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COMMAND GOVERNMENT FUND
(THE FUND)
CODE OF ETHICS ADOPTED PURSUANT TO RULE 17j-1
UNDER THE INVESTMENT COMPANY ACT OF 1940
(THE CODE)
1. PURPOSES
The Code has been adopted by the Board of Directors/Trustees of the Fund,
in accordance with Rule 17j-1(c) under the Investment Company Act of 1940 (the
Act) and in accordance with the following general principles:
(1) THE DUTY AT ALL TIMES TO PLACE THE INTERESTS OF SHAREHOLDERS FIRST.
Investment company personnel should scrupulously avoid serving their
own personal interests ahead of shareholders' interests in any decision
relating to their personal investments.
(2) THE REQUIREMENT THAT ALL PERSONAL SECURITIES TRANSACTIONS BE CONDUCTED
CONSISTENT WITH THE CODE AND IN SUCH A MANNER AS TO AVOID ANY ACTUAL OR
POTENTIAL CONFLICT OF INTEREST OR ANY ABUSE OF AN INDIVIDUAL'S POSITION OF
TRUST AND RESPONSIBILITY.
Investment company personnel must not only seek to achieve technical
compliance with the Code but should strive to abide by its spirit and the
principles articulated herein.
(3) THE FUNDAMENTAL STANDARD THAT INVESTMENT COMPANY PERSONNEL SHOULD NOT
TAKE INAPPROPRIATE ADVANTAGE OF THEIR POSITIONS.
Investment company personnel must avoid any situation that might
compromise, or call into question, their exercise of fully independent
judgment in the interest of shareholders, including, but not limited to the
receipt of unusual investment opportunities, perquisites, or gifts of more
than a DE MINIMIS value from persons doing or seeking business with the
Fund.
Rule 17j-1 under the Act generally proscribes fraudulent or manipulative
practices with respect to a purchase or sale of a security held or to be
acquired (as
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such term is defined in Section 2.) by an investment company, if effected by an
associated person of such company.
The purpose of the Code is to establish procedures consistent with the Act
and Rule 17j-1 to give effect to the following general prohibitions as set forth
in Rule 17j-1(b) as follows:
(a) It shall be 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:
(1) To employ any device, scheme or artifice to defraud such
registered investment company;
(2) 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;
(3) 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
(4) To engage in any manipulative practice with respect to such
registered investment company.
2. DEFINITIONS
(a) "Access Person" means any director/trustee, officer, general
partner or Advisory Person (including any Investment Personnel, as that
term is defined herein) of the Fund, the Manager, the Adviser/Subadviser,
or the Principal Underwriter.
(b) "Adviser/Subadviser" means the Adviser or Subadviser of the Fund
or both as the context may require.
(c) "Advisory Person" means (i) any employee of the Fund, Manager or
Adviser/Subadviser (or of any company in a control
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relationship to the Fund, Manager or Adviser/Subadviser) who, in connection
with his or her regular functions or duties, makes, participates in, or
obtains information regarding the purchase or sale of a security 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 who obtains information concerning
recommendations made to the Fund with regard to the purchase or sale of a
security.
(d) "Beneficial Ownership" will be interpreted in the same manner as
it would be under Securities Exchange Act Rule 16a-1(a)(2) in determining
which security holdings of a person are subject to the reporting and
short-swing profit provisions of Section 16 of the Securities Exchange Act
of 1934 and the rules and regulations thereunder, except that the
determination of direct or indirect beneficial ownership will apply to all
securities which an Access Person has or acquires (EXHIBIT A).
(e) "Complex" means the group of registered investment companies for
which Prudential Investments Fund Management LLC serves as Manager;
provided, however, that with respect to Access Persons of the Subadviser
(including any unit or subdivision thereof), "Complex" means the group of
registered investment companies in the Complex advised by the Subadviser or
unit or subdivision thereof.
