EXHIBIT 23 (p)
RESTATED CODE OF ETHICS
OF
BRIDGES INVESTMENT FUND, INC. &
BRIDGES INVESTMENT COUNSEL, INC.
PREAMBLE
This Restated Code of Ethics represents a replacement to the Code of Ethics
adopted by Bridges Investment Fund, Inc. and Bridges Investment Counsel, Inc. on
January 12, 1982 and subsequently amended on December 6, 1994 and October 12,
1999. The restatement of the Code of Ethics is in response to an amendment to
Rule 17j-1 of the General Rules and Regulations under the Investment Company Act
of 1940, as amended. The effective date of this Code is retroactive to May 1,
1981.
SECTION 1 _ DEFINITIONS
The following definitions establish the applicability of this Code of
Ethics to various persons and situations:
(a) "Advisor" means Bridges Investment Counsel, Inc. and any other
investment advisor for the Fund.
(b) "Fund" means Bridges Investment Fund, Inc.
(c) "Investment Company" means a company registered as such under the
Investment Company Act of 1940 and for which the Advisor is the
investment advisor.
(d) "Access Person" means:
(i) any director, officer, general partner or Advisory Person of
the Fund;
(ii) any director, officer, general partner or Advisory Person of
an Adviser who is primarily engaged in a business or
businesses other than advising investment companies
registered under the Investment Company Act or other
advisory clients as defined in paragraph (a)(1)(i)(B) of
Rule 17j-1, who, with respect to an investment company
registered under the Investment Company Act, makes any
recommendation, participates in the determination of which
recommendation will be made, or whose principal function or
duties relate to the determination of which recommendation
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will be made, or who, in connection with his or her duties,
obtains any information concerning recommendations on
Covered Securities being made by the Adviser to an
investment company registered under the Investment Company
Act; and
(iii) any director, officer or general partner of the
principal underwriter, if any, who, in the ordinary course
of business, makes, participates in or obtains information
regarding, the purchase or sale of Covered Securities by the
Fund for which the principal underwriter acts, or whose
functions or duties on the ordinary course of business
relate to the making of any recommendation to the Fund
regarding the purchase or sale of Covered Securities.
(e) "Advisory Person" of the Fund or of the Advisor means:
(i) any employee of the Fund or the Advisor, or of any company
in a control relationship to the Fund or Advisor, 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 whose
functions relate to the making of any recommendations with
respect to such purchases or sales; and
(ii) any natural person in a control relationship to the
Fund or Advisor who obtains information concerning
recommendations made to the Fund with regard to the purchase
or sale of Covered Securities by the Fund.
A person does not become an "Advisory Person" by virtue of the
following conditions:
(1) normally assisting in the preparation of public
reports, or receiving public reports, but not receiving
information about current recommendations or trading;
or
(2) a single instance of obtaining knowledge of current
recommendations or trading activity, or infrequently
and inadvertently obtaining such knowledge.
The phrase " . . . makes the purchase or sale . . ." is intended
to mean someone who places orders or otherwise arranges
transactions for the Fund.
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(f) "Affiliated Person" as defined in Section 2(a)(3) of the
Investment Company Act of 1940 means:
(i) a person directly or indirectly owning, controlling, or
holding the power to vote, 5 percent or more of the
outstanding voting securities of such other person;
(ii) any person 5 percent or more of whose outstanding
voting securities are directly or indirectly owned
custodially or held with the power of vote by such
other person;
(iii)any person directly or indirectly controlling,
controlled by, or under common control with such other
person;
(iv) any officer, director, partner, co-partner or employee
of such other person;
(v) if such other person is an investment company, any
investment advisor thereof or any member of an advisory
board thereof; and
(vi) if such other person is an unincorporated investment
company not having a board of directors, the depositor
thereof.
(g) "Beneficial Ownership" shall be interpreted in the same manner as
it would be in determining whether a person is the beneficial
owner of a security for purposes of section 16 of the Securities
Exchange Act of 1934 and the rules and regulations thereunder.
(h) "Control" shall have the same meaning as that set forth in
Section 2(a)(9) of the Investment Company Act.
(i) "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 Investment Company Act.
(j) "Purchase or sale of a Covered Security" includes, inter alia,
the writing of an option to purchase or sell a Covered Security.
(k) "Covered Security" means a security as defined in section
2(a)(36) of the Investment Company Act, except that it does not
include:
(i) Direct obligations of the Government of the United States;
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(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
registered under the Investment Company Act.
(l) "Limited Offering" means an offering that is exempt from
registration under the Securities Act of 1933 pursuant to section 4(2)
or section 4(6) or pursuant to rule 504, rule 505 or rule 506 under
the Securities Act of 1933.
(m) "Security Held or to be Acquired" means:
(i) Any Covered Security which, within the most recent 15 days:
(A) is or has been held by the Fund; or
(B) is being or has been considered by the Fund or Advisor
for purchase by the Fund; and
(ii) Any option to purchase or sell, and any security convertible
into or exchangeable for, a Covered Security described in
Section 1(m)(i).
SECTION 2 _ EXEMPTED TRANSACTIONS
The prohibitions of Section 3A of this Code of Ethics shall not apply to:
(a) Purchases or sales effected in any account over which an Access Person
has no direct or indirect influence or control.
(b) Purchases or sales of securities which are not eligible for purchase
or sale by the Fund.
(c) Purchases or sales which are non-volitional on the part of either the
Access Person or the Fund.
(d) Purchases which are part of an automatic dividend reinvestment plan.
(e) 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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(f) Purchases or sales which receive the prior approval of the President,
Vice President or Treasurer of the Fund because they are not
potentially harmful to the Fund because they would be very unlikely to
affect a highly institutional market, or because they clearly are not
related economically to the securities to be purchased, sold or held
by the Fund.
