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IMPERIAL INVESTMENTS, INC.
CODE OF ETHICS
A. Legal Requirements.
Rule 17j-1(b) under the Investment Company Act of 1940 (the "Act")
makes it unlawful for any officer or director (as well as other persons) of
Imperial Investments, Inc. (the "Fund"), in connection with the purchase or
sale(1) 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 to the Fund any untrue statement of a material fact or
omit to state to the Fund 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 Fund; or
(4) To engage in any manipulative practice with respect to the Fund.
A security is "held or to be acquired" if it is a covered
security(2) (or an option for or exchangeable for a covered security) and
within the most recent 15 days (i) the covered security is or has been
held by the Fund, or (ii) the covered security is being or has been
considered by the Fund or the investment adviser for the Fund for purchase
by the Fund.
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(1) A purchase or sale includes the writing of an option to purchase or
sell.
(2) A "covered security" is any security under the broad definition of
Section 2(a)(36) of the Act except: (i) direct obligations of the United
States, (ii) bankers' acceptances, bank CDs, commercial paper, high quality
short-term debt instruments (including repurchase agreements), and (iii)
shares of open-end investment companies.
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B. Fund Policies.
1. It is the policy of the Fund that no "access person"(3) of the Fund
shall engage in any act, practice or course or conduct that would violate the
provisions of Rule 17j-1(b) set forth above.
2. In keeping with the recommendations of the Board of Governors of the
Investment Company Institute, the following general policies shall govern
personal investment activities of access persons of the Fund:
(a) It is the duty of all access persons of the Fund to place the
interest of Fund shareholders first;
(b) All access persons of the Fund shall conduct personal securities
transactions in a manner that is consistent with this Code of Ethics and that
avoids any actual or potential conflict of interest or any abuse of a position
of trust and responsibility; and
(c) No access person of the Fund shall take inappropriate advantage
of his or her position with the Fund.
C. Reporting Requirements.(4)
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(3) An "access person" is (i) each director or officer of the Fund, (ii)
each employee (if any) of the Fund who, in connection with his regular
duties, makes, participates in, or obtains information about the purchase or
sale of a security by and/or of the Fund or whose functions relate to the
making of any recommendations with respect to such purchases or sales, and
(iii) any natural person in a control relationship to the Fund who obtains
information concerning recommendations made to the Fund with regard to the
purchase or sale of covered securities.
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In order to provide the Fund with information to enable it to
determine with reasonable assurance whether the Fund's policies are being
observed by its access persons:
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(4) An access person of the Fund who is also an access person of the
Fund's investment adviser, sub-adviser or principal underwriter, if any, may
submit reports required by this Section to such investment adviser,
sub-adviser or principal underwriter in lieu of submitting reports under
Imperial Investments, Inc.'s Code of Ethics provided that such forms contain
substantially the same information as called for in the forms required by
this Section C and comply with the requirements of Rule 17j-1(d)(1).
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(a) Each person becoming an access person of the Fund, other than a
director who is not an "interested person" of the Fund (as defined in the
Act), shall no later than 10 days after becoming such an access person
submit a report in the form attached hereto as Exhibit A (an "Initial
Holding Report") to the Fund's Compliance Officer showing all holdings in
"covered securities" in which the person had any direct or indirect
beneficial ownership.(5) Such Initial Holding Report shall also indicate
all broker/dealers and banks with which the access person held direct or
indirect ownership of securities. Such reports need not show holdings over
which such person had no direct or indirect influence or control.
(b) Each access person of the Fund, other than a director who is not
an "interested person" of the Fund (as defined in the Act), shall submit
reports each quarter in the form attached hereto as Exhibit B (a
"Securities Transaction Report") to the Fund's Compliance Officer showing
all transactions in "covered securities" in which the person had, or by
reason of such transaction acquired, any direct or indirect beneficial
ownership. Such 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.
(c) Each director who is not an "interested person" of the Fund (as
defined in the Act) shall submit the same quarterly report as required
under paragraph (b), but only for a transaction in a covered security
where he knew at the time of the transaction or, in the ordinary course of
fulfilling his official duties as a director, should have known that
during the 15-day period immediately preceding or after the date of the
transaction such
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(5) "Beneficial ownership" of a security as used in this Section C is
determined in the same manner as it would be for the purposes of Section 16
of the Securities Exchange Act of 1934, except that such determination should
apply to all covered securities. Generally, a person should consider himself
the beneficial owner of covered securities held by his spouse, his minor
children, a relative who shares his home, or other persons if by reason of
any contract, understanding, relationship, agreement or other arrange-men, he
obtains from such covered securities benefits substantially equivalent to
those of ownership. He should also consider himself the beneficial owner of
securities if he can vest or revest title in himself now or in the future.
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security is or was purchased or sold, or considered for purchase or sale,
by the Fund. Such report shall be submitted to Legal Counsel for the Fund.
No report is required if the director had no direct or indirect influence
or control over the transaction.
(d) Each access person of the Fund, other than a director who is not
an "interested person" (as defined in the Act), shall by January 30 of
each year submit to the Fund's Compliance Officer a report in the form
attached hereto as Exhibit A (an "Annual Holding Report") showing all
holdings in covered securities in which the person had any direct or
indirect beneficial ownership as of a date no more than 30 days before the
report is submitted. Such report need not show holdings over which such
person had no direct or indirect influence or control.
D. Preclearance Procedures.
Investment personnel of the Fund shall obtain approval from the
Fund's Compliance Officer before directly or indirectly acquiring beneficial
ownership in any securities in an initial public offering or in a limited
offering.(6)
E. Notice to, and Review of, Holding Reports by Access Persons.
1. The Fund's Compliance Officer shall notify each access person of
the Fund who may be required to make reports pursuant to this Code that such
person is subject to this reporting requirement and shall deliver a copy of this
Code to each such person.
