CODE OF ETHICS
STAR SELECT FUNDS
1. STATEMENT OF GENERAL FIDUCIARY PRINCIPLES
This Code of Ethics is based on the principles that (i) Access Persons
(as such term is hereinafter defined) owe a fiduciary duty to, among
others, the shareholders of the Investment Company to conduct their
personal transactions in Securities in a manner which neither interferes
with Investment Company portfolio transactions nor otherwise takes unfair
or inappropriate advantage of an Access Person's relationship to the
Investment Company; (ii) in complying with this fiduciary duty, Access
Persons owe shareholders the highest duty of trust and fair dealing; and
(iii) Access Persons must, in all instances, place the interests of the
shareholders of the Investment Company ahead of the Access Person's own
personal interests or the interests of others. For example, in order to
avoid the appearance of conflict from a personal transaction in a
Security, the failure to recommend that security to, or the failure to
purchase that security for, the Investment Company, may be considered a
violation of this code.
Access Persons must adhere to these general fiduciary principles, as well
as comply with the specific provisions of this Code. Advisory Persons
must also comply with the Associated Procedures of this Code. Technical
compliance with the terms of this Code and the Associated Procedures will
not automatically insulate an Access Person from scrutiny in instances
where the personal transactions in a Security undertaken by such Access
Person show a pattern of abuse of such Access Person's fiduciary duty to
the Investment Company and its shareholders or a failure to adhere to
these general fiduciary principles.
2. DEFINITIONS
(a) "Adviser" means Star Bank, N.A.
(b) "Investment Company" means each series or portfolio of the Star Select
Funds, which is advised by the Adviser.
(c) "Access Person" means (1) any director, officer, general partner, or
Advisory Person of the Adviser, who, with respect to any Investment Company,
makes any recommendation, participates in the determination of which
recommendation shall be made, or whose principal function or duties relate to
the determination of which recommendation shall be made to any Investment
Company; or who, in connection with his duties, obtains any information
concerning securities recommendations being made by the Adviser to any
Investment Company, (2) any trustee, officer or Advisory Person of the
Investment Company, and (3) all persons living within the same household as such
Access Person.
(d) The "1940 Act" means the Investment Company Act of 1940, as amended.
(e) "Advisory Person" means (i) any employee of the Adviser or the
Investment Company, who, in connection with the employee's regular functions or
duties, makes, participates in, or normally obtains information regarding the
current purchases or sales of a Security by the Investment Company, or whose
functions relate to the making of any recommendations with respect to such
purchases or sales; and (ii) any natural person in a control relationship to the
Investment Company who normally obtains information concerning current
recommendations made to the Investment Company with regard to the purchases or
sales of a Security.
(f) "Associated Procedures" means those policies, procedures and/or
Statements that have been adopted by the Adviser, and which are designed to
supplement this Code and its provisions.
(g) 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.
(h) "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 of indirect beneficial
ownership shall apply to all securities which an Access Person has or acquires.
As a general matter, "beneficial ownership" will be attributed to an Access
Person in all instances where the Access Person (i) possesses the ability to
purchase or sell the Securities (or the ability to direct the disposition of the
Securities); (ii) possesses voting power (including the power to vote or to
direct the voting) over such Securities; or (iii) receives any benefits
substantially equivalent to those of ownership.
(i) "Control" shall have the same meaning as that set forth in Section
2(a)(9) of the 1940 Act.
(j) "Disinterested Trustee" means a director, trustee, or managing general
partner of the Investment Company who is not an "interested person" of the
Investment Company within the meaning of Section 2(a)(19) of the 1940 Act.
(k) "Purchase or Sales of a security" includes, inter alia, the writing of
an option to purchase or sell a Security.
(l) "Investment Personnel" include: Access Persons with direct
responsibility and authority to make investment decisions affecting the
Investment Company (such as portfolio managers); Access Persons who provide
information and advice to such portfolio managers (such as security analysts);
and Access Persons who assist in executing investment decisions for the
Investment Company (such as traders). As the context requires, "Investment
Personnel" may refer to one or more Access Persons.
(m) "Security" shall have the meaning set forth in Section 2(a)(36) of the
1940 Act, and shall include: equity and debt securities; options on and warrants
to purchase equity or debt securities; shares of closed-end investment
companies; and Related Securities. "Related securities" are instruments and
securities that are related to, but not the same as, a Security. For example, a
Related Security may be convertible into a Security, or give its holder the
right to purchase the Security. For purposes of reporting, "Security" shall
include futures contracts. "Security" shall not include: securities issued by
the Government of the United States (including short term debt securities which
are U.S. government securities pursuant to Section 2(a)(16) of the 1940 Act);
bankers' acceptances; bank certificates of deposit; commercial paper; shares of
registered open-end investment companies; Securities which are not eligible for
purchase or sale by the Investment Company (including any Securities
representing an ownership interest in Star Bank, N.A.); and such other
instruments as may be determined by the Investment Company's Board of Trustees,
from time to time.
(n) "Public Company" means any entity subject to the reporting requirements
of the Securities Exchange Act of 1934.
