Exhibit (p)(3)
MORGAN KEEGAN SELECT FUND, INC.
MORGAN ASSET MANAGEMENT, INC. and MORGAN KEEGAN & COMPANY, INC.
Amended and Restated Code of Ethics
I. DUTY OF CARE AND LOYALTY
This Code of Ethics ("Code") is based on the principle that certain
officers, directors, and employees of Morgan Keegan Select Fund, Inc. ("Fund"),
Morgan Asset Management, Inc. ("MAM") and Morgan Keegan & Company, Inc. ("Morgan
Keegan"), owe a fiduciary duty to, among others, the clients of MAM, Morgan
Keegan and the shareholders of the Fund. The Code applies to every director,
officer, general partner, Portfolio Manager, or Advisory Person of the Fund,
MAM, and Morgan Keegan as described below and required by SEC Rule 17j-1(a)(1)
("Access Persons"). All such Access Persons must avoid activities, interests,
relationships or conflicts of interest that might interfere with making
decisions in the best interests of the Fund and its shareholders.
All Access Persons must at all times:
1. Place the interests of the Fund first. In other words, you must
scrupulously avoid conflicts of interest in which you serve your own
personal interests to the detriment of the interests of the Fund and
its shareholders.
2. Conduct all personal Securities Transactions in Accounts in full
compliance with this Code.
3. Avoid taking inappropriate advantage of your position. The receipt
of investment opportunities, perquisites, or gifts from persons
seeking business or undue influence with the Fund, MAM, Morgan
Keegan, or its clients could call into question the exercise of your
independent judgment in dealing with conflicts of interest.
Questionable situations should be resolved in favor of the Fund and
technical compliance with the Code's procedures will not necessarily insulate
from scrutiny any trades or other situations that indicate an abuse of your
duties.
II. IMPLEMENTATION OF THE CODE
The Compliance Department of Morgan Keegan will be responsible for
implementation of this Code, including the issuance of procedures, forms and
guidelines as deemed necessary for such implementation. Any questions concerning
this Code should be directed to the Compliance Department.
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III. ACCESS PERSON REPORTING REQUIREMENTS
In addition to the Trade Reporting Requirements described in Section VII
of this Code, every Access Person of the Fund must provide to the Compliance
Department personal holdings disclosure reports as described below. Each report
must include the date that the report was submitted to the Compliance
Department. The Compliance Department will identify all Access Persons who are
required to make reports under Section III of this Code and will inform those
persons of their reporting obligations. A list of all persons required to make
reports under this section will be maintained as described in Section XIV of
this Code.
A. INITIAL HOLDINGS REPORT.
No later than 10 days after the person becomes an Access Person,
each Access Person, except for Independent Fund Directors, must submit an
Initial Holdings Report including the title, number of shares, and
principal amount of each Covered Security in which the Access Person had
any direct or indirect beneficial ownership when the person became an
Access Person. In addition, with respect to brokerage accounts, the
Initial Holdings Report must include the name of any broker, dealer, or
bank with whom the Access Person maintained an account in which Securities
were held for the direct or indirect benefit of the Access Person as of
the date the person became an Access Person.
B. QUARTERLY HOLDINGS REPORT.
No later than 10 days after the end of a calendar quarter, each
Access Person must submit a Quarterly Holdings Report which contains the
following:
1. TRANSACTION SUMMARIES. A summary of all transactions
conducted during the quarter in Covered Securities in which
the Access Person had any direct or beneficial ownership
and indicating the status of any and all outside
directorships. The Transaction Summaries must include:
a. The nature and date of the transaction (i.e.
purchase, sale, or any other type of acquisition or
disposition);
b. The title, interest rate, maturity date, number of
shares, and principal amount of each Covered Security
involved;
c. The name of the broker, dealer or bank with or
through which the transaction was effected; and
d. The price of the Covered Security at which the
transaction was effected.
2. ACCOUNTS REPORT. In addition, with respect to brokerage
accounts, the Quarterly Holdings Report must include the name
of any broker, dealer, or bank with whom an account was
established during the quarter in which Securities were held
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for the direct or indirect benefit of the Access Person and
the date such account was established.
