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EXHIBIT (P)(2)
SANWA BANK CALIFORNIA
CODE OF ETHICS
STATEMENT OF GENERAL PRINCIPLES
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It is the policy of Sanwa Bank California (SBCL) that all SBCL personnel1
should: (1) at all times place the interests of the client first; (2) conduct
all personal securities transactions in a manner that is consistent with the
Code of Ethics and avoids any actual or potential conflict of interest or any
abuse of the individual's position of trust and responsibility; and (3) adhere
to the fundamental standard that SBCL personnel should not take inappropriate
advantage of their positions.
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(1) Investment Management personnel have been divided into four categories:
1. Fund Managers have the responsibility and authority to make
decisions about fund investments.
2. Investment Personnel include any employee of SBCL (or of
any company in control relationship to SBCL) 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 Funds and any natural
person who controls SBCL and who obtains information
concerning recommendations regarding the purchase or sale of
securities by a Client.
3. Access Persons are: (i) any director or officer of SBCL;
(ii) any employee of SBCL or of any company in a "control"
relationship with SBCL who, in connection with his regular
functions or duties, makes, participates in, or obtains
information regarding the purchase or sale of a security by
SBCL on behalf of an investment company portfolio, or whose
functions relate to the making of any recommendations with
respect to such purchase or sales; (iii) any individual in a
"control" relationship to SBCL who obtains information
concerning recommendations made to SBCL or to an investment
company portfolio with regard to the purchase or sale of a
security; and (iv) any advisory person of SBCL. An advisory
person means: (a) any employee of SBCL (or of any company in a
control relationship with SBCL) who, in connection with his or
her regular functions or duties, makes, participates in, or
obtains information regarding the purchase or sale of Covered
Securities by a Client, or whose functions relate to the
making of any recommendations with respect to the purchase or
sales; and (b) any natural person in a control relationship
with SBCL who obtains information concerning recommendations
made to the Client with regard to the purchase or sale of
Covered Securities by Client.
4. Non-Access Persons Otherwise Reporting are employees of
SBCL other than Fund Managers, Investment Personnel, or Access
Persons, assigned by SBCL Compliance as non-access persons
otherwise reporting.
SBCL Compliance will decide in its sole discretion to which category an
SBCL employee is assigned and to which provisions an SBCL employee is
required to comply. SBCL Compliance will also decide which persons,
including directors, officers, and employees of SBCL, will be subject
to this Code.
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GOVERNING STANDARDS
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This Code of Ethics shall be governed by Rule 17j-1 under the Investment Company
Act of 1940 and Sections 204 and 206 of the Investment Advisers Act of 1940.
This Code of Ethics also reflects the recommendations of the Investment Company
Institute's Guidelines on Personal Investing.
No employee of SBCL, in connection with the purchase or sale by such person of a
security "held or to be acquired" by (i) any investment portfolio (a "Fund") of
an investment company (a "Trust"), or (ii) any advisory client2 of SBCL
(together with a Fund or a Trust a "Client"), may:
(1) Employ any device, scheme, or artifice to defraud a Client;
(2) Make any untrue statement of a material fact to a Client or
omit to state to a Client a material fact necessary in order
to make the statements made, in light of the circumstances
under which they are made, not misleading;
(3) Engage in any act, practice, or course of business which
operates or would operate as a fraud or deceit upon a Client;
(4) Engage in any manipulative practice with respect to a Client;
or
(5) Acting as a principal for his or her own account, knowingly
sell any security to or purchase any security from a Client
or, acting as a broker for a person other than a Client,
knowingly effect any sale or purchase of any security for the
account of such Client, without disclosing to such Client in
writing, before the completion of the transaction, the
capacity in which he or she is acting and obtaining the
consent of such Client to the transaction.
A Covered Security is "held or to be acquired" if within the most recent 15 days
it (1) is or has been held by a Client, or (2) is being or has been considered
by SBCL for purchase on behalf of a Client. A Covered Security to be held or to
be acquired includes any option to purchase or sell, and any security
convertible into or exchangeable for, a Covered Security.
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(2) An advisory client includes without limitation, trust departments, common
trust funds or collective investment funds, commingled accounts or funds of any
kind, or any other type of advisory relationship, without regard to whether the
particular advisory client is controlled or held by SBCL or any subsidiary of
SBCL and whether organized as internal divisions or separate entities.
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SUBSTANTIVE RESTRICTIONS ON PERSONAL INVESTING ACTIVITIES
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1. INITIAL PUBLIC OFFERINGS(3)
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Fund Managers and Investment Personnel are prohibited from acquiring
any Reportable Personal Securities(4) in an Initial Public Offering
("IPO") and Investment Personnel must obtain approval from SBCL
Compliance before directly or indirectly acquiring beneficial ownership
in any securities other than Reportable Personal Securities in an
IPO.(5)
2. LIMITED OFFERINGS(6)
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Fund Managers and Investment Personnel shall when purchasing Reportable
Personal Securities in a limited offering:
a. Obtain the prior written approval from SBCL Compliance; and
b. Disclose their investment when they are involved in any
subsequent decision to invest on behalf of a Client in
securities of the same issuer, and refer the decision to
purchase securities of the issuer to SBCL Compliance.
