Exhibit 99.23P(1)
NATIONS FUNDS FAMILY
CODE OF ETHICS
This Code of Ethics shall apply to each investment company advised by
an affiliate of Bank of America Corporation that adopts the Code by action of
its Board of Directors (each, a "Company").1
A. Legal Requirements.
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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 Director of the Company
(as well as other persons), in connection with the purchase or sale, directly or
indirectly, by such person of a security "held or to be acquired"2by the
Company:
1. To employ any device, scheme or artifice to defraud the Company;
2. To make any untrue statement of a material fact to the Company or
omit to state a material fact necessary in order to make the statements made to
the Company, 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 Company; or
4. To engage in any manipulative practice with respect to the Company.
The policies, restrictions and procedures included in this Code of
Ethics are designed to prevent violations of these prohibitions.
In addition, the Investment Company Institute (the "ICI") has suggested
that investment companies adopt additional measures to obviate conflicts,
prevent and detect abusive practices and preserve the confidence of investors.
The policies, restrictions and procedures included in this Code of Ethics
substantially conform to the additional measures suggested by the ICI.
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(1) As used herein, "Director" shall mean a director or trustee and "Company"
shall mean a corporation or trust.
(2) A security "held or to be acquired" by the Company means any "covered
security" (defined below) which, within the most recent 15 days (i) is or has
been held by the Company, or (ii) is being or has been considered by the Company
or its investment adviser(s) for purchase by the Company; and any option to
purchase or sell, and any security convertible into or exchangeable for, a
covered security. Purchase or sale of a covered security includes the writing of
an option to purchase or sell a covered security.
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B. Company Policies.
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It is the policy of the Company that no "access person"3 of the
Company shall engage in any act, practice or course of conduct that would
violate the provisions of Rule 17j-1(b) set forth above. In this regard, each
access person has a duty at all times to place the interests of Company
shareholders first and is required to conduct all personal securities
transactions consistent with the letter and spirit of this Code of Ethics and in
such a manner as to avoid any actual or potential conflicts of interest or any
abuse of the access person's position of trust and responsibility. It is a
fundamental standard that access persons should not take inappropriate advantage
of their positions.
C. Restrictions.
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1. No access person shall purchase or sell, directly or indirectly, any
"covered security"4 where he or she has, or by reason of such transaction
acquires or disposes of, any direct or indirect beneficial ownership and where
he or she knows or should have known, at the time of such purchase or sale, that
the covered security:
(a) is being considered for purchase or sale by a fund of the
Company; or
(b) is being purchased or sold by a fund of the Company.
2. This Code sets forth additional requirements and restrictions that
"investment personnel"5 must comply with under this Code. To review such
requirements and restrictions, please refer to Part A of this Code.
3. The restrictions set forth in Sections C.1. shall not apply to:
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(3) An "access person" includes: (a) each Director or Officer of the Company;
(b) each employee (if any) of the Company (or of any company in a control
relationship to the Company) who, in connection with his or her regular
functions or duties, makes, participates in, or obtains information about the
purchase or sale of covered securities by the Company, or whose functions relate
to the making of such recommendations; and (c) any natural person in a control
relationship to the Company who obtains information concerning recommendations
made to the Company with regard to the purchase or sale of covered securities by
the Company.
(4) For purposes of this Code of Ethics, a "covered security" means a security
as defined in section 2(a)(36) of the 1940 Act, other than (i) direct
obligations of the Government of the United States; (ii) bankers' acceptances,
bank certificates of deposit, commercial paper and high quality short-term debt
instruments, including repurchase agreements; and (iii) shares issued by
open-end investment companies.
(5) "Investment personnel" includes any access person of the Company that is
either a portfolio manager (who makes decisions about fund investments) or a
person who assists in the investment process (including analysts and traders).
Other access persons who may from time to time obtain information about the
purchase or sale of a security by the Company are not investment personnel for
purposes of this Code of Ethics.
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(a) purchases or sales of any covered securities that are not
eligible for purchase or sale by any fund of the Company;
(b) purchases or sales which are non-volitional on the part of
the access person;
(c) purchases which are part of an automatic dividend
investment plan;
(d) purchases which are 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 the
issuer, and sales of such rights; or
(e) sales which are effected pursuant to a tender offer or
similar transaction involving an offer to acquire all or a
significant portion of a class of securities.