SECTION 3 _ PROHIBITIONS
In determining the form and content of a prohibition, persons should bear
in mind that Rule 17j-1 is not the exclusive source of restrictions on insider
activities. Other provisions of the federal securities laws must also be
considered. Employees of investment advisors, in particular, should be mindful
of the anti-fraud and reporting provisions of the Investment Advisors Act of
1940, especially Section 204 and the rules thereunder.
A. No Access Person shall purchase or sell, directly or indirectly, any
Covered Security in which he or she has, or by reason of such
transaction acquires, any direct or indirect beneficial ownership and
which to his or her actual knowledge at the time of such purchase or
sale (a) is being considered for purchase or sale by the Fund; or (b)
is being purchased or sold by the Fund; or (c) has been purchased or
sold by the Fund within the most recent 15 days.
B. It is unlawful for any Affiliated Person of or principal underwriter
for a Fund, or any Affiliated Person of the Advisor or principal
underwriter for a Fund, in connection with the purchase or sale,
directly or indirectly, by the person of a Security Held or to be
Acquired by the Fund:
(1) To employ any device, scheme or artifice to defraud the Fund;
(2) To make any untrue statement of a material fact to the Fund or
omit to state a material fact necessary in order to make the
statements made to the Fund, in light of the circumstances under
which they are made, not misleading;
(3) To engage in any act, practice or course of business that
operates or would operate as a fraud or deceit on the Fund; or
(4) To engage in any manipulative practice with respect to the Fund.
SECTION 4 _ REPORTING REQUIREMENTS OF ACCESS PERSONS
4A. Reports Required. Unless excepted by paragraph 4B of this Section,
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every Access Person of the Fund and every Access Person of the Advisor
or principal underwriter for the Fund, will report to the Fund,
Advisor or principal underwriter:
(a) Initial Holdings Reports.
(i) As required by Section 10(5), not later than 10 days after
the person becomes an Access Person, the Access Person shall
complete either the Confidential Disclosure of Personal
Holdings and Liabilities Form, attached hereto as Exhibit 1,
or the Initial Holdings Report, attached hereto as Exhibit
1-A, which shall contain at a minimum the following
information:
(1) The title, number of shares and principal amount of
each Covered Security in which the Access Person had
any direct or indirect beneficial ownership when the
person became an Access Person;
(2) The name of any broker, dealer or bank with whom the
Access Person maintained an account in which any
securities were held for the direct or indirect benefit
of the Access Person as of the date the person became
an Access Person; and
(3) The date that the report is submitted by the Access
Person.
(ii) Exception:
(1) A Disinterested Director of the Fund who would be
required to make a report solely by reason of being the
Fund director need not make an initial report.
(b) Quarterly Transaction Reports.
(i) As required by Section 10(5), not later than 10 days after
the end of the calendar quarter, the Access Person shall
complete the Quarterly Transactions Report, attached hereto
as Exhibit 2, which shall contain at a minimum the following
information:
(1) With respect to any transaction during the quarter in a
Covered Security in which the Access Person had any
direct or indirect beneficial ownership:
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(A) 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;
(B) The nature of the transaction (i.e., purchase,
sale or any other type of acquisition or
disposition);
(C) The price of the Covered Security at which the
transaction was effected;
(D) The name of the broker, dealer or bank with or
through which the transaction was effected; and
(E) The date that the report is submitted by the
Access Person.
(2) With respect to any account established by the Access
Person in which any securities were held during the
quarter for the direct or indirect benefit of the
Access Person:
(A) The name of the broker, dealer or bank with whom
the Access Person established the account;
(B) The date the account was established; and
(C) The date that the report is submitted by the
Access Person.
(ii) Exceptions:
(1) A Disinterested Director of the Fund who would be
required to make a report solely by reason of being the
Fund director, need only make a quarterly transaction
report if the director knew or, in the ordinary course
of fulfilling his or her official duties as the Fund
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director, should have known that during the 15-day
period immediately before or after the director's
transaction in a Covered Security, the Fund purchased
or sold the Covered Security, or the Fund or the
Advisor considered purchasing or selling the Covered
Security.
(2) An Access Person to the Advisor need not make a
quarterly transaction report to the Advisor if all the
information in the report would duplicate information
required to be recorded pursuant to Rules 204-2(a)(12)
or 204-2(a)(13) of the Investment Company Act of 1940.
(3) An Access Person need not make a quarterly transaction
report if the report would duplicate information
contained in broker trade confirmations or account
statements received by the Fund, Advisor or principal
underwriter with respect to the Access Person in the
time period required.
(c) Annual Holdings Reports.
(i) As required by Section 10(5), annually, the Access Person
shall complete either the Confidential Disclosure of
Personal Holdings and Liabilities Form, attached hereto as
Exhibit 1, or the Annual Holdings Report, attached hereto as
Exhibit 3, which shall contain at a minimum the following
information (which information will be current as of a date
no more than 30 days before the report is submitted):
(1) The title, number of shares and principal amount of
each Covered Security in which the Access Person had
any direct or indirect beneficial ownership;
(2) The name of any broker, dealer or bank with whom the
Access Person maintains an account in which any
securities are held for the direct or indirect benefit
of the Access Person; and
(3) The date that the report is submitted by the Access
Person.
(ii) Exception:
(1) A Disinterested Director of the Fund who would be
required to make a report solely by reason of being the
Fund director need not make an annual report.
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4B. Exceptions from All Reporting Requirements.