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(3) An 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 Section 13 or
15(d) of the Securities Exchange Act.
(4) Personal Securities are securities in which the person has, or by reason of
a reportable transaction acquires, any direct or indirect beneficial ownership.
Beneficial ownership of a security is determined in the same manner as it would
be for the purposes of Section 16 of the Securities Exchange Act of 1934, except
that such determination should apply to all securities. Generally, a person
should consider himself the beneficial owner of securities held by his spouse,
his minor children, a relative who shares his home, or other persons if by
reason of any contact, understanding, relationship agreement or other
arrangement, he obtains from such ownership. He should also consider himself the
beneficial owner of securities if he can invest or revest title in himself now
or in the future.
Reportable Personal Securities do not include: (1) securities issued or
guaranteed by the United States Government, its agencies or instrumentalities;
(2) bankers acceptances; (3) bank certificates of deposit; (4) commercial paper;
(5) shares of registered open-end investment companies; and (6) shares of SBCL
stock.
(5) Covered Securities means a security as defined in Section 2(a)(36) of the
Investment Company Act, except that it does not include (i) direct obligations
of the Government of the United States; (ii) bankers' acceptances, bank
certificates of deposit, commercial paper and high quality short-term debt
instruments, including repurchase agreements; and (iii) shares issued by
open-end Funds.
(6) A Limited Offering means an offering that is exempt from registration under
Securities Act pursuant to Section 4(2) of Section 4(6) or pursuant to Rule 504,
505, or 506 under the Securities Act.
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In a Limited Offering, Investment Personnel must obtain approval from
SBCL Compliance before directly or indirectly acquiring beneficial
ownership in any securities other than Reportable Personal Securities.
3. BLACKOUT PERIODS
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a. Same Day
Fund Managers, Investment Personnel, and Access Persons are
prohibited from executing a Reportable Personal Securities
transaction on a day or days when a Fund has a pending "buy"
or "sell" order in the same security until that order is
executed or withdrawn. Any profits realized on trades within
the proscribed periods will be disgorged.(7)
b. Seven Day
Fund Managers are prohibited from buying or selling a
Reportable Personal Security within at least seven (7)
calendar days before and after the Fund he or she manages
trades in that security. Any profits realized on trades within
the proscribed periods will be disgorged.
4. BAN ON SHORT-TERM TRADING PROFITS
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Fund Managers and Investment Personnel are prohibited from profiting in
the purchase and sale, or the sale and purchase, of the same (or
equivalent) Reportable Personal Securities within 60 calendar days. Any
profits realized on trades within the proscribed periods will be
disgorged. Note: This prohibition applies regardless of whether a Fund
has effected any transactions in the same security.(8)
5. SERVICE AS A DIRECTOR
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Fund Managers and Investment Personnel are prohibited from serving on
the board of directors of publicly traded companies, without prior
written authorization from SBCL's Board of Directors and/or a Trust's
Board of Trustees.
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(7) SBCL Compliance may grant exceptions on a case-by-case basis from this
disgorgement requirement under certain limited circumstances upon prior written
request timely submitted from the affected person.
(8) Ibid.
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DISCLOSURE AND REPORTING REQUIREMENTS
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1. PRE-CLEARANCE
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Fund Managers, Investment Personnel, and Access Persons are required to
preclear with SBCL Compliance all Reportable Personal Securities.
Authorization, if received, will be valid for a period of two (2)
business days.
2. RECORDS OF SECURITIES TRANSACTIONS
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Fund Managers, Investment Personnel, and Access Persons are required to
provide, on a timely basis, duplicate copies of confirmations of all
Reportable Personal Securities transactions and copies of periodic
statements for all securities accounts.
3. INITIAL HOLDINGS REPORTS
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No later than 10 days after a person becomes a Fund Manager, Investment
Personnel, or an Access Person, that person must submit the following
information to SBCL Compliance:
(A) The title, number of shares and principal amount of each
Covered Security in which the Access Person had any direct or
indirect beneficial ownership when the person became an Access
Person.
(B) 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
(C) The date that the report is submitted by the Access
Person.
4. QUARTERLY TRANSACTION REPORTS (EXHIBIT A)
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No later than 10 days after the end of a calendar quarter, all Fund
Managers, Investment Personnel, Access Persons, and Non-Access Persons
Otherwise Reporting must submit the following information to SBCL
Compliance:
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(A) With respect to any transaction during the quarter in a
Covered Security in which the Fund Manager, Investment
Personnel, Access Person, or Non-Access Person Otherwise
Reporting had any direct or indirect beneficial ownership:
(1) The date of the transaction, the title, the
interest rate and maturity date (if applicable), the
number of shares and the principal amount of each
Covered Security involved;
(2) The nature of the transaction (i.e., purchase,
sale or any other type of acquisition or
disposition);
(3) The price of the Covered Security at which the
transaction was effected;
(4) The name of the broker, dealer or bank with or
through which the transaction was effected; and
(5) The date that the report is submitted by the Fund
Manager, Investment Personnel, Access Person, or
Non-Access Person Otherwise Reporting.
