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DEUTSCHE PORTFOLIOS
DEUTSCHE FUNDS, INC.
CODE OF ETHICS
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 Fund to conduct their personal transactions
in Securities in a manner which neither interferes with Fund portfolio
transactions nor otherwise takes unfair or inappropriate advantage of an
Access Person's relationship to the Fund; (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 Fund 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 Fund, 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 and 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 Fund and its shareholders or a failure to adhere to these general fiduciary
principles.
The provisions of this code shall apply separately to each Fund.
2. DEFINITIONS
(a) "Fund" means each registered investment company named above which
adopts this Code, any series or portfolios of such Fund.
(b) "Access Person" means any director, trustee, officer, managing general
partner, general partner, or Advisory Person of the Fund, and all
relatives living within the same household as such Access Person;
provided, however, that any Access Person who is an employee of
Deutsche Portfolios' investment manager or sub-advisers, any Fund's
principal underwriter, or of any operating company that is an
affiliate or subsidiary of Deutsche Portfolios' investment manager or
sub-advisers or principal underwriter, shall be subject to the
provisions and terms of such adviser's or underwriter's code of
ethics, and shall not be subject to this Code and its Associated
Procedures.
(c) The "1940 Act" means the Investment Company Act of 1940, as amended.
(d) "Advisory Person" means (i) any employee of either the Fund or of any
company in a control relationship to the Fund (which would include any
company that is an affiliate or a subsidiary of Deutsche Fund
Management, Inc., DWS International Portfolio Management GmbH, or
Deutsche Asset Management North America, Inc.), 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 Fund, 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 Fund
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who normally obtains information concerning current recommendations
made to the Fund with regard to the purchases or sales of a Security.
(e) "Associated Procedures" means those policies, procedures and/or
statements that have been adopted by the Fund, and which are designed
to supplement this Code and its provisions.
(f) 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.
(g) "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 or
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.
(h) "Control" shall have the same meaning as that set forth in Section
2(a)(9) of the 1940 Act.
(i) "Disinterested director" means a director, trustee, or managing
general partner of the Fund who is not an "interested person" of the
Fund within the meaning of Section 2(a)(19) of the 1940 Act.
(j) "Purchase or sale of a Security" includes, INTER ALIA, the writing of
an option to purchase or sell a Security.
(k) "Investment Personnel" include: Access Persons with direct
responsibility and authority to make investment decisions affecting
Deutsche Portfolios (such as portfolio managers); Access Persons who
provide information and advice to such portfolio managers (such as
securities analysts); and Access Persons who assist in executing
investment decisions for Deutsche Portfolios (such as traders). As the
context requires, "Investment Personnel" may refer to one or more
Access Persons.
(l) "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 Fund (including any Securities representing an ownership interest
in Federated Investors and Deutsche Fund Management, Inc., DWS
International Portfolio Management GmbH, or Deutsche
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Asset Management North America,Inc.; and such other instruments as may
be determined by the Fund's Board of Directors, from time to time.
(m) "Public Company" means any entity subject to the reporting
requirements of the Securities Exchange Act of 1934 or whose
securities are listed or traded on a foreign stock exchange.
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 Fund, 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 Fund; or
(ii) is being purchased or sold by the Fund.
(b) Inducing or causing the Fund to take action, or to fail to take
action, for the purpose of achieving a personal benefit, rather than
to benefit the Fund, is a violation of this Code. Examples of this
would include causing the Fund to purchase a Security owned by the
Access Person for the purpose of supporting or driving up the price of
the Security, and causing the Fund to refrain from selling a Security
in an attempt to protect the value of the Access Person's investment,
such as an outstanding option.
(c) Using knowledge of the Fund'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 Access
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 Access Persons are prohibited from acquiring any Security
distributed in an initial public offering, until trading of the
Security commences in the secondary market.
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(e) All Access 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 Deutsche Portfolios' investment manager (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 this investment to the President of Deutsche
Portfolios' investment manager (or his designee) if the Investment
Personnel participates in any subsequent consideration of any
potential investment by the Fund, in the issuer of those
Securities. The Fund'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 Deutsche Portfolios' investment
manager, or his designee, so long as the person conducting such
review has no personal interest in the issuer.
