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EXHIBIT (P)(9)
ROBERT FLEMING, INC.
CODE OF ETHICS
While affirming its confidence in the integrity and good faith of all
of its employees, officers and directors, Robert Fleming, Inc. ("RFI")
recognizes that certain of its personnel have or may have knowledge of present
or future portfolio transactions and, in certain instances, the power to
influence portfolio transactions made by or for an advisory client, and that if
such individuals engage in personal transactions in securities that are
eligible for investment by a client, these individuals could be in a position
where their personal interests may conflict with the interests of the client.
In view of the foregoing and of the provisions of Rule 17j-1 under the
Investment Company Act of 1940 ("1940 Act") and Rule 204-2 under the Investment
Advisers Act of 1940, RFI has determined to adopt this Code of Ethics ("Code")
to specify and prohibit certain types of transactions deemed to create actual
conflicts of interest, the potential for conflicts, or the appearance of
conflicts, and to establish reporting requirements and enforcement procedures.
This Code is intended to be generally consistent with RFI's Investment
Management Compliance Manual. All persons covered by this Code are expected to
be familiar, and to comply, with both the Code and the Manual.
VIOLATIONS OF THIS CODE MAY RESULT IN LAW ENFORCEMENT ACTION AGAINST
RFI AND ITS EMPLOYEES BY THE SECURITIES AND EXCHANGE COMMISSION ("SEC") OR
STATE REGULATORS AND/OR DISCIPLINARY ACTION BY RFI AGAINST ANY EMPLOYEE
INVOLVED IN THE VIOLATION, INCLUDING TERMINATION OF EMPLOYMENT. ALL EMPLOYEES
SHOULD READ THESE REQUIREMENTS CAREFULLY AND BE SURE THAT THEY ARE UNDERSTOOD.
ANY QUESTIONS CONCERNING EITHER DOCUMENT SHOULD BE REFERRED TO THE COMPLIANCE
OFFICER.
I. STATEMENT OF GENERAL PRINCIPLES
In recognition of the trust and confidence placed in RFI by its
advisory clients and to give effect to RFI's belief that its operations should
be directed to the benefit of all of its advisory clients, including the Funds,
RFI hereby adopts the following general principles to guide the actions of its
Access Persons. The Code will apply primarily to employees who are employed in
one of the following RFI departments: Fleming Asset Management ("FAM USA") and
Risk Arbitrage ("Arbitrage"). These departments are collectively referred to in
this Code as the Investment Management Group (or "IMG"):
A. The interests of RFI's advisory clients, including the Funds,
are paramount. All personnel must conduct themselves and
their operations to give maximum effect to this tenet by
assiduously placing the clients' interests before their own.
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B. All personal securities transactions by Access Persons must
be accomplished so as to avoid even the appearance of a
conflict of interest on the part of such person with the
interests of any advisory client.
C. All personnel must avoid actions or activities that allow (or
appear to allow) a person to profit or benefit from his or
her position with respect to a client, or that otherwise
bring into question the person's independence or judgment.
D. All personnel must carefully avoid communicating information
concerning the investment decisions made for clients, or the
execution of such decisions, to officers and employees of the
RFI who work in departments other than IMG, or to officers or
employees of RFI's affiliates.
E. The personal investing activities of all personnel must be
conducted in a manner to avoid actual or potential conflicts
of interest with RFI's clients and RFI itself. Employees may
not use their positions with RFI or any investment
opportunities they learn of because of their positions with
RFI to the detriment of RFI's clients or RFI.
II. DEFINITIONS
A. "Access Person" shall mean any director or officer of RFI.
"Access Person" also means any employee in the RFI who: (i)
in connection with the management of any advisory client,
recommends investments to such advisory client, participates
in the determination of which recommendations are to be made,
or whose principal functions or duties relate to such
determinations; or (ii) in connection with his or her duties,
obtains any information concerning securities recommendations
being made by RFI to an advisory client. The term also
includes any of the following persons who obtain information
about securities recommendations made by RFI before the
effective dissemination of the recommendations (or of
information about the recommendations): (i) any person in a
control relationship to RFI; (ii) any affiliated person of a
controlling person; and (iii) any affiliated person of that
affiliate. The Compliance Officer and IMG Department
Managers may determine that additional persons, including
persons not employed by IMG, are to be treated as Access
Persons based on their access to information concerning IMG's
investment recommendations to a client.