(B) With respect to any account established by the Fund
Manager, Investment Personnel, Access Person, or Non-Access
Person Otherwise Reporting in which any securities were held
during the quarter for the direct or indirect benefit of the
Fund Manager, Investment Personnel, Access Person, or
Non-Access Person Otherwise Reporting:
(1) The name of the broker, dealer or bank with whom
the Fund Manager, Investment Personnel, Access
Person, or Non-Access Person Otherwise Reporting
established the account;
(2) The date the account was established; and
(3) The date that the report is submitted by the Fund
Manager, Investment Personnel, Access Person, or
Non-Access Person Otherwise Reporting.
5. ANNUAL HOLDINGS REPORTS (EXHIBIT A)
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Annually, the following information (which information must be current
as of a date no more than 30 days before the report is submitted) must
be submitted to SBCL Compliance by all Access Persons:
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(A) The title, number of shares and principal amount of each
Covered Security in which the Access Person had any direct or
indirect beneficial ownership;
(B) The name of any broker, dealer or bank with whom the
Access Person maintains an account in which any securities are
held for the direct or indirect benefit of the Access Person.
6. CERTIFICATION OF COMPLIANCE WITH CODE OF ETHICS
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Fund Managers, Investment Personnel, Access Persons, and Non-Access
Persons Otherwise Reporting are required to certify annually that they
have read and understand the Code of Ethics. They must further certify
that they are subject to and have complied with the requirements of the
Code of Ethics and that they have disclosed or reported all Personal
Securities transactions required to be disclosed or reported.
COMPLIANCE PROCEDURES
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In order to provide SBCL with information to enable it to determine with
reasonable assurance whether the provisions of the Code of Ethics are being
observed by Fund Managers, Investment Personnel, Access Persons, and Non-Access
Persons Otherwise Reporting:
1. SBCL Compliance shall, on an annual basis, notify each Fund Manager,
Investment Personnel, Access Person, and Non-Access Person Otherwise
Reporting of the reporting requirements of the Code of Ethics and shall
deliver a copy of the Code to each person.
2. Each Fund Manager, Investment Personnel, Access Person, and Non-Access
Person Otherwise Reporting shall submit to SBCL Compliance, on an
annual basis, an Annual Acknowledgment and Certification of Compliance
with the Code of Ethics as prescribed in Exhibit A. The annual
certification shall be filed with SBCL Compliance within thirty
calendar days after year-end.
3. Decisions regarding the pre-clearance of all Reportable Personal
Securities transactions for Fund Managers, Investment Personnel, and
Access Persons and decisions regarding the pre-clearance of IPOs and
Limited Offerings for Investment Personnel shall be documented in
writing by SBCL Compliance. Fund Managers, Investment Personnel, and
Access Persons shall make arrangements with their broker to provide
SBCL Compliance, on a timely basis, with copies of confirmations of all
Reportable Personal Securities transactions and copies of periodic
statements for all securities accounts.
4. SBCL's Compliance Officer or Senior Vice President shall report both to
the Board of Directors of SBCL and to the Board of Trustees of a Trust
no less frequently than
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annually with respect to:
(a) existing procedures regarding personal investing and
any changes made to the procedures during the past
year;
(b) any issues arising under the Code or its procedures
since the last report to the Board, including, but
not limited to, information about any material
violations of the Code or procedures and sanctions
imposed in response to the material violations;
(c) any recommended changes to existing procedures or
restrictions as indicated by SBCL's experience under
the Code of Ethics, evolving industry practices, or
other developments in laws or regulations.
The Board of Directors of SBCL and the Board of Trustees of a Trust
shall consider all reports made to it and shall determine whether the
policies established in the Code of Ethics have been violated, and what
sanctions, if any, should be imposed. SBCL will certify annually to the
Boards that it has adopted procedures reasonably necessary to prevent
Access Persons from violating the Code.
5. This Code of Ethics, a copy of each Initial Holdings Report, Annual
Holdings Report, and Quarterly Securities Transactions Report of the
parties covered in the Code, a record of all persons required to make
such reports or review such reports, a record of any violation of this
Code and of any action taken as a result of such violation, shall be
preserved with SBCL Compliance or Trust counsel for the period required
by Rule 17j-1 under the Investment Company Act of 1940 and Sections 204
and 206 of the Investment Advisers Act of 1940.
Adopted: July 12, 2000
The Board of Directors
SANWA BANK CALIFORNIA