(a) An Access Person shall not be required to make any reports under
this Section with respect to transactions effected for, and
Covered Securities held in, any account over which such person
does not have any direct or indirect influence or control.
(b) An Access Person to a Fund's principal underwriter need not make
a report to the principal underwriter under this Section 4 if:
(i) The principal underwriter is not an affiliated person of the
Fund (unless the Fund is a unit investment trust) or the
Advisor of the Fund; and
(ii) The principal underwriter has no officer, director or
general partner who serves as an officer, director or
general partner of the Fund or of the Advisor of the Fund.
4C. Review of Reports. Each Fund, Advisor and principal underwriter to
which reports are required to be made by this Section 4 will institute
procedures by which appropriate management or compliance personnel
review these reports.
4D. Notification of Reporting Obligation. Each Fund, Advisor and principal
underwriter to which reports are required to be made by this Section 4
will identify all Access Persons who are required to make these
reports and will inform those Access Persons of their reporting
obligation.
4E. Any report required by this Section may contain a statement that the
report shall not be construed as an admission that the person making
the report that he or she has any direct or indirect beneficial
ownership in the Covered Security to which the report relates.
4F. Recordkeeping. The Fund and Advisor will maintain the following at
its principal place of business:
(a) A copy of each report made by an Access Person as required by
this Section, including any information provided in lieu of the
reports, will be maintained for at least five years after the end
of the fiscal year in which the report is made or the information
is provided, the first two years in an easily accessible place;
and
(b) A record of all persons, currently or within the past five years,
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who are or were required to make reports under Section 4, or who
are or were responsible for reviewing these reports, will be
maintained in an easily accessible place.
SECTION 5 _ SANCTIONS
Upon discovering a violation of this Code of Ethics, the board of directors
of the Fund may impose such sanctions as it deems appropriate, including, inter
alia, a letter of censure or suspension or termination of the employment of the
violator. All material violations of this Code of Ethics and any sanctions
imposed with respect thereto shall be reported periodically to the Board of
Directors of the Fund.
SECTION 6 _ 17 C.F.R. 270.17J-1
The full text of Investment Company Act Rule 17j-1 in effect on October 29,
1999 is attached as Appendix I for ease of reference to the regulatory standard
to which the parties and persons affected by the Code of Ethics must adhere.
SECTION 7 _ GENERAL FIDUCIARY PRINCIPLES
The general fiduciary principles that govern person investment activities
of our covered individuals under this Code of Ethics are: (1) the duty at all
times to place the interest of Fund shareholders and Advisor clients first; (2)
the requirement that all personal securities transactions be conducted
consistent with this Code of Ethics and in such a manner as to avoid any actual
or potential conflict of interest or any absence of an individual's position of
trust and responsibility; and (3) the fundamental standard that the Fund and
Advisor personnel should not take inappropriate advantage of their positions.
SECTION 8 _ APPLICABILITY OF RESTRICTIONS AND PROCEDURE
This Code of Ethics should apply to certain sets or categories of personnel
and under different circumstances as set forth in this section.
1. Different Categories of Personnel
Portfolio Managers _ The first set includes portfolio managers _ those
employees entrusted with direct responsibility and authority to make
investment decisions affecting the Fund, and who, therefore, are the
persons best informed about the Fund's investment plans and interests.
Investment Personnel _ Any employee of the Fund or Advisor (or of any
company in a control relationship to the Fund or Advisor) who, in
connection with his or her regular functions or duties, makes or
participates in making recommendations regarding the purchase or sale
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of securities by the Fund and any natural person who controls the Fund
or Advisor and who obtains information concerning recommendations made
to the Fund regarding the purchase or sale of securities by the Fund.
This includes portfolio managers as well as other investment
personnel, such as the security analysts and traders who provide
information and advise to a portfolio manager or who help execute the
portfolio analysis decisions.
Access Persons _ The third and largest set of employees includes all
Access Persons, as this term is used in Rule 17j-1 and has been
applied in the securities industry. In addition to all portfolio
managers and other investment personnel, Access Persons include all
individuals who, in the course of their normal work force duties,
obtain information about an investment company's, investment advisory
client's, or a principal underwriter's purchase or sale of securities.
In keeping with the spirit of Rule 17j-1, the category of Access
Persons will be construed broadly to include all employees of the
companies bound by this Code of Ethics and members of their families
with respect to the trading prohibitions of Section 3.
2. Consideration of Different Circumstances
This Code of Ethics will not apply to personal transactions
involving certain types of securities that do not implicate the
policies of the Rule. Personal transactions involving small amounts
of securities that have very high market capitalization and high
average daily trading volume may have an exception from this Code of
Ethics, although the general rule will be broad applicability for all
transactions.
An Access Person who is also an investment advisory client of the
companies bound by this Code of Ethics may be exempt from this Code of
Ethics when a security transaction is undertaken as part of the
conduct of the portfolio in the ordinary course of business for that
account and for advisory clients with similar investment objectives
and assets allocation policies.
SECTION 9 _ SUBSTANTIVE RESTRICTIONS ON PERSONAL INVESTING ACTIVITIES
1. Initial Public Offerings
This Code of Ethics prohibits investment personnel from acquiring
any securities in an initial public offering in order to preclude any
possibility of their profiting improperly from their positions on
behalf of an investment company.
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2. Limited Offering
This Code of Ethics requires express prior approval from the Fund
or Advisor of any direct or indirect acquisition of beneficial
ownership of any securities by investment personnel in a Limited
Offering. This prior approval should take into account, among other
factors, whether the investment opportunity should be reserved for the
Fund and its shareholders or an investment advisory client, and
whether the opportunity is being offered to an individual by virtue of
his or her position with those companies. Investment personnel who
have been authorized to acquire securities in a Limited Offering
should be required to disclose that investment when they play a part
in the Fund's or investment advisory client's subsequent
consideration of an investment in the issuer. In such circumstances,
the Fund's decision to purchase securities of the issuer should be
subject to an independent review by investment personnel with no
personal interest in the issuer.
