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Exhibit (p)(1)
GOVERNOR FUNDS
(THE "TRUST")
CODE OF ETHICS
I. LEGAL REQUIREMENT.
Rule 17j-1(b) under the Investment Company Act of 1940, as amended (the
"1940 Act"), makes it unlawful for any officer or trustee of the Trust in
connection with the purchase or sale by such person of a security "held or to be
acquired" by the Trust:
(1) To employ any device, scheme or artifice to defraud the Trust;
(2) To make to the Trust any untrue statement of a material fact
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;
(3) To engage in any act, practice, or course of business which
operates or would operate as a fraud or deceit upon the Trust;
or
(4) To engage in any manipulative practice with respect to the
Trust's investment portfolios.
II. PURPOSE OF THE CODE OF ETHICS.
The Trust expects that its officers and trustees will conduct their
personal investment activities in accordance with (1) the duty at all times to
place the interests of the Trust's shareholders first, (2) the requirement that
all personal securities transactions be conducted consistent with this Code of
Ethics and in such a manner as to avoid any actual or potential conflict of
interest or any abuse of an individual's position of trust and responsibility,
and (3) the fundamental standard that investment company personnel should not
take inappropriate advantage of their positions.
In view of the foregoing, the provisions of Section 17(j) of the 1940
Act, the Securities and Exchange Commission's 1940 Act Release No. 23958
"Personal Investment Activities of Investment Company Personnel" (August 24,
1999), the "Report of the Advisory Group on Personal Investing" issued by the
Investment Company Institute on May 9, 1994 and the Securities and Exchange
Commission's September 1994 Report on "Personal Investment Activities of
Investment Company Personnel," the Trust has determined to adopt this Code of
Ethics, effective September 1, 2000, on behalf of the Trust to specify a code of
conduct for certain types of personal securities transactions which might
involve conflicts of interest or an appearance of impropriety, and to establish
reporting requirements and enforcement procedures.
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III. DEFINITIONS.
A. An "Access Person" means: (1) each trustee or officer of the
Trust; (2) each employee (if any) of the Trust (or of any
company in a control relationship to the Trust) who, in
connection with his or her regular functions or duties, makes,
participates in, or obtains information regarding the purchase
or sale of a security by the Trust or whose functions relate
to the making of any recommendations with respect to such
purchases or sales; and (3) any natural person in a control
relationship to the Trust who obtains information concerning
recommendations made to the Trust with regard to the purchase
or sale of a security.
For purposes of this Code of Ethics, an "Access Person" does
not include any person who is subject to the securities
transaction pre-clearance requirements and securities
transaction reporting requirements of the Code of Ethics
adopted by the Trust's investment adviser or principal
underwriter in compliance with Rule 17j-1 under the 1940 Act.
B. "RESTRICTED TRUSTEE" OR "RESTRICTED OFFICER" MEANS EACH
TRUSTEE OR OFFICER OF THE TRUST WHO IS NOT ALSO A TRUSTEE,
DIRECTOR, OFFICER, PARTNER, EMPLOYEE OR CONTROLLING PERSON OF
THE TRUST'S INVESTMENT ADVISER, ADMINISTRATOR, CUSTODIAN,
TRANSFER AGENT, OR DISTRIBUTOR.
C. An Access Person's "immediate family" includes a spouse, minor
children and adults living in the same household as the Access
Person.
D. A security is "held or to be acquired" if within the most
recent 15 days it (1) is or has been held by the Trust, or (2)
is being or has been considered by the Trust or its investment
adviser for purchase by the Trust. A purchase or sale includes
the writing of an option to purchase or sell and any security
that is exchangeable for or convertible into any security that
is held or to be acquired by the Trust.
E. An "Initial Public Offering" means an offering of securities
registered under the Securities Act of 1933, the issuer of
which, immediately before the registration, was not subject to
the reporting requirements of Sections 13 or 15(d) of the
Securities Exchange Act of 1934.
F. "Investment Personnel" of the Trust means:
(i) Any employee of the Trust (or of any company in a
control relationship to the Trust) who, in connection with his
or her regular functions or duties, makes or participates in
making recommendations regarding the purchase or sale of
securities by the Trust.
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(ii) Any natural person who controls the Trust and
who obtains information concerning recommendations made to the
Trust regarding the purchase or sale of securities by the
Trust.
