Exhibit (p)(3)
PPM HOLDINGS, INC.
PPM AMERICA, INC.
PPM FINANCE, INC.
PPM AMERICA FUNDS
CODE OF ETHICS AND CONDUCT
As an investment adviser, PPM America, Inc. ("PPMA") owes its clients
and shareholders of the PPM America Funds ("PPM Funds") the highest duty of
diligence and loyalty. Accordingly, one of the fundamental policies of PPMA is
to avoid any conflict of interest. In furtherance of this fundamental policy,
this Code of Ethics and Conduct ("Code") has been adopted by PPMA, by PPMA's
immediate parent company, PPM Holdings, Inc., by PPMA's affiliated company, PPM
Finance, Inc., and by the PPM Funds. PPMA, PPM Holdings and PPM Finance are
referred to collectively in the Code as "PPM". The PPM Funds have separately
adopted a Code of Ethics for the disinterested trustees.
The Code applies to each employee of PPM, including all executive
officers of PPMA, PPM Holdings or PPM Finance, and to all access persons of the
PPM Funds (each referred to collectively in the Code as an "Employee"). Each
Employee should consult with the Chief Compliance Officer of the PPM Company
with which the Employee is affiliated regarding any question about the Code or
other issues relating to PPM's fiduciary obligations to its clients before
taking any action. Please also remember that PPM has developed Policy and
Procedures Regarding Inside Information and Chinese Walls ("Inside Information
Policy"). Please refer to the Inside Information Policy as appropriate.
I. GENERAL STANDARDS
A. FAIR DEALING. Each Employee shall act in a manner consistent with
the obligation of PPM and each person covered by the Code to deal fairly with
all clients when taking investment action. Any investment ideas developed by an
Employee in the course of the Employee's work for PPM shall be made available
for use by PPM's clients prior to any personal trading or investment by any
Employee based on such ideas, including trading or investment by an Employee
directly or indirectly.
B. PERSONAL SECURITIES TRANSACTIONS. No Employee may purchase or sell
any security in which the Employee has a beneficial interest except in
accordance with this Code. See Appendix A for examples of situations in which a
person covered by the Code will be deemed to have a beneficial interest in a
security for purposes of the Code. Specific prohibitions and reporting
requirements are contained in Sections III and IV of the Code.
C. GIFTS, FAVORS, AND GRATUITIES. An Employee may not accept any gift,
favor, gratuity or invitation offered by any broker, client, approved company
(i.e., a company whose securities are held by a PPM client, including PPM
Funds), supplier, or other person or organization with whom PPM has a business
relationship, that creates a conflict between the Employee's personal financial
interest and the interests of PPM's clients. Specifically, an Employee may not
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accept any such gift, favor, gratuity or invitation except those extended as a
customary courtesy of business life. Prohibited gifts or gratuities include the
receipt of any credit facility, personal investment opportunities or other
special treatment from any broker or dealer that is not available from that
broker or dealer to similarly situated customers not in the securities or
investment management business.
No Employee should offer any gift, favor, gratuity, or invitation that
influences decision-making or otherwise creates a conflict of interest on the
part of the intended recipient.
D. CONFIDENTIALITY. Information relating to any client's portfolio or
activities is strictly confidential and shall not be disclosed, orally or in
writing, to anyone outside PPM, unless that Employee has been specifically
authorized to release that information. For further guidance in this regard,
consult PPM's Press Policy and policy regarding Confidential Information and
Non-Competition.
E. SERVICE AS A DIRECTOR. No Employee shall serve on the board of directors
(or equivalent) of any company with a class of publicly-held securities, unless
such service has been authorized by PPM's Management Committee. Board service
increases the likelihood of possession of material, non-public information.
Please refer to PPM's Inside Information Policy.
F. EXEMPTIONS FROM THE CODE'S PROVISIONS. The purpose of the Code is to
prevent the damage that might result from a conflict between the interests of an
Employee of PPM and PPM's clients, not to impose undue financial burdens on
persons subject to the Code. For that reason, the Chief Compliance Officer has
the authority to grant an exemption, in advance of any proposed transaction,
from any provision of this Code except the provisions requiring reporting of
personal securities transactions if, in the judgment of the Chief Compliance
Officer, compliance with the provision of the Code would result in serious
financial hardship to the Employee and the requested exemption would not result
in any breach by PPM of its duties to its clients. EXEMPTION OF A PROPOSED
TRANSACTION FROM THE CODE IS EXPECTED TO BE GRANTED VERY RARELY.
II. TRANSACTIONS COVERED BY THE CODE
AND EXEMPT TRANSACTIONS
The Code regulates personal securities transactions as a part of the
effort by PPM to detect and prevent conduct that might create an actual or
potential conflict of interest with a client. The Code flatly prohibits certain
transactions and establishes reporting requirements for ALL TRANSACTIONS except
those listed as exempt in Section II.B.
A. TRANSACTIONS COVERED BY THE CODE. Every transaction in a security by or
for the benefit of an Employee is subject to the Code.
Security is defined very broadly for purposes of the Code. Transactions
involving options, warrants, and futures contracts are subject to the same
restrictions and procedures as those set forth in this Code with respect to the
underlying securities.
The Code covers transactions in the personal account of an Employee, the
account of any member of the Employee's immediate family (including spouse,
minor children or any relative living in the Employee's home), any other account
in which the Employee has a direct or indirect financial or "beneficial"
ownership interest, or in any nonclient account controlled by or under the
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influence of the Employee. As required by the Securities and Exchange
Commission, beneficial interest is defined broadly; see Appendix A to the Code
for examples of ownership arrangements covered by the Code. Having a beneficial
interest in a security for purposes of the Code is not necessarily the same
thing as ownership for other purposes (including, for example, tax purposes).
