JOINT CODE OF ETHICS
Section I Statement of General Fiduciary Principles
This Code of Ethics (the "Code") has been adopted by T.O. RICHARDSON
TRUST a Massachusetts Business Trust (the "Trust"), T.O. RICHARDSON COMPANY,
INC. (the "Adviser") the investment adviser of the Trust, and T.O. RICHARDSON
SECURITIES, INC. (the "Underwriter") the principal underwriter of shares of
beneficial interest in the Trust, in compliance with Rule 17j1 under the
Investment Company Act of 1940 (the "Act"). The purpose of the Code is to
establish standards and procedures for the detection and prevention of
activities by which persons having knowledge of the investments and investment
intentions of the Trust may abuse their fiduciary duties to the Trust and
otherwise to deal with the types of conflict of interest situations to which
Rule 17j1 is addressed.
The Code is based on the principle that the trustees and officers of
the Trust, and the personnel of the Adviser and Underwriter who provide services
to the Trust, owe a fiduciary duty to the Trust to conduct their personal
securities transactions in a manner that does not interfere with the Trust's
transactions or otherwise take unfair advantage of their relationship with the
Trust. All such trustees, officers and personnel of the Trust, the Adviser and
the Underwriter, ("Trust Employees") are expected to adhere to this general
principal as well as to comply with all of the specific provisions of this Code
that are applicable to them.
Technical compliance with the Code will not automatically insulate any
Trust Employee from scrutiny of transactions that show a pattern of compromise
or abuse of the individual's fiduciary duties to the Trust. Accordingly, all
Trust Employees must seek to avoid any actual or potential conflicts between
their personal interests and the interests of the Trust and its shareholders. In
sum, all Trust Employees shall place the interests of the Trust before their own
personal interests.
Every Trust Employee must read and retain this Code of Ethics, and
should recognize that he or she is subject to the provisions hereof.
Section 11 Definitions
(A) "Access Person" means: (1) any trustee, director, officer, or
Advisory Person (as defined below) of the Trust or of the Adviser; and (2) any
director or officer of the Underwriter, who in the ordinary course of his or her
business makes, participates in or obtains information regarding the purchase or
sale of Securities for the Trust or whose functions or duties as part of the
ordinary course of his or her business relate to the making of any
recommendations to the Trust regarding the purchase or sale of Securities.
(B) An "Advisory Person" of the Trust or of the Adviser means: (i) any
employee of the Trust or the Adviser, or of any company in a control
relationship to the
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Trust or the Adviser, who in connection with his or her regular functions or
duties makes, participates in, or obtains current information regarding the
purchase or sale of any Security by the Trust, or whose functions relate to the
making of any recommendations with respect to such purchases or sales; and (ii)
any natural person in a control relationship to the Trust or the Adviser who
obtains information concerning recommendations made to the Trust with regard to
the purchase or sale of any Security.
(C) "Beneficial Ownership" has the meaning set forth in paragraph
(a)(2) of Rule 16a-1 under the Securities Exchange Act of 1934, and for purposes
of this Code shall be deemed to include, but not be limited to, any interest by
which an Access Person or any member of his or her immediate family (i.e., a
person who is related by blood or marriage to, and who is living in the same
household as, the Access Person) can directly or indirectly derive a monetary or
other economic benefit from the purchase, sale (or other acquisition or
disposition) or ownership of a Security, including for this purpose any such
interest which arises as a result of a general partnership interest in a general
or limited partnership; an interest in a trust; a right to dividends which is
separated or separable from the underlying Security; a right to acquire equity
Securities through the exercise or conversion of any derivative Security
(whether or not presently exercisable); and a performance related advisory fee
(other than an asset based fee). 1
(D) "Compliance Officer" means the chief compliance officer of the
Adviser.
(E) "Control" shall have the same meaning as that set forth in Section
2(a)(9) of the Investment Company Act of 1940 (the "Investment Company Act").
(F) "Independent Trustee" means a trustee of the Trust who is not an
"interested person" of the Trust within the meaning of Section 2(a)(19) of the
Investment Company Act.