3. EXEMPTED TRANSACTIONS
The prohibitions of Section 4 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 which are non-volitional on the part of either the
Access Person or the Investment Company, subject to the provisions of Section 4
(h) of this Code.
(c) Purchases which are either: made solely with the dividend proceeds
received in a dividend reinvestment plan; or part of an automatic payroll
deduction plan, whereby an employee purchases securities issued by an employer.
(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 any sales of such rights so acquired.
4. PROHIBITED TRANSACTIONS AND ACTIVITIES
(a) No Access Person shall purchase or sell, directly or indirectly, any
Security in which he or she has, or by reason of such transaction acquires, a
direct or indirect beneficial ownership interest 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 Investment
Company; or
(ii) is being purchased or sold by the Investment Company.
(b) Inducing or causing the Investment Company to take action, or to fail
to take action, for the purpose of achieving a personal benefit, rather than to
benefit of the Investment Company, is a violation of this Code. Examples of this
would include causing the Investment Company to purchase a Security owned by the
Advisory Person for the purpose of supporting or driving up the price of the
Security, and causing the Investment Company to refrain from selling a Security
in an attempt to protect the value of the Advisory Person's investment, such as
an outstanding option.
(c) Using actual knowledge of Investment Company's portfolio transactions
to profit by the market effect of such transactions is a violation of this Code.
One test which will be applied in determining whether this prohibition has been
violated will be to review the Securities transactions of Advisory Persons for
patterns. However, it is important to note that a violation could result from a
single transaction if the circumstances warranted a finding that the provisions
of Section 1 of this Code have been violated.
(d) All Advisory Persons are prohibited from acquiring any Security
distributed in an initial public offering, until trading of the Security
commences in the secondary market.
(e) All Advisory Persons are prohibited from acquiring Securities for
their personal accounts in a private placement made by an issuer that is a
Public Company, without the express prior approval of the President of the
Adviser (or his designee). In instances where an Investment Personnel, after
receiving prior approval, acquires a security in a private placement, the
Investment Personnel has an affirmative obligation to disclose his investment to
the President of the Adviser (or his designee) if the Investment Personnel
participates in any subsequent consideration of any potential investment, by the
Investment Company, in the issuer of those Securities. The Investment Company's
decision to purchase Securities of such an issuer (following a purchase by an
Investment Personnel in an approved personal transaction) will be subject to an
independent review by the President of the Adviser, or his designee, so long as
the person conducting such review has no personal interest in the issuer.
(f) All Advisory Persons are prohibited from executing a personal
transaction in all Securities (including transactions in pension or
profit-sharing plans in which the Advisory Person has a beneficial interest),
without express prior approval of the President of the Adviser (or his
designee), in accordance with the Associated Procedures governing pre-clearance.
A purchase or sale of Securities not otherwise approved pursuant to the
Associated Procedures may, upon request made prior to the personal transaction,
nevertheless receive the approval of the President of the Adviser (or his
designee) if such purchase or sale would be: only remotely potentially harmful
to the Investment Company; very unlikely to affect a highly institutional
market; or clearly not related economically to the securities to be purchased,
sold or held by the Investment Company. Notwithstanding the receipt of express
prior approval, any purchases or sales by Advisory Persons undertaken in
reliance on this provision remain subject to the prohibitions enumerated in
Sections 4(g) and (h) of this Code.
(g) All Advisory Persons are prohibited from executing a personal
transaction in any Security on a day during which the Investment Company has a
pending "buy" or "sell" order for that Security, until the Investment Company's
order is either executed or withdrawn. All Investment Personnel are prohibited
from purchasing or selling any Security within seven (7) calendar days before
and after the Investment Company purchases or sells the same Security.
Transactions undertaken in violation of this prohibition will either be required
to be unwound, or any profits realized by an Access Person on any personal
transactions in Securities within the proscribed periods (either undertaken
while the Investment Company has an open order, or within the 7-day blackout
period) will be required to be disgorged (to an entity designated by the
President of the Adviser [or his designee]), and the Advisory Person will be
subject to disciplinary action, as determined by the Director of Compliance
and/or the Investment Company's Board of Trustees.
(h) All Advisory Persons are prohibited from profiting in the purchase and
sale, or sales and purchase, of the same (or equivalent) Securities within 60
calendar days. Transactions undertaken in violation of this prohibition will
either be required to be unwound or any profits realized on such short-term
trades will be required to be disgorged. For purposes of this prohibition, each
personal transaction in the Security will begin a new 60 calendar day period. As
an illustration, if an Advisory Person purchases 1000 shares of Omega
Corporation on June 1st, 500 shares on July 1st, and 250 shares on August 1st,
the profit from the sale of the 1000 shares purchased on June 1st is prohibited
for any transaction prior to October 1st (i.e., 60 calendar days following
August 1st). In circumstances where a personal transaction in Securities within
the proscribed period is involuntary (for example, due to unforeseen corporate
activity, such as a merger), the Advisory Person must notify the Director of
Compliance.