If you have any question about whether a transaction is covered by the
Code, contact the Chief Compliance Officer before taking any action.
B. EXEMPT TRANSACTIONS. The following transactions are exempt from the
reporting provisions of this Code:
1. purchases or sales effected in any account over which an
Employee has no direct or indirect influence or control or
in any account of the Employee which is managed on a
discretionary basis by a person other than the Employee and
with respect to which the Employee does not in fact
influence or control purchase or sale transactions;
2. purchases or sales which are involuntary on the part of the
Employee (for example, the redemption of a debt security by
the issuer);
3. purchases which are part of an automatic dividend
reinvestment plan;
4. purchases of securities by exercising rights that were
issued pro rata to all holders of a class of securities, but
only if the Employee acquired the rights directly from the
issuer (and not by purchase from someone other than the
issuer), and sales of rights that were acquired by the
Employee by pro rata issuance directly from the issuer; and
5. transactions involving: shares of registered open-end mutual
funds; securities issued by the United States Government;
bankers' acceptances; bank certificates of deposit;
commercial paper; short-term debt securities issued or
guaranteed by any agency or instrumentality of the United
States Government; or other money market instruments
designated by PPMA.
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III. PERSONAL INVESTMENT RULES
A. PROHIBITED TRANSACTIONS. The following transactions are prohibited:
1. FRONT-RUNNING. No Employee shall engage in "front-running"
an order or recommendation, even if the Employee is not
handling either the order or the recommendation and even if
the order or recommendation is for someone other than a
client of PPM. Front-running consists of executing a
transaction in the same or underlying securities, options,
rights, warrants, convertible securities, or other related
securities, in advance of block or large transactions of a
similar nature likely to affect the value of the securities,
based on the knowledge of the forthcoming transaction or
recommendation.
2. SECURITIES ON RESTRICTED LISTS; INSIDE INFORMATION POLICY.
No Employee may purchase or sell any security prohibited by
the Inside Information Policy, including:
a. any security on the Firm Wide Restricted List; and
b. for Employees designated in the Inside Information
Policy as members of the Private Information Investment
and Access Groups, any security on the Private
Information Restricted List.
See the Inside Information Policy for more information and
definitions.
3. BLACKOUT PERIOD FOR CLIENT TRANSACTIONS. No Employee may
purchase or sell any security which: (a) is being purchased
or sold on behalf of a client (i.e., an order has been
entered but not executed for a client), (b) has been
purchased or sold by a client within the prior seven
calendar days, or (c) is being planned for purchase or sale
on any client's behalf within the next seven days.
Notwithstanding the prohibition in the preceding paragraph,
no blackout period will apply to any Exempt Transaction, as
defined in Section II.B. of the Code, or to any transaction
in a security which is being purchased or sold, has been
purchased or sold, or is being planned for purchase or sale,
on behalf of a PPMA client by a foreign affiliate of or
subadviser to PPMA.
4. PRE-APPROVAL OF PERSONAL SECURITIES TRANSACTIONS. No
Employee may initiate, recommend, or in any other way
participate in a personal securities transaction in a
security that is not an Exempt Transaction (as defined in
this Code) unless that transaction has been pre-approved as
described in III.B., below.
5. INITIAL PUBLIC OFFERINGS. No Employee may purchase any
equity security or any security convertible into an equity
security in an initial public offering ("IPO") of that
security.
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6. PRIVATE PLACEMENTS. No Employee may purchase any security in
a private placement without the prior written approval of
the Chief Compliance Officer.
7. SHORT SALES. No Employee may sell short any security that is
held in any PPMA client account.
8. DEALING WITH CLIENTS. No Employee may sell or purchase any
security to or from a client portfolio.
9. BETS. No Employee shall make a wager or bet of any kind on
the change in the price of any security or the value of any
securities index.
B. PROCEDURES FOR PRE-APPROVAL OF PERSONAL SECURITIES TRANSACTIONS.
1. TRANSACTIONS FOR WHICH PRE-APPROVAL IS REQUIRED. Except for
Exempt Transactions (as defined in Section II.B., above),
each Employee must obtain written approval to initiate,
recommend, or in any other way participate in a personal
securities transaction of any kind (including purchases,
sales, exercises and exchanges) from the Chief Compliance
Officer of PPMA or any other person designated by the Chief
Compliance Officer.
2. HOW TO REQUEST PRE-APPROVAL. Requests by an Employee for
prior approval of personal securities transactions must be
made in writing on PPM's standard Personal Trade Information
form ("PTI"). A copy of the PTI is attached as Appendix B.
In requesting pre-approval, an Employee must disclose any
relationship between the security proposed to be purchased
and any security held or planned to be acquired by any PPM
client (for example, the security proposed to be purchased
has been made available because of purchases of the same or
related securities by PPM clients).
3. APPROVAL BY A COMPLIANCE OFFICER. The reviewing Compliance
Officer shall mark his response on the PTI, give two copies
to the Employee and give the other copy to the Chief
Compliance Officer. A Compliance Officer will generally
approve a personal securities transaction if, in the
judgment of the Compliance Officer:
a. the transaction is not prohibited by the Code;
b. the transaction does not violate PPM's Inside
Information Policy; and
c. the transaction does not involve a conflict of interest
or potential for a conflict of interest.