G. A "Limited Offering" means an offering that is exempt from
registration under the Securities Act of 1933 pursuant to
Section 4(2) or Section 4(6) or pursuant to Rule 504, Rule
505, or Rule 506 under the Securities Act of 1933.
H. "Covered Security" means a security as defined in Section
2(a)(36) of the 1940 Act, except that it does not include
direct obligations of the Government of the United States;
bankers' acceptances; bank certificates of deposit; commercial
paper; high quality short-term debt instruments (any
instrument having a maturity at issuance of less than 366 days
and that is rated in one of the two highest rating categories
by a nationally recognized statistical rating organization),
including repurchase agreements; and shares of registered
open-end investment companies.
IV. POLICIES OF THE TRUST REGARDING PERSONAL SECURITIES TRANSACTIONS.
A. GENERAL POLICY.
No Access Person of the Trust shall engage in any act,
practice or course of business that would violate the provisions of Rule
17j-1(b) set forth above, or in connection with any personal investment
activity, engage in conduct inconsistent with this Code of Ethics.
B. SPECIFIC POLICIES.
(1) RESTRICTIONS ON PERSONAL SECURITIES TRANSACTIONS BY
ACCESS PERSONS OTHER THAN RESTRICTED TRUSTEES AND
RESTRICTED OFFICERS.
(a) Except as provided below in paragraph
IV.B.1.d., no Access Person who is not a
Restricted Trustee or Restricted Officer may
buy or sell Covered Securities for his or
her personal portfolio or the portfolio of a
member of his or her immediate family
without obtaining oral authorization from
the Compliance Officer of the Trust's
investment adviser PRIOR to effecting such
security transaction.
A written authorization for such security transaction
will be provided by the administrator's Compliance
Officer to the person receiving the authorization (if
granted).
NOTE: If an Access Person has questions as
to whether purchasing or selling a security
for his or her personal portfolio or the
portfolio of a member of his or her
immediate family requires prior oral
authorization, the Access Person should
consult the administrator's
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Compliance Officer for clearance or denial
of clearance to trade PRIOR to effecting any
securities transactions.
(b) Pre-clearance approval under paragraph (a)
will expire at the close of business on the
trading day after the date on which oral
authorization is received, and the Access
Person is required to renew clearance for
the transaction if the trade is not
completed before the authority expires.
(c) No clearance will be given to an Access
Person other than a Restricted Trustee or
Restricted Officer to purchase or sell any
Covered Security (1) on a day when any
portfolio of the Trust has a pending "buy"
or "sell" order in that same Covered
Security until that order is executed or
withdrawn or (2) when the Compliance Officer
has been advised by the investment adviser
that the same Covered Security is being
considered for purchase or sale for any
portfolio of the Trust.
(d) The pre-clearance requirements contained in
paragraph IV.B.1.a, above, shall not apply
to the following securities ("Exempt
Securities"):
i) Securities that are not Covered
Securities;
ii) Securities purchased or sold in any
account over which the Access
Person has no direct or indirect
influence or control.
iii) Securities purchased or sold in a
transaction which is non-volitional
on the part of either the Access
Person or the Trust.
iv) Securities acquired as a part of an
automatic dividend reinvestment
plan.
v) Securities acquired 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, and sales of such
rights so acquired.
vi) Securities which the Trust's
investment portfolios are not
permitted to purchase under the
investment objectives and policies
set forth in the Trust's then
current prospectus(es) under the
Securities Act of 1933 or the
Trust's registration statement on
Form N-1A.
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(e) The pre-clearance requirement
contained in paragraph IV.B.1.a,
above, shall apply to ALL purchases
of a beneficial interest in any
security through an Initial Public
Offering or a Limited Offering by
any Access Person who is also
classified as Investment Personnel.
A record of any decision and the
reason supporting such decision to
approve the acquisition by
Investment Personnel of Initial
Public Offerings or Limited
Offerings shall be made by the
Compliance Officer.
(2) RESTRICTIONS ON PERSONAL SECURITIES
TRANSACTIONS BY RESTRICTED TRUSTEES AND
RESTRICTED OFFICERS.
The Trust recognizes that a Restricted Trustee and a Restricted Officer
do not have on-going, day-to-day involvement with the operations of the Trust.
