REVISED CODE OF ETHICS
SECURITIES MANAGEMENT & TIMING FUNDS
AND SECURITIES MANAGEMENT & TIMING, INC.
(Adopted July 18, 2000)
I. STATEMENT OF GENERAL PRINCIPLES
This Code of Ethics has been adopted by Securities Management & Timing
Funds (the "Trust") and its adviser, Securities Management & Timing, Inc. (the
"Adviser"), for the purpose of instructing all employees, officers, directors
and trustees of the Trust and/or the Adviser in their ethical obligations and to
provide rules for their personal securities transactions. All such employees,
officers, directors and trustees owe a fiduciary duty to the Trust and its
shareholders. A fiduciary duty means a duty of loyalty, fairness and good faith
towards the Trust and its shareholders, and the obligation to adhere not only to
the specific provisions of this Code but to the general principles that guide
the Code. These general principles are:
o The duty at all times to place the interests of the Trust and
its shareholders first;
o The requirement that all personal securities transactions be
conducted in a manner consistent with the Code of Ethics and in
such a manner as to avoid any actual or potential conflict of
interest or any abuse of any individual's position of trust and
responsibility; and
o The fundamental standard that such employees, officers,
directors and trustees should not take inappropriate advantage
of their positions, or of their relationship with the Trust or
its shareholders.
It is imperative that the personal trading activities of the employees,
officers, directors and trustees of the Trust and the Adviser, respectively, be
conducted with the highest regard for these general principles in order to avoid
any possible conflict of interest, any appearance of a conflict, or activities
that could lead to disciplinary action. This includes executing transactions
through or for the benefit of a third party when the transaction is not in
keeping with the general principles of this Code.
All personal securities transactions must also comply with the Securities &
Exchange Commission's Rule 17j-1. Under this rule, no Employee may:
o employ any device, scheme or artifice to defraud the Trust or
any of its shareholders;
o make to the Trust or any of its shareholders any untrue
statement of a material fact or omit to state to such client a
material fact necessary in order to make the statements made,
in light of the circumstances under which they are made, not
misleading;
o engage in any act, practice, or course of business which
operates or would operate as a fraud or deceit upon the Trust
or any of its shareholders; or
o engage in any manipulative practice with respect to the Trust
or any of its shareholders.
II. DEFINITIONS
A. Advisory Employees: Employees who participate in or make
recommendations with respect to the purchase or sale of securities.
B. Beneficial Interest: ownership or any benefits of ownership,
including the opportunity to directly or indirectly profit or otherwise obtain
financial benefits from any interest in a security.
C. Compliance Officer: Craig M. Pauly, or with respect to Craig M.
Pauly, Bruce C. Willett.
D. Disinterested Trustees: trustees whose affiliation with the Trust
is solely by reason of being a trustee of the Trust.
E. Employee Account: each account in which an Employee or a member of
his or her family has any direct or indirect Beneficial Interest or over which
such person exercises control or influence, including, but not limited to, any
joint account, partnership, corporation, trust or estate. An Employee's family
members include the Employee's spouse, minor children, any person living in the
home of the Employee and any relative of the Employee (including in-laws) to
whose support an Employee directly or indirectly contributes.
F. Employees: the employees, officers, and trustees of the Trust and
the employees, officers and directors of the Adviser, including Advisory
Employees.
G. Exempt Transactions: transactions which are 1) effected in an amount
or in a manner over which the Employee has no direct or indirect influence or
control, 2) pursuant to a systematic dividend reinvestment plan, systematic cash
purchase plan or systematic withdrawal plan, 3) in connection with the exercise
or sale of rights to purchase additional securities from an issuer and granted
by such issuer pro-rata to all holders of a class of its securities, 4) in
connection with the call by the issuer of a preferred stock or bond, 5) pursuant
to the exercise by a second party of a put or call option, 6) closing
transactions no more than five business days prior to the expiration of a
related put or call option, 7) with respect to registered open-end investment
companies, 8) involving shares of a security of a company with a market
capitalization in excess of $1 billion and average daily trading volume in
excess of 1,000,000 shares for the past ten trading days.
H. Funds: any series of the Trust.
I. Related Entity: a partnership or other entity 1) in which persons
unaffiliated with the Adviser or any Employee (and not otherwise subject to this
Code) participate and 2) to which the Adviser or an Employee acts as adviser,
general partner or other fiduciary.