4. EXECUTING A PRE-APPROVED TRANSACTION. Pre-approval of a
securities transaction is effective for three New York Stock
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Exchange trading days following the date approval is
granted.1 If an Employee becomes aware of a significant
change in the circumstances on which approval was based
before the transaction is executed, the member shall bring
that change in circumstances to the attention of the
Compliance Officer who approved the transaction to determine
whether the previously granted approval should be revoked or
modified.
If the transaction is executed, the Employee shall submit to
the Chief Compliance Officer a copy of the completed PTI
within two business days of execution of the transaction,
showing the terms of the transaction as executed. If the
transaction is not executed, the PTI should be returned to
the Chief Compliance Officer showing that the transaction
was not completed.
5. EFFECT OF PRE-APPROVAL. The approval of any personal
securities transaction by a Compliance Officer does not
relieve an Employee of that Employee's Responsibilities
under the federal securities laws, including those relating
to insider trading, or PPM's policies, including this Code.
C. REPORTS OF PERSONAL INVESTMENTS AND TRANSACTIONS.
1. ACCOUNT AND HOLDINGS REPORT. Upon entering employment with
PPM and annually thereafter, every Employee must submit to
the Chief Compliance Officer a Personal Securities Accounts
and Holdings Report ("Personal Securities Report") (a copy
of which is attached as Appendix C) with respect to every
security and securities account in which the Employee has or
expects to have a beneficial interest and every nonclient
account for which he or she exercises influence or control
over investment decisions.
As to securities accounts, the Personal Securities Report
requires the Employee to identify the brokerage firm at
which each such account is maintained, the title of the
account, the account number, and the names and addresses of
all individuals with a beneficial interest in the account.
When an Employee opens a new securities account, closes an
existing account, or no longer has influence or control over
an account, the Employee shall promptly notify the Chief
Compliance Officer in writing.
As to securities holdings, the Personal Securities Report
requires disclosure of the name of the security, the type of
security, the number of shares or principal amount (for debt
securities), the nature of the Employee's interest in the
security, and the brokerage firm where it is held. An
Employee need not report securities obtained in Exempt
Transactions as described in Section II.B., above.
The annual submission of the Personal Securities Report is
due by February 28 of each year, reporting each Employee's
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securities accounts and holdings as of December 31 of the
prior year. The Chief Compliance Officer shall keep a copy
of all Personal Securities Reports.
2. TRANSACTION REPORTING. Each Employee shall report all
completed personal securities transactions to the Chief
Compliance Officer by completing the PTI in accordance with
the procedures set forth in Section III.B., above.
3. CONFIRMATIONS AND STATEMENTS. Each Employee is responsible
for arranging to have confirmations and monthly account
statements for each account listed by the Employee in the
Employee's Personal Securities Report sent by the broker or
other entity holding the account to the Chief Compliance
Officer.
IV. ADMINISTRATION OF THE CODE
A. Communications.
1. INITIAL COMMUNICATION AND CERTIFICATION. Upon adoption of
the Code or the commencement of employment, each Employee of
PPM is provided with a copy of the Code. At that time, each
Employee also is scheduled to discuss the Code with the
Chief Compliance Officer. Each Employee is required to
acknowledge his or her understanding of the Code's
prohibitions and requirements by signing a Compliance
Certificate and returning it to the Chief Compliance Officer
for retention in PPM's files.
2. ANNUAL CERTIFICATION. Each year PPM recirculates the Code to
its Employees and requires that each of them sign a
Compliance Certificate and return the executed copy to the
Chief Compliance Officer.
3. QUESTIONS. Persons subject to the Code are encouraged to
direct any questions that may arise concerning the Code and
its prohibitions to the Chief Compliance Officer.
B. REVIEW OF PERSONAL SECURITIES TRANSACTIONS.
1. REVIEW OF CONFIRMATIONS. Within five business days after the
receipt of a confirmation, the Chief Compliance Officer or
someone under his supervision shall match the confirmation
with the appropriate PTI, to ensure that all trades have
received prior authorization, if required.
If a confirmation discloses a securities transaction which
was required to be pre-approved, but for which no prior
written approval was obtained, or which was executed after
the prior approval expired, the Chief Compliance Officer
shall discuss the circumstances of the transaction and the
reason for the failure to follow required procedures with
the Employee and shall make a written record of the matter.
A copy of that record shall be retained in that Employee's
personal securities transactions file. This action does not
preclude any other sanction for violation of the Code.
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2. MONTHLY REVIEW. On a monthly basis, the Chief Compliance
Officer or someone under his supervision shall review each
Employee's personal securities transactions, using the PTIs,
confirmations, and other account documentation to look for
indications of improper personal securities transactions.
The Chief Compliance Officer shall discuss any questionable
transactions with the Employee who effected the trade and
make such other inquiries as the Chief Compliance Officer in
his discretion deems appropriate. The Chief Compliance
Officer shall make a written record of any determination
made and the reasons underlying that determination.
C. RECORDKEEPING. The Chief Compliance Officer or someone under his
supervision shall maintain the records listed below for a period of five years
at PPM's principal place of business in an easily accessible place:
1. LIST OF PERSONS COVERED BY THE CODE. A list of all
Employees, which shall constitute a list of all persons
subject to the Code during the period.
2. COMPLIANCE CERTIFICATES. Compliance Certificates signed by
all Employees acknowledging receipt of copies of the Code
and acknowledging that they are subject to it, and, in the
case of Employees subject to the Code in prior periods,
certifying that he or she complied with the Code during that
prior period.
