CODE OF ETHICS
NEVIS CAPITAL MANAGEMENT, INC.
Dated August 30, 2000
I. INTRODUCTION
A. FIDUCIARY DUTY. This Code of Ethics has been adopted by Nevis
Capital Management, Inc. ("Nevis"). Nevis serves as an investment adviser to
investment companies registered under the Investment Company Act of 1940 as well
as other clients (singularly a "Client" and together the "Clients"). Capitalized
terms used in this Code are defined in the Code's Appendix.
This Code is based on the principle that the directors and officers of
Nevis have a fiduciary duty to place the interests of Clients ahead of their own
interests. The Code applies to all Access Persons and focuses principally on
pre-clearance and reporting of personal transactions in Securities. Access
Persons must avoid activities, interests and relationships that might interfere
with making decisions in the best interests of Clients.
As fiduciaries, Access Persons must at all times:
1. PLACE THE INTERESTS OF CLIENTS FIRST. Access Persons must
scrupulously avoid serving their own personal interests ahead of the
interests of Clients. An Access Person may not induce or cause a Client
to take action, or not to take action, for personal benefit, rather
than for the benefit of the Client. For example, an Access Person would
violate this Code by causing a Client to purchase a Security he or she
owned for the purpose of increasing the price of that Security.
2. AVOID TAKING INAPPROPRIATE ADVANTAGE OF THEIR POSITIONS.
Access Persons may not, for example, use their knowledge of portfolio
transactions to profit by the market effect of such transactions.
Receipt of investment opportunities, prerequisites, or gifts from
persons seeking business with Nevis could call into question the
exercise of an Access Person's independent judgment.
3. CONDUCT ALL PERSONAL SECURITIES TRANSACTIONS IN FULL
COMPLIANCE WITH THIS CODE INCLUDING THE REPORTING AND PRE-CLEARANCE
REQUIREMENTS. Doubtful situations should be resolved in favor of
Clients. Technical compliance with the Code's procedures will not
automatically insulate from scrutiny any trades that indicate an abuse
of fiduciary duties.
B. LEGAL REQUIREMENT.
Rule 17j-1(b) under the 1940 Act and the principles in Section 206 of
the Investment Advisers Act of 1940 make it unlawful for any officer or director
of Nevis (as well as certain other persons), in connection with the purchase or
sale by such person of a Security held or to be acquired by a Client:
1. To employ any device, scheme or artifice to defraud the
Client;
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2. To make to a Client any untrue statement of a material fact
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. To engage in any act, practice, or course of business that
operates or would operate as a fraud or deceit upon a Client;
or
4. To engage in any manipulative practice with respect to a
Client.
II. PERSONAL SECURITIES TRANSACTIONS
A. PROHIBITED TRANSACTIONS.
1. PROHIBITED SECURITIES TRANSACTIONS. The following
Securities Transactions are prohibited and will not be authorized under
any circumstances.
a. INSIDE INFORMATION. Any transaction in a Security
while in possession of material nonpublic information regarding the
Security or the issuer of the Security;
b. MARKET MANIPULATION. Transactions intended to raise,
lower, or maintain the price of any Security or to create a false
appearance of active trading; and
c. OTHERS. Any other transactions deemed by the
Compliance Officer (or a designee) to involve a conflict of
interest, possible diversions of a corporate opportunity, or an
appearance of impropriety.
B. PRE-CLEARANCE.
1. PRE-APPROVAL OF INVESTMENTS IN INITIAL PUBLIC OFFERINGS AND
LIMITED OFFERINGS. All Investment Personnel shall obtain approval from
Nevis before directly or indirectly acquiring a Beneficial Interest in
any Securities in an initial public offering or an offering exempt from
registration pursuant to Rules 504, 505 or 506 or under Sections 4(2)
or 4(6) of the Securities Act of 1933.