In addition, the restrictions set forth in Section C.1. shall not apply to
purchases or sales which are only remotely potentially harmful to the Company,
because they would be very unlikely to affect a highly institutional market.
D. Procedures.
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1. In order to provide the Company with information to enable it to
determine with reasonable assurance whether the provisions of Rule 17j-1(b) are
being observed by its access persons, each access person shall file the
following reports with the Company:
(a) Initial Holdings Report
Each access person of the Company, other than a Director
who is not an "interested person" of the Company (as defined in
the 1940 Act), shall submit reports in the form attached hereto as
Appendix A to the Company's designated compliance person showing
all transactions in "reportable securities" in which the access
person had direct or indirect beneficial ownership6 when the
person became an access person.
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(6) 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.
(1) A direct pecuniary interest is the opportunity, directly
or indirectly, to profit, or to share the profit, from the transaction.
(2) 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 settler if you can revoke the trust, or a beneficiary if you
have or share investment control with the Trustee/Director; and equity
securities which may be acquired upon exercise of an option or other right, or
through conversion.
For interpretive guidance on whether you have a direct or indirect
pecuniary interest in a transaction, you should consult the Company's designated
compliance person. A report shall not
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Such reports shall be filed not later than 10 days after the person becomes an
access person, but need not show transactions over which such person had no
direct or indirect influence or control.
(b) Quarterly Transaction Report
Each access person of the Company, other than a Director
who is not an "interested person" of the Company (as defined in
the 1940 Act), shall submit reports in the form attached hereto as
Appendix B to the Company's designated compliance person showing
all transactions during the quarter in "reportable securities" in
which the person has, or by reason of such transaction acquires or
disposes of, any direct or indirect beneficial ownership. Such
reports shall be filed not 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. In
lieu of providing such a report, an applicant may arrange for
duplicate confirmations and account statements to be provided
directly to the Company's designated compliance person.
(c) Annual Holdings Report
Each access person of the Company, other than a Director
who is not an "interested person" of the Company (as defined in
the 1940 Act), shall submit an annual report in the form attached
hereto as Appendix C to the Company's designated compliance person
showing all transactions during the year in "reportable
securities" in which the person had, or by reason of such
transaction acquires or disposes of, any direct or indirect
beneficial ownership. Information in the annual report must be
current as of a date no more than 30 days before the report is
submitted to the Company. Such reports shall be filed not later
than 15 days after the end of each calendar year, but need not
show transactions over which such person had no direct or indirect
influence or control.
(d) Exception from Reporting Requirements
Each Director who is not an "interested person" of the
Company and who would be required to make a report solely by
reason of being a Company director, shall not make an initial
holdings report or annual holdings report, however, shall submit
the same quarterly transaction report as required under paragraph
(b), but only for a transaction in a "reportable security" where
the director knew at the time of the transaction or, in the
ordinary course of fulfilling the director's official duties as a
Company director, should have known that during the 15-day period
immediately before or after the date of the director's transaction
in a "reportable security", such covered security is or was
purchased or sold by the Company, or considered for purchase or
sale by the Company or its investment adviser. No report is
required if the Director had no direct or indirect influence or
control over the transaction.
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be construed as an admission by the person making the report that he or she has
any direct or indirect beneficial ownership in the security.
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The Company does not believe that personal transactions by its access persons in
any securities other than securities which the Company is permitted to purchase
would be prohibited by Rule 17j-1(b). For purposes of subparagraphs (a) through
(d) above, "reportable securities" includes only covered securities which the
funds of the Company are permitted to acquire under their investment objectives
and policies set forth in the Company's then current prospectus(es) under the
Securities Act of 1933, as amended. In the event that any of the investment
objectives and policies for the funds of the Company changes in the future, the
Board of Directors may reconsider the scope of this reporting requirement in
light of such change and Rule 17j-1.
2. Every access person of the Company shall provide an annual
certification in the form of Appendix D to the Company's designated compliance
person. This requirement applies to all Directors, including those who are not
"interested persons" of the Company.
3. The Company's designated compliance person shall notify each "access
person" of the Company who may be required to make reports pursuant to this Code
that such person is subject to reporting requirements and shall deliver a copy
of this Code to each such person. Any amendments to this Code shall be similarly
furnished to each person to whom this Code is applicable.