3. THE CODE. A copy of each code of ethics that has been in
effect at any time during the period.
4. REPORTS. A copy of each Personal Securities Report, PTI,
confirmation and monthly statement submitted by an Employee
and a record of any known violation and action taken as a
result thereof during the period.
D. ANNUAL REVIEW OF PROCEDURES. The Code shall be reviewed by PPM's
management on an annual basis to assess its effectiveness, in conjunction with
PPM's other policies and procedures, in preventing improper and illegal personal
securities trading by PPM's Employees.
V. VIOLATIONS OF THE CODE
If the Chief Compliance Officer determines that a violation or possible
violation of any of the provisions of this Code has occurred, the Chief
Compliance Officer shall report that determination to the President of PPMA (or,
if the violation of the Code is believed to involve the President, appropriate
executive officers of PPM Limited). The Chief Compliance shall discuss the
matter with the Employee. If the President of PPMA agrees with the determination
of the Chief Compliance Officer, the Chief Compliance Officer shall promptly
report such violation to the Board of Directors of PPMA and/or to the Board of
Trustees of PPM Funds. PPMA's Board of Directors may impose such sanctions
against the Employee as it deems appropriate under the circumstances. Such
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sanctions may include unwinding a transaction, forfeiture of any profit from a
transaction, reduction in salary, censure, suspension or termination of
employment.
Violations of this Code may also violate the federal securities laws.
Sanctions for violations of the federal securities laws, particularly violations
of the antifraud provisions, include fines, money damages, injunctions,
imprisonment, and bars from certain types of employment in the securities
business.
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Appendix A
EXAMPLES OF BENEFICIAL OWNERSHIP
You will be deemed to have a beneficial interest in a security for
purposes of the Code in the circumstances listed below.
1. Securities held by you for your own benefit, whether such securities are
in bearer form, registered in your own name, or otherwise;
2. Securities held by others for your benefit (regardless of whether or how
such securities are registered), such as, for example, securities held for you
by custodians, brokers, relatives, executors, or administrators;
3. Securities held by a pledgee for your account;
4. Securities held by a trust in which you have an interest. A remainder
interest will confer beneficial ownership only if you have power to exercise or
share investment control over the trust.
5. Securities held by you as trustee or co-trustee, where either you or any
member of your immediate family (i.e., spouse, children or descendants,
stepchildren, parents and their ancestors, and stepparents, in each case
treating a legal adoption as blood relationship) has an interest in the trust.
6. Securities held by a trust of which you are the settlor, if you have the
power to revoke the trust without obtaining the consent of all the beneficiaries
and have or share investment control;
7. Securities held by any non-public partnership in which you are a partner
to the extent of your interest in partnership capital or profits;
8. Securities held by a personal holding company controlled by you alone or
jointly with others;
9. Securities held in the name of your spouse unless legally separated, or
in the name of you and your spouse jointly;
10. Securities held in the name of your minor children or in the name of
any immediate family member of you or your spouse (including an adult child) who
is presently sharing your home. This applies even if the securities were not
received from you and the income from the securities is not actually used for
the maintenance of your household;
11. Securities held in the name of any person other than you and those
listed in paragraphs (9) and (10), above, if by reason of any contract,
understanding, relationship, agreement, or other arrangement you obtain benefits
substantially equivalent to those of ownership;
12. Securities held in the name of any person other than you, even though
you do not obtain benefits substantially equivalent to those of ownership (as
described in (11), above), if you can vest or revest title in yourself.
<PAGE>
Appendix B
PERSONAL TRADE INFORMATION
CONFIDENTIAL
Employee Name:__________________________________________
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PART A: PRE-CLEARANCE
Securities Description:
-----------------------------------------
Buy |_| Sell |_|
Quantity2:
Is this security or transaction related in any way to a security being
held, purchased or sold by PPM on behalf of a client? No |_| Yes |_|
Give Details___________________________________________________________
Pre-Approval Signature: Date:
------------------------------- -----------
Reminder: Pre-approval is valid for only 3 NYSE trading days following the date
of pre-approval.
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PART B: TRADE DETAIL
Buy |_| Sell |_|
Trade Date: Quantity: Price per Unit:
------------ ------- ----------
Broker:
----------------------------------------------------------------
Check here if the transaction was not executed: |_|
Employee Signature: Date:
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PART C: REVIEW
Reviewer's Notes:
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Reviewer's Initials: Date of Review:
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2 For equity securities, enter the number of shares. For debt securities, enter
the par value.
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Appendix C
PERSONAL SECURITIES ACCOUNTS AND HOLDINGS REPORT
In accordance with PPM's Code of Ethics and Conduct (the "Code"),
please provide a list of all of your securities accounts and securities holdings
in which you have a beneficial interest. More detailed instructions are set
forth below. You will be asked to complete this report upon entering PPM's
employment and annually thereafter. In addition, during the course of the year,
if you open a new account or otherwise obtain a beneficial interest in a
securities account, the Code requires that you report that new account in
writing to the Chief Compliance Officer. If you have any question as to whether
a security account or holding should be reported on this Report, you should
consult with the Chief Compliance Officer.
1. Please provide a list identifying all securities accounts in which you
have a beneficial interest. See Appendix A to the Code for examples of
situations in which you will be deemed to have a beneficial interest in
a security. If you have any question as to whether an account should be
reported, you should consult with the Chief Compliance Officer.