(f) "Compliance Officer" means the person designated by the Manager,
the Adviser/Subadviser, or Principal Underwriter (including his or her
designee) as having responsibility for compliance with the requirements of
the Code.
(g) "Control" will have the same meaning as that set forth in Section
2(a)(9) of the Act.
(h) "Disinterested Director/Trustee" means a Director/Trustee of the
Fund who is not an "interested person" of the Fund within the meaning of
Section 2(a)(19) of the Act.
An interested Director/Trustee who would not otherwise be deemed to be
an Access Person, shall be treated as a Disinterested Director/Trustee for
purposes of compliance with the provisions of the Code.
(i) "Initial Public Offering" means an offering of securities
registered under the Securities Act of 1933, 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.
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(j) "Investment Personnel" means: (a) Portfolio Managers and other
Advisory Persons who provide investment information and/or advice to the
Portfolio Manager(s) and/or help execute the Portfolio Manager's(s')
investment decisions, including securities analysts and traders; and (b)
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 a security.
(k) "Manager" means Prudential Investments Fund Management, LLC.
(l) "Portfolio Manager" means any Advisory Person who has the direct
responsibility and authority to make investment decisions for the Fund.
(m) "Private placement" means a limited 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 such
Securities Act.
(n) "Security" will have the meaning set forth in Section 2(a)(36) of
the Act, except that it will not include shares of registered open-end
investment companies, direct obligations of the Government of the United
States, short-term debt securities which are "government securities" within
the meaning of Section 2(a)(16) of the Act, bankers' acceptances, bank
certificates of deposit, commercial paper and such other money market
instruments as are designated by the Compliance Officer. For purposes of
the Code, an "equivalent Security" is one that has a substantial economic
relationship to another Security. This would include, among other things,
(1) a Security that is exchangeable for or convertible into another
Security, (2) with respect to an equity Security, a Security having the
same issuer (including a private issue by the same issuer) and any
derivative, option or warrant relating to that Security and (3) with
respect to a fixed-income Security, a Security having the same issuer,
maturity, coupon and rating.
(o) "Security held or to be acquired" means any Security or any
equivalent Security which, within the most recent 15 days: (1) is or has
been held by the Fund; or (2) is being considered by the Fund or its
investment adviser for purchase by the Fund.
3. APPLICABILITY
The Code applies to all Access Persons and the Compliance Officer shall
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provide each Access Person with a copy of the Code. The prohibitions described
below will only apply to a transaction in a Security in which the designated
Access Person has, or by reason of such transaction acquires, any direct or
indirect Beneficial Ownership. The Compliance Officer will maintain a list of
all Access Persons who are currently, and within the past five years, subject to
the Code.
4. PROHIBITED PURCHASES AND SALES
A. INITIAL PUBLIC OFFERINGS
No Investment Personnel may acquire any Securities in an initial public
offering. For purposes of this restriction, "Initial Public Offerings" shall not
include offerings of government and municipal securities.
B. PRIVATE PLACEMENTS
No Investment Personnel may acquire any Securities in a private placement
without prior approval.
(i) Prior approval must be obtained in accordance with the
preclearance procedure described in Section 6 below. Such approval will
take into account, among other factors, whether the investment opportunity
should be reserved for the Fund and its shareholders and whether the
opportunity is being offered to the Investment Personnel by virtue of his
or her position with the Fund. The Adviser/Subadviser shall maintain a
record of such prior approval and reason for same, for at least 5 years
after the end of the fiscal year in which the approval is granted.
(ii) Investment Personnel who have been authorized to acquire
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Securities in a private placement must disclose that investment to the
chief investment officer (including his or her designee) of the
Adviser/Subadviser (or of any unit or subdivision thereof) or the
Compliance Officer when they play a part in any subsequent consideration of
an investment by the Fund in the issuer. In such circumstances, the Fund's
decision to purchase Securities of the issuer will be subject to an
independent review by appropriate personnel with no personal interest in
the issuer.
