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Exhibit 16(d)
MAS FUNDS
(THE "FUND")
AND
MILLER ANDERSON & SHERRERD, LLP
("MAS")
AND
MAS FUND DISTRIBUTION, INC.
("MASDI")
CODE OF ETHICS
1. PURPOSES
This Code of Ethics has been adopted by the Fund, MAS and MASDI, the
principal underwriter of the Funds, in accordance with Rule 17j-1 under the
Investment Company Act of 1940, as amended (the "Act"). Rule 17j-1 under the
Act generally proscribes fraudulent or manipulative practices with respect to
purchases or sales of securities held or to be acquired by investment
companies, if effected by affiliated persons (as defined under the Act) of such
companies. Specifically, Rule 17j-1 provides that it is unlawful for any
affiliated person of or principal underwriter for a registered investment
company, or any affiliated person of an investment adviser of or principal
underwriter for a registered investment company, in connection with the
purchase or sale, directly or indirectly, by such person of a security held or
to be acquired by such registered investment company:
(a) To employ any device, scheme or artifice to defraud such
registered investment company;
(b) To make to such registered investment company any untrue
statement of a material fact or omit to state to such registered
investment company a material fact necessary in order to make the
statements made, in light of the circumstances under which they
are made, not misleading;
(c) To engage in any act, practice, or course of business which
operates or would operate as a fraud or deceit upon any such
registered investment company; or
(d) To engage in any manipulative practice with respect to such
registered investment company.
While Rule 17j-1 is designed to protect only the interests of the Fund and
its stockholders, MAS applies the policies and procedures described in this
Code of Ethics to all employees of MAS to protect the interests of its non-Fund
clients as well (hereinafter, where appropriate, non-Fund clients of MAS are
referred to as "Advisory Clients" and any reference to an Advisory Client(s)
relates only to the activities of employees of MAS).
The purpose of this Code of Ethics is to (i) ensure that Access Persons
conduct their personal securities transactions in a manner which does not (a)
create an actual or potential conflict of interest with the Fund's or an
Advisory Client's portfolio transactions, (b) place their personal interests
before the interests of the Fund and its stockholders or an Advisory Client or
(c) take unfair advantage of their relationship to the Fund or an Advisory
Client and (ii) provide policies and procedures consistent with the Act and
Rule 17j-1 designed to give effect to the general prohibitions set forth in
Rule 17j-l.
Among other things, the procedures set forth in this Code of Ethics
require that all (i) Access Persons review this Code of Ethics at least
annually, (ii) Access Persons, unless excepted by Sections 8(d) or (e) of this
Code of Ethics, report transactions in Covered Securities, (iii) Access Persons
refrain from engaging in certain transactions, and (iv) employees of MAS
pre-clear with the appropriate trading desk any transactions in Covered
Securities.
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2. DEFINITIONS
(a) "Access Person" means any director, officer or Advisory Person
of the Fund or of MAS, and any director or officer of MASDI, who,
in the ordinary course of business, makes, participates in or
obtains information regarding the purchase or sale of Covered
Securities by the Fund.
(b) "Advisory Person" means any employee of the Fund, or of MAS (or
of any company in a control relationship to the Fund or MAS),
who, in connection with his or her regular functions or duties,
makes, participates in, or obtains information regarding the
purchase or sale of Covered Securities by the Fund or an Advisory
Client, or whose functions relate to the making of any
recommendations with respect to such purchases or sales.
(c) "Beneficial ownership" shall be interpreted in the same manner
as it would be in determining whether a person is subject to the
provisions of Section 16 of the Securities Exchange Act of 1934,
as amended, and the rules and regulations thereunder, except that
the determination of direct or indirect beneficial ownership
shall apply to all securities which an Access Person has or
acquires.
(d) "Control" shall have the same meaning as that set forth in
Section 2(a)(9) of the Act.
(e) "Compliance Department" means the MAS Compliance Department.
(f) "Covered Security" means a security as defined in Section
2(a)(36) of the Act, except that it does not include: (i) shares
of registered open-end investment companies, (ii) direct
obligations of the Government of the United States, and (iii)
bankers' acceptances, bank certificates of deposit, commercial
paper, and high quality short-term debt instruments, including
repurchase agreements.
(g) "Disinterested Director" means a director of the Fund who is not
an "interested person" of the Fund within the meaning of Section
2(a)(19) of the Act.
(h) "Purchase or sale (or sell)" with respect to a Covered Security
means any acquisition or disposition of a direct or indirect
beneficial interest in a Covered Security, including, inter alia,
the writing or buying of an option to purchase or sell a Covered
Security.
(i) "Security held or to be acquired" means (i) any Covered Security
which, within the most recent 15 days, is or has been held by the
Fund or an Advisory Client, or is being or has been considered by
the Fund or an Advisory Client or MAS for purchase by the Fund or
an Advisory Client; and (ii) any option to purchase or sell, and
any security convertible into or exchangeable for, a Covered
Security described in this paragraph.
