EXHIBIT (p)(ii)
METAMARKETS INVESTMENTS LLC
POLICY AND PROCEDURES
DESIGNED TO DETECT AND PREVENT INSIDER TRADING AND TO COMPLY
WITH RULE 17J-1 OF THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED
A. POLICY STATEMENT ON INSIDER TRADING
MetaMarkets Investments LLC ("MetaMarkets") forbids any officer,
managing member, person with trading authority or employee (each, a "Covered
Person") from trading, either personally or on behalf of others, including
registered investment companies, private investment funds and private accounts
advised by MetaMarkets, on material nonpublic information or communicating
material nonpublic information to others in violation of the law. This conduct
is frequently referred to as "insider trading." MetaMarkets' policy extends to
activities within and outside each Covered Person's duties at MetaMarkets. Each
Covered Person must read (and acknowledge that he or she has done so on the form
annexed hereto as Appendix A) and must retain this policy statement. Any
questions regarding MetaMarkets' policy and procedures should be referred to
Susan Smith at (614) 985-3088 or any person who, in the future, may be
designated as MetaMarkets' compliance officer (the "Compliance Officer").
The term "insider trading" is not defined in the Federal securities
laws, but generally is used to refer to the use of material nonpublic
information to trade in securities (whether or not one is an "insider") or to
communications of material nonpublic information to others.
While the law concerning insider trading is not static, it is
generally understood that the law prohibits:
1) trading by an insider while in possession of material nonpublic
information;
2) trading by a non-insider while in possession of material nonpublic
information, where the information either was disclosed to the
non-insider in violation of an insider's duty to keep it confidential
or was misappropriated; or
3) communicating material nonpublic information to others.
The elements of insider trading and the penalties for such unlawful
conduct are discussed below. If, after reviewing this policy statement, you have
any questions you should consult the Compliance Officer.
1. WHO IS AN INSIDER?
The concept of "insider" is broad. It includes generally officers,
directors and employees of a company. In addition, a person can become a
"temporary insider" if he or she enters into a special confidential relationship
in the conduct of a company's affairs and, as a result, is given access to
information solely for the company's purposes. A temporary insider can include,
among others, a company's attorneys, accountants, consultants, bank lending
officers, and certain employees of such organizations. In addition, although it
is unlikely to occur in the normal conduct of its business, MetaMarkets or a
Covered Person could become a temporary insider of a company it advises or for
which it performs other services. According to the Supreme Court, the company
must expect an outsider to keep the disclosed nonpublic information confidential
and the relationship must at least imply such a duty before the outsider will be
considered an insider.
2. WHAT IS MATERIAL INFORMATION?
Trading on inside information is not a basis for liability unless the
information is material. "Material information" is defined generally as
information for which there is a substantial likelihood that a reasonable
investor would consider it important in making his or her investment decisions,
or information that is reasonably certain to have a substantial effect on the
price of a company's securities. Information that insiders should consider
material includes, but is not limited to, dividend changes, earnings estimates,
changes in previously released earnings estimates, significant merger or
acquisition proposals or agreements, major litigation problems, antitrust
charges, labor disputes, pending large commercial or government contracts, major
new products or services and significant shifts in operating or financial
circumstances (such as major write-offs and strikes at major plants) and
extraordinary management developments (such as key personnel changes).
Material information does not have to relate to a company's business.
For example, in one case, the Supreme Court considered as material certain
information about the contents of a forthcoming newspaper column that was
expected to affect the market price of a security. In that case, a WALL STREET
JOURNAL reporter was found criminally liable for disclosing to others the dates
that reports on various companies would appear in the JOURNAL and the
favorableness of those reports.
3. WHAT IS NONPUBLIC INFORMATION?
Information is nonpublic until it has been effectively communicated to
the market place. One must be able to point to some fact to show that the
information is generally public. For example, information found in a report
filed with the SEC, or appearing in DOW JONES, REUTERS ECONOMIC SERVICES, THE
WALL STREET JOURNAL or other publications of general circulation would be
considered public.