C. BLACKOUT PERIODS
(i) Except as provided in Section 5 below, Access Persons are
prohibited from executing a Securities transaction on a day during which
any investment company in the Complex has a pending "buy" or "sell" order
in the same or an equivalent Security and until such time as that order is
executed or withdrawn; provided, however, that this prohibition shall not
apply to Disinterested Directors/Trustees except if they have actual
knowledge of trading by any fund in the Complex and, in any event, only
with respect to those funds on whose boards they sit.
This prohibition shall also not apply to Access Persons of the
Subadviser who do not, in the ordinary course of fulfilling his or her
official duties, have access to information regarding the purchase and sale
of Securities for the Fund and are not engaged in the day-to-day operations
of the Fund; provided that Securities investments effected by such Access
Persons during the proscribed period are not effected with knowledge of the
purchase or sale of the same or
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equivalent Securities by any fund in the Complex.
A "pending 'buy' or 'sell' order" exists when a decision to purchase
or sell a Security has been made and communicated.
(ii) Portfolio Managers are prohibited from buying or selling a
Security within seven calendar days before or after the Fund trades in the
same or an equivalent Security. Nevertheless, a personal trade by any
Investment Personnel shall not prevent a Fund in the same Complex from
trading in the same or an equivalent security. However, such a transaction
shall be subject to independent review by the Compliance Officer.
(iii) If trades are effected during the periods proscribed in (i) or
(ii) above, except as provided in (iv) below with respect to (i) above, any
profits realized on such trades will be promptly required to be disgorged
to the Fund.
(iv) A transaction by Access Persons (other than Investment Personnel)
inadvertently effected during the period proscribed in (i) above will not
be considered a violation of the Code and disgorgement will not be required
so long as the transaction was effected in accordance with the preclearance
procedures described in Section 6 below and without prior knowledge of
trading by any fund in the Complex in the same or an equivalent Security.
D. SHORT-TERM TRADING PROFITS
Except as provided in Section 5 below, Investment Personnel are
prohibited from profiting from a purchase and sale, or sale and purchase, of the
same or an equivalent Security within any 60 calendar day period. If trades are
effected during the proscribed
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period, any profits realized on such trades will be immediately required to
be disgorged to the Fund.
E. SHORT SALES
No Access Person may sell any security short which is owned by any Fund in
the Complex. Access Persons may, however, make short sales when he/she owns an
equivalent amount of the same security.
F. OPTIONS
No Access Person may write a naked call option or buy a naked put option on
a security owned by any Fund in the Complex. Access Persons may purchase options
on securities not held by any Fund in the Complex, or purchase call options or
write put options on securities owned by any Fund in the Complex, subject to
preclearance and the same restrictions applicable to other Securities. Access
Persons may write covered call options or buy covered put options on a Security
owned by any Fund in the Complex at the discretion of the Compliance Officer.
G. INVESTMENT CLUBS
No Access Person may participate in an investment club.
5. EXEMPTED TRANSACTIONS
Subject to preclearance in accordance with Section 6 below with respect to
subitems (b), (e), (f), (g) and (i) hereof, the prohibitions of Sections 4(C)
and 4(D) will not apply to the following:
(a) Purchases or sales of Securities effected in any account over
which the Access Person has no direct or indirect influence or control or
in any account of the Access Person which is managed on a discretionary
basis by a person other than such Access Person and with respect to which
such Access Person does not in fact influence or control such
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transactions.
(b) Purchases or sales of Securities (or their equivalents)
which are not eligible for purchase or sale by any fund in the Complex.
(c) Purchases or sales of Securities which are non-volitional
on the part of either the Access Person or any fund in the Complex.
(d) Purchases of Securities 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.
(f) Any equity Securities transaction, or series of related
transactions effected over a 30 calendar day period, involving 500 shares
or less in the aggregate, if (i) the Access Person has no prior knowledge
of activity in such security by any fund in the Complex and (ii) the
issuer is listed on The New York Stock Exchange or has a market
capitalization (outstanding shares multiplied by the current price per
share) greater than $1 billion (or a corresponding market capitalization
in foreign markets).