Independent Fund Directors are not required to submit Quarterly
Holdings Reports as required by this section unless the Independent Fund
Director know or, in the course of fulfilling his or her official duties
as a Fund director, should have known, that during the fifteen day period
immediately before or after the Independent Fund Director's transaction in
a Covered Security, the Fund purchased or sold the Covered Security, or
the Fund or its investment adviser considered purchasing or selling the
Covered Security.
In the event that an Access Person is required by this section to
file a Quarterly Holdings Report for a period in which he or she cannot
identify any personal holdings or transactions which would require
reporting, the Access Person will instead file a signed Certification of
Exemption, certifying that he or she is not required to report any
holdings or transactions in the said period.
C. ANNUAL HOLDINGS REPORT.
According to a schedule adopted by the Compliance Department, each
Access Person must submit an Annual Holdings Report which is current as of
a date no more than 30 days before the report is submitted. The Annual
Holdings Report must include the following:
1. HOLDINGS SUMMARY. The title, number of shares, and
principal amount of each Covered Security in which the
Access Person had any direct or indirect beneficial
ownership. In addition, with respect to brokerage
accounts, the Annual Holdings Report must include the name
of any broker, dealer, or bank with whom the Access Person
maintained an account in which Securities were held for the
direct or indirect benefit of the Access Person.
Independent Fund Directors do not need to submit a Holdings
Summary.
2. ANNUAL CERTIFICATION OF COMPLIANCE. Each Annual Holdings
Report will also include an Annual Certification of
Compliance, signed by the Access Person, in which the
Access Person certifies that he or she has read and
understands this Code, has complied with the requirements
of this Code, and has reported all Securities Transactions
in Accounts required to be disclosed or reported pursuant
to the requirements of this Code.
IV. PRE-CLEARANCE REQUIREMENTS
All Securities Transactions in Accounts held by Advisory Persons or their
Immediate Families are subject to prior authorization by the Compliance
Department subject to the limitations and exceptions set forth below. Advisory
Persons, except the Portfolio Managers, can seek approval by submitting, prior
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to the time the order is entered, a request to the Portfolio Managers.(1) The
Portfolio Managers should submit their requests to the Compliance Department.
V. PROHIBITED TRANSACTIONS
All Advisory Persons and their Immediate Families are prohibited from
engaging in any of the following Securities Transactions in Accounts, although
some transactions may be engaged in with prior approval. All Advisory Persons,
except the Portfolio Managers, seeking prior approval should submit such
requests to the Portfolio Managers. The Portfolio Managers should submit their
requests for prior approval to the Compliance Department.
A. Any transaction in a Covered Security while in possession of
material nonpublic information regarding the Covered Security or the
issuer of the Covered Security. This prohibition applies to all
Access Persons;
B. Transactions intended to raise, lower, or maintain the price of any
Covered Security or to create a false appearance of active trading.
This prohibition applies to all Access Persons;
C. Purchases or sales of Covered Securities, or writing an option to
purchase or sell a Covered Security, at a time when the Person has
knowledge of an intention to purchase or sell that Covered Security
(or an Equivalent Security) on behalf of the Fund. This prohibition
applies whether the Securities Transaction is in the same (two
purchases) or the opposite (a purchase and sale) direction of the
transaction of the Fund. This prohibition applies to all Access
Persons;
D. Any purchase or sale of Covered Securities, including writing an
option to purchase or sell a Covered Security, on any day during
which the Fund has a pending "buy" or "sell" order in the same
Covered Security (or Equivalent Security) until that order is
executed or withdrawn, unless an explanation of why the trade is
necessary is provided and provision is made for the Fund trade to
take precedence, in terms of price, over the trade in question.
Prior to approving a trade, the Compliance Department shall
determine whether there is an open order for the Covered Security by
the Fund;
E. Any acquisition of Securities in an Initial Public Offering (other
than a new offering of a registered open-end investment company). A
record of any approval granted under this paragraph and the reasons
for such approval will be maintained as described in Section XIV of
this Code;
F. Any acquisition of Covered Securities in a Limited Offering or
private placement. The Compliance Department may give permission
after considering, among other factors, whether the investment
opportunity should be reserved for the Fund and whether the
opportunity is being offered to the Advisory Person by virtue of his
or her position. In the event any Advisory Person is authorized to
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(1) Each Portfolio Manager is aware of all equities or bonds that the
portfolio he manages holds.