B. "Beneficial ownership" of a security is to be determined in
the same manner as it is for purposes of Section 16 of the
Securities Exchange Act of 1934 and Rule 16a-1(a)(2)
thereunder. This means that a person should generally
consider himself or herself the beneficial owner of any
securities in which he or she has a direct or indirect
pecuniary interest. In addition, a person should consider
himself or herself the beneficial owner of securities held by
(i) his or her spouse or minor children, (ii) a relative who
shares his or her home, or (iii) other persons by reason of
any contract, arrangement, understanding, or relationship
that provides him or
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her with sole or shared voting or investment power over the
securities held by such person.
C. The "Compliance Officer" is Larry A. Kimmel.
D. "Control" shall have the same meaning as that set forth in
Section 2(a)(9) of the 1940 Act. Section 2(a)(9) provides
that "control" means the power to exercise a controlling
influence over the management or policies of a company,
unless such power is solely the result of an official
position with such company. Ownership of more than 25% of a
company's outstanding voting securities is presumed to give
the holder of such securities control over the company. This
is a rebuttable presumption, and it may be countered by the
facts and circumstances of a given situation.
E. "Fund" means any investment company registered under the 1940
Act for which RFI acts as investment adviser or sub-adviser.
F. "High quality short-term debt instrument" 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.
G. The "IMG Department Managers" are Jonathan Simon (FAM USA
Large and Mid Cap), Christopher Jones (FAM USA Small Cap) and
Arthur Levy (Arbitrage).
H. "Investment Personnel" means: (i) any employee of RFI (or of
any company in a control relationship to RFI) 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 an advisory client; and
(ii) any natural person who controls RFI and who obtains
information concerning recommendations made to a client
regarding the purchase or sale of securities by the client.
I. "IPO" (i.e., initial public offering) means an offering of
securities registered under the Securities Act of 1933, the
issuer of which, immediately before registration, was not
subject to the reporting requirements of Section 13 or
Section 15(d) of the Securities Exchange Act of 1934.
J. "Limited offering" means an offering that is exempt from
registration under the Securities Act of 1933 pursuant to
Section 4(2), Section 4(6), Rule 504, Rule 505 or Rule 506
(e.g., private placements).
K. A "personal securities account" means any account in which
any securities are held for the person's direct or indirect
benefit.
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L. "Purchase or sale of a Security" includes, among other
things, the writing of an option to purchase or sell a
Security.
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M. "Security" shall have the same meaning as that set forth in
Section 2(a)(36) of the 1940 Act, except that it shall not
include direct obligations of the U.S. Government; bankers'
acceptances, bank certificates of deposit, commercial paper,
high quality short-term debt instruments, including
repurchase agreements; and shares of registered open-end
mutual funds.
N. A "Security held or to be acquired" by a client means: (i)
any Security which, within the most recent 15 days, (a) is or
has been held by a client or (b) is being or has been
considered by RFI for purchase by a client; and (ii) any
option to purchase or sell, and any security convertible into
or exchangeable for, a Security described in (i) of this
definition.
O. A security is "being considered for purchase" when a security
is identified as such by a particular investment team.
P. A Security is "being purchased or sold" by an advisory client
from the time when a recommendation has been communicated to
the person who places the buy and sell orders for a client
until the time when such program has been fully completed or
terminated.
III. GENERAL PROHIBITION AGAINST FRAUD, DECEIT AND MANIPULATION
No Access Person shall, in connection with the purchase or sale,
directly or indirectly, by such person of a Security held or to be acquired by
any advisory client:
A. Employ any device, scheme, or artifice to defraud such
client;
B. Make to such client any untrue statement of a material fact
or omit to state to such client a material fact necessary in
order to make the statements made, in light of the
circumstances under which they are made, not misleading;
C. Engage in any act, practice or course of business that would
operate as a fraud or deceit upon such client; or
D. Engage in any manipulative practice with respect to such
client.
