institute's Advisory Group on Personal Investing
or be accompanied by a written statement explaining any differences
and supplying the rationale therefor;
(2) Promptly report to the Trust in writing any material amendments to
such code of ethics;
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(3) Promptly furnish to the Trust upon request copies of any reports
made pursuant to such code of ethics by any person who is an Access
Person as to the Trust; and
(4) Shall immediately furnish to the Trust, without request, all
material information regarding any violation of such code of ethics
by any person who is an Access Person as to the Trust.
VIII. ANNUAL WRITTEN REPORT TO THE BOARD.
At least once a year, the Review Officer will provide the Board of
Trustees a WRITTEN report that includes:
(1) ISSUES ARISING UNDER THE CODE - The Report will describe any
issue(s) that arose during the previous year under the Code,
including any material Code violations, and any resulting
sanctions.
(2) CERTIFICATION - The Report will certify to the Board of Trustees
that the Trust has adopted measures reasonably necessary to prevent
its personnel from violating the Code currently and in the future.
IX. RECORDS.
The Trust shall maintain records in the manner and to the extent set
forth below, which records may be maintained under the conditions described in
Rule 31a-2 under the 1940 Act and shall be available for examination by
representatives of the Securities and Exchange Commission.
(1) A copy of this code of ethics 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;
(2) A record of any violation of this code of ethics 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;
(3) A copy of each report made by an officer or Trustee pursuant to
this code of ethics 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;
(4) A list of all persons who are, or within the past five years have
been, required to make reports pursuant to this code of ethics
shall be maintained in an easily accessible place;
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(5) A copy of each annual report to the Board of Trustees will be
maintained for at least five years from the end of the fiscal year
in which it is made, the first two years in an easily accessible
place; and
(6) A record of any decision, and the reasons supporting the decision,
to approve the acquisition of Securities in an IPO or a Private
Placement, shall be preserved for at least five years after the end
of the fiscal year in which the approval is granted.
X. MISCELLANEOUS.
(1) CONFIDENTIALITY. All reports of securities transactions and any
other information filed with the Trust pursuant to this Code shall
be treated as confidential provided that such reports and related
information may be produced to the Securities and Exchange
Commission and other regulatory agencies.
(2) INTERPRETATION OF PROVISIONS. The Board of Trustees may from time
to time adopt such interpretations of this Code as it deems
appropriate.
(3) PERIODIC REVIEW AND REPORTING. The President of the Trust shall
report to the Board of Trustees at least annually as to the
operation of this Code and shall address in any such report the
need (if any) for further changes or modifications to this Code.
Adopted: March __, 2000.