3. Blackout Periods
This Code of Ethics prohibits any Access Person from executing a
securities transaction on a day during which any investment company in
his or her complex has a pending "buy" or "sell" order in that same
security until that order is executed or withdrawn. In addition, this
Code of Ethics prohibits any portfolio manager from buying or selling
a security within at least seven calendar days before or after an
investment company that he or she manages trades in that security.
Any profits realized on trades within the proscribed periods should be
required to be disgorged.
4. Ban on Short-Term Trading Profits
This Code of Ethics prohibits all investment personnel from
profiting on the purchase and sale, or sale and purchase, of the same
or equivalent securities within 60 calendar days. Any profits
realized on such short-term trades will be required to be disgorged.
5. Gifts
This Code of Ethics prohibits investment personnel from receiving
any gifts of anything of more than de minims value from any person or
entity that does business with or on behalf of the Fund or Advisor.
6. Service as a Director
This Code of Ethics prohibits investment personnel from serving
on the boards of directors of publicly traded companies, absent prior
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authorization based upon a determination that the board service would
be consistent with the interests of the Fund and its shareholders and
the Advisor. In the relatively small number of instances in which
board service is authorized, investment personnel serving as directors
normally should be isolated from those making investment decisions
through "Chinese Wall" or other procedures.
SECTION 10 _ COMPLIANCE PROCEDURES
1. Preclearance
This Code of Ethics requires all Access Persons to "preclear"
personal securities investments before such transactions are
initiated.
2. Records of Securities Transactions
This Code of Ethics requires all Access Persons to direct their
brokers, or other financial intermediaries that may pay for, hold, or
receive securities, to supply to a designated compliance official for
the Fund and/or Advisor, on a timely basis, duplicate copies of
confirmations of all personal securities transactions and copies of
periodic statements for all securities accounts.
3. NASD Rulemaking _ Opening of Accounts
Upon adoption by the NASD of the appropriate Rule, this Code of
Ethics requires all broker dealers to notify a registered investment
advisor when any of its employees opens a brokerage account.
Employees are hereby required to notify their employer that they have
initiated an account opening at a broker, bank or other financial
intermediary, and each employee will acknowledge that written
instructions have been given to the broker or financial intermediary
to send regular or normal transaction confirmations and statements of
account to the employer.
4. Post-trade Monitoring
The Fund and Advisor will implement appropriate procedures to
monitor investment activity by Access Persons after preclearance has
been granted. The system of procedures will seek to identify patterns
of personal securities trading occurring before Fund or advisory
clients trade. The system of procedures may involve sampling and
comparison of trading activities of various accounts and individuals
within our office environment.
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5. Disclosure of Personal Holdings and Liabilities
Under Section 4, this Code of Ethics requires that all employees
of the Fund, the Advisor, and the principal underwriter, if any,
disclose all personal securities holdings and personal financial
liabilities upon commencement of employment and thereafter on an
annual basis. Section 4 also requires quarterly transaction reports
and updates for such individuals.
6. Certification of Compliance With Code of Ethics
This Code of Ethics requires all Access Persons be required to
certify annually that they have read and understand this Code and that
they recognize that they are subject thereto. Further, Access Persons
should be required to certify annually that they have complied with
the requirements of this Code of Ethics and they have disclosed or
reported all personal securities transactions required to be disclosed
or reported pursuant to the requirements of this Code.
This Code of Ethics also requires the Fund, Advisor and principal
underwriter, if any, to certify, when adopting or making any material
changes to its code, that it has adopted procedures reasonably
necessary to prevent Access Persons from violating this Code.
7. Review By the Board of Directors
The management of the Fund, the Advisor and principal
underwriter, if any, will prepare a written annual report to the Board
of Directors of the Fund that, at a minimum _
(a) summarizes existing procedures concerning personal investing and
any changes in the procedures made during the past year;
(b) identifies any violations requiring significant remedial action
during the past year and the sanctions imposed in response to
the violations;
(c) identifies any recommended changes in existing restrictions or
procedures based upon the Fund's, Advisor's or principal
underwriter's experience under the code of ethics, evolving
industry practices, or developments in applicable laws or
regulations; and
(d) certifies that the Fund, Advisor or principal underwriter, if
any, has adopted procedures reasonably necessary to prevent
Access Persons from violating its code of ethics.
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The Fund and Advisor will maintain a copy of each report at its
principal place of business for at least five years after the end of
the fiscal year in which it was made, the first two years in an easily
accessible place.
8. Additional Disclosure
The Fund will disclose in its Prospectus whether or not Access
Persons are permitted to engage in personal securities transactions,
and, if so, subject to what general restrictions and procedures. The
Fund will also provide in its Prospectus whether it, the Advisor and
principal underwriter, if any, has adopted codes of ethics and will
file such codes as exhibits to its registration statement.
SECTION 11 _ TRANSITIONAL PERIOD
The management and employees of the Fund, the Advisor will be allowed a
period from the date of adoption of this Restated Code of Ethics until March 1,
2000 to comply with Sections 4A(a), 4C, 4D and 4F(b), Section 9(2) and Section
10(8). The management and employees of the Fund and Advisor will be allowed a
period from the date of adoption of this Restated Code of Ethics until April 10,
2000 to supply the new information required under Section 4A(b) and until
September 1, 2000 to comply with Section 4A(c), Section 10(7) and Section 16.