4. The Company's designated compliance person shall report to the
Board of Directors:
(a) at the next meeting following the receipt of any report on
Appendix B with respect to each reported transaction in a security
which was, within 15 days before or after the date of the reported
transaction: (i) purchased or sold by the Company, or (ii)
considered by the Company for purchase or sale, unless (in either
case) the amount involved in the transaction was less than
$50,000;
(b) with respect to any transaction not required to be reported to
the Board by the operation of subparagraph (a), that the Company's
designated compliance person believes nonetheless may evidence a
violation of this Code; and
(c) apparent violations of the reporting requirements stated
herein.
5. Each year the Company must furnish to the Company's Board of
Directors, and the Board of Directors must consider, a written "annual issues
and certification report" that:
(a) describes any issues arising under its code of ethics or
procedures since the last report to the Board of Directors,
including, but not limited to, information about material
violations of the code or procedures and sanctions imposed in
response to the material violations, and
(b) certifies that the Company has adopted procedures reasonably
necessary to prevent access persons from violating its code of
ethics.
6. The Board of Directors shall consider reports made to it hereunder
and shall determine whether the policies established in Paragraph B of this Code
of Ethics have been
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violated, and what sanctions, if any, should be imposed. The Board of Directors
shall review the operation of this Code at least once a year, and shall make and
approve such changes to the Code as it deems necessary.
7. This Code, a copy of each annual issues and certification report, a
copy of each report by an access person, any written report hereunder by the
Company's designated compliance person and lists of all persons required to make
reports shall be preserved with the Company's records for the period required by
Rule 17j-1. In addition, a record of any violation of this Code shall be
preserved with the Company's records for the period required by Rule 17j-1.
E. Adoption and Approval of Codes of Ethics.
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. The Board of Directors, including a majority of non-interested Directors,
shall approve the code of ethics of the Company, the code of ethics of each
investment adviser and principal underwriter of the Company upon initial
engagement of either, and any material changes to these codes no later than six
months after the adoption of the material change.
F. Insider Trading and Conflicts of Interest.
-----------------------------------------
The Board of Directors of the Company has adopted a policy statement on
insider trading and conflicts of interests (the "Policy Statement"), a copy of
which is attached hereto as Appendix E. All access persons are required by this
Code of Ethics to read and familiarize themselves with their responsibilities
under the Policy Statement.
G. Interrelationship with Investment Adviser's and Sub-Adviser's
-------------------------------------------------------------
Codes of Ethics.
---------------
A person who is both an access person of the Company and an access
person of either the Adviser or a sub-adviser is only required to report under
and otherwise comply with the Adviser's or sub-adviser's Rule 17j-1 code of
ethics, provided that such code has been adopted pursuant to and in compliance
with Rule 17j-1 and that the Board of Directors of the Company has also approved
such code pursuant to Rule 17j-1. Such persons, however, are still subject to
the principles and prohibitions contained in Section A of this Code.
H. Sanctions.
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Upon discovering a violation of this Code, the Board of Directors of
the Company may impose such sanctions as it deems appropriate.
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PART A
Investment Personnel
In addition to the requirements and restrictions contained in Sections
A-H of this Code, investment personnel are also subject to the following
requirements and restrictions:
1. Investment personnel are prohibited from purchasing any security in
an initial public offering or in a private placement unless they obtain the
prior written approval of the Company's designated compliance person. This
restriction shall not apply to:
(a) purchases or sales of any covered securities that are not
eligible for purchase or sale by any fund of the Company;
(b) purchases or sales which are non-volitional on the part of
the access person;
(c) purchases which are part of an automatic dividend
investment plan;
(d) purchases which are 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 the issuer, and sales of such rights; or
(e) sales which are effected pursuant to a tender offer or
similar transaction involving an offer to acquire all or a
significant portion of a class of securities.
2. Any profits realized by investment personnel from "short-term
trading"7 of a covered security shall be disgorged to the Company.
3. Investment personnel are prohibited from receiving any gift or item
valued at more than $100 per donor per year from any person or entity that does
business with or on behalf of the Company.
4. Investment personnel are prohibited from serving on the board of
directors of a company whose stock is publicly traded, absent prior
authorization from the Company's designated compliance person based upon a
determination that the board service would be consistent with the interests of
the Company and its shareholders.
5. Investment personnel are required to provide copies of all brokerage
statements and confirmations to the Company's designated compliance person. All
investment personnel shall disclose all personal securities holdings upon
commencement of employment with the Company and annually thereafter.
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(7) For purposes of this Code of Ethics, "short-term trading" is defined as a
purchase and sale, or sale and purchase, of the same (or equivalent) securities,
which both occur within any 60-day period.