(g) Any fixed-income Securities transaction, or series of related
transactions effected over a 30 calendar day period, involving 100 units
($100,000 principal amount) or less in the aggregate, if the Access
Person has no prior knowledge of transactions in such Securities by any
fund in the Complex.
(h) Any transaction in index options effected on a broad-based
index (See Exhibit B.)(1)
(i) Purchases or sales of Securities which receive the prior
approval of the Compliance Officer (such person having no personal
interest in such purchases or sales), based on a determination that no
abuse is involved and that such purchases and sales are not likely to
have any economic impact on any fund in the Complex or on its ability to
purchase or sell Securities of the same class or other Securities of the
same issuer.
(j) Purchases or sales of Unit Investment Trusts.
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(1) Exhibit B will be amended by the Compliance Officer as necessary.
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6. PRECLEARANCE
Access Persons (other than Disinterested Directors/Trustees) must
preclear all personal Securities investments with the exception of those
identified in subparts (a), (c), (d), (h) and (j) of Section 5 above.
All requests for preclearance must be submitted to the Compliance
Officer for approval. All approved orders must be executed no later than
5:00 p.m. local time on the business day following the date preclearance is
granted. If any order is not timely executed, a request for preclearance
must be resubmitted.
7. REPORTING
(a) Disinterested Directors/Trustees shall report to the Secretary
of the Fund or the Compliance Officer the information described in Section
7(b) hereof with respect to transactions in any Security in which such
Disinterested Director/Trustee has, or by reason of such transaction
acquires, any direct or indirect Beneficial Ownership in the Security ONLY if
such Disinterested Director/Trustee, at the time of that transaction knew or,
in the ordinary course of fulfilling his or her official duties as a
Director/Trustee of the Fund, should have known that, during the 15-day
period immediately preceding or subsequent to the date of the transaction in
a Security by such Director/Trustee, such Security is or was purchased or
sold by the Fund or was being considered for purchase or sale by the Fund,
the Manager or Adviser/Subadviser; provided, however, that a Disinterested
Director/Trustee is not required to make a report with respect to
transactions effected in any account over which such Director/Trustee does
not have any direct or indirect influence or control or in any account of the
Disinterested Director/Trustee which is managed on a discretionary basis by a
person other than
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such Director/Trustee and with respect to which such Director/Trustee does
not in fact influence or control such transactions. The Secretary of the Fund
or the Compliance Officer shall maintain such reports and such other records
to the extent required by Rule 17j-1 under the Act.
(b) Every report required by Section 7(a) hereof shall be made not
later than ten days after the end of the calendar quarter in which the
transaction to which the report relates was effected, and shall contain the
following information:
(i) The date of the transaction, the title and the number of shares,
and the principal amount of each Security involved;
(ii) The nature of the transaction (I.E., purchase, sale or any
other type of acquisition or disposition);
(iii) The price at which the transaction was effected;
(iv) The name of the broker, dealer or bank with or through whom the
transaction was effected; and
(v) The date that the report is submitted.
(c) Any such report may contain a statement that the report shall not
be construed as an admission by the person making such report that he or she
has any direct or indirect Beneficial Ownership in the Security to which the
report relates.
8. RECORDS OF SECURITIES TRANSACTIONS AND POST-TRADE REVIEW
Access Persons (other than Disinterested Directors/Trustees) are
required to direct their brokers to supply, on a timely basis, duplicate
copies of confirmations of all personal Securities transactions and copies of
periodic statements for all Securities accounts in which such Access Persons
have a Beneficial Ownership interest to the
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Compliance Officer. Such instructions must be made upon becoming an Access
Person and promptly as new accounts are established, but no later than ten
days after the end of a calendar quarter, with respect to any account
established by the Access Person in which any securities were held during the
quarter for the direct or indirect beneficial interest of the Access Person.