"Security" includes all stock, debt obligations and other securities and similar
instruments of whatever kind, including any warrant or option to acquire or sell
a security. References to a Security in this Code (e.g., a prohibition or
requirement applicable to the purchase or sale of a Security) shall be deemed to
refer to and to include any warrant for, option in, or Security immediately
convertible into that Security, and shall also include any instrument (whether
or not such instrument itself is a Security) which has an investment return or
value that is based, in whole or part, on that Security (collectively,
"Derivatives"). Therefore, except as otherwise specifically provided by this
Code: (i) any prohibition or requirement of this Code applicable to the
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1 Beneficial ownership will not be deemed to exist solely as a result of any
indirect interest a person may have in the investment performance of an account
managed by such person, or over which such person has supervisory
responsibility, which arises from such person's compensation arrangement with
the Adviser or any affiliate of the Adviser under which the performance of the
account, or the profits derived from its management, is a factor in the
determination of such person's compensation.
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purchase or sale of a Security shall also be applicable to the purchase or sale
of a Derivative relating to that Security; and (ii) any prohibition or
requirement of this Code applicable to the purchase or sale of a Derivative
shall also be applicable to the purchase or sale of a Security relating to that
Derivative.
(H) A Security is "being considered for purchase or sale" when a recommendation
to purchase or sell that Security has been made or communicated and, with
respect to the person making the recommendation, when such person seriously
considers making such a recommendation.
(I) "Trust Employee" means any person who is a trustee, director, officer or
employee of the Trust or the Adviser.
Section III Objective and General Prohibitions
Although certain provisions of this Code apply only to Access Persons, all Trust
Employees must recognize that they are expected to conduct their personal
activities in accordance with the standards set forth in Section I above, this
Section III and Section VII. Therefore, a Trust Employee may not engage in any
investment transaction under circumstances where the Trust Employee benefits
from or interferes with the purchase or sale of investments by the Trust. In
addition, Trust Employees may not use information concerning the investments or
investment intentions of the Trust, or their ability to influence such
investment intentions, for personal gain or in a manner detrimental to the
interests of the Trust.
Trust Employees may not engage in conduct which is deceitful, fraudulent, or
manipulative, or which involves false or misleading statements, in connection
with the purchase or sale of investments by the Trust. In this regard, Trust
Employees should recognize that Rule 17j-I makes it unlawful for any affiliated
person or principal underwriter of the Trust, or any affiliated person of such a
person, directly or indirectly, in connection with the purchase or sale of a
Security held or to be acquired by the investment company to:
(i) employ any device, scheme or artifice to defraud the Trust;
(ii) make any untrue statement of a material fact to the Trust or omit to
state to the Trust a material fact necessary in order to make the
statements made, in light of the circumstances under which they are
made, not misleading;
(iii) engage in any act, practice, or course of business which operates or
would operate as a fraud or deceit upon the Trust; or
(iv) engage in any manipulative practice with respect to the Trust.
Trust Employees should also recognize that a violation of this Code or of Rule
17j I may result in the imposition of: (1) sanctions as provided by Section IX
below; or (2) the
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imposition administrative, civil and, in certain cases, criminal fines,
sanctions or penalties.
Section IV Prohibited Transactions
(A) An Access Person may not purchase or otherwise acquire direct or indirect
Beneficial Ownership of any Security, and may not sell or otherwise dispose of
any Security in which he or she has direct or indirect Beneficial Ownership, if
he or she knows or should know at the time of entering into the transaction
that: (1) the Trust has purchased or sold the Security within the last 15
calendar days, or is purchasing or selling or is going to purchase or sell the
Security in the next 15 calendar days; or (2) the Adviser has within the last 15
calendar days considered purchasing or selling the Security for the Trust or is
considering purchasing or selling the Security for the Trust or within the next
15 calendar days is going to consider purchasing or selling the Security for the
Trust, unless such Access Person:
(i) obtains advance clearance of such transaction pursuant to Section
V; and
(ii) reports to the Trust the information described in Section VI of
this Code. 2
For purposes of administering this Code, Access Persons who are Advisory Persons
shall be presumed to have the requisite knowledge of the Trust's transactions so
as to require advance clearance, regardless of whether such persons actually
have such knowledge. Accordingly, all Advisory Persons shall obtain advance
clearance of all transactions in Securities in accordance with this Section IV
(A) except in the case of a transaction as to which one of the exceptions from
advance clearance set forth in Section IV (B) below applies.