C. EXEMPTIONS.
1. The following Securities Transactions are exempt from the
restrictions set forth in the Code:
a. MUTUAL FUNDS. Securities issued by any registered
open-end investment companies;
b. NO KNOWLEDGE. Securities Transactions where
neither the Access Person nor an Immediate Family member knows
of the transaction before it is completed (for example,
Securities Transactions effected for an Access Person by a
director of a blind trust or discretionary trades involving an
investment partnership or investment club in which the Access
Person is neither consulted nor advised of the trade before it
is executed);
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c. CERTAIN CORPORATE ACTIONS. Any acquisition of
Securities through stock dividends, dividend reinvestments,
stock splits, reverse stock splits, mergers, consolidations,
spin-offs, or other similar corporate reorganizations or
distributions generally applicable to all holders of the same
class of Securities;
d. RIGHTS. Any acquisition of Securities through the
exercise of rights issued by an issuer PRO RATA to all holders
of a class of its Securities, to the extent the rights were
acquired in the issue; and
e. MISCELLANEOUS. Any transaction in the following:
(1) bankers' acceptances, (2) bank certificates of deposit,
(3) commercial paper, (4) repurchase agreements, (5)
Securities that are direct obligations of the U.S. Government,
and (6) other Securities as may from time to time be
designated in writing by the Compliance Officer on the grounds
that the risk of abuse is minimal or non-existent.
2. Personal Transactions in Securities that also are being
purchased, sold or held by a Client are exempt from the restrictions in
the Code if the Access Person does not, in connection with his or her
regular functions or duties, make, participate in, or obtain
information regarding the purchase or sale of Securities by, or on
behalf of, Clients.
D. REPORTING REQUIREMENTS
1. INITIAL HOLDINGS AND ACCOUNTS REPORT. Any person who
becomes an Access Person of Nevis must submit within 10 days of
becoming an Access Person an initial holdings and accounts report to
the Compliance Officer listing all Securities accounts and Securities
that he or she holds in such accounts in which that Access Person (or
Immediate Family member) has a Beneficial Interest.
2. QUARTERLY REPORTING REQUIREMENTS. Every Access Person and
members of his or her Immediate Family must submit to the Compliance
Officer a report on a quarterly basis with respect to any transaction
during the quarter in a Security in which the Access Person (or
Immediate Family member) has a Beneficial Interest setting the forth
the following information: (i) the date of the transaction; (ii) the
title (and interest rate and maturity date, if applicable); (iii) the
number of shares and principal amount; (iv) the nature of the
transaction (e.g., purchase, sale); (v) the price of the Security; and
(vi) the name of the broker, dealer or bank through which the trade was
effected. The report must be received no later than 10 days after the
end of the calendar quarter.
As an alternative to the quarterly report described
above, an Access Person (or Immediate Family member) may arrange for
the Compliance Officer to receive directly from any broker, dealer, or
bank that effects any Securities Transaction, duplicate copies of each
confirmation for each such transaction and periodic statements for each
brokerage account in which such Access Person (or Immediate Family
member) has a Beneficial Interest. All copies must be received no later
than 10 days after the end of the calendar quarter. Each confirmation
or statement must disclose the information required to be in a
quarterly report described above.
3. ANNUAL HOLDINGS AND ACCOUNTS REPORT. Every Access Person
must submit an annual holdings and accounts report listing all
Securities accounts and Securities in which that Access Person (or
Immediate Family member) has a Beneficial Interest. The information in
the
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annual holdings report must be current as of a date no more than 30
days before the report is submitted. The completed report should be
submitted to the Compliance Officer within 30 days following the end of
the calendar year.
4. ANNUAL CERTIFICATION OF COMPLIANCE. Each Access Person must
certify annually (by a date specified by and on the form designated by
the Compliance Officer) that the Access Person:
a. Has received, read and understand this Code of
Ethics and recognizes that the Access Person is subject to the
Code;
b. Has complied with all the requirements of this
Code of Ethics; and
c. Has disclosed or reported all personal securities
transactions, holdings and accounts required by this Code of
Ethics to be disclosed or reported.
III. FIDUCIARY DUTIES
A. CONFIDENTIALITY. Access Persons are prohibited from revealing
information relating to the investment intentions, activities or portfolios of
Clients except to persons whose responsibilities require knowledge of the
information.
B. CORPORATE OPPORTUNITIES. Access Persons may not take personal
advantage of any opportunity properly belonging to a Client or Nevis. This
includes, but is not limited to, acquiring Securities for one's own account that
would otherwise be acquired for a Client.