J. Related Securities: securities issued by the same issuer or issuer
under common control, or when either security gives the holder any contractual
rights with respect to the other security, including options, warrants or other
convertible securities.
K. Securities: any note, stock, treasury stock, bond, debenture,
evidence of indebtedness, certificate of interest or participation in any profit
-sharing agreement, collateral-trust certificate, pre-organization certificate
or subscription, transferable share, investment contract, voting-trust
certificate, certificate of deposit for a security, fractional undivided
interest in oil, gas or other mineral rights, or, in general, any interest or
instrument commonly known as a "security," or any certificate or interest or
participation in temporary or interim certificate for, receipt for, guarantee
of, or warrant or right to subscribe to or purchase (including options) any of
the foregoing; except for the following: 1) securities issued by the government
of the United States, 2) bankers' acceptances, 3) bank certificates of deposit,
4) commercial paper, and 5) shares of registered open-end investment companies.
L. Securities Transaction: the purchase or sale, or any action to
accomplish the purchase or sale, of a Security for an Employee Account.
III. PERSONAL INVESTMENT GUIDELINES
A. Personal Accounts
1. The Personal Investment Guidelines in this Section III do
not apply to Exempt Transactions unless the transaction involves a private
placement or initial public offering. Employees must remember that regardless of
the transaction's status as exempt or not exempt, the Employee's fiduciary
obligations remain unchanged.
2. While trustees of the Trust are subject at all times to the
fiduciary obligations described in this Code, the Personal Investment Guidelines
and Compliance Procedures in Sections III and IV of this Code apply to
Disinterested Trustees only if the trustee knew, or in the ordinary course of
fulfilling the duties of that position, should have known, that during the
fifteen days immediately preceding or after the date of the trustee's
transaction that the same Security or a Related Security was or was to be
purchased or sold for a Fund or that such purchase or sale for a Fund was being
considered, in which case such Sections apply only to such transaction.
3. A Securities Transaction effected on behalf of a Related
Entity is subject to this Code because the Adviser or an Employee has an
interest in the Related Entity. While the Adviser and each Employee is subject
at all times to the fiduciary obligations described in this Code, paragraphs 4
and 5 of this Section III do not apply to a Securities Transaction effected on
behalf of a Related Entity.
4. Except as provided in paragraph 3 of this Section III,
Employees may not execute a Securities Transaction on a day during which a
purchase or sell order in that same Security or a Related Security is pending
for a Fund. Securities Transactions executed in violation of this prohibition
shall be unwound or, if not possible or practical, the Employee must disgorge to
the Fund the value received by the Employee due to any favorable price
differential received by the Employee. For example, if the Employee buys 100
shares at $10 per share, and the Fund buys 1000 shares at $11 per share, the
Employee will pay $100 (100 shares x $1 differential) to the Fund.
5. Except as provided in paragraph 3 of this Section III, an
Advisory Employee may not execute a Securities Transaction within seven (7)
calendar days before or after a transaction in the same Security or a Related
Security has been executed on behalf of a Fund. If the Compliance Officer
determines that a transaction has violated this prohibition, the transaction
shall be unwound or, if not possible or practical, the Employee must disgorge to
the Fund the value received by the Employee due to any favorable price
differential received by the Employee.
6. In connection with the acquisition of any security in an
initial public offering or private placement, the Employee must pre-clear the
acquisition with the Compliance Officer. The Compliance Officer will take into
account, among other factors, whether the investment opportunity should be
reserved for a Fund, and whether the opportunity is being offered to the
Employee by virtue of the Employee's position with the Trust or the Adviser. If
the acquisition is authorized, the Compliance Officer will retain a record of
the authorization and the rationale supporting the authorization. Employees who
have been authorized to acquire securities in a private placement will, in
connection therewith, be required to disclose that investment if and when the
Employee takes part in any subsequent investment in the same issuer. In such
circumstances, the determination to purchase Securities of that issuer on behalf
of a Fund will be subject to an independent review by personnel of the Adviser
with no personal interest in the issuer.