SECTION 12 _ AUTHORIZERS FOR PRECLEARANCE
The President of the Fund and Advisor is the primary authorizing person for
preclearance of personal securities transactions. In the absence or non-
availability of the President, two officers elected at the last Annual Meeting
of the Board of Directors for the respective companies may sign the
authorization for a preclearance of a personal security transaction.
SECTION 13 _ FILING OF REPORTS BY PORTFOLIO MANAGERS, INVESTMENT PERSONNEL,
ACCESS PERSONS AND OTHER PERSONS AND ENTITIES
Reports required to be filed under this Code of Ethics should be directed
to the President of the Fund and the Advisor. The President may delegate review
functions of these materials to officers or agents elected or appointed by the
Board of Directors of the respective companies.
SECTION 14 _ DISCIPLINE
Employees and other persons who willfully violate this Code of Ethics may
expect disciplinary action appropriate to the situation involved. Penalties
applied by other investment advisors and investment companies are published in
16
industry association communications and SEC releases. These disciplinary
actions should be described as harsh in the context of our subject companies;
nonetheless, they could form the basis of actions and fine assessments taken by
the management and directors of the entities bound by this Code of Ethics.
SECTION 15 _ CONFIDENTIALITY
Reports that are filed by persons or entities under this Code of Ethics
will be handled in a confidential manner. The information will be reviewed only
by senior corporate officers on a need to know basis or by a certified public
accountant or attorney if the entities adopting this Code of Ethics desire to
retain outside reviewers to prepare summary reports.
SECTION 16 _ ADOPTION AND APPROVAL OF CODE OF ETHICS
1. This Code will be approved by the Board of Directors of the Fund,
including a majority of directors who are not interested persons. The
Board of Directors of the Fund will also approve any material changes
to this Code no later than six months after the adoption of the
material change.
2. The code of ethics of an Advisor or principal underwriter, if any,
will be approved by the Board of Directors of the Fund before
initially retaining the services of the Advisor or principal
underwriter. The Board of Directors of the Fund will approve any
material changes to these codes of ethics no later than six months
after the adoption of the material change.
3. Before approving the codes or any material changes to the codes, the
Board of Directors of the Fund will receive a certification from the
Fund, Advisor or principal underwriter in accordance with the
requirements of Section 10(6).
4. The Fund, Advisor and principal underwriter will maintain a copy of
its current code of ethics and any code of ethics that was in effect
within the past five years in an easily accessible place at its
principal place of business.
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APPENDIX I
FULL TEXT OF RULE 17J-1
INVESTMENT COMPANY ACT
17 C.F.R. 270.17J-1
(EFFECTIVE OCTOBER 29, 1999)
S 270.17J-1 PERSONAL INVESTMENT ACTIVITIES OF INVESTMENT COMPANY PERSONNEL.
(a) Definitions. For purposes of this section:
(1) Access Person means:
(i) Any director, officer, general partner or Advisory Person of a
Fund or of a Fund's investment adviser.
(A) If an investment adviser is primarily engaged in a business
or businesses other than advising Funds or other advisory
clients, the term Access Person means any director, officer,
general partner or Advisory Person of the investment adviser
who, with respect to any Fund, makes any recommendation,
participates in the determination of which recommendation
will be made, or whose principal function or duties relate
to the determination of which recommendation will be made,
or who, in connection with his or her duties, obtains any
information concerning recommendations on Covered Securities
being made by the investment adviser to any Fund.
(B) An investment adviser is "primarily engaged in a business or
businesses other than advising Funds or other advisory
clients" if, for each of its most recent three fiscal years
or for the period of time since its organization, whichever
is less, the investment adviser derived, on an
unconsolidated basis, more than 50 percent of its total
sales and revenues and more than 50 percent of its income
(or loss), before income taxes and extraordinary items, from
the other business or businesses.
(ii) Any director, officer or general partner of a principal
underwriter who, in the ordinary course of business, makes,
participates in or obtains information regarding, the purchase or
2
sale of Covered Securities by the Fund for which the principal
underwriter acts, or whose functions or duties in the ordinary
course of business relate to the making of any recommendation to
the Fund regarding the purchase or sale of Covered Securities.
(2) Advisory Person of a Fund or of a Fund's investment adviser means:
(i) Any employee of the Fund or investment adviser (or of any company
in a control relationship to the Fund or investment adviser) 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 a Fund, or whose functions relate
to the making of any recommendations with respect to the
purchases or sales; and
(ii) Any natural person in a control relationship to the Fund or
investment adviser who obtains information concerning
recommendations made to the Fund with regard to the purchase or
sale of Covered Securities by the Fund.
(3) Control has the same meaning as in section 2(a)(9) of the Act [15
U.S.C. 80a-2(a)(9)].
(4) Covered Security means a security as defined in section 2(a)(36) of
the Act [15 U.S.C. 80a-2(a)(36)], except that it does not include:
(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 Funds.
(5) Fund means an investment company registered under the Investment
Company Act.
(6) An Initial Public Offering means an offering of securities registered
under the Securities Act of 1933 [15 U.S.C. 77a], the issuer of which,
immediately before the registration, was not subject to the reporting
requirements of sections 13 or 15(d) of the Securities Exchange Act of
1934 [15 U.S.C. 78m or 78o(d)].
(7) Investment Personnel of a Fund or of a Fund's investment adviser
means:
(i) Any employee of the Fund or investment adviser (or of any company
in a control relationship to the Fund or investment adviser) who,
3
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.
(ii) Any natural person who controls the Fund or investment
adviser and who obtains information concerning recommendations
made to the Fund regarding the purchase or sale of securities by
the Fund.