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acquire and has acquired Covered Securities in a Limited Offering,
he or she is required to disclose that investment to the Compliance
Department if the investment plays a part in any subsequent
consideration of an investment in the issuer by the Fund. The
decision to purchase Securities of the issuer by the Fund must be
authorized by the Compliance Department. A record of any approval
granted under this paragraph and the reasons for such approval will
be maintained as described in Section XIV of this Code;
G. Purchases of a Portfolio Security within 60 days of a sale of the
Portfolio Security, and sales of a Portfolio Security within 60 days
of a purchase of the Portfolio Security absent an agreement to give
up all profits of the transaction; and
H. Purchases or sales of Covered Securities, or writing an option to
purchase or sell a Covered Security, within seven calendar days of a
purchase or sale of the same Covered Securities (or Equivalent
Securities) by the Fund.
VI. EXEMPTIONS
The following Securities Transactions are exempt from the preclearance
requirements set forth in Section IV and the prohibitions set forth in Section
V, except as further explained below:
A. MUTUAL FUNDS. Securities issued by any registered open-end
investment companies (including but not limited to the Fund);
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 trustee 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);
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. EXERCISE OF 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;
E. COMMODITIES, FUTURES AND OPTIONS ON FUTURES. Commodities, futures
(including currency futures) and options on futures are not subject
to preclearance, nor to the seven-day blackout, 60-day profit
disgorgement, and prohibited transaction provisions of Section V,
but are subject to transaction reporting;
F. GIFTS AND BEQUESTS. Receipt of Securities as gifts and bequests and
the making of personal or charitable gifts and bequests of
Securities; and
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G. MISCELLANEOUS. Any transaction in the following: (1) bankers
acceptances, (2) bank certificates of deposits, (3) commercial
paper, (4) repurchase agreements, (5) Securities that are direct
obligations of the U.S. Government, (6) other Securities which may
from time to time be exempted in writing by the Securities and
Exchange Commission.
VII. TRADE REPORTING REQUIREMENTS
All Access Persons and their Immediate Families must arrange for the
Compliance Department to receive directly from the broker, dealer, or bank in
question, duplicate copies of each confirmation and periodic statements for each
Securities Transaction in each Account. If any such Access Person is unable to
arrange for duplicate confirmations and statements to be sent, he or she must
immediately notify the Compliance Department. This provision shall not apply to
Independent Fund Directors.
VIII. CONFIDENTIALITY; CONFLICT OF INTEREST
ALL ACCESS PERSONS ARE PROHIBITED FROM REVEALING (except to the extent
necessary in the normal course of the fulfillment of required duties on behalf
of the Fund), OR ACTING UPON FOR PERSONAL BENEFIT, ANY INFORMATION RELATING TO
THE INVESTMENT INTENTIONS, ACTIVITIES OR PORTFOLIO HOLDINGS OF THE FUND.
ALL ACCESS PERSONS ARE PROHIBITED FROM TAKING PERSONAL ADVANTAGE OF ANY
INVESTMENT OPPORTUNITY PROPERLY BELONGING TO THE FUND, TO MAM OR TO MORGAN
KEEGAN.
IX. GIFTS
A. ACCEPTING GIFTS
On occasion, because of their position with MAM, Morgan Keegan, or
the Fund, the Portfolio Manager or other Advisory Persons may be offered,
or may receive without notice, gifts from clients, outside vendors, or
other persons who do business or are seeking to do business with MAM,
Morgan Keegan or the Fund. Solicitation of such gifts or gratuities is
unprofessional and is strictly prohibited. This provision shall not apply
to gifts received from immediate family members who give any such gifts in
that capacity.
Acceptance of extraordinary or extravagant gifts is not permissible.