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NAME OF ACCOUNT ACCOUNT NUMBER NAME OF BROKERAGE FIRM
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NOTE: CONTINUE LISTING AS NECESSARY ON ADDITIONAL SHEETS
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2. Please provide a list of all securities in which you have a
beneficial interest. See Appendix A to the Code for examples of situations in
which you will be deemed to have a beneficial interest in a security. You need
not include securities that you obtained in Exempt Transactions as defined in
the Code. If you do not have any securities holdings to report, write NONE.
Instead of filling out this form, you may attach copies of the most recent
statements of each of the accounts listed above.
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Number of
Shares or
Type of Principal4 Brokerage Firm
NAME OF SECURITY Security3 Amount Where Held
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NOTE: CONTINUE LISTING AS NECESSARY ON ADDITIONAL SHEETS
I CERTIFY THAT THE STATEMENTS MADE BY ME ON THIS FORM ARE TRUE,
COMPLETE, AND CORRECT TO THE BEST OF MY KNOWLEDGE AND BELIEF AND ARE MADE IN
GOOD FAITH.
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Date Signature
3 Insert the following symbol as pertinent to indicate the type of security
held: C-common stock, P-preferred stock, O-option, D-debt security, and X-other.
4 For Debt Securities.
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PPM AMERICA, INC.
COMPLIANCE CERTIFICATE
-------------------------
Name (print or type)
This is to certify that the attached Code of Ethics and Conduct
("Code") was distributed and explained to me at a meeting held on
_____________________, 199___. I have read and understand the Code. I certify
that I will comply with these policies and procedures during the course of my
employment by PPM and that, since my last Compliance Certification (if any), I
have complied with the Code. Moreover, I agree to promptly report to the Chief
Compliance Officer any violation or possible violation of these policies and
procedures. I UNDERSTAND THAT VIOLATION OF THE CODE SHALL BE GROUNDS FOR
DISCIPLINARY ACTION OR DISMISSAL AND MAY ALSO BE A VIOLATION OF FEDERAL AND/OR
STATE SECURITIES LAWS.
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Date Signature
<PAGE>
Exhibit (p)(7)
MEMORIAL INVESTMENT ADVISORS, INC.
CODE OF ETHICS
INTRODUCTION
This Code of Ethics (the "Code") has been adopted by Memorial
Investment Advisors, Inc. ("Memorial Advisors") with respect to Memorial
Advisors investment advisory services to U. S. registered investment companies
or series thereof (each a "Fund"). The Code establishes standards and procedures
for the detection and prevention of inappropriate personal securities
transactions by persons having knowledge of the investments and investment
intentions of a Fund and addresses other situations involving a potential
conflict of interest. Definitions of underlined terms are included in Appendix
A.
This Code is intended to ensure that the personal securities
transactions of persons subject to the Code are conducted in accordance with the
following principles:
(i) the duty at all times to place first the interests of Clients;
(ii) The requirement that all personal securities transactions be
conducted consistent with this Code and in such a manner as to avoid any actual
or potential conflict of interest or any abuse of an individual's responsibility
and position of trust; and
(iii) the fundamental standard that Memorial Advisors personnel not
take inappropriate advantage of their positions.
1. WHO IS COVERED BY THIS CODE
This Code applies to all directors, officers and employees of Memorial
Advisors. Certain provisions apply only to Access Persons and Investment
Personnel and portfolio managers, in each case only with respect to those Funds
as listed in Appendix B. Memorial Advisors forbids any Access Person or
Investment Personnel from engaging in any conduct which is contrary to this Code
or Memorial Advisor's Insider Trading Policy and Related Procedures. All Access
Persons are subject to the Code's restrictions and requirements regarding
opening securities accounts, effecting securities transaction, report securities
transactions, maintaining information and documents in a confidential manner and
other matters.
Failure to comply with this Code is a very serious matter and may
result in disciplinary action, including, among other things, monetary
fines, disgorgement of profits, and suspension or termination of
employment.
2. PRECLEARANCE REQUIREMENT
All Access Persons must obtain prior written approval from the designated Review
Officer before engaging in personal securities transactions. Approvals will be
valid for 24 hours.
3. PROHIBITED TRANSACTIONS
(a) ALL DIRECTORS, OFFICERS AND EMPLOYEES:
(i) PROHIBITION AGAINST FRAUDULENT CONDUCT. No director,
officer or employee may use any information concerning a security held or to be
acquired by a Fund, or his or her ability to influence any investment decisions,
for personal gain or in a manner detrimental to the interests of a Fund. In
addition, no director, officer or employee shall, directly or indirectly:
(1) employ any device, scheme or artifice to defraud a Fund
or engage in any manipulative practice with respect to a Fund;
(2) make to a Fund, any untrue statement of a material fact
or omit to state to a Fund a material fact necessary in order to
make the statements made, in light of the circumstances under
which they are made, not misleading;
<PAGE>
(3) engage in any act, practice, or course of business which
operates or would operate as a fraud or deceit upon a Fund; or
(4) engage in any manipulative practice with respect to a
Fund.
(ii) CONFIDENTIALITY. Except as required in the normal course
of carrying out their business responsibilities, no director, officer or
employee shall not reveal information relating to the investment intentions or
activities of any Fund, or securities that are being considered for purchase or
sale on behalf of any Fund.