Because investment recommendations and decisions made for the Trust are made by
persons who are associated with the Adviser, Access Persons who are not
associated with the Adviser will, in the absence (if evidence to the contrary,
be presumed not to have the requisite knowledge of the Trust's transactions so
as to generally require advance clearance of transactions.
Accordingly, Access Persons who are Independent Trustees or associated with
Independent Trustees shall not be required to obtain advance clearance of a
transaction unless at the time of the transaction they have actual knowledge of
the matters described in (A) above.
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2 The prohibitions of this Section IV apply to Securities acquired or disposed
of in any type of transaction, including but not limited to nonbrokered
transactions, such as purchases and sales of privately placed Securities and
Securities acquired directly from an issuer, except to the extent that one of
the exemptions from the prohibitions set forth in Section IV(B) is applicable.
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(B) The prohibitions of this Section IV do not apply to:
Purchases that are made by reinvesting cash dividends pursuant to an automatic
dividend reinvestment program ("DRIP") (however, this exception does not apply
to optional cash purchases pursuant to a DRIP);
(2) Purchases and redemptions of shares of registered, openend mutual funds (but
not shares of closedend funds), including shares of the Trust;
(3) Bank certificates of deposit and bankers' acceptances;
Money market instruments (including repurchase agreements) with a stated
maturity of 12 months or less;
U.S. Treasury obligations;
(6) Purchases of rights issued by an issuer pro rata to all holders of a class
of its Securities, if such rights are acquired from such issuer, and the
exercise of such rights;
Transactions in exchange traded futures contracts;
(8) Involuntary (i.e., nonvolitional) purchases, sales and transfers of
Securities; and
(9) Transactions in an account over which the Access Person does not exercise,
directly or indirectly, any influence or control; provided, however, that such
influence or control shall be presumed to exist in the case of the account of an
immediate family member of the Access Person who lives in the same household as
the Access Person, absent a written determination by the Compliance Officer to
the contrary.
Section V Preclearance Procedures
(A) From Whom Obtained.
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Preclearance of a personal transaction in a Security required to be approved
pursuant to Section IV above must be obtained from the Compliance Officer or a
person who has been authorized by the Compliance Officer to preclear
transactions. Each of these persons is referred to in this Code as a "Clearing
Officer." A Clearing Officer seeking preclearance with respect to his or her own
transaction shall obtain such clearance from another Clearing Officer.
(B) Time of Clearance.
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(1) Access Persons may preclear trades only in cases where they have a present
intention to effect a transaction in the Security for which preclearance is
sought. It is not appropriate for an Access Person to obtain a general or
openended preclearance to cover the eventuality that he or she may buy or sell a
Security at some future time
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depending upon market developments. Consistent with the foregoing, an Access
Person may not simultaneously request pre-clearance to buy and sell the same
Security.
(2) Preclearance of a trade shall be valid and in effect only for a period of 24
hours from the time preclearance is given; provided, however, that a
preclearance expires upon the person becoming aware of facts or circumstances
that would prevent a proposed trade from being precleared were such facts or
circumstances made known to a Clearing Officer. Accordingly, if an Access Person
becomes aware of new or changed facts or circumstances which give rise to a
question as to whether preclearance could be obtained if a Clearing Officer was
aware of such facts or circumstances, the person shall be required to so advise
a Clearing Officer before proceeding with such transaction.
(C) Form.
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Clearance must be obtained in writing by completing and signing the form
provided for that purpose by the Trust, which form shall set forth the details
of the proposed transaction, and obtaining the signature of a Clearing Officer.
The form is annexed hereto as Schedule A. If an Access Person has responsibility
regarding the determination by the Adviser of Securities to be purchased or sold
for the Trust and is requesting approval to purchase or sell a Security that is
owned by the Trust or is purchasing a Security which is a permissible investment
for the Trust, but has not purchased such Security for the Trust, the Access
Person shall inform the Clearing Officer of that fact at the time approval to
purchase or sell the Security is sought.