IV. GENERAL PROHIBITIONS REGARDING PERSONAL SECURITIES TRANSACTIONS
The following prohibitions apply to each Access Person. Spouses of
Access Persons may be subject to conflicting duties or requirements imposed by
their employers or clients. To the extent that spouses' duties to their
employers or clients conflict with the requirements of this Code, spouses
should follow the former. Access Persons whose spouses are subject to such
conflicts are expected to be aware of this potential conflict and to use
discretion in discussing investment activities with their spouses.
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A. Front-Running or Scalping. Access Persons are not permitted
to "front-run" any securities transaction of a client or RFI,
or to "scalp" by making securities recommendations for
clients with the intent of personally profiting from personal
holdings of or transactions in the same or related
securities.
B. Trading Parallel to or Against a Client. Access Persons are
prohibited from trading contemporaneously in the same or
related securities, including options and futures contracts,
as any client of RFI, either parallel to the transaction
being effected for the client or against the trade being made
or recommended for the client.
C. Short Sales of a Security Held by a Client. No Access Person
may sell short any security held in a client's account
managed by RFI.
D. Use of Confidential or Material, Non-Public Information. An
Access Person may not buy or sell any sell any security if
the Access Person has material, non-public information about
the security or the market for the security obtained in the
course of employment with RFI or otherwise, without first
reporting the information to the Compliance Officer and
obtaining the Compliance Officer's prior approval for the
trade. The Compliance Manual includes additional restrictions
and prohibitions regarding confidential and material
non-public information.
V. PROHIBITED PURCHASES AND SALES
A. Subject to Sections VI(C) and VI(D) of this Code, no Access
Person may purchase or sell, directly or indirectly, any
Security in which he or she had or by reason of such
transaction acquires any Beneficial Ownership, within 24
hours (7 days, in the case of Investment Personnel) before or
after the time that the same (or a related) Security is being
purchased or sold by any Fund or other advisory client. Any
profits realized on trades within these proscribed periods
will be disgorged.
1. Exceptions to paragraph A above are permitted under
the following circumstances:
(a) If the client activity in a particular
Security is due to a client-directed inflow
and/or withdrawal of funds and there is no
change of weighting in the subject security
in the client's portfolio.
(b) If an Investment Person has liquidated a
particular security from a client's
portfolio, then the Investment Person may
also sell that security on the next
business day after the liquidation has been
completed.
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(c) If approved by the Compliance Officer (or
his designee), an exception may be granted
on a case-by-case basis when no abuse is
involved and the equities of the situation
strongly support an exception to the rule.
2. Access Persons are subject to the blackout periods
set forth in paragraph A above, only with respect to
client account activity which occurs on behalf of
the department, either FAM USA or Arbitrage, for
which they are employed. For example, a personal
trade effected by an Access Person of FAM USA that
occurs two calendar days before or after a client
trade on behalf of an Arbitrage account would not be
deemed a violation of the provisions set forth in
paragraph A above.
B. No officer, director or employer of RFI may acquire any
securities that are publicly traded in the United States as
part of an IPO. Securities traded publicly outside the United
States may be acquired in an IPO with prior written approval,
as provided in Section VI(A). However, such approval
generally will not be granted if the security in question is
eligible for investment by any Fund or other advisory client.
C. No Access Person shall purchase any security offered in a
limited offering without prior written approval, as provided
in Section VI(A). Such approval generally will not be granted
if the security in question is eligible for investment by any
Fund or other advisory client, and the client has the ability
to purchase the security.
D. An Access Person is required to hold all securities for at
least sixty (60) calendar days from purchase before selling
the security. For example, an Access Person who purchases an
option on a security may not exercise the option until at
least sixty (60) calendar days have passed. Profit due to any
such short-term trades will be disgorged. Exceptions to this
policy are permitted only with the prior approval of the
Compliance Officer and the individual's Department Manager,
and then only in the case of emergency or extraordinary
circumstances.