Notification must be made in writing and a copy of the notification must be
submitted to Compliance. This notification will include the broker, dealer or
bank with which the account was established and the date the account was
established.
Compliance with this Code requirement will be deemed to satisfy the
reporting requirements imposed on Access Persons under Rule 17j-1(d),
provided, however, that such confirmations and statements contain all the
information required by Section 7. b. hereof and are furnished within the
time period required by such section.
The Compliance Officer will periodically review the personal
investment activity and holdings reports of all Access Persons (including
Disinterested Directors/Trustees with respect to Securities transactions
reported pursuant to Section 7 above).
9. DISCLOSURE OF PERSONAL HOLDINGS
Within ten days after an individual first becomes an Access Person
and thereafter on an annual basis, each Access Person (other than
Disinterested Directors/Trustees) must disclose all personal Securities
holdings. Such disclosure must be made in writing and be as of the date the
individual first became an Access Person with respect to the initial report
and by January 30 of each year, including
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holdings information as of December 31, with respect to the annual report.
All such reports shall include the following: title, number of shares and
principal amount of each security held, name of broker, dealer or bank with
whom these securities are held and the date of submission by the Access
Person.
10. GIFTS
Access Persons are prohibited from receiving any gift or other
thing of more than $100 in value from any person or entity that does
business with or on behalf of the Fund. Occasional business meals or
entertainment (theatrical or sporting events, etc.) are permitted so long as
they are not excessive in number or cost.
11. SERVICE AS A DIRECTOR
Investment Personnel are prohibited from serving on the boards of
directors of publicly traded companies, absent prior authorization based upon a
determination that the board service would be consistent with the interests of
the Fund and its shareholders. In the limited instances that such board service
is authorized, Investment Personnel will be isolated from those making
investment decisions affecting transactions in Securities issued by any publicly
traded company on whose board such Investment Personnel serves as a director
through the use of "Chinese Wall" or other procedures designed to address the
potential conflicts of interest.
12. CERTIFICATION OF COMPLIANCE WITH THE CODE
Access Persons are required to certify annually as follows:
(i) that they have read and understood the Code;
(ii) that they recognize that they are subject to the Code;
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(iii) that they have complied with the requirements of the Code; and
(iv) that they have disclosed or reported all personal Securities
transactions required to be disclosed or reported pursuant to
the requirements of the Code.
13. CODE VIOLATIONS
All violations of the Code will be reported to the Board of
Directors/Trustees of the Fund on a quarterly basis. The Board of
Directors/Trustees may take such action as it deems appropriate.
14. REVIEW BY THE BOARD OF DIRECTORS/TRUSTEES
The Board of Directors/Trustees will be provided with an annual
report which at a minimum:
(i) certifies to the Board that the Fund, Manager, Investment
Adviser/Subadviser, and Principal Underwriter has adopted procedures
reasonably necessary to prevent its Access persons from violating its Code.
(ii) summarizes existing procedures concerning personal investing
and any changes in the procedures made during the preceding year;
(iii) identifies material Code or procedural violations and
sanctions imposed in response to those material violations; and
(iv) identifies any recommended changes in existing restrictions or
procedures based upon the Fund's experience under the Code, evolving industry
practices, or developments in applicable laws and regulations.
The Board will review such report and determine if any further
action is required.
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EXPLANATORY NOTES TO CODE
1. No comparable Code requirements have been imposed upon Prudential
Mutual Fund Services LLC, the Fund's transfer agent, or those of its
directors or officers who are not Directors/Trustees or Officers of the Fund
since they are deemed not to constitute Access Persons or Advisory Persons as
defined in paragraphs (e)(1) and (2) of Rule 17j-1.