3. PROHIBITED TRANSACTIONS
(a) No Access Person or employee of MAS shall purchase or sell any
Covered Security which to his or her actual knowledge at the time
of such purchase or sale:
(i) is being considered for purchase or sale by the Fund or an Advisory
Client; or
(ii) is being purchased or sold by the Fund or an Advisory Client.
(b) No employee of MAS shall purchase or sell a Covered Security
while there is a pending "buy" or "sell" order in the same or a
related security for a Fund or an Advisory Client until that
order is executed or withdrawn.
(c) No Advisory Person shall purchase or sell a Covered Security
within seven calendar days before or after any portfolio(s) of
the Fund over which such Advisory Person exercises investment
discretion or an Advisory Client over which the Advisory Person
exercises investment discretion purchases or sells the same or a
related Covered Security. Any profits realized or unrealized by
the Advisory Person on a prohibited purchase or sale within the
proscribed period shall be disgorged to a charity.
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(d) No employee of MAS shall profit from the purchase and sale or
sale and purchase of the same (or equivalent) Covered Security
within 60 calendar days. Any profits realized on such purchase or
sale shall be disgorged to a charity.
(e) No Access Person or employee of MAS shall purchase any
securities in an initial public offering.
(f) No employee of MAS shall purchase privately-placed securities
unless such purchase is pre-approved by the Compliance
Department. Any such person who has previously purchased
privately-placed securities must disclose such purchases to the
Compliance Department before such person participates in a Fund's
or an Advisory Client's subsequent consideration of an investment
in the securities of the same or a related issuer. Upon such
disclosure, the Compliance Department shall appoint another
person with no personal interest in the issuer, to conduct an
independent review of such Fund's or such Advisory Client's
decision to purchase securities of the same or a related issuer.
(g) No Access Person or employee of MAS shall recommend the purchase
or sale of any Covered Securities to a Fund or to an Advisory
Client without having disclosed to the Compliance Department his
or her interest, if any, in such Covered Securities or the issuer
thereof, including without limitation (i) his or her direct or
indirect beneficial ownership of any securities of such issuer,
(ii) any contemplated purchase or sale by such person of such
securities, (iii) any position with such issuer or its
affiliates, and (iv) any present or proposed business
relationship between such issuer or its affiliates, on the one
hand, and such person or any party in which such person has a
significant interest, on the other; provided, however, that in
the event the interest of such person in such securities or the
issuer thereof is not material to his or her personal net worth
and any contemplated purchase or sale by such person in such
securities cannot reasonably be expected to have a material
adverse effect on any such purchase or sale by a Fund or an
Advisory Client or on the market for the securities generally,
such person shall not be required to disclose his or her interest
in the securities or the issuer thereof in connection with any
such recommendation.
(h) No Access Person or employee of MAS shall reveal to any other
person (except in the normal course of his or her duties on
behalf of a Fund or an Advisory Client) any information regarding
the purchase or sale of any Covered Security by a Fund or an
Advisory Client or consideration of the purchase or sale by a
Fund or an Advisory Client of any such Covered Security.
4. PRE-CLEARANCE OF COVERED SECURITIES TRANSACTIONS AND PERMITTED BROKERAGE
ACCOUNTS
No employee of MAS shall purchase or sell Covered Securities without prior
written authorization from the appropriate trading desk. Pre-clearance of a
purchase or sale shall be valid and in effect only for the business day in
which such pre-clearance is given; provided, however, that the approval of an
unexecuted purchase or sale is deemed to be revoked when the employee becomes
aware of facts or circumstances that would have resulted in the denial of
approval of the approved purchase or sale were such facts or circumstances made
known to the MAS trading desk at the time the proposed purchase or sale was
originally presented for approval. MAS requires all of its employees to
maintain their personal brokerage accounts at a broker/dealer affiliated with
Morgan Stanley Dean Witter (hereinafter, a "Morgan Stanley Account"). Outside
personal brokerage accounts are permitted only under very limited circumstances
and only with express written approval by the Compliance Department. The
Compliance Department has implemented procedures reasonably designed to monitor
purchases and sales effected pursuant to the aforementioned pre-clearance
procedures.
5. EXEMPTED TRANSACTIONS
(a) The prohibitions of Section 3 and Section 4 of this Code of
Ethics shall not apply to:
(i) Purchases or sales effected in any account over which an
Access Person or an employee of MAS has no direct or
indirect influence or control;
(ii) Purchases or sales which are non-volitional;
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(iii) Purchases which are part of an automatic dividend
reinvestment plan; or
(iv) Purchases effected upon the exercise of rights issued by an
issuer pro rata to all holders of a class of its securities
and sales of such rights so acquired, but only to the extent
such rights were acquired from such issuer.