VI. PRE-APPROVAL OF TRANSACTIONS
A. Except as provided in Section VI(C), each Access Person must
obtain prior approval for each proposed transaction in a
Security. In addition, persons seeking approval under
Section V(B) or (C) above shall do so in accordance with this
paragraph A. Each Access Person should obtain clearance from
the appropriate investment team and the respective trading
desk, and then seek approval from the person listed below as
his or her primary supervisor. If that person is
unavailable, the Access Person then must obtain approval from
one of the supervisor's alternates. No transaction in any
Security shall be effected without the prior written approval
of the primary or alternate supervisor.
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In determining whether to grant approval, the primary and
alternate supervisors shall refer to Section VI(D), below.
<TABLE>
<CAPTION>
Primary Supervisor Alternate Supervisors Access Persons
------------------ --------------------- --------------
<S> <C> <C>
Jonathan Simon Christopher Jones FAM USA Large and Mid Cap managers and
Arthur Levy analysts, and traders
Larry Kimmel
Sharon Devlin
Christopher Jones Jonathan Simon FAM USA Small Cap managers, analysts,
Arthur Levy traders and marketing staff
Larry Kimmel
Sharon Devlin
Arthur Levy Larry Kimmel All other IMG staff, including Jonathan
Sharon Devlin Simon and Christopher Jones
Larry Kimmel Sharon Devlin Arthur Levy
</TABLE>
B. In determining whether to grant approval for the purchase of
a security offered in a limited offering or a security traded
publicly outside the United States in an IPO, the primary or
alternate supervisor shall take into account, among other
factors, whether the investment opportunity should be
reserved for a Fund or other advisory client, whether the
opportunity is being offered to the person by virtue of his
or her position with RFI, and whether it is possible for the
client to purchase the security.
C. The pre-approval requirements of Section VI(A) shall not
apply to the following transactions:
1. Purchases or sales over which the Access Person has
no direct or indirect influence or control.
2. Purchases or sales that are non-volitional on the
part of the Access Person, including purchases or
sales upon exercise of puts or calls written by the
Access Person and sales from a margin account
pursuant to a bona fide margin call.
3. Purchases that are part of an automatic dividend
reinvestment plan.
4. Purchases effected 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.
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NOTE: These exceptions to the pre-approval requirement of
Section VI(A) shall not apply to requests for approval to
purchase or acquire a security in a limited offering or that
is traded publicly outside the United States in an IPO in
accordance with Section V(B) or (C) above.
D. The following transactions generally shall be approved by the
Compliance Officer:
1. Transactions which appear upon reasonable inquiry
and investigation to present no reasonable
likelihood of harm to any advisory client, including
any Fund, and which are otherwise in accordance with
Rule l7j-l. Such transactions would normally include
purchases or sales of up to 1,000 shares of a
Security that is being considered for purchase or
sale by a Fund or other client (but not then being
purchased or sold) if the issuer has a market
capitalization of over $1 billion.
2. Purchases or sales of Securities that are not
eligible for purchase or sale by any advisory
client, including any Fund, as determined by
reference to the applicable laws, rules or
regulations, the investment objectives and policies
and investment restrictions of the Fund or other
client and any undertakings made to regulatory
authorities.
3. Purchases or sales of Securities that the client is
financially or otherwise unable to purchase or sell.
4. Transactions that the officers of the IMG, as a
group and after consideration of all the facts and
circumstances, determine to be in accordance with
Section III and to present no reasonable likelihood
of harm to a Fund or other client.
VII. ADDITIONAL RESTRICTIONS AND REQUIREMENTS
A. During any calendar year, no Access Person shall accept or
receive any gift of more than $100 in aggregate value from
any person or entity that does business with or on behalf of
RFI or a Fund. All Access Persons must record all gifts
received or given on their respective Departmental log.
B. No Investment Personnel shall accept a position as a
director, trustee or general partner of a publicly-traded
company, private company or partnership unless the acceptance
of such position has been approved by the Compliance Officer
and Department Managers consistent with the interests of RFI
and all advisory clients, including the Funds.
VIII. REPORTING AND COMPLIANCE OBLIGATIONS
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A. The Compliance Officer shall create and thereafter maintain a
list of all Access Persons.