Any such gifts must be declined or returned in order to protect the
reputation and integrity of MAM, Morgan Keegan and the Fund. Gifts of a
nominal value (I.E., gifts with a reasonable value of no more $100 a year)
and customary business lunches, dinners, entertainment (E.G., sporting
events), and promotional items (E.G., pens, mugs, T-shirts) may be
accepted.
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If any gift is received that might be prohibited under this Code,
the Portfolio Manager or Advisory Person involved must immediately inform
the Compliance Department.
B. GIVING GIFTS
The Portfolio Manager and other Advisory Persons may not give any
gift with a value in excess of $100 per year to persons associated with
securities or financial organizations, other member organization,
including exchanges, commodity firms, news media, or clients of Morgan
Keegan or MAM. This provision shall not apply to gifts to immediate family
members given in that capacity.
X. UNDUE INFLUENCE
NO PERSON MAY CAUSE OR ATTEMPT TO CAUSE THE FUND TO PURCHASE, SELL OR HOLD
ANY SECURITY IN A MANNER CALCULATED TO CREATE ANY PERSONAL BENEFIT TO SUCH
PERSON.
If the Portfolio Manager or any member of his or her Immediate Family
stands to materially benefit from an investment decision for the Fund that he or
she is recommending or participating in, the Portfolio Manager must disclose
that interest to the Compliance Department. Based on the information given, a
decision will be made on whether or not to restrict the Portfolio Manager's
participation in causing the Fund to purchase or sell a Covered Security in
which he or she has an interest.
The Portfolio Manager must disclose to the Compliance Department any
Beneficial Interest that he or she, or his or her Immediate Family, has in that
Covered Security or an Equivalent Security, or in the issuer thereof, where the
decision could create a material benefit to the Portfolio Manager, or to his or
her Immediate Family, or create the appearance of impropriety. The Compliance
Department will determine whether or not the Portfolio Manager will be
restricted in making investment decisions.
XI. SERVICE AS A DIRECTOR
Neither the Portfolio Manager nor any other Advisory Person may serve on
the board of directors of a publicly traded company not affiliated with MAM,
absent prior authorization from the Compliance Department. This provision shall
not apply to Independent Fund Directors.
XII. CODE OF ETHICS REVIEW COMMITTEE
A. INVESTIGATING VIOLATIONS OF THE CODE
The Code of Ethics Review Committee is responsible for investigating
any reported or suspected violation of the Code and imposing sanctions.
Any such investigation may be delegated to the Compliance Department.
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B. ANNUAL REPORTS
The Code of Ethics Review Committee will review the Code at least
once a year, in light of legal and business developments and experience in
implementing the Code, and will prepare an annual report to the Fund's
Board of Directors. The report will:
1. Describe any issues arising under this Code since the last
report to the Board of Directors, including but not limited
to, information about material violations of the Code and
sanctions imposed in response to the material violations; and
2. Certify that the Fund, MAM or Morgan Keegan has adopted
procedures reasonably necessary to prevent Access Persons from
violating the Code.
XIII. REMEDIES
A. SANCTIONS
If the Code of Ethics Review Committee determines that any Access
Person has committed a violation of this Code, the Committee may recommend
the imposition of such sanctions, subject to review as set forth below, as
it deems appropriate, including reversal of the transaction(s) in question
and forfeiture of any profit or absorption of any loss derived therefrom,
a letter of censure, or suspension or termination of the employment of the
violator for cause.
B. REVIEW
Whenever the Code of Ethics Review Committee determines that any
Access Person has committed a violation of this Code that merits remedial
action, it will report to the President of MAM information relating to the
investigation of the violation, including any recommended sanctions. The
President of MAM shall have the power to modify or increase the sanction
as he or she deems appropriate. In performing this function, the President
of MAM shall have access to all information considered by the Code of
Ethics Review Committee in relation to the case.