(b) ACCESS PERSONS. In addition to the restrictions in Section 3(a),
Access Persons are subject to the following restrictions:
(i) BLACKOUT PERIOD. Access Persons shall not purchase or sell
a Covered Security in an account over which they have direct or
indirect influence or control on a day during which they know or should
have know a Fund has a pending "buy" or "sell" order in that same
security until that order is executed or withdrawn. For purposes of
this Section, the (i) common stock and any fixed income security of an
issuer shall not be deemed to be the same security and (ii)
non-convertible preferred stock of an issuer shall be deemed to be the
same security as the fixed income securities of that issuer; and (iii)
convertible preferred stock shall be deemed to be the same security as
both the common stock and fixed income securities of that issuer.
(1) BLACKOUT PERIOD EXCLUSIONS AND DEFINITIONS. The
following transactions shall not be prohibited by this Code and
are not subject to the limitations of Section 3(b):
(A) purchases or sales over which the Access Person has
no direct or indirect influence or control (for this
purpose, you are deemed to have direct or indirect influence
or control over the accounts of a spouse, minor children and
relatives residing in the Access Person's home);
(B) purchases which are part of an automatic dividend
reinvestment plan;
(C) purchases or sales which are non-volitional on the
part of the Access Person; and
(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.
(ii) UNDUE INFLUENCE. Access Persons shall not cause or
attempt to cause any Fund to purchase, sell or hold any security in a manner
calculated to create any personal benefit to them and shall not recommend any
securities transactions for a Fund without having disclosed their interest, if
any, in such securities or the issuer thereof, including, without limitation,
(i) beneficial ownership of any securities of such issuer, (ii) any position
with such issuer or its affiliates and (iii) any present or proposed business
relationship between the Access Person (or any party in which he or she has a
significant interest) and such issuer or its affiliates.
(iii) CORPORATE OPPORTUNITIES. Access Persons shall not take
personal advantage of any opportunity properly belonging to a Fund.
(iv) OTHER PROHIBITED TRANSACTIONS. Access Persons shall not:
(1) induce or cause a Fund to take actions or to fail to
take action, for personal benefit rather than for the benefit of
the Fund;
(2) accept anything other than of de minimis value or any
other preferential treatment from any broker-dealer or other
entity with which a Fund does business;
<PAGE>
(3) establish or maintain an account at a broker-dealer,
bank or other entity through which securities transactions may be
effected without written notice to the designated Review Officer
prior to establishing such an account;
(4) use knowledge of portfolio transactions of a Fund for
their personal benefit or the personal benefit of others; or
(5) violate the anti-fraud provisions of the federal or
state securities laws.
(c) INVESTMENT PERSONNEL. In addition to the restrictions in Sections 3(a)
and (b), Investment Personnel are subject to the following restrictions:
(i) SHORT-TERM TRADING PROFITS. Investment Personnel shall not
profit from the purchase and sale or sale and purchase of the same (or
equivalent) securities within 60 calendar days. Any profits realized on such
short-term trades shall be disgorged to charity. The designated Review Officer
may grant exceptions to this prohibition in whole or in part and upon such
conditions as the Review Officer may impose if the Review Officer determines
that no harm resulted to a Fund and that to require disgorgement would be
inequitable or result in undue hardship to the individual who entered into the
transaction.
(ii) INITIAL PUBLIC OFFERINGS. Investment Personnel may not
directly or indirectly acquire securities in an initial public offering.
(iii) PRIVATE PLACEMENTS Investment Personnel may not directly
or indirectly acquire securities in a private placement unless the Review
Officer determines whether the investment opportunity should be reserved for a
Fund, and whether such opportunity is being offered to the Investment Personnel
by virtue of their position with the Fund. Any Investment Personnel of a Fund
who has taken a personal position through a private placement will be under an
affirmative obligation to disclose that position in writing to the Review
Officer if he or she plays a material role in the Fund's subsequent investment
decision regarding the same issuer; this separate disclosure must be made even
though the Investment Personnel has previously disclosed the ownership of the
privately placed security in compliance with the preclearance requirements of
this section. Once disclosure is given, an independent review of the Fund's
investment decision will be made.
(iv) SERVICE AS A DIRECTOR. Investment Personnel shall not
serve on the boards of directors of publicly traded companies, absent prior
authorization based upon a determination by the Review Officer that the board
service would be consistent with the interests of the Fund and its shareholders.
(d) PORTFOLIO MANAGERS. In addition to the restrictions in Sections
3(a), (b) and (c), no portfolio manager shall purchase or sell a Covered
Security within seven calendar days before or after a Fund for which the
portfolio manager makes or participates in making a recommendation trades in
that security. Any profits realized on trades within this proscribed period
shall be disgorged and given to charity.
4. REPORTING REQUIREMENTS
(a) REPORTING. Access Persons, must report to the designated
Review Officer the information described in this Section with
respect to transactions in any Covered Security in which they
have, or by reason of such transaction acquire, any direct or
indirect beneficial ownership.
(b) EXCLUSIONS FROM REPORTING. Purchases or sales in Covered
Securities in an account in which the Access Person has no
direct or indirect or control are not subject to the reporting
requirements of this Section.
(c) INITIAL HOLDING REPORTS. No later than ten (10) days after
an Access Person becomes subject to this Code he or she must
report the following information:
(i) the title, number of shares and principal amount of
each Covered Security (whether or not publicly traded )
in which the Access Person has any direct or indirect
Beneficial Ownership as of the date he or she became
subject to this Code;
<PAGE>
(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 Access Person direct or
indirect benefit as of the date he or she became
subject to this Code; and
(iii) the date that the report is submitted.