C. UNDUE INFLUENCE. Access Persons may not cause or attempt to cause a
Client to purchase, sell or hold any Security in a manner calculated to create
any personal benefit to the Access Person. If an Access Person or Immediate
Family member stands to benefit materially from an investment decision for a
Client which the Access Person is recommending or participating in, the Access
Person must disclose to those persons with authority to make investment
decisions for the Client (or, if the Access Person in question is a person with
authority to make investment decisions for the Client, to the Compliance
Officer) any Beneficial Interest that the Access Person (or Immediate Family
member) has in that Security or an Equivalent Security, or in the issuer
thereof, where the decision could create a material benefit to the Access Person
(or Immediate Family member) or the appearance of impropriety. The person to
whom the Access Person reports the interest, in consultation with the Compliance
Officer, must determine whether or not the Access Person will be restricted in
making investment decisions.
D. SERVICE AS A DIRECTOR. No Investment Person may serve on the board
of directors of a publicly-held company absent prior written authorization by
the Compliance Officer. This authorization will be based upon a determination
that the board service would be consistent with the interests of Clients. If
granted, this authorization normally will require that the affected Investment
Person be isolated, through a "Chinese Wall" or other procedures, from those
making investment decisions related to the issuer on whose board the person
sits.
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IV. COMPLIANCE WITH THIS CODE OF ETHICS
A. DUTIES OF COMPLIANCE OFFICER.
1. IDENTIFYING AND NOTIFYING ACCESS PERSONS. The Compliance
Officer will identify each Access Person and notify each Access Person
that the person is subject to this Code of Ethics, including the
reporting requirements.
2. PROVIDING INFORMATION TO ACCESS PERSONS. The Compliance
Officer will furnish all Access Persons with a copy of this Code and
provide advice, with the assistance of counsel, about the
interpretation of this Code.
3. REVIEW. The Compliance Officer will review the reports
submitted by each Access Person to determine whether there may have
been any transactions prohibited by this Code of Ethics. The Compliance
Officer is responsible for investigating any suspected violation of the
Code and shall report the results of each investigation to the Board of
Directors of Nevis (the "Board"). The Board is responsible for
reviewing the results of any investigation of any reported or suspected
violation of the Code.
B. REMEDIES. The Compliance Officer has sole authority to determine the
remedy for any violation of the Code, including appropriate disposition of any
monies forfeited pursuant to this provision. If the Compliance Officer
determines that an Access Person has committed a violation of the Code, the
Compliance Officer may impose sanctions and take other actions as it deems
appropriate, including a letter of caution or warning, suspension of personal
trading rights, suspension of employment (with or without compensation), fine,
civil referral to the SEC, criminal referral, and termination of the employment
of the violator for cause. The Compliance Officer may also require the Access
Person to reverse the trade(s) in question and forfeit any profit or absorb any
loss derived therefrom.
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APPENDIX 1
DEFINITIONS
"ACCESS PERSON" means:
(1) every director or officer of Nevis;
(2) every employee of Nevis who, in connection with his or her regular
functions, makes, participates in, or obtains information regarding the
purchase or sale of a Security by a Client;
(3) every natural person in a control relationship with Nevis who obtains
information concerning recommendations made to a Client with regard to
the purchase or sale of a security, prior to its dissemination or prior
to the execution of all resulting trades; and
(4) such other persons as the Compliance Officer shall designate.
Any uncertainty as to whether an individual is an Access Person should be
brought to the attention of the Compliance Officer. Such questions will be
resolved in accordance with, and this definition shall be subject to, the
definition of "Access Person" found in Rule 17j-1(a)(1) under the 1940 Act.
"INVESTMENT PERSONNEL" and "INVESTMENT PERSON" mean the Portfolio
Manager, any employees who are authorized to make investment decisions for
Clients, and any Access Person who, in connection with his or her regular
functions or duties, provides information and advice to the Portfolio Manager or
who helps execute the Portfolio Manager's decisions.
"BENEFICIAL INTEREST" means the opportunity, directly or indirectly,
through any contract, arrangement, understanding, relationship or otherwise, to
profit, or share in any profit derived from, a transaction in the subject
Securities. An Access Person is deemed to have a Beneficial Interest in
Securities owned by members of his or her Immediate Family. Common examples of
Beneficial Interest include joint accounts, spousal accounts, UTMA accounts,
partnerships, trusts and controlling interests in corporations. Any uncertainty
as to whether an Access Person has a Beneficial Interest in a Security should be
brought to the attention of the Compliance Officer. Such questions will be
resolved in accordance with, and this definition shall be subject to, the
definition of "beneficial owner" found in Rules 16a-1(a)(2) and (5) promulgated
under the Securities Exchange Act of 1934.