(b) Notwithstanding the prohibitions of Sections 3(a), (b) and (c)
of this Code of Ethics, the Compliance Department or MAS trading
desk, as appropriate, may approve a purchase or sale of a Covered
Security by employees of MAS which would appear to be in
contravention of the prohibitions in Sections 3(a), (b) and (c)
if it is determined that (i) the facts and circumstances
applicable at the time of such purchase or sale do not conflict
with the interests of the Fund or an Advisory Client, or (ii)
such purchase or sale is only remotely potentially harmful to the
Fund or an Advisory Client because it would be very unlikely to
affect a highly institutional market, or because it is clearly
not related economically to the securities to be purchased, sold
or held by the Fund or Advisory Client, and (iii) the spirit and
intent of this Code of Ethics is met.
6. RESTRICTIONS ON RECEIVING GIFTS
No employee of MAS shall receive any gift or other consideration in
merchandise, service or otherwise of more than de minimis value from any
person, firm, corporation, association or other entity that does business with
or on behalf of the Fund or an Advisory Client.
7. SERVICE AS A DIRECTOR
No employee of MAS shall serve on the board of directors of a
publicly-traded company without prior written authorization from the Compliance
Department. Approval will be based upon a determination that the board service
would not conflict with the interests of the Fund and its stockholders or an
Advisory Client.
8. REPORTING
(a) Unless excepted by Section 8(d) or (e) of this Code of Ethics,
each Access Person must disclose all personal holdings in Covered
Securities to the Compliance Department for its review no later
than 10 days after becoming an Access Person and annually
thereafter. The initial and annual holdings reports must contain
the following information:
(i) The title, number of shares and principal amount of each
Covered Security in which the Access Person has any direct
or indirect beneficial ownership;
(ii) The name of any broker, dealer or bank with or through whom
the Access Person maintained an account in which any
securities were held for the direct or indirect benefit of
the Access Person; and
(iii) The date the report was submitted to the Compliance
Department by the Access Person.
(b) Unless excepted by Section 8(d) or (e) of this Code of Ethics,
each Access Person and each employee of MAS must report to the
Compliance Department for its review within 10 days of the end of
a calendar quarter the information described below with respect
to transactions in Covered Securities in which such person has,
or by reason of such transactions acquires any direct or indirect
beneficial interest:
(i) The date of the transaction, the title, the interest rate
and maturity date (if applicable), the number of shares and
the principal amount of each Covered 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 Covered Security at which the purchase or
sale was effected;
(iv) The name of the broker, dealer or bank with or through which
the purchase or sale was effected; and
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(v) The date the report was submitted to the Compliance
Department by such person.
(c) Unless excepted by Section 8(d) or (e) of this Code of Ethics,
each Access Person and each employee of MAS must report to the
Compliance Department for its review within 10 days of the end of
a calendar quarter the information described below with respect
to any account established by such person in which any securities
were held during the quarter for the direct or indirect benefit
of such person:
(i) The name of the broker, dealer or bank with whom the account
was established;
(ii) The date the account was established; and
(iii) The date the report was submitted to the Compliance
Department by such person.
(d) An Access Person will not be required to make any reports
described in Sections 8(a), (b) or (c) above for any account over
which the Access Person has no direct or indirect influence or
control. An Access Person or an employee of MAS will not be
required to make the annual holdings report under Section 8(a)
and the quarterly transactions report under Section 8(b) with
respect to purchases or sales effected for, and Covered
Securities held in: (i) a Morgan Stanley Account, (ii) an account
in which the Covered Securities were purchased pursuant to a
dividend reinvestment plan (up to an amount equal to the cash
value of a regularly declared dividend, but not in excess of this
amount), or (iii) an account for which the Compliance Department
receives duplicate trade confirmations and quarterly statements.
(e) A Disinterested Director of the Fund, who would be required to
make a report solely by reason of being a Fund director, is not
required to make initial and annual holdings reports.
Additionally, such Disinterested Director need only make a
quarterly transactions report for a purchase or sale of Covered
Securities if he or she, at the time of that transaction, knew
or, in the ordinary course of fulfilling his or her official
duties as a Disinterested Director of the Fund, should have known
that, during the 15-day period immediately preceding or following
the date of the Covered Securities transaction by him or her,
such Covered Security is or was purchased or sold by the Fund or
was being considered for purchase or sale by the Fund.
(f) The reports described in Sections 8(a), (b) and (c) above may
contain a statement that the reports shall not be construed as an
admission by the person making such reports that he or she has
any direct or indirect beneficial ownership in the Covered
Securities to which the reports relate.