(8) A Limited Offering means an offering that is exempt from registration
under the Securities Act of 1933 pursuant to section 4(2) or section
4(6) [15 U.S.C. 77d(2) or 77d(6)] or pursuant to rule 504, rule 505,
or rule 506 [17 CFR 230.504, 230.505, or 230.506] under the Securities
Act of 1933.
(9) Purchase or sale of a Covered Security includes, among other things,
the writing of an option to purchase or sell a Covered Security.
(10) Security Held or to be Acquired by a Fund means:
(i) Any Covered Security which, within the most recent 15 days:
(A) Is or has been held by the Fund; or
(B) Is being or has been considered by the Fund or its
investment adviser for purchase by the Fund; and
(ii) Any option to purchase or sell, and any security convertible
into or exchangeable for, a Covered Security described in
paragraph (a)(10)(i) of this section.
(b) Unlawful Actions. It is unlawful for any affiliated person of or
principal underwriter for a Fund, or any affiliated person of an investment
adviser of or principal underwriter for a Fund, in connection with the
purchase or sale, directly or indirectly, by the person of a Security Held
or to be Acquired by the Fund:
(1) To employ any device, scheme or artifice to defraud the Fund;
(2) To make any untrue statement of a material fact to the Fund or omit to
state a material fact necessary in order to make the statements made
to the Fund, in light of the circumstances under which they are made,
not misleading;
(3) To engage in any act, practice or course of business that operates or
would operate as a fraud or deceit on the Fund; or
(4) To engage in any manipulative practice with respect to the Fund.
4
(c) Code of Ethics.
(1) Adoption and Approval of Code of Ethics.
(i) Every Fund (other than a money market fund or a Fund that does
not invest in Covered Securities) and each investment adviser of
and principal underwriter for the Fund, must adopt a written code
of ethics containing provisions reasonably necessary to prevent
its Access Persons from engaging in any conduct prohibited by
paragraph (b) of this section.
(ii) The board of directors of a Fund, including a majority of
directors who are not interested persons, must approve the code
of ethics of the Fund, the code of ethics of each investment
adviser and principal underwriter of the Fund, and any material
changes to these codes. The board must base its approval of a
code and any material changes to the code on a determination that
the code contains provisions reasonably necessary to prevent
Access Persons from engaging in any conduct prohibited by
paragraph (b) of this section. Before approving a code of a Fund,
investment adviser or principal underwriter or any amendment to
the code, the board of directors must receive a certification
from the Fund, investment adviser or principal underwriter that
it has adopted procedures reasonably necessary to prevent Access
Persons from violating the investment adviser's or principal
underwriter's code of ethics. The Fund's board must approve the
code of an investment adviser or principal underwriter before
initially retaining the services of the investment adviser or
principal underwriter. The Fund's board must approve a material
change to a code no later than six months after adoption of the
material change.
(iii)If a Fund is a unit investment trust, the Fund's principal
underwriter or depositor must approve the Fund's code of ethics,
as required by paragraph (c)(1)(ii) of this section. If the Fund
has more than one principal underwriter or depositor, the
principal underwriters and depositors may designate, in writing,
which principal underwriter or depositor must conduct the
approval required by paragraph (c)(1)(ii) of this section, if
they obtain written consent from the designated principal
underwriter or depositor.
5
(2) Administration of Code of Ethics.
(i) The Fund, investment adviser and principal underwriter must use
reasonable diligence and institute procedures reasonably
necessary to prevent violations of its code of ethics.
(ii) No less frequently than annually, every Fund (other than a
unit investment trust) and its investment advisers and principal
underwriters must furnish to the Fund's board of directors, and
the board of directors must consider, a written report that:
(A) Describes any issues arising under the 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 Fund, investment adviser or principal
underwriter, as applicable, has adopted procedures
reasonably necessary to prevent Access Persons from
violating the code.
(3) Exception for Principal Underwriters. The requirements of paragraphs
(c)(1) and (c)(2) of this section do not apply to any principal
underwriter unless:
(i) The principal underwriter is an affiliated person of the Fund or
of the Fund's investment adviser; or
(ii) An officer, director or general partner of the principal
underwriter serves as an officer, director or general partner of
the Fund or of the Fund's investment adviser.
(d) Reporting Requirements of Access Persons.
(1) Reports Required. Unless excepted by paragraph (d)(2) of this section,
every Access Person of a Fund (other than a money market fund or a
Fund that does not invest in Covered Securities) and every Access
Person of an investment adviser of or principal underwriter for the
Fund, must report to that Fund, investment adviser or principal
underwriter:
(i) Initial Holdings Reports. No later than 10 days after the person
becomes an Access Person, the following information:
6
(A) The title, number of shares and principal amount of each
Covered Security in which the Access Person had any direct
or indirect beneficial ownership when the person became an
Access Person;
(B) The name of any broker, dealer or bank with whom the Access
Person maintained an account in which any securities were
held for the direct or indirect benefit of the Access Person
as of the date the person became an Access Person; and
(C) The date that the report is submitted by the Access Person.
(ii) Quarterly Transaction Reports. No later than 10 days after
the end of a calendar quarter, the following information:
(A) With respect to any transaction during the quarter in a
Covered Security in which the Access Person had any direct
or indirect beneficial ownership:
(1) 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;
(2) The nature of the transaction (i.e., purchase, sale or
any other type of acquisition or disposition);
(3) The price of the Covered Security at which the
transaction was effected;
(4) The name of the broker, dealer or bank with or through
which the transaction was effected; and
(5) The date that the report is submitted by the Access
Person.