"CODE" means this Code of Ethics, as it may be amended from time to
time.
"COMPLIANCE OFFICER" means the Compliance Officer of Nevis or, with
respect to any trading activities by the Compliance Officer, an appropriate
person designated by the Compliance Officer.
"EQUIVALENT SECURITY" means any Security issued by the same entity as
the issuer of a subject Security, including options, rights, stock appreciation
rights, warrants, preferred stock, restricted stock, phantom stock, bonds, and
other obligations of that company or security otherwise convertible into that
security. Options on securities are included even if, technically, they are
issued by the Options Clearing Corporation or a similar entity.
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"NEVIS" means Nevis Capital Management, Inc.
"IMMEDIATE FAMILY" of an Access Person means any of the following
persons who reside in the same household as the Access Person:
child grandparent son-in-law
stepchild spouse daughter-in-law
grandchild sibling brother-in-law
parent mother-in-law sister-in-law
stepparent father-in-law
Immediate Family includes adoptive relationships and any other relationship
(whether or not recognized by law) which the Compliance Officer determines could
lead to the possible conflicts of interest, diversions of corporate opportunity,
or appearances of impropriety which this Code is intended to prevent.
"1940 ACT" means the Investment Company Act of 1940, as amended.
"PORTFOLIO MANAGER" means a person who has or shares principal
day-to-day responsibility for managing the portfolio of Clients.
"SEC" means the Securities and Exchange Commission.
"SECURITY" includes stock, notes, bonds, debentures, and other
evidences of indebtedness (including loan participations and assignments),
limited partnership interests, investment contracts, and all derivative
instruments of the foregoing, such as options and warrants. "Security" does not
include futures or options on futures, but the purchase and sale of such
instruments are nevertheless subject to the reporting requirements of the Code.
"SECURITIES TRANSACTION" means a purchase or sale of Securities in
which an Access Person or a member of his or her Immediate Family has or
acquires a Beneficial Interest.
"CLIENT" means any person for which Nevis serves as investment adviser.
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APPENDIX 2
ANNUAL CERTIFICATION OF COMPLIANCE WITH CODE OF ETHICS
I acknowledge that I have received the Code of Ethics dated
_______________, and certify that:
1. I have read the Code of Ethics and I understand that it
applies to me and to all accounts in which I or a member of my
Immediate Family has any Beneficial Interest.
2. In accordance with Section II.D. of the Code of Ethics, I
will report or have reported all Securities Transactions in which I
have, or a member of my Immediate Family has, a Beneficial Interest,
except for transactions exempt from reporting.
3. I have listed on Appendix 3 of this form all accounts and
securities in which I have, or any member of my Immediate Family has,
any Beneficial Interest.
4. I will comply or have complied with the Code of Ethics in
all other respects.
5. I agree to disgorge and forfeit any profits on prohibited
transactions in accordance with the requirements of the Code of Ethics.
-------------------------------------
Access Person's Signature
-------------------------------------
Print Name
Date:____________________
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APPENDIX 3
PERSONAL SECURITIES HOLDINGS AND ACCOUNTS DISCLOSURE FORM
(for use as an Initial or Annual Holdings and Accounts Report)
PURSUANT TO SECTION II.D OF THE CODE OF ETHICS, PLEASE LIST ALL
SECURITIES ACCOUNTS AND SECURITIES HOLDINGS FOR EACH SECURITIES ACCOUNT IN WHICH
YOU OR YOUR IMMEDIATE FAMILY MEMBER HAS BENEFICIAL INTEREST. YOU DO NOT NEED TO
LIST THOSE SECURITIES THAT ARE EXEMPT PURSUANT TO SECTION II.C.
Is this an Initial or Annual Report? _________________
Name of Access Person: ____________________________
Name of Account Holder: ____________________________
Relationship to Access Person: ____________________________
SECURITIES HOLDINGS:
Attach to this Report your most recent account statement and/or list Securities
held below:
<TABLE>
<CAPTION>
NAME OF SECURITY QUANTITY PRINCIPAL AMOUNT NAME OF BROKER/DEALER/BANK
---------------- -------- ---------------- --------------------------
<S> <C> <C> <C>
1.