4. WHAT ARE SOME OF THE PENALTIES FOR INSIDER TRADING?
Penalties for trading on or communicating material nonpublic
information are severe, both for individuals involved in such unlawful conduct
and their employers. A person can be subject to some or all of the penalties
below even if he or she does not personally benefit from the violation.
Penalties include:
o civil injunctions
o treble damages
o disgorgement of profits
o jail sentences
o fines for the person who committed the violation of up to
three times the profit gained or loss avoided, whether or not
the person actually benefited, and o fines for the employer or
other controlling person of up to the greater of $1,000,000 or
three times the amount of the profit gained or loss avoided.
In addition, any violation of this policy statement can be expected to
result in serious sanctions by MetaMarkets, potentially including dismissal of
the persons involved.
* * *
B. PROCEDURES TO DETECT AND PREVENT INSIDER TRADING
The following procedures have been established to aid Covered Persons
in avoiding insider trading, and to aid MetaMarkets in preventing, detecting and
imposing sanctions against individuals for insider trading. Each Covered Person
must follow these procedures or risk serious sanctions, including dismissal,
substantial personal liability and criminal penalties.
1. IDENTIFYING INSIDE INFORMATION
Before trading for yourself or others, including registered investment
companies, private investment funds or private accounts advised by MetaMarkets,
in the securities of a company about which you may have potential inside
information, ask yourself the following questions:
i. Is the information material? Is this information that an investor
would consider important in making his or her investment
decisions? Is this information that would substantially affect
the market price of the securities if disclosed?
ii. Is the information nonpublic? To whom has this information been
provided? Has the information been effectively communicated to
the marketplace by appearing in publications of general
circulation? Is the information already available to a
significant number of other traders in the market?
If after consideration of the foregoing you believe that the
information is material and nonpublic, or if you have questions as to whether
the information is material and nonpublic, you should take the following steps:
i. Report the matter immediately to the Compliance Officer.
ii. Do not purchase or sell the securities on behalf of yourself or
others, including registered investment companies, private
investment funds or private accounts advised by MetaMarkets.
iiii. Do not communicate the information within or outside of
MetaMarkets other than to the Compliance Officer.
2. PERSONAL SECURITIES TRADING
Each Covered Person who is an Access Person (as defined below) must
obtain clearance from the Compliance Officer before engaging in any securities
transaction1 in which the person, the person's family (including a spouse, minor
children and adults living in the same household as the Access Person), or
trusts of which the person is a trustee or in which he or she has a beneficial
interest are parties. Each Access Person must provide the Compliance Officer
with a written description of the proposed transaction in the form of Appendix
B, and the Compliance Officer shall notify the person promptly of clearance or
denial of clearance to trade. Notification of approval or denial to trade may be
verbally given, but the Compliance Officer will initial and date the written
description of the proposed transaction to confirm his/her approval, a copy of
which shall be kept in MetaMarkets' records.
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1 No preclearance or reporting is required in respect of direct
obligations of the United States Government, bankers' acceptances, bank
certificates of deposit, commercial paper, high quality short-term debt
instruments, repurchase agreements and shares of registered open-end
investment companies. "High quality short-term debt instruments" means
any instrument that has 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.
<PAGE>
An "Access Person" is each managing member, officer or "advisory
person" of MetaMarkets. An "advisory person" is any Covered Person of
MetaMarkets or of a company in a control relationship to MetaMarkets 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 on behalf of
MetaMarkets.com Funds or any other registered investment company advised by
MetaMarkets (collectively, the "Fund"), or whose functions relate to the making
of any recommendations with respect to such purchases or sales, and any natural
person in a control relationship to MetaMarkets who obtains information
concerning recommendations made to the Fund with regard to the purchase or sale
of a security by the Fund.
Each Covered Person must comply with the reporting requirements of
Section D.1(a) and D.1(b) below as if such person was an Access Person. The
Compliance Officer shall report all violations of this Section B.2 to
MetaMarkets' managing members and to the Fund's Board as required by Section
D.4.
3. RESTRICTING ACCESS TO MATERIAL NONPUBLIC INFORMATION
Information in your possession that you identify as material and
nonpublic may not be communicated to anyone, including any person within
MetaMarkets, except as provided in Paragraph 1 above. In addition, care should
be taken to keep the information secure. For example, memos, reports,
correspondence or files containing the information should be restricted.