B. Each Access Person must maintain his or her personal
securities accounts at Bear Stearns (for accounts in the
United States) or an affiliate of RFI (for accounts outside
the United States). Exceptions to this policy may be granted
by the Compliance Officer for special situations (i.e., a
managed account). Each Access Person must direct each such
brokerage firm or other financial institution to promptly
send duplicate copies of each account statement and brokerage
confirmation to the Compliance Officer.
C. Every Access Person shall report to the Compliance Officer
the name of any publicly-traded company (or any company
anticipating a public offering of its equity securities) and
the total number of its shares beneficially owned by him or
her if such total ownership is more than 5% of the company's
outstanding shares.
D. Every Access Person who owns any securities acquired in a
limited offering shall disclose such ownership to the
Compliance Officer if such person is involved in any
subsequent consideration of an investment in the issuer of
those securities by a Fund or other advisory client. RFI's
decision to recommend the purchase of such issuer's
securities to any Fund or other advisory client will be
subject to independent review by Investment Personnel with no
personal interest in the issuer.
E. Reports.
1. Initial Holdings Reports: Every Access Person must
provide to the Compliance Officer a complete listing
of all Securities owned by such person, as well as
all personal securities accounts, within ten (10)
days of becoming an Access Person. Such reports need
not show transactions effected for, or Securities
held in, personal securities accounts over which the
person has no direct or indirect influence or
control. An Initial Holdings Report Form is attached
as Appendix I.
2. Annual Holdings Reports: On an annual basis, each
Access Person must submit to the Compliance Officer
a listing of all Securities beneficially owned by
such person, as well as all personal securities
accounts. The list must be current as of a date no
more than thirty (30) days before the report is
submitted and must be received within thirty (30)
days of the end of the calendar year. Such reports
need not show transactions effected for, or
Securities held in, personal securities accounts
over which the person has no direct or indirect
influence or control. An Annual Holdings Report Form
is attached at Appendix II.
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3. Quarterly Reports:
a. Each Access Person shall report all
transactions in Securities in which the
person has, or by reason of such
transaction acquires, any direct or
indirect beneficial ownership. Reports
shall be filed with the Compliance Officer
quarterly. Each Access Person must also
report any personal securities accounts
established during the quarter. The
Compliance Officer shall submit
confidential quarterly reports with respect
to his or her own personal Securities
transactions and personal securities
accounts established to an officer
designated to receive his or her reports,
who shall act in all respects in the manner
prescribed herein for the Compliance
Officer. Such reports need not show
transactions effected for, or Securities
held in, personal securities accounts over
which the person has no direct or indirect
influence or control.
b. Every report shall be made no later than
ten days after the end of the calendar
quarter in which the transaction to which
the report relates was effected, and shall
contain the following information (a
Quarterly Report Form is included as
Appendix III):
(i) The date of the transaction, the
title, the interest rate and
maturity (if applicable), the
number of shares and principal
amount of each Security involved;
(ii) The nature of the transaction
(i.e., purchase, sale or any other
type of acquisition or
disposition);
(iii) The price of the Security at which
the transaction was effected;
(iv) The name of the broker, dealer or
bank with or through which the
transaction was effected;
(v) The date the report is submitted by
the Access Person; and
(vi) With respect to any personal
securities account established
during the quarter, the broker,
dealer or bank with whom the
account was established, and the
date the account was established.
c. In the event the Access Person has no
reportable items during the quarter, the
report should be so noted and returned
signed and dated.
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d. An Access Person need not submit a
quarterly report if the report would
duplicate information in broker trade
confirmations or account statements
received by the Compliance Officer,
provided that all required information is
contained in the broker trade confirmations
or account statements and is received by
the Compliance Officer no later than 10
days after the end of the calendar quarter.
4. Any of these reports may contain a statement that
the report shall not be construed as an admission by
the person making such report that he has any direct
or indirect beneficial ownership in the security to
which the report relates.