In addition, it has been the practice of the Trust to give information about
securities purchased or sold by the Trust or considered for purchase or sale by
the Trust to Restricted Trustees and Restricted Officers in materials circulated
more than 15 days after such securities are purchased or sold by the Trust or
are considered for purchase or sale by the Trust. Accordingly, the Trust
believes that less stringent controls are appropriate for Restricted Trustees
and Restricted Officers, as follows:
(a) The securities pre-clearance
requirement contained in paragraph
IV.B.1.a. above shall only apply to
a Restricted Trustee or Restricted
Officer if he or she knew or, in
the ordinary course of fulfilling
his or her official duties as a
trustee or officer, should have
known, that during the fifteen day
period before the transaction in a
Covered Security (other than an
Exempt Security) or at the time of
the transaction that the Covered
Security purchased or sold by him
or her other than an Exempt
Security was also purchased or sold
by the Trust or considered for the
purchase or sale by the Trust.
(b) If the pre-clearance provisions of
the preceding paragraph apply, no
clearance will be given to a
Restricted Trustee or Restricted
Officer to purchase or sell any
Covered Security (1) on a day when
any portfolio of the Trust has a
pending "buy" or "sell" order in
that same Covered Security until
that order is executed or withdrawn
or (2) when the Compliance Officer
has been advised by the investment
adviser that the same Covered
Security is being considered for
purchase or sale for any portfolio
of the Trust.
V. PROCEDURES.
In order to provide the Trust with information to enable it to
determine with reasonable assurance whether the provisions of this Code are
being observed by its Access Persons:
A. Each Access Person of the Trust other than a trustee who is not an
"interested person" of the Trust (as defined in the 1940 Act) will
submit to the administrator
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an Initial Holdings Report in the form attached hereto as Exhibit A
that lists ALL Covered Securities beneficially owned(1) by the Access
Person except as stated below. This report must be submitted within ten
days of becoming an Access Person (or for persons already designated as
Access Person within 10 days of the adoption of this Code of Ethics),
and must include the title of each security, the number of shares held,
and the principal amount of the security. The Report must also include
a list of any securities accounts maintained with any broker, dealer or
bank.
B. Each Access Person of the Trust other than a trustee who is not an
"interested person" of the Trust (as defined in the 1940 Act) will also
submit to the administrator an Annual Holdings Report attached hereto
as Exhibit A no later than thirty days after the end of the calendar
year. Except as stated below, the Annual Holdings Report must list ALL
Covered Securities beneficially owned by the Access Person, the title
of each security, the number of shares held, and the principal amount
of the security, as well as a list of any securities accounts
maintained with any broker, dealer or bank.
C. Each Access Person of the Trust other than a Restricted Trustee or
Restricted Officer shall direct his or her broker to supply to the
Compliance Officer of the Trust's administrator, on a timely basis,
duplicate copies of confirmations of all securities transactions in
which the person has, or by reason of such transaction acquires any
direct or indirect beneficial ownership and copies of periodic
statements for all securities accounts.
D. Except as stated below, each Access Person of the Trust, other than a
trustee who is not an "interested person" (as defined in the 1940 Act),
shall submit reports in the form attached hereto as Exhibit B to the
Trust's administrator, showing all transactions in Covered Securities
in which the person has, or by reason of such transaction acquires, any
direct or indirect beneficial ownership, as well as all accounts
established with brokers, dealers or banks during the quarter in which
any Covered Securities were held for the direct or indirect beneficial
interest of
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1. You will be treated as the "beneficial owner" of a security under this policy
only if you have a direct or indirect pecuniary interest in the security.
(a) A direct pecuniary interest is the opportunity, directly or
indirectly, to profit, or to share the profit, from the
transaction.
(b) An indirect pecuniary interest is any nondirect financial
interest, but is specifically defined in the rules to include
securities held by members of your immediate family sharing
the same household; securities held by a partnership of which
you are a general partner; securities held by a trust of which
you are the settlor if you can revoke the trust without the
consent of another person, or a beneficiary if you have or
share investment control with the trustee; and equity
securities which may be acquired upon exercise of an option or
other right, or through conversion.
For interpretive guidance on this test, you should consult
counsel.
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the Access Person.(2) Such reports shall be filed no later
than 10 days after the end of each calendar quarter. An Access
Person of the Trust need not make a quarterly transaction
report under this paragraph if all of the information required
by this paragraph V.D. is contained in the brokerage
confirmations or account statements required to be submitted
under paragraph V.C. and is received by the administrator in
the time period stated above.