(D) Filing.
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A copy of all completed clearance forms, with the required signatures, shall be
retained by the Compliance Officer.
(E) Factors Considered in Clearance of Personal Transactions.
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A Clearing Officer may refuse to grant clearance of a personal transaction in
his or her Sole discretion without being required to specify any reason for the
refusal. Generally, a Clearing Officer will consider the following factors in
determining whether or not to clear a proposed transaction:
(1) Whether the amount or nature of the transaction or person making
it is likely to affect the price or market for the Security; and
(2) Whether the person making the proposed purchase or sale is likely
to benefit from purchases or sales being made or being considered on behalf of
the Trust; and
(3) Whether the transaction is likely to affect adversely the Trust.
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(F) Monitoring of Personal Transactions After Clearance.
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After clearance is given to an Access Person, the Compliance Officer shall
periodically monitor each Access Person's transactions to ascertain whether
cleared transactions have been executed within 24 hours and whether it was
executed in the specified amounts.
Section VI Quarterly Reports by Access Persons
(A) Within ten (10) days after the end of each calendar quarter, each Access
Person shall make a written report to the Compliance Officer of all transactions
occurring in the quarter by which he or she acquired or disposed of a direct or
indirect Beneficial Interest in any Security, except that the report need not
set forth information regarding the following types of transactions:
(1) Purchases and redemptions of shares of registered, openend mutual funds
(but not shares of closedend funds), including shares of the Trust;
(2) Bank certificates of deposit and bankers' acceptances;
(3) Money market instruments (including repurchase agreements) with a
stated maturity of 12 months or less;
(4) U.S. Treasury obligations;
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(5) Transactions in an account over which the Access Person does not
exercise, directly or indirectly, any influence or control provided, however,
that such influence or control shall be presumed to exist in the case of the
account of an immediate family member of the Access Person who lives in the same
household as the Access Person, absent a written determination by the Compliance
Officer to the contrary; and
(6) Transactions in Securities of a type which are not permissible investments
for the Trust.3
Such report is hereinafter called a "Quarterly Securities Transaction Report."
(B) Except as provided in (E) below, a Quarterly Securities Transaction
Report shall be on the form annexed hereto as Schedule B and must contain the
following information with respect to each reportable transaction:
(1) Date and nature of the transaction (purchase, sale or any other
type of acquisition or disposition);
(2) Title, number of shares or principal amount of each Security and
the price at which the transaction was effected; and
(3) Name of the broker, dealer or bank with or through whom the
transaction was effected.
(C) A Quarterly Securities Transaction Report may contain a statement
that the report is not to be construed as an admission that the person making it
has or had any direct or indirect Beneficial Interest in any Security to which
the report relates
(D) Notwithstanding the quarterly reporting requirement set forth in
this Section VI, an Independent Trustee is not required to file a Quarterly
Securities Transaction Report unless he or she was actually aware of the Trust's
trading activity at any time during the fifteen day period immediately preceding
or after such Independent Trustee engaged in a Securities transaction.
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3 The reporting requirements of this Section VI apply to Securities acquired or
disposed of in all types of transactions, including but not limited to
nonbrokered transactions, such as purchases and sales of privately placed
Securities and Securities acquired directly from an issuer, except to the extent
that one of the exemptions from the reporting requirements applies.
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(E) In lieu of submitting a Quarterly Securities Transaction Report, an
Access Person may arrange for the Compliance Officer to be sent duplicate
confirmations and statements for accounts through which the Access Person
effects Securities transactions. However, a Quarterly Securities Transaction
Report must be submitted for any quarter during which the Access Person has
acquired or disposed of direct or indirect Beneficial Ownership of any Security
if such transaction was not in an account for which duplicate confirmations and
statements are being sent. Access Persons who are associated persons of the
"Adviser" and who provide duplicate confirmations and statements for their
accounts to the "Adviser" will be deemed to satisfy the requirement to submit a
Quarterly Securities Transaction Report if such confirmations and statements
reflect all transactions in Securities required to be reported by them
hereunder.