B. Other Restrictions
1. Employees are prohibited from serving on the boards of
directors of publicly traded companies, absent prior authorization by the
Compliance Officer. The consideration of prior authorization will be based upon
a determination that the board service will be consistent with the interests of
the Trust and the Funds' shareholders. In the event that board service is
authorized, Employees serving as directors will be isolated from other Employees
making investment decisions with respect to the securities of the company in
question.
2. No Employee may accept from a customer or vendor an amount
in excess of $50 per year in the form of gifts or gratuities, or as compensation
for services. If there is a question regarding receipt of a gift, gratuity or
compensation, it is to be reviewed by the Compliance Officer.
IV. COMPLIANCE PROCEDURES
A. Employee Disclosure and Certification
1. Within ten (10) days of commencement of employment with the
Trust or the Adviser, each Employee must certify that he or she has read and
understands this Code and recognizes that he or she is subject to it, and must
disclose the following information as of the date the person became an Employee:
a) the title, number of shares and principal amount of each Security in which
the Employee has a Beneficial Interest when the person became an Employee, b)
the name of any broker, dealer or bank with whom the Employee maintained a
trading account when the person became an Employee, and the date the report is
submitted.
2. Annually, each Employee must certify that he or she has read
and understands this Code and recognizes that he or she is subject to it, that
he or she has complied with the requirements of this Code and has disclosed or
reported all personal Securities Transactions required to be disclosed or
reported pursuant to the requirements of this Code. In addition, each Employee
shall annually provide the following information (as of a date no more than 30
days before the report is submitted): a) the title, number of shares and
principal amount of each Security in which the Employee had any Beneficial
Interest, b) the name of any broker, dealer or bank with whom the Employee
maintains an account in which any Securities are held for the direct or indirect
benefit of the Employee, and 3) the date the report is submitted.
B. Compliance
1. The Compliance Officer shall institute procedures to review the
reports required by this Section IV. The Compliance Officer shall identify all
Employees, inform those persons of their reporting obligations, and maintain a
record of all current and former Employees.
2. All Employees must provide copies of all broker confirmations
and periodic account statements to the Compliance Officer. Each Employee must
report, no later than ten (10) days after the close of each calendar quarter, on
the Securities Transaction Report form provided by the Trust or the Adviser, all
transactions in which the Employee acquired any direct or indirect Beneficial
Interest in a Security, including Exempt Transactions but excluding transactions
effected on behalf of a Related Entity, and certify that he or she has reported
all transactions required to be disclosed pursuant to the requirements of this
Code. The report shall also identify any trading account established by the
Employee during the quarter with a broker, dealer or bank.
3. The Compliance Officer will, on a quarterly basis, check
the trading confirmations provided by brokers to verify that the Employee has
not violated the Code. The Employee's annual disclosure of Securities holdings
will be reviewed by the Compliance Officer for compliance with this Code,
including transactions that reveal a pattern of trading inconsistent with this
Code.
4. If an Employee violates this Code, the Compliance Officer
will report the violation to management personnel of the Trust and the Adviser
for appropriate remedial action which, in addition to the actions specifically
delineated in other sections of this Code, may include a reprimand of the
Employee, or suspension or termination of the Employee's relationship with the
Trust and/or the Adviser.
5. For purposes of reviewing the Securities Transactions
permitted by paragraph 3 of Section III, the Compliance Officer will, on a
quarterly basis, provide the Disinterested Trustees with a report which
discloses all Securities Transactions effected on behalf of a Related Entity if
the Fund sold or purchased the same Security or Related Security on the same
day. The report to will disclose, for the Fund transaction and the Related
Entity transaction, the name of the broker, number of shares, commission and
price paid. The Compliance Officer will also disclose to the Disinterested
Trustees the name of each Related Entity and the percentage of each Related
Entity not owned by Employees or the Adviser, and report to the Disinterested
Trustees any material change in such information.
6. The management personnel of the Trust will prepare an
annual report to the Trust's board of trustees that summarizes existing
procedures and any changes in the procedures made during the past year and
certify to the Trust's Board of Trustees that the Adviser and the Trust have
each adopted procedures reasonably necessary to prevent Employees from violating
this Code. The report will describe any issues existing under this Code since
the last report, including without limitation, information about any material
violations of this Code, any significant remedial action during the past year
and any recommended procedural or substantive changes to this Code based on
management's experience under this Code, evolving industry practices or legal
developments.