(f) All Access Persons are prohibited from executing a personal
transaction in all Securities (including transactions in pension or
profit-sharing plans in which the Access Person has a beneficial
interest), without express prior approval of the President of
Deutsche Portfolios' investment manager (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 Duetsche Portfolios' investment manager (or his
designee) if such purchase or sale would be only remotely
potentially harmful to the Fund; very unlikely to affect a highly
institutional marker, or clearly not related economically to the
securities to be purchased, sold or held by the Fund.
Notwithstanding the receipt of express prior approval, any
purchases or sales by Access Persons undertaken in reliance on this
provision remain subject to the prohibitions enumerated in Sections
4(g) and (h) of this Code.
(g) All Access Persons are prohibited from executing a personal
transaction in any Security on a day during which the Fund has a
pending "buy" or "sell" order for that Security, until the Fund'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 Fund 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 Fund 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 Deutsche
Portfolios' investment manager [or his designee]), and the Access
Person will be subject to disciplinary action, as determined by the
Director of Compliance and/or the Fund's Board of Directors.
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(h) All Access Persons are prohibited from profiting in the purchase and
sale, or sale 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 Access 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
Access Person must notify the Director of Compliance.
In circumstances where an Access Person can document personal
exigencies, the President of Deutsche Portfolios' investment manager
(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 (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 MINIMIS value in any year from any person or entity
from, to or through whom the Fund purchases or sells Securities, or an
issuer of Securities. For purposes of this Code, "DE MINIMIS value" is
equal to $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 Deutsche Portfolio's investment manager (or his
designee). Authorization to serve on the board of a Public Company may
be granted in instances where the President of Deutsche Portfolios'
investment manager (or his designee) determines that such board
service would be consistent with the interests of the Fund 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 Fund
regarding possible investments in the securities issued by the Public
Company on whose board the Investment Personnel sits.
(k) Notwithstanding the other restrictions of this Code to which
Disinterested directors are subject, subparagraphs (d) through (h) of
this Section 4 shall not apply to Disinterested directors.
5. REPORTING
(a) Every Access Person shall report to the Fund the information described
in Section 5(c) 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.
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(b) A Disinterested director of the Fund need only report a personal
transaction in a Security if such director, at the time of that
personal transaction, knew or, in the ordinary course of fulfilling
his or her official duties as a director of the Fund, should have
known that, during the 15-day period immediately preceding or
following the date of the personal transaction by the director, such
Security was purchased or sold by the Fund or was being considered for
purchase or sale by the Fund or its investment manager.
(c) Every report shall be made not later than 10 calendar 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;
(iv) the name of the broker, dealer or bank 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).
(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 or
she has any direct or indirect beneficial ownership in the Security to
which the report relates.
(e) Every Access Person is required to direct his or her broker to forward
to the President of Deutsche Portfolios' investment manager (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.
(f) Any Access Person who receives any gift, favor, preferential
treatment, valuable consideration or other thing or value of more than
DE MINIMIS value in any year from any person or entity that does
business either with or on behalf of the Fund (including an issuer of
Securities or any entity or person through whom the Fund 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
Access Person's employment responsibilities for the
Access 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;
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(iv) the acceptance of gifts, 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 to an
employee, for recognition of service and accomplishment.
(g) All Access Persons, on an annual basis or upon request of the Director
of Compliance (or his designee), will be required to furnish a list of
all Securities held by such Access Person or the members of his
household. All Access Persons, upon commencement of employment, are
required to disclose all personal Securities holdings.
In addition, all Access 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
Access Person has complied with the requirements of this Code and that
the Access 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.
(h) A Disinterested director shall be exempt from the reporting
requirements contained in subparagraphs (e) through (g) of this
Section 5 of this Code, so long as at the time of the personal
transaction in the Security, the Disinterested director neither
knew, nor, in the ordinary course of fulfilling his official duties as
a director of the Fund, should have known that during the 15-day
period immediately preceding or after the date of the transaction in
the Security by the Disinterested director the Security was purchased
or sold by the Fund, or considered for purchase or sale.
6. SANCTIONS
Upon discovering a violation of this Code (or, in certain instances, its
Associated Procedures), the Board of Directors of the Fund 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 a
recommendation of the 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.
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