(B) With respect to any account established by the Access Person
in which any securities were held during the quarter for the
direct or indirect benefit of the Access Person:
(1) The name of the broker, dealer or bank with whom the
Access Person established the account;
(2) The date the account was established; and
7
(3) The date that the report is submitted by the Access
Person.
(iii) Annual Holdings Reports. Annually, the following information
(which information must be current as of a date no more than 30
days before the report is submitted):
(A) The title, number of shares and principal amount of each
Covered Security in which the Access Person had any direct
or indirect beneficial ownership;
(B) The name of any broker, dealer or bank with whom the Access
Person maintains an account in which any securities are held
for the direct or indirect benefit of the Access Person; and
(C) The date that the report is submitted by the Access Person.
(2) Exceptions from Reporting Requirements.
(i) A person need not make a report under paragraph (d)(1) of this
section with respect to transactions effected for, and Covered
Securities held in, any account over which the person has no
direct or indirect influence or control.
(ii) A director of a Fund who is not an "interested person" of
the Fund within the meaning of section 2(a)(19) of the Act [15
U.S.C. 80a-2(a)(19)], and who would be required to make a report
solely by reason of being a Fund director, need not make:
(A) An initial holdings report under paragraph (d)(1)(i) of this
section and an annual holdings report under paragraph
(d)(1)(iii) of this section; and
(B) A quarterly transaction report under paragraph (d)(1)(ii) of
this section, unless the director knew or, in the ordinary
course of fulfilling his or her official duties as a Fund
director, should have known that during the 15-day period
immediately before or after the director's transaction in a
Covered Security, the Fund purchased or sold the Covered
Security, or the Fund or its investment adviser considered
purchasing or selling the Covered Security.
8
(iii)An Access Person to a Fund's principal underwriter need not
make a report to the principal underwriter under paragraph (d)(1)
of this section if:
(A) The principal underwriter is not an affiliated person of the
Fund (unless the Fund is a unit investment trust) or any
investment adviser of the Fund; and
(B) The principal underwriter has no officer, director or
general partner who serves as an officer, director or
general partner of the Fund or of any investment adviser of
the Fund.
(iv) An Access Person to an investment adviser need not make a
quarterly transaction report to the investment adviser under
paragraph (d)(1)(ii) of this section if all the information in
the report would duplicate information required to be recorded
under SS 275.204-2(a)(12) or 275.204-2(a)(13) of this chapter.
(v) An Access Person need not make a quarterly transaction report
under paragraph (d)(1)(ii) of this section if the report would
duplicate information contained in broker trade confirmations or
account statements received by the Fund, investment adviser or
principal underwriter with respect to the Access Person in the
time period required by paragraph (d)(1)(ii), if all of the
information required by that paragraph is contained in the broker
trade confirmations or account statements, or in the records of
the Fund, investment adviser or principal underwriter.
(3) Review of Reports. Each Fund, investment adviser and principal
underwriter to which reports are required to be made by paragraph
(d)(1) of this section must institute procedures by which appropriate
management or compliance personnel review these reports.
(4) Notification of Reporting Obligation. Each Fund, investment adviser
and principal underwriter to which reports are required to be made by
paragraph (d)(1) of this section must identify all Access Persons who
are required to make these reports and must inform those Access
Persons of their reporting obligation.
(5) Beneficial Ownership. For purposes of this section, beneficial
ownership is interpreted in the same manner as it would be under S
240.16a-1(a)(2) of this chapter in determining whether a person is the
beneficial owner of a security for purposes of section 16 of the
9
Securities Exchange Act of 1934 [15 U.S.C. 78p] and the rules and
regulations thereunder. Any report required by paragraph (d) of this
section may contain a statement that the report will not be construed
as an admission that the person making the report has any direct or
indirect beneficial ownership in the Covered Security to which the
report relates.
(e) Pre-approval of Investments in IPOs and Limited Offerings. Investment
Personnel of a Fund or its investment adviser must obtain approval from the
Fund or the Fund's investment adviser before directly or indirectly
acquiring beneficial ownership in any securities in an Initial Public
Offering or in a Limited Offering.
(f) Recordkeeping Requirements.
(1) Each Fund, investment adviser and principal underwriter that is
required to adopt a code of ethics or to which reports are required to
be made by Access Persons must, at its principal place of business,
maintain records in the manner and to the extent set out in this
paragraph (f), and must make these records available to the Commission
or any representative of the Commission at any time and from time to
time for reasonable periodic, special or other examination:
(A) A copy of each code of ethics for the organization that is in
effect, or at any time within the past five years was in effect,
must be maintained in an easily accessible place;
(B) A record of any violation of the code of ethics, and of any
action taken as a result of the violation, must be maintained in
an easily accessible place for at least five years after the end
of the fiscal year in which the violation occurs;
(C) A copy of each report made by an Access Person as required by
this section, including any information provided in lieu of the
reports under paragraph (d)(2)(v) of this section, must be
maintained for at least five years after the end of the fiscal
year in which the report is made or the information is provided,
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 make reports under paragraph (d) of
this section, or who are or were responsible for reviewing these
reports, must be maintained in an easily accessible place; and
(E) A copy of each report required by paragraph (c)(2)(ii) of this
section must be maintained for at least five years after the end
of the fiscal year in which it is made, the first two years in an
easily accessible place.
10
(2) A Fund or investment adviser must maintain a record of any decision,
and the reasons supporting the decision, to approve the acquisition by
investment personnel of securities under paragraph (e), for at least
five years after the end of the fiscal year in which the approval is
granted.