XIV. RECORDKEEPING
A copy of all of the following information, supplied pursuant to this
Code, will be retained at the principal place of business of the Fund for at
least five years after the end of the fiscal year in which the report is
submitted:
A. A copy of the current Code of Ethics, in addition to a copy of any
Code of Ethics in effect at any time within the past five years;
B. A list of all persons, currently or within the last five years, who
are or were required to make Personal Holdings Reports, and the
names of the Compliance Department employees who are or were
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responsible for reviewing those reports (as described in Section III
of this Code);
C. Personal Holdings Reports (including Initial Holdings Reports,
Quarterly Holdings Reports, and Annual Holdings Reports) or
Certifications of Exemption submitted by Access Persons (as
described in Section III);
D. A record of any pre-clearance approval of investments, and the
reasons for such approval (as described in Section IV);
E. A record of any approval granted for acquisition of Securities in an
Initial Public Offering or Limited Offering and the reasons for such
approval (as described in Sections V.E and V.F);
F. Trade Reports submitted by Access Persons (as described in Section
VII); and
G. The Annual Report of the Code of Ethics Review Committee (as
described in Section XII).
All such reports and information will be made available for reasonable
periodic or any other special inspection by the Code of Ethics Review Committee,
the Compliance Department, any party to which any investigation is referred by
any of the foregoing, the Securities and Exchange Commission, any
self-regulatory organization, and any state securities commission.
Amended and Restated August 21, 2000 by the Board of Directors of the Morgan
Keegan Select Fund, Inc.
Enclosures forming part of this Code: Procedures and Definitions Appendix.
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MORGAN KEEGAN SELECT FUND, INC.
CODE OF ETHICS
PROCEDURES AND DEFINITIONS
I. DEFINITIONS
ACCESS PERSON is defined as any director, officer, general partner, or
Advisory Person of the Fund or the Fund's investment adviser.
ADVISORY PERSON is defined as any employee of the Fund who in connection
with his or her regular functions or duties, makes, participates in, or
obtains information regarding the purchase or sale of Covered Securities
by the Fund, or whose functions relate to the making of any
recommendations with respect to purchases or sales, or any person in a
control relationship to the Fund who obtains information concerning
recommendations made to the Fund with regard to the purchase or sale of
Covered Securities by the Fund; and the Portfolio Manager, or any other
person the Compliance Department designates as an Advisory Person..
ACCOUNT is defined as the following Securities accounts: any personal
account; any joint or tenant-in-common account in which the person has an
interest or is a participant; any account for which the person acts as
trustee, executor, or custodian; any account over which the person has
investment discretion or otherwise can exercise control (other than
non-related clients' accounts over which the person has investment
discretion), including the accounts of entities controlled directly or
indirectly by the person; any other account in which the person has a
direct or indirect Beneficial Interest and any account in which an
Immediate Family member has a Beneficial Interest; provided, however that
Account shall not include any Securities Account over which the Person has
no investment discretion and cannot exercise control over any investment
decisions; including any blind trusts.
BENEFICIAL OWNERSHIP/INTEREST means a direct or indirect "pecuniary
interest" (as defined in subparagraph (a)(2) of Rule 16a-1 under the
Securities Exchange Act of 1934) that is held or shared by a person
directly or indirectly, through any contract, arrangement, understanding,
relationship, or otherwise, in a security. The term "pecuniary interest,"
as it is defined under the 1934 Act, is generally understood to mean
having the opportunity to share, directly or indirectly, in any profit or
loss on a transaction in Securities, including but not limited to all
joint accounts, partnerships and trusts. An Access Person is presumed to
have Beneficial Ownership of any family member's account.
COVERED SECURITY is defined as a security as defined in section 2(a)(36)
of the Investment Company Act of 1940 ("1940 Act"), except that it does
not include direct obligations of the United States government, bankers'
acceptances, bank certificates of deposit, commercial paper, high quality
short-term debt instruments, repurchase agreements, or shares issued by
open-end funds.
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EQUIVALENT SECURITY is defined as any Securities issued by the same entity
as the issuer or a security, including options, rights, warrants,
preferred stock, restricted stock, bonds, and other obligations of that
issuer.
IMMEDIATE FAMILY is defined as a person's spouse, a person's minor child,
any adult residing in the same household as the person, any relative
dependant on the person for financial support, and any other person
designated by the Compliance Department.