9. ANNUAL CERTIFICATIONS
All Access Persons and employees of MAS must certify annually that they
have read, understood and complied with the requirements of this Code of Ethics
and recognize that they are subject to this Code of Ethics by signing the
certification attached hereto as Exhibit A.
10. BOARD REVIEW
The management of the Fund and representatives or officers of MAS and,
with respect to the Fund, MASDI, shall each provide the Fund's Board of
Directors, at least annually, with the following:
(a) a summary of existing procedures concerning personal investing
and any changes in the procedures made during the past year;
(b) a description of any issues arising under this Code of Ethics or
procedures since the last such report, including, but not limited
to, information about material violations of this Code of Ethics
or procedures and sanctions imposed in response to material
violations;
(c) any recommended changes in the existing restrictions or
procedures based upon the Fund's or MAS's experience under this
Code of Ethics, evolving industry practices or developments in
applicable laws and regulations; and
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(d) a certification (attached hereto as Exhibits B and C, as
appropriate) that each has adopted procedures reasonably
necessary to prevent its Access Persons from violating this Code
of Ethics.
11. SANCTIONS
Upon discovering a violation of this Code of Ethics, the Board of
Directors of the Fund or the Executive Committee of MAS, as the case may be,
may impose such sanctions as it deems appropriate.
12. RECORDKEEPING REQUIREMENTS
The management of the Fund and representatives or officers of MAS and,
with respect to the Funds, MASDI, each shall maintain, as appropriate, the
following records for a period of five years, the first two years in an easily
accessible place, and shall make these records available to the Securities and
Exchange Commission or any representative of such during an examination of the
Fund or of MAS:
(a) a copy of this Code of Ethics or any other Code of Ethics which
was in effect at any time within the previous five years;
(b) a record of any violation of this Code of Ethics during the
previous five years, and of any action taken as a result of the
violation;
(c) a copy of each report required by Section 8 of this Code of
Ethics, including any information provided in lieu of each such
report;
(d) a record of all persons, currently or within the past five
years, who are or were subject to this Code of Ethics and who are
or were required to make reports under Section 8 of this Code of
Ethics;
(e) a record of all persons, currently or within the past five
years, who are or were responsible for reviewing the reports
required under Section 8 of this Code of Ethics; and
(f) a record of any decision, and the reasons supporting the
decision, to approve the acquisition of securities described in
Sections 3(e) and (f) of this Code of Ethics.
The effective date of this Code of Ethics is February 24, 2000.
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EXHIBIT A
MAS FUNDS
(THE "FUND")
AND
MILLER ANDERSON & SHERRERD, LLP
("MAS")
AND
MAS FUND DISTRIBUTION, INC.
("MASDI")
CODE OF ETHICS
ANNUAL CERTIFICATION
I hereby certify that I have read and understand the Code of Ethics (the
"Code") which has been adopted by the Fund, MAS and MASDI and recognize that it
applies to me and agree to comply in all respects with the policies and
procedures described therein. Furthermore, I hereby certify that I have
complied with the requirements of the Code in effect, as amended, for the year
ended December 31, , and that all of my reportable transactions in Covered
Securities were executed and reflected accurately in a Morgan Stanley Account
(as defined in the Code) or that I have attached a report that satisfies the
annual holdings disclosure requirement as described in Section 8(a) of the
Code.
Date: ---------------- , ----- Name: --------------------------------
Signature: -----------------------------
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EXHIBIT B
MILLER ANDERSON & SHERRERD, LLP ("MAS")
ANNUAL CERTIFICATION UNDER RULE 17J-1
OF THE INVESTMENT COMPANY ACT OF 1940
Pursuant to Rule 17j-1 under the Investment Company Act of 1940, as
amended (the "1940 Act") and pursuant to the Code of Ethics for MAS, MAS Funds
and MAS Fund Distribution, Inc., MAS hereby certifies to the Board of Trustees
of MAS Funds that MAS has adopted procedures reasonably necessary to prevent
Access Persons (as defined in the Code of Ethics) from violating the Code of
Ethics.
Date: ------------------
By: --------------------------------
Name: Paul A. Frick
Title: Compliance Officer
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EXHIBIT C
MAS FUND DISTRIBUTION, INC.
("MASDI")
ANNUAL CERTIFICATION UNDER RULE 17J-1
OF THE INVESTMENT COMPANY ACT OF 1940
Pursuant to Rule 17j-1 under the Investment Company Act of 1940, as
amended (the "1940 Act") and pursuant to the Code of Ethics for MASDI, MAS
Funds and Miller Anderson & Sherrerd, LLP, MASDI hereby certifies to the Board
of Trustees of MAS Funds that MASDI has adopted procedures reasonably necessary
to prevent Access Persons (as defined in the Code of Ethics) from violating the
Code of Ethics.
Date: ------------------
By: --------------------------------
Name: Paul A. Frick
Title: Compliance Officer
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