4. RESOLVING INSIDER TRADING ISSUES
If, after consideration of the items set forth in Paragraph 1, you
have questions as to whether information is material or nonpublic or the
propriety of any action, or about the foregoing procedures, please contact the
Compliance Officer to discuss your questions before trading or communicating the
information to anyone.
C. REQUIREMENTS REGARDING INVESTMENT COMPANIES
Rule 17j-1(b) under the Investment Company Act of 1940, as amended
(the "Act"), makes it unlawful for any Covered Persons considered "Access
Persons" with respect to the Fund, in connection with the purchase or sale by
such person of a security "held or to be acquired" by the Fund:
(1) To employ any device, scheme or artifice to defraud the Fund;
(2) To make any untrue statement of a material fact to the Fund or
omit to state a material fact necessary in order to make the
statements made to the Fund, in light of the circumstances under
which they are made, not misleading;
(3) To engage in any act, practice, or course of business that
operates or would operate as a fraud or deceit on the Fund; or
(4) To engage in any manipulative practice with respect to the Fund.
A security is "held or to be acquired" by the Fund if within the most
recent 15 days it (i) is or has been held by the Fund, or (ii) is being or has
been considered by the Fund or MetaMarkets for purchase by the Fund. A security
"held or to be acquired" by the Fund also includes any option to purchase or
sell, and any security convertible into or exchangeable for, a security
described in the preceding sentence. A purchase or sale of a security includes,
among other things, the writing of an option to purchase or sell a security.
It is MetaMarkets' policy that no Access Person shall engage in any
act, practice or course of conduct that would violate the provisions of Rule
17j-1(b) set forth above.
D. PROCEDURES TO MONITOR COMPLIANCE WITH REQUIREMENTS REGARDING
INVESTMENT COMPANIES
1. To provide MetaMarkets with information to enable it to determine
with reasonable assurance whether the provisions of Rule 17j-1(b) are being
observed:
(a) Within 10 days of receiving this Policy, all Access Persons must
submit to the Compliance Officer a statement of all securities in
which such Access Person has any direct or indirect beneficial
ownership.2 This statement must include (i) the title, number of
shares and principal amount of each security, (ii) the name of
any broker, dealer or bank with whom the Access Person maintained
an account in which any securities were held for the direct or
indirect benefit of such Access Person as of the date the person
became an Access Person and (iii) the date of submission by the
Access Person. This statement also must be submitted by all new
employees who are Access Persons upon their employment by
MetaMarkets.
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2 "Beneficial ownership" of a security is determined in the same manner
as it would be for purposes of Section 16 of the Securities Exchange
Act of 1934, and Rule 16a-1 thereunder, except that such determination
should apply to all securities. Generally, you should consider yourself
the beneficial owner of securities held by your spouse, your minor
children, a relative who shares your home, or other persons if, by
reason of any contract, understanding, relationship, agreement or other
arrangement, you obtain from such securities benefits substantially
equivalent to those of ownership. You should also consider yourself the
beneficial owner of securities if you can vest or revest title in
yourself, now or in the future. Any report by a Covered Person required
under this Code may contain a statement that the report will not be
construed as an admission that the person making the report has any
direct or indirect beneficial ownership in the security to which the
report relates.
<PAGE>
(b) When an Access Person opens a brokerage account, or whenever an
Access Person with an existing brokerage account becomes a
MetaMarkets employee, such Access Person is required to send
written notification of such fact to the Compliance Officer
BEFORE engaging in any personal securities transactions through
such account. A letter in the form annexed hereto as Appendix C
will be sent to the broker-dealer involved, allowing such Access
Person to maintain the account and directing that duplicate
confirmations of transactions in the account be sent to the
Compliance Officer.
(c) Access Persons shall pre-clear all securities transactions as
provided in Section B.2.