The Adviser shall deliver such confirmations and statements or analysis thereof
to permit the Compliance Officer to ascertain compliance with this Code.
(F) It is the responsibility of each Access Person to take the initiatives to
comply with the requirements of this Section VI. Any effort by the Trust, or by
the Adviser, the Administrator or the Distributor, to facilitate the reporting
process does not change or alter that responsibility.
Section VII Additional Prohibitions
(A) Confidentiality of Trust Transactions.
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Until disclosed in a public report to shareholders or to the SEC in the normal
course, all information concerning the Securities "being considered for purchase
or sale" by the Trust shall be kept confidential by all Trust Employees and
disclosed by them only on a "need to know" basis. It shall be the responsibility
of the Compliance Officer to report any inadequacy found in this regard to the
trustees of the Trust.
(B) Outside Business Activities, Relationships and Directorships.
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Access Persons may not engage in any outside business activities or maintain a
business relationship with any person or company that may give rise to conflicts
of interest or jeopardize the integrity or reputation of the Trust. Similarly,
no such outside business activities or relationship may be inconsistent with the
interests of the Trust. Access Persons who are members, officers or employees of
the Adviser may not serve as a director of any public or private company, except
with the prior approval of the Compliance Officer, and all directorships held by
such Access Persons shall be reported to the Compliance Officer.
(C) Gratuities.
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Trust Employees shall not, directly or indirectly, take, accept, receive or give
gifts or other consideration in merchandise, services or otherwise, except: (i)
customary business gratuities such as meals, refreshments, beverages and
entertainment that are associated with a legitimate business purpose, reasonable
in cost, appropriate as to time and place, do not influence or give the
appearance of influencing the recipient and cannot be viewed as a bribe,
kickback or payoff; and (ii) business related gifts of nominal value.
Section VIII Certification by Access Persons
Access Persons shall be required to certify not more than 30 days after
they become Access Persons, and annually thereafter, that they have read and
understand this Code and recognize that they are subject to it. Such Access
Persons shall also be required to certify annually that they have complied with
the requirements of this Code. The form of certification is annexed hereto as
Schedule C.
Section IX Sanctions
Any violation of this Code shall be subject to the imposition of such
sanctions by the Trust as may be deemed appropriate under the circumstances to
achieve the purposes of Rule 17j1 and this Code. The sanctions to be imposed
shall be determined by the Board of Trustees, including a majority of the
Independent Trustees; provided, however, that with respect to violations by
personnel of the Adviser or Underwriter (or of a company which controls the
Adviser or the Underwriter, the sanctions to be imposed shall be determined by
the Adviser or the Underwriter (or the controlling person thereof), as
applicable. Sanctions may include, but are not limited to, suspension or
termination of employment, a letter of censure and/or restitution of an amount
equal to the difference between the price paid or received by the Trust and the
more advantageous price paid or received by the offending person.
Section X Administration and Construction
(A) The administration of this Code shall be the responsibility of the
Compliance Officer.
(B) The duties of the Compliance Officer are as follows:
(1) Continuous maintenance of current lists of the names of all Trust
Employees and Access persons with an appropriate description of their title or
employment, including a notation of any directorships held by Access Persons who
are partners, members, officers, or employees of the Adviser or of any company
which controls the Adviser;
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(2) On an annual basis, providing each Trust Employee with a copy of
this Code and informing such persons of their duties and obligations hereunder;
(3) Maintaining or supervising the maintenance of all records and reports
required by this Code;
(4) Preparing listings of all securities transactions reported by Access
Persons and reviewing such transactions against a listing of transactions
effected by the Trust;
(5) Issuance, either personally or with the assistance of counsel as
may be appropriate, of any interpretation of this Code which may appear
consistent with the objectives of Rule 17j I and this Code;
(6) Conduct of such inspections or investigations as shall reasonably
be required to detect and report, with recommendations, any apparent violations
of this Code to the Board of Trustees of the Trust; and
(7) Submission of a quarterly report to the Board of Trustees
containing a description of. any detected violation of this Code, noting in each
case any sanction imposed; any transactions which suggest the possibility of a
violation of this Code or of interpretations issued by the Compliance Officer;
and any other significant information concerning the appropriateness of and
actions taken under this Code,
(C) The Compliance Officer shall maintain and cause to be maintained in
an easily accessible place, the following records:
(1) A copy of all codes of ethics adopted by the Trust,
the Adviser and Underwriter pursuant to Rule 17j1, to
satisfy the requirements of such Rule as applicable
for a period of five (5) years;
(2) A record of each violation of this Code and of any
action taken as a result of such violation for a
period of not less than five (5) years following the
end of the fiscal year of the Trust in which the
violation occurred;
(3) A copy of each report made by an Access Person or the
Compliance Officer, for a period of not less than
five (5) years from the end of the fiscal year of the
Trust in which such report or interpretation is made
or issued, the most recent two (2) years of which
shall be kept in a place that is easily accessible;
and
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(4) A list of all persons who are, or within the past
five (5) years have been, required to make reports
pursuant to Rule 17j1 and this Code of Ethics.