E. Each trustee who is not an "interested person" of the Trust
need not make an initial or annual holdings report but shall
submit the same quarterly report as required under paragraph
V.D. to the administrator, but only for a transaction in a
Covered Security (except as stated below) where he or she knew
at the time of the transaction or, in the ordinary course of
fulfilling his or her official duties as a trustee, should
have known that during the 15-day period immediately preceding
or after the date of the transaction, such Covered Security is
or was purchased or sold, or considered for purchase or sale,
by the Trust.
F. The reporting requirements of this Section V do not apply to
securities transactions effected for, and any Covered
Securities held in, any account over which an Access Person
does not have any direct or indirect influence or control.
G. The administrator of the Trust shall notify each Access Person
of the Trust who may be subject to the pre-clearance
requirement or required to make reports pursuant to this Code
that such person is subject to the pre-clearance or reporting
requirements and shall deliver a copy of this Code to each
such person.
H. The administrator of the Trust shall review the initial
holdings reports, annual holdings reports, and quarterly
transaction reports received, and as appropriate compare the
reports with the pre-clearance authorization received, and
report to the Trust's Board of Trustees:
(a) with respect to any transaction that appears to
evidence a possible violation of this Code; and
(b) apparent violations of the reporting requirement
stated herein.
I. The Board shall consider reports made to it hereunder and
shall determine whether the policies established in Sections
IV and V of this Code of Ethics have been violated, and what
sanctions, if any, should be imposed on the violator,
including but not limited to a letter of censure, suspension
or termination of the employment of the violator, or the
unwinding of the transaction and the disgorgement of any
profits to the Trust. The Board shall review the operation of
this Code of Ethics at least once a year.
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2. See footnote 1 above.
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J. The Trust's investment adviser and principal underwriter shall
adopt, maintain and enforce separate codes of ethics with
respect to their personnel in compliance with Rule 17j-1 under
the 1940 Act, and shall forward to the Trust's administrator
and the Trust's counsel copies of such codes and all future
amendments and modifications thereto. The Board of Trustees,
including a majority of the trustees who are not "interested
persons" of the Trust (as defined in the 1940 Act), shall
approve this Code of Ethics, and the codes of ethics of each
investment adviser and principal underwriter of the Trust, and
any material amendments to such codes. Such approval must be
based on a determination that such codes contain provisions
reasonably necessary to prevent Access Persons of the Trust
from engaging in any conduct prohibited under such codes and
under Rule 17j-1 under the 1940 Act. The Board shall review
and approve such codes at least once a year. Furthermore, any
material changes to an investment adviser's or principal
underwriter's code will be approved by the Board at the next
scheduled quarterly board meeting and in no case more than six
months after such change. Before approving any material
amendments to the investment adviser's or principal
underwriter's code of ethics, the Board must receive a
certification from the investment adviser or principal
underwriter that it has adopted procedures reasonably
necessary to prevent Access Persons from violating its code of
ethics and under Rule 17j-1 under the 1940 Act.
K. At each quarterly Board of Trustees' meeting the administrator
(on behalf of the Trust), investment adviser and principal
underwriter of the Trust shall provide a written report to the
Trust's Board of Trustees stating:
(a) any reported securities transaction that occurred
during the prior quarter that may have been
inconsistent with the provisions of the codes of
ethics adopted by the Trust's investment adviser or
principal underwriter; and
(b) all disciplinary actions3 taken in response to such
violations.
L. At least once a year, the administrator shall provide to the
Board with respect to this Code of Ethics, and the Trust's
investment adviser and principal underwriter shall provide to
the Board with respect to their codes of ethics, a written
report which contains: (a) a summary of existing procedures
concerning personal investing by advisory persons and any
changes in the procedures during the past year; (b) an
evaluation of current compliance procedures and a report on
any recommended changes in existing restrictions or procedures
based upon the Trust's experience under this Code of Ethics,
industry practices, or developments in applicable laws and
regulations; (c) describes any issues arising under the code
of ethics or procedures since the last report, including but
not limited to,
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(3). Disciplinary action includes but is not limited to any action that has a
material financial effect upon the employee, such as fining, suspending, or
demoting the employee, imposing a substantial fine or requiring the disgorgement
of profits.
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information about material violations of the code or
procedures and sanctions imposed in response to material
violations; and (d) a certification that the procedures which
have been adopted are those reasonably necessary to prevent
Access Persons from violating the respective Codes of Ethics.