5. Access to reports of personal securities
transactions, holdings and accounts, and duplicate
confirmations and personal securities account
statements will be restricted to the Compliance
Officer and such other persons as RFI may designate
to assist the Compliance Officer with review of the
reports. Department Managers will be given monthly
reports of the personal securities transactions of
persons under their supervision. All such materials
will be kept confidential, subject to the right of
inspection by the SEC or other government agencies,
and RFI's senior management and Board of Directors.
IX. REVIEW AND ENFORCEMENT
A. The Compliance Officer's Duties and Responsibilities. The
Compliance Officer shall notify each person who becomes an
Access Person and who is required under this Code of Ethics
of their reporting requirements no later than 10 days before
the first quarter in which such person is required to begin
reporting.
B. The Compliance Officer will continuously monitor personal
trades to determine whether a violation of this Code may have
occurred. Before determining that a person has violated the
Code, the Compliance Officer shall give such person an
opportunity to supply additional explanatory material.
C. If the Compliance Officer determines that a violation has
occurred, or believes that a Code violation may have
occurred, the Compliance Officer must submit a written report
regarding the possible violation, together with any
confirmations, account statements or other reports and any
additional explanatory material provided by the Access
Person, to the Access Person's primary supervisor, as
indicated at Section VI(A) and legal counsel for RFI, who
shall make an independent determination as to whether a
violation has occurred. If the primary supervisor is
unavailable or is unable to review the transaction, the
alternate supervisor shall act in all respects in the manner
prescribed herein for the primary supervisor.
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D. If the primary or alternate supervisor finds that a violation
has occurred, the supervisor shall impose upon the individual
such sanctions as he deems appropriate.
X. ANNUAL WRITTEN REPORTS TO THE BOARD
At least annually, RFI will provide written reports to the Fund's
Board of Directors as follows:
A. Issues Arising Under the Code. The reports must describe any
issue(s) that arose during the previous year under the codes
or procedures thereto, including any material code or
procedural violations, and any resulting sanction(s). RFI may
report to the Board more frequently as it deems necessary or
appropriate and shall do so as requested by the Board.
B. Certification. Each report must be accompanied by a
certification to the Board that RFI has adopted procedures
reasonably necessary to prevent its Access persons from
violating this Code of Ethics.
XI. RECORDKEEPING
The Adviser will maintain the records set forth below. These records
will be maintained in accordance with the 1940 Act and the following
requirements. They will be available for examination by representatives of the
Securities and Exchange Commission and other regulatory agencies.
A. A copy of this Code and any other code adopted by RFI under
Rule 17j-1, which is, or at any time within the past five
years has been, in effect will be preserved in an easily
accessible place.
B. A record of any Code violation and of any sanctions taken
will be preserved in an easily accessible place for a period
of at least five years following the end of the fiscal year
in which the violation occurred.
C. A copy of each Quarterly Report, Initial Holdings Report, and
Annual Holdings Report submitted under this Code, including
any information provided in lieu of any such reports made
under the Code, will be preserved for a period of at least
five years from the end of the fiscal year on which it is
made, for the first two years in an easily accessible place.
D. A record of all persons, currently or within the past five
years, who are or were required to submit reports under this
Code, or who are or were responsible for reviewing these
reports, will be maintained in an easily accessible place.
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E. A copy of each annual report required by Section X of this
Code must be maintained for at least five years from the end
of the fiscal year in which it is made, for the first two
years in any easily accessible place.
F. A record of any decision, and the reasons supporting the
decision, to approve the acquisition of securities acquired
in an IPO or a limited offering, for at least five years
after the end of the fiscal year in which the approval is
granted.
XII. MISCELLANEOUS
A. Confidentiality. All reports and other confirmations and
reports of Securities transactions, and any other information
filed with RFI pursuant to this Code, shall be treated as
confidential, provided such reports and information may be
produced to the Securities and Exchange Commission and other
regulatory agencies.
B. Interpretation of Provisions. RFI may from time to time
adopt such interpretations of this Code as it deems
appropriate.
C. Compliance Certification. Within 10 days of becoming an
Access Person, and each year thereafter, each such person
must complete the Compliance Certification, attached as
Appendix IV.
Adopted September 25, 1997; amended July 27, 1999 and May 4, 2000
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