(d) In connection with any decision by the Compliance Officer to
approve transactions by investment personnel3 acquiring direct or
indirect beneficial ownership in any securities in an initial
public offering or a limited offering (i.e., an offering exempt
from registration under the Securities Act of 1933 pursuant to
Sections 4(2) or 4(6) or Rules 504, 505 or 506 thereunder), the
Compliance Officer will prepare a report of the decision that
takes into account, among other factors, whether the investment
opportunity should be reserved for the Fund and its shareholders,
and whether the opportunity is being offered to an individual by
virtue of his or her position with MetaMarkets or the Fund. Any
investment personnel receiving approval from the Compliance
Officer to acquire securities in an initial public offering or a
limited offering must disclose that investment when they
participate in the Fund's subsequent consideration of an
investment in such issuer and any decision on behalf of the Fund
to invest in such issuer will be subject to an independent review
by investment personnel with no personal interest in the issuer.
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3 "Investment personnel" is any employee of MetaMarkets (or of any
company in a control relationship to MetaMarkets) 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 Fund, and any natural person who controls MetaMarkets and who
obtains information concerning recommendations made to the Fund
regarding the purchase or sale of securities by the Fund.
<PAGE>
(e) All investment personnel and any other Access Persons who obtain
information concerning recommendations made to the Fund with
regard to the purchase or sale of a security are prohibited from
engaging in any personal securities transaction on a day the Fund
has a pending "buy" or "sell" order involving the same security
until the Fund's order is executed or withdrawn.
(f) All investment personnel are prohibited from receiving a gift or
other items of more than DE MINIMIS value from any person or
entity that does business with or on behalf of the Fund.
(g) Investment personnel must receive authorization from the
Compliance Officer prior to serving as a board member of any
publicly-traded company. Authorization will be based upon a
determination that the board service would be consistent with the
interests of the Fund and its shareholders. Any investment
personnel serving as a board member of a publicly-traded company
will be excluded from any investment decisions on behalf of the
Fund regarding such company.
(h) Each Access Person shall submit reports in the form attached
hereto as Appendix D to the Compliance Officer, showing all
transactions in securities, in which the person has, or by reason
of such transaction acquires, any direct or indirect "beneficial
ownership." These reports shall be filed no later than 10 days
after the end of each calendar quarter, but need not show
transactions over which such person had no direct or indirect
influence or control. An Access Person need not make a quarterly
transaction report under this Section if the report would
duplicate information contained in broker trade confirmations or
account statements received by the Compliance Officer with
respect to the Access Person in the time period required above,
if all information required to be in the quarterly transaction
report is contained in the broker trade confirmations or account
statements.
(i) Each Access Person shall submit an annual report in the form
attached hereto as Appendix E to the Compliance Officer, showing
as of a date no more than 30 days before the report is submitted
(1) all holdings in securities in which the person had any direct
or indirect "beneficial ownership" and (2) the name of any
broker, dealer or bank with whom the person maintains an account
in which any securities are held for the direct or indirect
benefit of the Access Person.
(j) All Covered Persons are required to certify annually to the
Compliance Officer that they have (i) read and understand the
foregoing procedures and recognize that they are subject to the
terms and conditions hereof, (ii) complied with the applicable
requirements of the foregoing procedures and (iii) disclosed or
reported all personal securities transactions required to be
disclosed or reported pursuant to the foregoing procedures. A
form of certification is annexed hereto as Appendix F.
2. The Compliance Officer shall notify each Access Person and any
other Covered Person who may be required to make reports pursuant to the Code
that such person is subject to its reporting requirements and shall deliver a
copy of the Code to each such person.
3. MetaMarkets will forward to the Director of Compliance of the Fund
copies of this Code, all future amendments and modifications thereto, the names
of all persons who are now or hereafter required to report their securities
transactions pursuant to the Code, and a copy of each report submitted by such
persons.
4. The Compliance Officer shall:
(a) review all reports required to be made by Covered Persons
pursuant to this Code;
(b) submit to the Fund's Board within 30 days after the end of
each calendar quarter a written report listing (i) the names of those
persons who were required to submit reports for the prior quarter
under this Code but failed to and (ii) any reported securities
transaction that occurred during the prior quarter that may have been
inconsistent with the provisions of this Code; and
(c) promptly investigate any securities transaction listed
pursuant to subparagraph (b)(ii) above and submit periodic status
reports with respect to each such investigation to the Fund's Board.