INDEPENDENT FUND DIRECTOR is defined as a director of the Fund who is not
an "interested person" of the fund within the meaning of Section 2(a)(19)
of 1940 Act, 15.
INITIAL PUBLIC OFFERING is defined as 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.
LIMITED OFFERING is defined as an offering that is exempt from
registration under the Securities Act of 1933 pursuant to section 4(2) or
section 4(6) or 77d(6)) or pursuant to rule 504, rule 505, or rule 506
under the Securities Act of 1933.
PORTFOLIO MANAGER is defined as the person with principal day-to-day
responsibility for managing the Fund's portfolios.
PORTFOLIO SECURITIES is defined as stocks, notes, bonds, debentures, or
other evidences of indebtedness, and all derivative investments, such as
options and warrants, being held by the Fund, or presently being
contemplated for purchase by the Fund.
SECURITIES TRANSACTION is defined as a purchase or sale of Securities, or
writing an option to purchase or sell a Covered Security.
II. OFFICERS, DIRECTORS AND EMPLOYEES OF MORGAN ASSET MANAGEMENT AND MORGAN
KEEGAN, INC. SUBJECT TO THE CODE OF ETHICS
A. Portfolio Managers: James Kelsoe and Elkan Scheidt
B. Advisory Persons: Charles Maxwell, Dan Mann, Ramond Mecherle,
Mary Brown, Karen Scherrod, Thom Weller, Susan Graziosi, Louis
Hale, James Kelsoe and Elkan Scheidt.
C. Access Persons: Allen Morgan, Jr. (President), Joseph Weller
(Treasurer and Assistant Secretary), Charles Maxwell (Secretary
and Assistant Treasurer), William Hughes (President/MAM), the
Advisory Persons, and the Independent Fund Directors (unless
otherwise excepted).
D. Independent Fund Directors: James D. Witherington, Jr., William
J. Mann, and Stillman McFadden
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III. COMPLIANCE PROCEDURES
A. GENERAL
1. The Portfolio Manager shall maintain all records and documents
relating to his/her portfolio management in a secure and
confidential manner.
2. All Access Person Account statements provided pursuant to
Section VII. of the Code shall be compared with completed
transactions of the Fund to monitor for possible violations.
The basis of this comparison shall be the trading activity of
the duplicated confirmations and statements versus a daily
report of securities transactions for the Fund.
3. A signed acknowledgment is to be obtained from the Portfolio
Manager designating any Securities Accounts in which the
Portfolio Manager has no involvement in investment decisions.
4. A signed acknowledgment is to be obtained from the Portfolio
Manager designating which Accounts have investment objectives
that are inconsistent with those of the Fund.
B. ACKNOWLEDGMENT
Signed acknowledgments are to be obtained from the persons listed in
Section II of these Procedures and Definitions as follows:
1. A signed acknowledgment stating that the individual has read,
understood and complied with the Code and that no transactions
have been effected in conflict with the Code is to be obtained
from all Access Persons, including Independent Fund Directors.
2. A signed acknowledgment stating that the individual has no
access to transactions or contemplated transactions prior to
public disclosure is to be obtained from all Access Persons,
including Independent Fund Directors.
3. A signed acknowledgment stating that all personal transactions
have been reported as required is to be obtained from all
Access Persons, except for Independent Fund Directors.
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IV. REVIEW OF ADVERTISING
All advertising materials and sales literature prepared on behalf of the
Fund shall be approved by the marketing department of MAM for
mathematical, factual and technical accuracy and then approved by the
Compliance Department for appropriate disclosure and presentation. The
Compliance Department shall be responsible for all regulatory submissions
and state filings, where applicable.
V. PROXY VOTING PROCEDURES
The Portfolio Manager shall vote all proxies and transmit the voted
proxies to the proxy solicitor and maintain copies of those voted proxies
in a secure location
VI. CODE OF ETHICS REVIEW COMMITTEE
The Code of Ethics Review Committee will be made up of the following
persons:
Mike Henry, Compliance Director
James Kelsoe, Portfolio Manager
Elkan Scheidt, Portfolio Manager
Beth Ducrest, Compliance Administrator
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