(d) QUARTERLY TRANSACTION REPORTS. No later than ten (10) days
after the end of a calendar quarter, Access Persons must
report the following information:
(i) with respect to any transaction during the quarter in a
Covered Security (whether or not publicly traded) in which
the Access Person has, or by reason of such transaction
acquired, 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.
(ii) with respect to any account established by the Access Person
in which any Covered Securities (whether or not publicly
traded) were held during the quarter for your direct or
indirect benefit:
(1) the name of the broker, dealer or bank with he or
she/you established the account;
(2) the date the account was established; and
(3) the date that the report is submitted.
(e) ANNUAL HOLDINGS REPORTS. Annually, all Access Persons must report the
following information (which information must be current as of a date
no more than thirty (30) days before the report is submitted):
(i) the title, number of shares and principal amount of each
Covered Security (whether or not publicly traded) in which the Access
Person had any direct or indirect beneficial ownership;
(ii) the name of any broker, dealer or bank with whom you
maintain an account in which any securities are held for his or her
direct or indirect benefit; and
(iii) the date that the report is submitted.
(f) CERTIFICATION OF COMPLIANCE. All Access Persons are required to
certify annually (in the form of Attachment A) that they have read and
understood the Code and recognize that they are subject to the Code.
Further, all Access Persons are required to certify annually that they
have complied with all the requirements of the Code and have disclosed
or reported all personal securities transactions pursuant to the
requirements of the Code.
<PAGE>
(g) ALTERNATIVE REPORTING. The submission to the Review Officer of
duplicate broker trade confirmations and statements on all securities
transactions shall satisfy the reporting requirements of Section 4.
(h) REPORT QUALIFICATION. Any report may contain a statement that the
report shall not be construed as an admission by the person making the
report that he or she has any direct or indirect Beneficial Ownership
in the Covered Securities to which the report relates.
(i) Account Opening Procedures. All Access Persons shall provide written
notice to the Review Officer prior to opening any account with any
entity through which a Covered Securities transaction may be effected.
In addition, Access Persons must promptly:
(i) provide full access to a Fund, its agents and attorneys to any
and all records and documents which a Fund considers relevant to
any securities transactions or other matters subject to the Code;
(ii) cooperate with a Fund, or its agents and attorneys, in
investigating any securities transactions or other matter subject
to the Code.
(iii)provide a Fund, its agents and attorneys with an explanation (in
writing if requested) of the facts and circumstances surrounding
any securities transaction or other matter to the Code; and
(iv) promptly notify the Review Officer or such other individual as a
Fund may direct, in writing, from time to time, of any incident
of noncompliance with the Code by anyone subject to this Code.
5. REVIEW OFFICER
(a) DUTIES OF REVIEW OFFICER. Ms. Katie Harrison, the Compliance Officer
of Memorial Advisors, has been appointed as the Review Officer to:
(i) review all securities transaction and holdings reports and
maintain the names of persons responsible for reviewing these
reports;
(ii) identify all persons subject to this Code who are required to
make these reports and promptly inform each person of the
requirements of this Code;
(iii)compare, on a quarterly basis, all Covered Securities
transactions with each Fund's completed portfolio transactions to
determine whether a Code violation may have occurred;
(iv) maintain a signed acknowledgement by each person who is then
subject to this Code, in the form of Attachment A; and
(v) identify persons who are Investment Personnel of the Fund and
inform those persons of their requirements to obtain prior
written approval from the Review Officer prior to directly or
indirectly acquiring ownership of a security in any private
placement.
(b) POTENTIAL TRADE CONFLICT. When there appears to be a transaction that
conflicts with the Code, the Review Officer shall request a written
explanation of the person's transaction. If after post-trade review,
it is determined that there has been a violation of the Code, a report
will be made by the designated Review Officer with a recommendation of
appropriate action to the Directors of Memorial Advisors.
(c) REQUIRED RECORDS. The Review Officer shall maintain and cause to be
maintained:
(i) a copy of any code of ethics adopted by Memorial Advisors which
has been in effect during the previous five (5) years in an
easily accessible place;
<PAGE>
(ii) a record of any violation of any code of ethics and of any
actions taken as a result of such violation, in an easily
accessible place for at least five (5) years after the end of the
fiscal year in which the violation occurs;
(iii)a copy of each report made by anyone subject to this Code as
required by Section 4 for at least five (5) years after the end
of the fiscal year in which the report is made, the first two (2)
years in an easily accessible place;
(iv) a list of all persons who are, or within the past five years have
been, required to make reports or who were responsible for
reviewing these reports pursuant to any code of ethics adopted by
Memorial Advisors, in an easily accessible place;
(v) a copy of each written report and certification required pursuant
to Section 5(e) of this Code for at least five (5) years after
the end of the fiscal year in which it is made, the first two (2)
years in an easily accessible place; and
(vi) a record of any decision, and the reasons supporting the
decisions, approving the acquisition by Investment Personnel of
privately placed securities for at least five (5) years after the
end of the fiscal year in which the approval is granted.
(d) POST-TRADE REVIEW PROCESS. Following receipt of trade confirms and
statements, transactions will be screened for violations of the Code,
including the following:
(i) same day trades: transactions by Access Persons occurring on the
same day as the purchase or sale of the same security by a
Fund for which they are an Access Person.
(ii) portfolio manager trades: transactions by a portfolio manager
within seven calendar days before and after a Fund, for which the
portfolio manager makes or participates in making a
recommendation, trades in that security.