M. This Code, the codes of the investment adviser and principal
underwriter, a record of any violation of such codes and any
action taken as a result of the violation, a copy of each
report by an Access Person, any written report hereunder by
the Trust's administrator, investment adviser or principal
underwriter, records of approvals relating to Initial Public
Offerings and Limited Offerings, lists of all persons required
to make reports and a list of all persons responsible for
reviewing such reports shall be preserved with the Trust's
records for the period and in the manner required by Rule
17j-1.
VI. CERTIFICATION.
Each Access Person will be required to certify annually that he or she
has read and understood this Code of Ethics, and will abide by it. Each Access
Person will further certify that he or she has disclosed or reported all
personal securities transactions required to be disclosed or reported under the
Code of Ethics. A form of such certification is attached hereto as Exhibit B.
The Board of Trustees of Governor Funds
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EXHIBIT A
GOVERNOR FUNDS
HOLDINGS REPORT
For the Year/Period Ended _______________________
(month/day/year)
[ ] Check Here if this is an Initial Holdings Report
To: BISYS Fund Services Ohio, Inc., as Administrator of the above listed Fund
As of the calendar year/period referred to above, I have a
direct or indirect beneficial ownership interest in the securities listed below
which are required to be reported pursuant to the Code of Ethics of the Trust:
Title of Number Principal
Security of Shares Amount
-------- --------- ------
The name of any broker, dealer or bank with whom I maintain an
account in which my securities are held for my direct or indirect benefit are as
follows:
THIS REPORT (I) EXCLUDES TRANSACTIONS WITH RESPECT TO WHICH I
HAD NO DIRECT OR INDIRECT INFLUENCE OR CONTROL, (II) EXCLUDES OTHER TRANSACTIONS
NOT REQUIRED TO BE REPORTED, AND (III) IS NOT AN ADMISSION THAT I HAVE OR HAD
ANY DIRECT OR INDIRECT BENEFICIAL OWNERSHIP IN THE SECURITIES LISTED ABOVE.
Date: Signature:
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Print Name:
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EXHIBIT B
GOVERNOR FUNDS
SECURITIES TRANSACTION REPORT
For the Calendar Quarter Ended _______________________
(month/day/year)
To: BISYS Fund Services Ohio, Inc., as Administrator of the above listed Fund
During the quarter referred to above, the following
transactions were effected in securities of which I had, or by reason of such
transactions acquired, direct or indirect beneficial ownership, and which are
required to be reported pursuant to the Code of Ethics of the Trust:
<TABLE>
<CAPTION>
Interest Rate Nature of
and Maturity Transaction Broker/Dealer or
Date of Number Principal Date (if (Purchase, Bank Through
Security Transaction of Shares Amount Applicable) Sale, Other) Price Whom Effected
-------- ----------- --------- -------- -------------- ------------ ----- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
For each Access Person of the Trust, other than a trustee who is not an
"interested person" (as defined in the 1940 Act), provide the following
information with respect to any account established by you during the quarter
referred to above in which securities were held during the quarter for your
direct or indirect benefit:
1. The name of the broker, dealer or bank with whom you
established the account:
2. The date the account was established:
THIS REPORT (I) EXCLUDES TRANSACTIONS WITH RESPECT TO WHICH I
HAD NO DIRECT OR INDIRECT INFLUENCE OR CONTROL, (II) EXCLUDES OTHER TRANSACTIONS
NOT REQUIRED TO BE REPORTED, AND (III) IS NOT AN ADMISSION THAT I HAVE OR HAD
ANY DIRECT OR INDIRECT BENEFICIAL OWNERSHIP IN THE SECURITIES LISTED ABOVE.
Date: Signature:
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Print Name:
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EXHIBIT C
GOVERNOR FUNDS
ANNUAL CERTIFICATE
Pursuant to the requirements of the Code of Ethics of Governor
Funds, the undersigned hereby certifies as follows:
1. I have read the Trust's Code of Ethics.
2. I understand the Code of Ethics and acknowledge that
I am subject to it.
3. Since the date of the last Annual Certificate (if
any) given pursuant to the Code of Ethics, I have
reported all personal securities transactions and
provided any securities holding reports required to
be reported under the requirements of the Code of
Ethics.
Date: --------------------------------------
Print Name
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Signature