2. The Compliance Officer of the Fund or his or her delegate or
Legal Counsel for the Fund shall review reports submitted under Section C of
this Code within 21 days of submission.
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(6) "Investment personnel of the Fund" means (i) any employee of the Fund
(or of a company in a control relationship to the Fund) 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
(ii) any natural person who controls the Fund and who obtains information
concerning recommendations made to the Fund regarding the purchase or sale of
securities. "Initial public offering" and "limited offering" shall have the
same meaning as set forth in Rule 17j-1(a)(6) and (8), respectively.
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3. The Compliance Officer of the Fund will establish and maintain
records of access persons of the Fund, other than directors who are not an
"interested persons" (as defined in the Act), who are required to make reports
under Section C of this Code and shall establish and maintain records of any
delegate responsible for reviewing such reports. Legal Counsel for the Fund will
establish and maintain records of directors who are not "interested persons" (as
defined in the Act) who are required to make reports under Section C of this
Code.
F. Reports to Directors.
1. The Fund's Compliance Officer or Legal Counsel for the Fund
shall report to the Board of Directors:
(a) at the next meeting following the receipt of any Securities
Transaction Report with respect to each reported transaction in a security
which was held or acquired by the Fund within 15 days before or after the
date of the reported transaction or at a time when, to the knowledge of
the Fund's Compliance Officer, to the knowledge of Legal Counsel for the
Fund, the Fund, or the investment adviser for the Fund, was considering
the purchase or sale of such security, unless the amount involved in the
transaction was less than $50,000;
(b) with respect to any transaction or holding not required to be
reported to the Board by the operation of subparagraph (a) that the Fund's
Compliance Officer or Legal Counsel for the Fund believes nonetheless may
evidence a violation of this Code; and
(c) any apparent violation of the reporting requirements of Section
C of this Code.
2. The Board shall consider reports made to it hereunder and shall
determine whether the policies established in section B of this Code have been
violated, and what sanctions, if any, should be imposed.
G. Approval of Codes and Material Amendments Thereto.
1. The Board of Directors of the Fund, including a majority of the
independent Directors thereof, shall approve the Codes of Ethics of the Fund
and, if any, of the investment adviser to the Fund, of the sub-adviser to the
Fund and of the principal underwriter of the Fund. No investment adviser,
sub-adviser or principal underwriter of the Fund may be appointed unless and
until the Code of Ethics of that entity has been approved by the Board of
Directors of the Fund, including a majority of the independent Directors
thereof. Following initial approval of the Code of Ethics of the investment
adviser to the Fund, the sub-adviser to the Fund or the
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principal underwriter of the Fund, any material change to such Code must be
approved by the Board of Directors of the Fund, including a majority of the
independent Directors thereof, within six months of said amendment. No amendment
of this Code may be made unless and until approved by the Board of Directors of
the Fund, including a majority of the independent Directors thereof.
2. In approving a Code of Ethics, the Board of Directors shall have
secured a certificate from the entity that adopted the Code that it has adopted
procedures reasonably necessary to prevent its access persons from violating the
Code in question.
H. Annual Report
The Fund and, if any, the principal underwriter thereof and any
investment adviser or sub-adviser to the Fund shall, not less frequently than
annually, furnish the Board of Directors of the Fund with a written report that:
1. 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 such Code or procedures and sanctions imposed in
response, and
2. certifies that the Fund, principal underwriter, investment
adviser or sub-adviser, as applicable, has adopted procedures
reasonably necessary to prevent its access persons from
violating its Code of Ethics.
This Code, a copy of each Securities Transaction and Holding Report
by an access person, any written report hereunder by the Fund's Compliance
Officer, any written report hereunder by the Legal Counsel for the Fund, and
lists of all persons required to make reports shall be preserved with the Fund's
records for the period required by Rule 17j-1.
Adopted: April 28, 2000
The Board of Directors
Imperial Investments, Inc.
/s/ Richard M. Baker
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Secretary
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Exhibit A
IMPERIAL INVESTMENTS, INC.
Holding Report
[ ] Initial Holding Report of ___________, 200__
(date a reporting person became an access person)
[ ] Annual Holding Report as of ____________, 200__
(date not more than 30 days prior to submission)
To the Compliance Officer of Imperial Investments, Inc. or Legal Counsel for
Imperial Investments, Inc.:
As of the above date, I had direct or indirect beneficial ownership of the
following covered securities:
Principal
Number Amount of
Title of Shares Security
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As of that same date, I held direct or indirect beneficial ownership of
securities with the following broker/dealer(s) or bank(s):___________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
This report (i) excludes securities with respect to which I had no direct
or indirect influence or control, (ii) excludes securities 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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Exhibit B
IMPERIAL INVESTMENTS, INC.
Securities Transaction Report
For the Calendar Quarter Ended: ___________, 200__
To the Compliance Officer of Imperial Investments, Inc. or Legal Counsel for
Imperial Investments, Inc.:
During the quarter referred to above, the following transactions were
effected in securities of which I had, or by reason of such transaction
acquired, direct or indirect beneficial ownership, and which are required to be
reported pursuant to the Fund's Code of Ethics:
Title of Broker/
Security (and Dealer
interest rate No. of Shares and Nature of Price at or Bank
and maturity Principal Dollar Transaction Which Through
date, if Date of Amount of (Purchase, Transaction Whom
applicable) Transaction Transaction (Price) Sale, Other) Effected Effected
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During the quarter referred to above, I established the following account
in which securities were held for my direct or indirect benefit during the
quarter:
Broker/Dealer or
Bank With Whom Date the Account
Account Established Was Established
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This report (i) excludes transactions with respect to which I had no direct or
indirect influence or control, (ii) excludes 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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