2.
3.
4.
5.
</TABLE>
(Attach separate sheets as necessary)
SECURITIES ACCOUNTS:
<TABLE>
<CAPTION>
ACCOUNT NAME ACCOUNT NUMBER DATE ACCOUNT OPENED NAME OF BROKER/DEALER/BANK
------------ -------------- ------------------- --------------------------
<S> <C> <C> <C>
1.
2.
3.
4.
</TABLE>
(Attach separate sheets as necessary)
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I certify that this Report and the attached statements (if any)
constitute all the Securities accounts and Securities that must be reported
pursuant to this Code.
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Access Person Signature
------------------------------------ --------------------------
Print Name Date
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APPENDIX 4
REPORT OF SECURITY TRANSACTIONS
FOR QUARTER ENDED_______________________
You do not need to report transactions in 1) direct obligations of the U.S.
Government, 2) bankers' acceptances, bank CDs, commercial paper, high quality
short-term debt instruments, 3) shares of an open-end investment company, and 4)
transactions which you had no direct or indirect influence or control.
Disclose all securities transactions for the period covered by this Report:
<TABLE>
<CAPTION>
----------------------------- ------------- ---------------- -------------- -------------- ------------- ---------------------------
Price at
Name/Description of Number Date of Which Principal Bought Name of
Security* Shares Transaction Effected Amount or Sold Broker/Dealer/Bank
----------------------------- ------------- ---------------- -------------- -------------- ------------- ---------------------------
<S> <C> <C> <C> <C> <C> <C>
----------------------------- ------------- ---------------- -------------- -------------- ------------- ---------------------------
----------------------------- ------------- ---------------- -------------- -------------- ------------- ---------------------------
----------------------------- ------------- ---------------- -------------- -------------- ------------- ---------------------------
----------------------------- ------------- ---------------- -------------- -------------- ------------- ---------------------------
----------------------------- ------------- ---------------- -------------- -------------- ------------- ---------------------------
----------------------------- ------------- ---------------- -------------- -------------- ------------- ---------------------------
----------------------------- ------------- ---------------- -------------- -------------- ------------- ---------------------------
</TABLE>
* Please disclose the interest rate or maturity date, if applicable.
Did you establish any securities accounts during the period covered by this
Report? ___ Yes ___ No
If Yes, please complete the following:
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<TABLE>
<CAPTION>
---------------------------------------------------------- --------------------------- ---------------------------
Date of
Name of Broker Account Opening Account Number
---------------------------------------------------------- --------------------------- ---------------------------
<S> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------- --------------------------- ---------------------------
---------------------------------------------------------- --------------------------- ---------------------------
---------------------------------------------------------- --------------------------- ---------------------------
</TABLE>
____ The above is a record of every transaction in a security or account
opened which I had, or in which I acquired, any direct or indirect
beneficial ownership during the period indicated above.
____ I certify that the Compliance Officer has received confirmations or
account statements pertaining to all transactions executed and that
disclose the information required above, and notice of any accounts
opened, during the period covered by this Report.
____ I have nothing to report for the period covered by this Report.
Date:_____________________________ Signature:______________________________
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APPENDIX 5
INITIAL PUBLIC OFFERING / PRIVATE PLACEMENT
CLEARANCE FORM
(for the use of the Compliance Officer only)
The Code of Ethics for Nevis Capital Management, Inc. requires any
acquisition of securities in an initial public offering (other than shares of
open-end investment companies) and private placement by any Investment Person to
be pre-cleared. A record of the rationale supporting the pre-clearance of such
transactions must be completed and retained for a period of 5 years after the
end of the fiscal year in which approval is granted. This form should be used
for such record keeping purposes.
Name of Investment Person: _________________________________
Date of Request: _________________________________
Name of IPO / Private Placement: _________________________________
Date of Offering: _________________________________
Number of Shares/Interests _________________________________
Price: _________________________________
Name of Broker/Dealer/Bank _________________________________
___ I have cleared the IPO / Private Placement transaction described above.
Reasons supporting the decision to approve the above transaction:
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Name of Compliance Officer
------------------------------------
Signature of Compliance Officer
------------------------------------
Date
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