5. At least once a year, MetaMarkets shall provide the Fund's Board
with a written report that (i) describes issues that arose during the previous
year under this Code, including information about material Code violations and
sanctions imposed in response to these material violations, and (ii) certifies
to the Fund's Board that it has adopted procedures reasonably necessary to
prevent Access Persons from violating the Code. Copies of these reports must be
preserved with MetaMarkets' records for the period required by Rule 17j-1.
6. This Code, a copy of each report by a Covered Person (which term
includes Access Persons), a record of all persons, currently or within the past
five years, who are or were required to make reports under the Code, or who are
or were responsible for reviewing these reports, a record of any decision, and
the reasons supporting the decision, a copy of each report required by Section
D.1(d), and a record of any Code violation and any action taken as a result of
the violation must be preserved with MetaMarkets' records for the period
required by Rule 17j-1.
Adopted: March 27, 2000
Revised: July 13, 2000
<PAGE>
APPENDIX A
ACKNOWLEDGMENT
I have read and understand the foregoing procedures and will comply in
all respects with them.
_______________________ ________________________
NAME DATE
<PAGE>
APPENDIX B
PERSONAL INVESTMENT REPORT
Date of Report:________________
To: Compliance Officer
From:__________________________________________________________
Date of Transaction:___________________________________________
Name of Security: _____________________________________________
Interest Rate and Maturity Date (As Applicable):______________________________
Number of Shares: ____________________________________________________________
Principal Amount ($):_________________________________________________________
Price Per Share ($): _________________________________________________________
Purchase:____________ Sale:__________ Other: ______________________________
Name of Broker, Dealer or Bank With or Through Which the Transaction Was
Effected:
_______________________________________
Comments:
Signature:__________________
Approved By: _______________________
<PAGE>
APPENDIX C
Date
Contact
Broker/Dealer
Address
Re: Access Person's Name
Dear ___________________ :
We have been informed that ________________________ , [state title] of
MetaMarkets Investments LLC is maintaining an account with ___________________.
This letter will serve to inform you that we do not object to the maintenance of
this account, provided that you promptly send duplicate copies of all
confirmations and statements to the undersigned marked "Personal and
Confidential."
Sincerely yours,
<PAGE>
APPENDIX D
QUARTERLY PERSONAL INVESTMENT REPORT
Date of Report: ____________________
To: Compliance Officer
From: _______________________________________
Date of Transaction:_________________________
Name of Security:____________________________
Interest Rate and Maturity Date (As Applicable):______________________________
Number of Shares: ___________________________________________________________
Principal Amount ($):________________________________________________________
Price Per Share ($): ________________________________________________________
Purchase: _____________ Sale: __________ Other: _______________________
Name of Broker, Dealer or Bank With or Through Which the Transaction Was
Effected:
_____________________________
Comments:
Signature:__________________
Approved By: ___________________________
<PAGE>
APPENDIX E
ANNUAL PERSONAL HOLDINGS REPORT*
Date of Report: ___________________________________
To: Compliance Officer
From: __________________________________________
Name of Security Number of Shares Principal Amount($)
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Names of Brokers, Dealers or Banks With Whom You Maintain an Account in Which
Any Securities Are Held for Your Direct or Indirect Benefit:
Signature: ___________________________
Approved By:__________________________
---------------------
* Information must be current as of a date no more than 30 days before this
report is submitted.
<PAGE>
APPENDIX F
ANNUAL CERTIFICATION OF COMPLIANCE
WITH THE POLICIES AND PROCEDURES DESIGNED TO
DETECT AND PREVENT INSIDER TRADING AND TO COMPLY
WITH RULE 17J-1 OF THE INVESTMENT COMPANY ACT OF 1940,
AS AMENDED (THE "CODE")
I certify that:
1. I have read and understand the Code and recognize that I am subject to its
terms and conditions.
2. During the past year, I have complied with the Code's procedures.
3. During the past year, I have disclosed or reported all personal securities
transactions required to be disclosed or reported pursuant to the Code's
procedures.
__________________________
Signature
Dated:_______________________ ___________________________
Print Name