Dated: February 29, 2000
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EXHIBIT A
DEFINITION OF BENEFICIAL OWNERSHIP
The term "beneficial ownership" of securities would include not only
ownership of securities held by an access person for his or her own benefit,
whether in bearer form or registered in his or her own name or otherwise, but
also ownership of securities held for his or her benefit by others (regardless
of whether or how they are registered) such as custodians, brokers,
executors, administrators, or trustees (including trusts in which he or she
has only a remainder interest), and securities held for his or her account by
pledges, securities owned by a partnership in which he or she should regard
as a personal holding corporation. Correspondingly, this term would exclude
securities held by an access person for the benefit of someone else.
Ordinarily, this term would not include securities held by executors
or administrators in estates in which an access person is a legatee or
beneficiary unless there is a specific legacy to such person of such
securities or such person is the sole legatee or beneficiary and there are
other assets in the estate sufficient to pay debts ranking ahead of such
legacy, or the securities are held in the estate more than a year after the
decedent's death.
Securities held in the name of another should be considered as
"beneficially" owned by an access person where such person enjoys "benefits
substantially equivalent to ownership". The SEC has said that although the
final determination of beneficial ownership is a question to be determined in
the light of the facts of the particular case, generally a person is regarded
as the beneficial owner of securities held in the name of his or her spouse
and their minor children. Absent special circumstances such relationship
ordinarily results in such person obtaining benefits substantially equivalent
to ownership, e.g., application of the income derived from such securities to
maintain a common home, to meet expenses which such person otherwise would
meet from other sources, or the ability to exercise a controlling influence
over the purchase, sale or voting of such securities.
An access person also may be regarded as the beneficial owner of
securities held in the name of another person, if by reason of any contact,
understanding, relationship, agreement or other arrangement, he obtains
therefrom benefits substantially equivalent to those of ownership. Moreover,
the fact that the holder is a relative or relative of a spouse and sharing
the same home as an access person may in itself indicate that the access
person would obtain benefits substantially equivalent to those of ownership
from securities held in the name of such relative. Thus, absent
countervailing facts, it is expected that securities held by relatives who
share the same home as an access person will be treated as being beneficially
owned by the access person.
An access person also is regarded as the beneficial owner of
securities held in the name of a spouse, minor children or other person, even
though he does not obtain therefrom the aforementioned benefits of ownership,
if he can vest or revest title in himself at once or at some future time.
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EXHIBIT B
INDEX OPTIONS ON A BROAD-BASED INDEX
<TABLE>
<CAPTION>
TICKER SYMBOL DESCRIPTION
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<S> <C>
NIK Nikkei 300 Index CI/Euro
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OEX S&P 100 Close/Amer Index
--------------------------- -------------------------------------------------
OEW S&P 100 Close/Amer Index
--------------------------- -------------------------------------------------
OEY S&P 100 Close/Amer Index
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SPB S&P 500 Index
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SPZ S&P 500 Open/Euro Index
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SPX S&P 500 Open/Euro Index
--------------------------- -------------------------------------------------
SXZ S&P 500 (Wrap)
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SXB S&P 500 Open/Euro Index
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RUZ Russell 2000 Open/Euro Index
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RUT Russell 2000 Open/Euro Index
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MID S&P Midcap 400 Open/Euro Index
--------------------------- -------------------------------------------------
NDX NASDAQ- 100 Open/Euro Index
--------------------------- -------------------------------------------------
NDU NASDAQ- 100 Open/Euro Index
--------------------------- -------------------------------------------------
NDZ NASDAQ- 100 Open/Euro Index
--------------------------- -------------------------------------------------
NDV NASDAQ- 100 Open/Euro Index
--------------------------- -------------------------------------------------
NCZ NASDAQ- 100 Open/Euro Index
--------------------------- -------------------------------------------------
SML S&P Small Cap 600
--------------------------- -------------------------------------------------
TPX U.S. Top 100 Sector
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SPL S&P 500 Long-Term Close
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ZRU Russell 2000 L-T Open/Euro
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VRU Russell 2000 Long-Term Index
--------------------------- -------------------------------------------------
</TABLE>