Part A-1
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APPENDIX A
NATIONS FUNDS FAMILY
Initial Holdings Report
for the Calendar Year Ended December 31, 200_.
To the Designated Compliance Person of ___________:
On the day I became an access person, , 200 , the following
transactions were effected in covered securities of which I had, or by reason of
such transaction acquired or disposed of, direct or indirect beneficial
ownership, and which are required to be reported pursuant to the Company's Code
of Ethics:
<TABLE>
<CAPTION>
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Broker, Dealer, Account Name
Broker, Dealer, Bank Account (Direct or Indirect
Title of Security Number of Shares Principal Amount Bank Name Number Benefit)
----------------------- ----------------- ------------------- -------------------- ----------------- ---------------------
<S> <C> <C> <C> <C> <C>
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</TABLE>
Appendix A-1
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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.
Dated: _____________________ Signature: _______________________
Appendix A-2
<PAGE>
APPENDIX B
NATIONS FUNDS FAMILY
Quarterly Transaction Report
for the Calendar Year Ended December 31, 200_.
To the Designated Compliance Person of ___________:
During the quarter ended , 200 , the following transactions were
effected in covered securities of which I had, or by reason of such transaction
acquired or disposed of, direct or indirect beneficial ownership, and which are
required to be reported pursuant to the Company's Code of Ethics:
<TABLE>
<CAPTION>
------------------- --------------- ------------- -------------- ---------------- ----------------- ----------- ---------------
Nature of Interest
Transaction Rate/Maturity Broker,
Date of Number of Principal (Purchase, Date Dealer, Bank
Title of Security Transaction Shares Amount Sale, Other) (if applicable) Price Name
------------------- --------------- ------------- -------------- ---------------- ----------------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
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</TABLE>
Appendix B-1
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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.
Dated: _____________________ Signature: _______________________
Appendix B-2
<PAGE>
APPENDIX C
NATIONS FUNDS FAMILY
Annual Holdings Report
for the Calendar Year Ended December 31, 200_.
To the Designated Compliance Person of ___________:
During the calendar year ended December 31, 200 , the following
transactions were effected in covered securities of which I had, or by reason of
such transaction acquired or disposed of, direct or indirect beneficial
ownership, and which are required to be reported pursuant to the Company's Code
of Ethics:
<TABLE>
<CAPTION>
----------------------- ----------------- ------------------- -------------------- ----------------- ---------------------
Broker, Dealer, Account Name
Broker, Dealer, Bank Account (Direct or Indirect
Title of Security Number of Shares Principal Amount Bank Name Number Benefit)
----------------------- ----------------- ------------------- -------------------- ----------------- ---------------------
<S> <C> <C> <C> <C> <C>
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</TABLE>
Appendix C-1
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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.
Dated: _____________________ Signature: _______________________
Appendix C-2
<PAGE>
APPENDIX D
NATIONS FUNDS FAMILY
Annual Certification of Compliance
for the Calendar Year Ended December 31, 200__.
To the Designated Compliance Person of :
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I hereby certify that, during the calendar year specified above, I have
complied with the requirements of the Code of Ethics and have disclosed or
reported all personal securities transactions required to be disclosed or
reported pursuant to the requirements of the Code. I have read and understand
the Code of Ethics and recognize that I am subject thereto.
Dated: ____________________ Signature:
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Appendix D-1
<PAGE>
APPENDIX E
POLICY STATEMENT ON INSIDER TRADING
A. Introduction
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The Company seeks to foster a reputation for integrity and
professionalism. That reputation is a vital business asset. The confidence and
trust placed in us by investors in the Company is something we should value and
endeavor to protect. To further that goal, this Policy Statement implements
procedures to deter the misuse of material, nonpublic information in securities
transactions.
Trading securities while in possession of material, nonpublic
information or improperly communicating that information to others may expose
you to stringent penalties. Criminal sanctions may include a fine of up to
$1,000,000 and/or ten years imprisonment. The Securities and Exchange Commission
("SEC") can recover the profits gained or losses avoided through the volative
trading, a penalty of up to three times the illicit windfall and an order
permanently barring you from the securities industry. Finally, you may be sued
by investors seeking to recover damages for insider trading violations.
Regardless of whether a government inquiry occurs, the Company views
seriously any violation of this Policy Statement. Such violations constitute
grounds for disciplinary sanctions, including dismissal.