In circumstances where an Advisory Person can document personal exigencies,
the President of the Adviser (or his designee) may grant an exemption from the
prohibition of profiting in the purchase and sale, or sale and purchase, of the
same (or equivalent) Securities within 60 calendar days. Such an exemption is
wholly within the discretion of the President of the Adviser (or his designee),
and any request for such an exemption will be evaluated on the basis of the
facts of the particular situation.
(i) All Investment Personnel are prohibited from receiving any gift, favor,
preferential treatment, valuable consideration, or other thing of more than a de
minimus value in any year from any person or entity from, to or through whom the
Investment purchases or sells Securities, or an issuer to Securities. For
purposes of this code, "de minimus value" is equal $100 or less.
(j) All Investment Personnel are prohibited from serving on the boards of
directors of any Public Company, absent express prior authorization from the
President of the Adviser (or his designee). Authorization to serve on the board
of a Public Company may be granted in instances where the President of the
Adviser (or his designee) determines that such board service would be consistent
with the interests of the Investment Company and its shareholders. If prior
approval to serve as a director of a Public Company is granted, an Investment
Personnel has an affirmative duty to recuse himself from participating in any
deliberations by the Investment Company regarding possible investments in the
securities issued by the Public Company on whose board the Investment Personnel
sits.
5. REPORTING
(a) Every Access Person shall report the information described in Section
5(b) of this Code with respect to transactions (other than those personal
transactions in Securities exempted under Section 3 of this Code) in any
security in which such Access Person has or by reason of such transaction
acquires, any direct or indirect beneficial ownership. Access Persons affiliated
with the Adviser shall report such information to the Adviser's designated
compliance officer, and Access Persons affiliated with the Investment Company
shall report such information to the Investment Company's designated compliance
officer.
Notwithstanding the foregoing, a Disinterested Trustee is required to
report the information described in Section 5(b) of this Code only if the
Trustee knew, or in the ordinary course of fulfilling his official duties as a
Trustee of the Investment Company, should have known that during the 15-day
period immediately preceding or after the date of the transaction in a security
by the Trustee such security is or was purchased or sold by the Investment
Company or such purchase or sale by the Investment Company is or was considered
by the Investment Company or the Adviser.
(b) 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, shall be dated and signed by the Access Person submitting the report,
and shall contain the following information:
(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; and
(v) if there were no personal transactions in Securities during the
period, either a statement to that effect or the word "None" (or some
similar designation).
(c) 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.
(d) Every Advisory Person is required to direct his or her broker to
forward to the President of the Adviser (or his designee), on a timely basis,
duplicate copies of both confirmations of all personal transactions in
Securities effected for any account in which such Access Person has any direct
or indirect beneficial ownership interest and periodic statements relating to
any such account.
(e) Any Advisory Person who receives any gift, favor, preferential
treatment, valuable consideration or other thing of value of more than de
minimus value in any year from any person or entity that does business either
with or on behalf of the Investment Company (including an issuer of Securities
or any entity or person through whom the Investment Company purchases or sells
Securities) is required to report the receipt of such gift to the Director of
Compliance (or his designee). This reporting requirement shall not apply to:
(i) salaries, wages, fees or other compensation paid, or expenses paid
or reimbursed, in the usual scope of an Advisory Person's employment
responsibilities for the Advisory Person's employer;
(ii) the acceptance of meals, refreshments or entertainments of
reasonable value in the course of a meeting or other occasion, the purpose
of which is to hold bona fide business discussions;
(iii) the acceptance of advertising or promotional material of nominal
value, such as pens, pencils, note pads, key chains, calendars and similar
items;
(iv) the acceptance of meals, refreshments or entertainments of
reasonable value that are related to commonly recognized events or
occasions, such as a promotion, new job, Christmas, or other recognized
holiday; or
(v) the acceptance of awards, from an employer or employee, for
recognition of service and accomplishment.
(f) All Advisory Persons, on an annual basis or upon request from the
Director of Compliance (or his designee), will be required to furnish a
list of all Securities held by such Advisory Person or the members of his
household. All Advisory Persons, upon commencement of employment, are
required to disclose all personal Securities holdings.
In addition, all Advisory Persons are required, on an annual basis, to
certify that they have received, read, and understand the provisions of this
Code, and that they recognize that they are subject to its provisions. Such
certification shall also include a statement that the Advisory Person has
complied with the requirements of this Code and that the Advisory Person has
disclosed or reported all personal transactions in Securities that are required
to be disclosed or reported pursuant to the requirements of this Code.
6. SANCTIONS
Upon discovering a violation of this Code (or, in certain instances, its
Associated Procedures), the Adviser (in cases involving an Access Person
affiliated with the Adviser) or the Trust (in cases involving Access Persons
affiliated with the Trust) may take such actions or impose such sanctions, if
any, as it deems appropriate, including, inter alia, a letter of censure or
suspension, a fine, or termination of the employment of the violator. (In
instances where the violation is committed by a member of the Access Person's
household, any sanction would be imposed on the Access Person.) The filing of
any false, incomplete or untimely reports, as required by Section 5 of this
Code, may (depending on the circumstances) be considered a violation of this
Code. All material violations of this Code and any sanctions imposed with
respect thereto should be reported periodically to the Board of Trustees of the
Investment Company.
