Exhibit (p)(1)
THE COMMUNITY REINVESTMENT ACT
QUALIFIED INVESTMENT FUND
CODE OF ETHICS
I. Legal Requirement.
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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 Community
Reinvestment Act Qualified Investment Fund (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.
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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 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.
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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
advisor 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 director, officer, partner,
employee or controlling person of the Trust's investment advisor,
servicing agent, custodian 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 advisor 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.
(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.
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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.
I. "De Minimis Security" means securities issued by any company included
in the Standard and Poor's 500 Stock Index and in an amount less than
$10,000.
IV. Policies of the Trust Regarding Personal Securities Transactions.
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A. General Policy.
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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.
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1. Restrictions on Personal Securities Transactions By Access
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Persons Other Than Restricted Trustees and Restricted Officers.
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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 servicing agent PRIOR
to effecting such security transaction.
A written authorization for such security transaction will
be provided by the servicing agent's Compliance Officer to
the person receiving the authorization (if granted) and to
the Trust's servicing agent to memorialize the oral
authorization that was 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
servicing agent'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 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
advisor that the same Covered Security is being considered
for purchase or sale for 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. De Minimis Securities;
iii. Securities purchased or sold in any account over which
the Access Person has no direct or indirect influence
or control.
iv. Securities purchased or sold in a transaction which is
non-volitional on the part of either the Access Person
or the Trust.
v. Securities acquired as a part of an automatic dividend
reinvestment plan.
vi. 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.
vii. Securities which the Trust's investment portfolio is
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
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Trustees and Restricted Officers.
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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
advisor that the same Covered Security is being considered
for purchase or sale for any portfolio of the Trust.
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V. Procedures.
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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 an Initial Holdings Report in
the form attached hereto as Exhibit A that lists all Covered
Securities beneficially owned1 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 servicing agent, on a
timely basis,
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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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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 servicing agent, 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 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 servicing agent 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
servicing agent, 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 servicing agent 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.
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2 See footnote 1 above.
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H. The servicing agent 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.
J. The Trust's investment advisor 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 servicing agent 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 advisor 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
advisor'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 servicing agent
(on behalf of the Trust), investment advisor and principal
underwriter of the Trust shall provide a written report to the
Trust's Board of Trustees stating:
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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 advisor or principal underwriter; and
b. all disciplinary actions3 taken in response to such
violations.
L. At least once a year, the Trust's servicing agent shall provide
to the Board with respect to this Code of Ethics and the Trust's
investment advisor 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, 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 advisor 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
servicing agent, investment advisor 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.
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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.
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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, or requiring the disgorgement of profits.
The Board of Trustees of
The Community Reinvestment
Act Qualified Investment Fund
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EXHIBIT A
THE COMMUNITY REINVESTMENT ACT
QUALIFIED INVESTMENT FUND
(THE "TRUST")
HOLDINGS REPORT
For the Year/Period Ended _______________________
(month/day/year)
[ ] Check Here if this is an Initial Holdings Report
To: Declaration Service Company, as Servicing Agent of the Trust
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
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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
THE COMMUNITY REINVESTMENT ACT
QUALIFIED INVESTMENT FUND
(THE "TRUST")
SECURITIES TRANSACTION REPORT
For the Calendar Quarter Ended _______________________
(month/day/year)
To: Declaration Service Company, as Servicing Agent of the Trust
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>
Nature of Broker/Dealer
Interest Rate Transaction or Bank
Date of Number of Principal and Maturity (Purchase, Through Whom
Security Transaction Shares Amount Date (if applicable Sale, Other) Price Effected
-------- ----------- ------ ------- ------------------- ------------ ---- --------
<S> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
During the quarter referred to above, I established the following accounts
in which securities were held during the quarter for my direct or indirect
benefit:
1. The name of the broker, dealer or bank with whom I 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
THE COMMUNITY REINVESTMENT ACT
QUALIFIED INVESTMENT FUND
(THE "TRUST")
ANNUAL CERTIFICATE
Pursuant to the requirements of the Code of Ethics of the Trust, 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
___________________________________
Signature