B. Scope of the Policy Statement
------------------------------
This Policy Statement is drafted broadly; it will be applied and
interpreted in a similar manner. This Policy Statement applies to securities
trading and information handling by Access Persons, as defined in the Company's
Code of Ethics, (including spouses, minor children and adult members of their
households).
The law of insider trading is unsettled; an individual legitimately may
be uncertain about the application of the Policy Statement in a particular
circumstance. Often, a single question can forestall disciplinary action or
complex legal problems. You should direct any questions relating to the Policy
Statement to the Company's Compliance Person. You also must notify the
Compliance Person immediately if you have any reason to believe that a violation
of the Policy Statement has occurred or is about to occur.
C. Policy Statement
----------------
No person to whom this Policy Statement applies, including you, may
trade, either personally or on behalf of others, while in possession of
material, nonpublic information; nor may the Company's Access Persons
communicate material, nonpublic information to others in violation of the law.
This section reviews principles important to the Policy Statement.
Appendix E-1
<PAGE>
1. What is Material Information?
Information is "material" when there is a substantial likelihood that a
reasonable investor would consider it important in making his or her investment
decisions. Generally, this is information whose disclosure will have a
substantial effect on the price of a company's securities. No simple "bright
line" test exists to determine when information is material; assessments of
materiality involve a highly fact-specific inquiry. For this reason, you should
direct any questions about whether information is material to the Compliance
Person.
Material information often relates to a company's results and
operations including, for example, dividend changes, earning results, changes in
previously released earnings estimates, significant merger or acquisition
proposals or agreements, major litigation, liquidation problems, and
extraordinary management developments.
Material information also may relate to the market for a company's
securities. Information about a significant order to purchase or sell securities
may, in some contexts, be deemed material. Similarly, prepublication information
regarding reports in the financial press also may be deemed material. For
example, the Supreme Court upheld the criminal convictions of insider trading
defendants who capitalized on prepublication information about the Wall Street
Journal's "Heard on the Street" column.
2. What is Nonpublic Information?
Information is "public" when it has been disseminated broadly to
investors in the marketplace. Tangible evidence of such dissemination is the
best indication that the information is public. For example, information is
public after it has become available to the general public through a public
filing with the SEC or some other government agency, the Dow Jones "tape" or the
Wall Street Journal or some other publication of general circulation, and after
sufficient time has passed so that the information has been disseminated widely.
3. Identifying Inside Information
Before executing any trade for yourself or others, including the
Company, you must determine whether you have access to material, nonpublic
information. If you think that you might have access to material, nonpublic
information, you should take the following steps:
(i) Report the information and proposed trade immediately to the
Compliance Person.
(ii) Do not purchase or sell the securities on behalf of yourself or
others, including the Company.
(iii) Do not communicate the information inside or outside the Company,
other than to the Compliance Person.
Appendix E-2
<PAGE>
(iv) After the Compliance Person has reviewed the issue, the firm will
determine whether the information is material and nonpublic and,
if so, what action the Company should take.
You should consult with the Compliance Person before taking any action.
This degree of caution will protect you and the Company.
4. Contact with Public Companies
The Company's contacts with public companies represent an important
part of our research efforts. The Company may make investment decisions on the
basis of the Company's conclusions formed through such contacts and analysis of
publicly-available information. Difficult legal issues arise, however, when, in
the course of these contacts, a Company employee or other person subject to this
Policy Statement becomes aware of material, nonpublic information. This could
happen, for example, if a company's Chief Financial Officer prematurely
disclosed quarterly results to an analyst or an investor relations
representative makes a selective disclosure of adverse news to a handful of
investors. In such situations, the Company must make a judgment as to its
further conduct. To protect yourself and the Company, you should contact the
Compliance Person immediately if you believe that you may have received
material, nonpublic information.
5. Tender Offers
Tender offers represent a particular concern in the law of insider
trading for two reasons. First, tender offer activity often produces
extraordinary gyrations in the price of the target company's securities. Trading
during this time period is more likely to attract regulatory attention (and
produces a disproportionate percentage of insider trading cases). Second, the
SEC has adopted a rule which expressly forbids trading and "tipping" while in
possession of material, nonpublic information regarding a tender offer received
from the tender offer, the target company or anyone acting on behalf of either.
Company employees and others subject to this Policy Statement should exercise
particular caution any time they become aware of nonpublic information relating
to a tender offer.
Appendix E-3