(D) On an annual basis, and at such other time as deemed to be
necessary or appropriate by the trustees, the trustees shall review operation of
this Code and shall adopt such amendments thereto as may be necessary to assure
that the provisions of the Code establish standards and procedures that are
reasonably designed to detect and prevent activities that would constitute
violations of Rule 17j1.
(E) This Code may not be amended or modified except in a written form
which is specifically approved by majority vote of the Independent Trustees.
This Code was approved by the Board of Trustees of the Trust at a
meeting held October 19, 1998.
Attest:
T.O. Richardson Trust
_______________________ By______________________________
Secretary Its President
Attest: T.O. Richardson Company, Inc.
________________________ By______________________________
Secretary Its President
Attest: T.O. Richardson Securities, Inc.
________________________ By______________________________
Secretary Its President
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SCHEDULE A
REQUEST FOR PERMISSION TO ENGAGE IN PERSONAL TRANSACTIONS
I hereby request permission to effect a transaction in Securities in which I
have or will acquire direct or indirect Beneficial Ownership.
PURCHASES AND ACQUISITIONS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
No. of Shares
or Principal Name of Current Market Price Name of
Date Amount Security Per Share or Unit Broker
---- -------------- --------- ----------------------- --------
</TABLE>
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SALES AND OTHER DISPOSITIONS
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(check if applicable) If I have responsibility for the determination by the
Adviser of Securities to be purchased or sold by the Trust, I have noted (by
means of an asterisk) those Securities noted above which are owned by the Trust.
If, I am requesting permission to purchase Securities which are not presently
owned by the Trust, I have included a statement as to why such securities are
not being purchased for the Trust or being considered by the Trust.
Date: ______________________ Signature: _________________________
Permission Granted __________ Permission Denied ___________________
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Date: ____________________ Signature: __________________________
(Clearing Officer)
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SCHEDULE B
QUARTERLY SECURITIES TRANSACTION REPORT
The following lists all transactions in Securities, in which I acquired
or dispose of any direct or indirect Beneficial Ownership, that were effected
during the last calendar quarter and are required to be reported by Section
VI(A) of the Code. (If no such transactions took place write "NONE".) Please
sign and date this report and return it to the Compliance Officer no late than
the 10th day of the month following the end of the quarter. Use reverse side if
additional space is needed.
PURCHASES AND ACQUISITIONS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
No. of Shares
Trade or Principal Name of Unit Total
Date Amount Security Price Price Broker
</TABLE>
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SALES AND OTHER DISPOSITIONS
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Date Completed: ___________________ Signature: ____________________
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SCHEDULE C
ACKNOWLEDGMENT OF COMPLIANCE WITH CODE OF ETHICS
______I have read and understand the Joint Code of Ethics of T.O.
Richardson Trust and recognize that the provisions of the Code apply to me and
agree to comply in all respects with the procedures described therein.
Furthermore, if during the past calendar year I was subject to the Code, certify
that I complied in all respects with the requirements of the Code as in effect
during that year.
Date Completed: ___________________ Print Name: ____________________
Signature: ______________________
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