<PAGE>
EXHIBIT 1
CONFIDENTIAL
DISCLOSURE OF PERSONAL HOLDINGS AND LIABILITIES
Section 10(5) of the Restated Code of Ethics of Bridges Investment Counsel,
Inc. and Bridges Investment Fund, Inc. (the "Companies") requires all investment
advisor and investment company employees to disclose all personal securities
holdings and personal financial liabilities upon commencement of employment and
annually thereafter. In fulfillment of this requirement, the Companies require
all employees to complete the attached Financial Report (which is taken from
the Interagency Biographical and Financial Report used by the Federal Banking
Agencies) on a confidential basis. This certification form and the Financial
Report will be submitted to Mr. Stan Matzke, Jr., who will review them on behalf
of the Companies and may prepare a confidential report and review any issues
raised thereby on a confidential basis with the Chairman of the Audit Committee
of each respective company, and as deemed appropriate, with the Compliance
Officer of such institution.
In accordance with this requirement, I, the undersigned employee, hereby
certify to the Companies that the attached Biographical and Financial Report is
true and correct to the best of my knowledge and belief. This information is
submitted by me to the Companies on a confidential basis.
Dated:
Signature
Print Name of Employee
<PAGE>
EXHIBIT 1-A
BRIDGES INVESTMENT FUND, INC.
BRIDGES INVESTMENT COUNSEL, INC.
INITIAL HOLDINGS REPORT
Name: ________________________________
Date: __________________
This Initial Holdings Report shall be completed no later than 10 days after
the undersigned becomes an Access Person.
Covered Securities1
Please complete the following for Covered Securities in which you had any direct
or indirect beneficial ownership as of the date you became an Access Person.
Title of Securities Number of Shares Principal Amount (for debt
securities)
____________________ _________________ ________________________
____________________ _________________ ________________________
____________________ _________________ ________________________
1 A security as defined in section 2(a)(36) of the Investment Company Act,
except that it does not include: direct obligations of the Government of the
United States; bankers' acceptances, bank certificates of deposit, commercial
paper, and high quality short-term debt instruments, including repurchase
agreements; and shares issued by open-end investment companies registered under
the Investment Company Act.
2
Account Institutions
Please list the name of any broker, dealer or bank with whom you maintained an
account in which any securities were held for your direct or indirect benefit as
of the date you became an Access Person.
________________________________ _____________________________
________________________________ _____________________________
________________________________ _____________________________
________________________________ _____________________________
________________________________ _____________________________
________________________________ _____________________________
I hereby certify that the above information is true and correct to the best
of my knowledge and belief. This information is submitted on a confidential
basis.
_____________________________
(signature)
<PAGE>
EXHIBIT 2
BRIDGES INVESTMENT FUND, INC.
BRIDGES INVESTMENT COUNSEL, INC.
QUARTERLY TRANSACTIONS REPORT
Name: ________________________________
Date: __________________
This Quarterly Transactions Report shall be completed no later than 10 days
after the end of the calendar quarter.
Covered Securities1
Please complete the following for transactions in Covered Securities in which
you had any direct or indirect beneficial ownership during the previous calendar
quarter.
If you had no transactions in Covered Securities during the previous calendar
quarter, write "none" on the following line: ___________________________.
<TABLE>
<CAPTION>
Date of Title of Number of Principal Amount, Nature of Price Name of broker,
Transaction Securities Shares Interest Rate and Transaction (purchase/sale dealer or bank
Maturity Debt (for (purchase, sale through which the
debt securities) or any other transaction was
type of effected
acquisition or
disposition)
<S> <C> <C> <C> <C> <C> <C>
__________ __________ _________ ______________ _____________ ______________ _______________
__________ __________ _________ ______________ _____________ ______________ _______________
__________ __________ _________ ______________ _____________ ______________ ______________
</TABLE>
1 A security as defined in section 2(a)(36) of the Investment Company Act,
except that it does not include: direct obligations of the Government of the
United States; bankers' acceptances, bank certificates of deposit, commercial
paper, and high quality short-term debt instruments, including repurchase
agreements; and shares issued by open-end investment companies registered under
the Investment Company Act.
Account Institutions
Please list the name of any broker, dealer or bank with whom you maintained an
account in which any securities were held for your direct or indirect benefit
during the previous quarter .
_________________________________________ _______________________________
__________________________________________ _______________________________
__________________________________________ ______________________________
_________________________________________ _______________________________
I hereby certify that the above information is true and correct to the best
of my knowledge and belief. This information is submitted on a confidential
basis.
_____________________________
(signature)
<PAGE>
EXHIBIT 3
BRIDGES INVESTMENT FUND, INC.
BRIDGES INVESTMENT COUNSEL, INC.
ANNUAL HOLDINGS REPORT
Name: ________________________________
Date: __________________
Covered Securities1
Please complete the following for Covered Securities in which you had any direct
or indirect beneficial ownership within 30 days of the date of this report.
Title of Securities Number of Shares Principal Amount (for debt
securities)
___________________ _________________ _____________________
___________________ _________________ _____________________
___________________ _________________ _____________________
1 A security as defined in section 2(a)(36) of the Investment Company Act,
except that it does not include: direct obligations of the Government of the
United States; bankers' acceptances, bank certificates of deposit, commercial
paper, and high quality short-term debt instruments, including repurchase
agreements; and shares issued by open-end investment companies registered under
the Investment Company Act.
2
Account Institutions
Please list the name of any broker, dealer or bank with whom you maintained an
account in which any securities were held for your direct or indirect benefit
within 30 days of the date of this report.
________________________________ _____________________________
________________________________ _____________________________
________________________________ _____________________________
________________________________ _____________________________
________________________________ _____________________________
________________________________ _____________________________
I hereby certify that the above information is true and correct to the best
of my knowledge and belief. This information is submitted on a confidential
basis.
_____________________________
(signature)
<PAGE>