(iii)potential conflicts: transactions by Access Persons in
securities, which, within the most recent 15 days, are or have
been held by a Fund or are being or have been considered by a
Fund or [Memorial Advisors] for purchase by a Fund.
(iv) other activities: transactions which that may give the appearance
than an Access Person has executed transactions not in
accordance with this Code.
(e) SUBMISSION TO FUND BOARD. The Review Officer shall annually prepare a
written report to the Board of Directors of a Fund listed in Appendix
B that:
(i) describes any issues under this Code or its procedures since the
last report to the Directors, including, but not limited to,
information about material violations of the code or procedures
and sanctions imposed in response to the material violations; and
(ii) certifies that the Memorial Advisors has adopted procedures
reasonably necessary to prevent its Access Persons from violating
this Code.
<PAGE>
MEMORIAL INVESTMENT ADVISORS, INC.
CODE OF ETHICS
APPENDIX A: DEFINITIONS
(a) Access Person:
(i) of Memorial Advisors means each director or officer of Memorial
Advisors, any employee or agent of Memorial Advisors, or any
company in a control relationship to Memorial Advisors who, in
connection with the person's regular functions or duties, makes,
participates in or obtains information regarding the purchase or
sale of Covered Securities by a Fund advised by Memorial
Advisors, 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 Memorial Advisors
who obtains information concerning recommendations made to a Fund
by Memorial Advisors with regard to the purchase or sale of
Covered Securities by the Fund;
(b) Act means the Investment Company of 1940, as amended.
(c) Beneficial Owner shall have the meaning as that set forth in Rule
16a-1(a)(2) under the Securities Exchange Act of 1934, as amended,
except that the determination of direct or indirect beneficial
ownership shall apply to all Covered Securities which an Access Person
owns or acquires. A beneficial owner of a security is any person who,
directly or indirectly, through any contract, arrangement,
understanding, relationship or otherwise, has or shares a direct or
indirect pecuniary interest (the opportunity, directly or indirectly,
to profit or share in any profit derived from a transaction in the
subject securities) in a security.
Indirect pecuniary interest in a security includes securities held by a
person's immediate family sharing the same household. Immediate family
means any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law (including adoptive
relationships).
(d) Control means the power to exercise a controlling influence over the
management or policies of a company, unless this power is solely the
result of an official position with the company. Ownership of 25% or
more of a company's outstanding voting securities is presumed to give
the holder thereof control over the company. This presumption may be
rebutted by the Review Officer based upon the facts and circumstances
of a given situation.
(e) Covered Security means any security except:
(i) direct obligations of the Government of the United States;
(ii) banker's acceptances and bank certificates of deposits;
(iii)commercial paper and debt instruments with a maturity at
issuance of less than 366 days and that are rated in one of the
two highest rating categories by a nationally recognized
statistical rating organization;
(iv) repurchase agreements covering any of the foregoing; and
(v) shares of registered open-end investment companies.
(f) Investment Personnel means
(i) any employee of Memorial Advisors 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 managed by Memorial Advisors; and any individual who
controls Memorial Advisors or a Fund for which Memorial Advisors
<PAGE>
is an investment adviser and who obtains information concerning
recommendations made to the Fund regarding the purchase or sale
of securities by the Fund.
(g) Purchase or sale includes, among other things, the writing of an option to
purchase or sell.
(h) Security held or to be acquired by the Fund means
(i) any Covered Security which, with the most recent 15 days (x) is
or has been held by the applicable Fund or (y) is being or has
been considered by the applicable Fund or its investment adviser
for purchase by the applicable Fund; and
(ii) and any option to purchase or sell, and any security convertible
into or exchangeable for, a Covered Security.
<PAGE>
MEMORIAL INVESTMENT ADVISORS, INC.
CODE OF ETHICS
APPENDIX B
List of Access Persons
(as of September 1, 2000)
<TABLE>
<S> <C> <C> <C> <C> <C>
----------------------- ---------------- ------------------- ------------------ ------------------- ------------------
Memorial Advisors AP IP As of Date Fund End Date
----------------------- ---------------- ------------------- ------------------ ------------------- ------------------
----------------------- ---------------- ------------------- ------------------ ------------------- ------------------
Christopher W. Christopher W. 9/1/2000 Memorial Funds
Hamm Hamm
----------------------- ---------------- ------------------- ------------------ ------------------- ------------------
----------------------- ---------------- ------------------- ------------------ ------------------- ------------------
James L Sullivan 9/1/2000 Memorial Funds
----------------------- ---------------- ------------------- ------------------ ------------------- ------------------
----------------------- ---------------- ------------------- ------------------ ------------------- ------------------
----------------------- ---------------- ------------------- ------------------ ------------------- ------------------
----------------------- ---------------- ------------------- ------------------ ------------------- ------------------
</TABLE>
AP=Access Person; IP=Investment Personnel
<PAGE>
MEMORIAL INVESTMENT ADVISORS, INC.
Code of Ethics
ATTACHMENT A
ACKNOWLEDGEMENT
I understand that I am subject to the Code of Ethics of Memorial Investment
Advisors, Inc. I have read and I understand the Memorial Investment Advisors,
Inc. Code of Ethics and I certify that I have complied with the requirements of
the Code of Ethics and I have disclosed or reported all personal securities
transactions required to be disclosed or reported pursuant to the requirements
of the Code.
------------------------------------- -----------------
Signature Date
-------------------------------------
Printed Name
This form must be completed and return to Memorial's Compliance
Department:
