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EXHIBIT (p)(2)
DENVER INVESTMENT ADVISORS LLC
ETHICS RULES
INCLUDING
CODE OF ETHICS, INSIDER TRADING POLICY, AND
GIFT AND OUTSIDE EMPLOYMENT POLICY
Amended Effective August 1, 1998
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TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
SECTION I: INTRODUCTION AND STATEMENT OF POLICY.................................................................1
A. STATEMENT OF GENERAL PRINCIPLES................................................................1
B. THE ETHICS RULES...............................................................................1
SECTION II: SUMMARY OF ETHICS RULES............................................................................3
A. CODE OF ETHICS.................................................................................3
1 Securities to Which the Code Applies..................................................3
2 Persons to Whom the Code Applies and Applicable Rules.................................3
2.1 Access Persons...............................................................3
2.2 General......................................................................3
2.3 Preclearance and Reporting...................................................4
2.4 Restrictions.................................................................4
B. INSIDER TRADING POLICY.........................................................................4
1 General...............................................................................4
2 What to do if in Possession of Material Nonpublic Information.........................5
C. GIFT AND OUTSIDE EMPLOYMENT POLICY.............................................................5
SECTION III: GENERAL INFORMATION................................................................................6
A. ENFORCEMENT....................................................................................6
B. CAUTION REGARDING PERSONAL TRADING ACTIVITIES..................................................6
C. COMMUNICATIONS WITH OUTSIDE DIRECTORS AND TRUSTEES OF INVESTMENT COMPANIES ADVISED BY
DENVER INVESTMENT ADVISORS.....................................................................6
D. INTERNAL USE...................................................................................6
E. FORMS..........................................................................................7
SECTION IV APPENDICES DETAILING THE ETHICS RULES (Index)........................................................8
</TABLE>
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DENVER INVESTMENT ADVISORS LLC ETHICS RULES
SECTION I: INTRODUCTION AND STATEMENT OF POLICY
A. STATEMENT OF GENERAL PRINCIPLES
Denver Investment Advisors LLC ("Denver Investment Advisors") and its members,
officers, and employees (as defined herein, "Access Persons") are cognizant of
and committed to the performance of their fiduciary duties under general
corporate law and as more specifically articulated in the Investment Company
Act of 1940 (the "1940 Act") and the Investment Advisers Act of 1940 (the
"Advisers Act"), including, without limitation, proscriptions against
overreaching, self-dealing, insider trading, and conflicts of interests.
Moreover, with respect to certain legal matters and ethical questions arising
in the course of their deliberations and actions, Denver Investment Advisors
and its Access Persons regularly seek the advice of counsel.
These Ethics Rules are directed to the particular objectives of compliance with
the provisions of Rule 17j-1 under the 1940 Act and with various provisions of
the Advisers Act, and to the prevention of engagement in any personal
securities transactions by Access Persons which might conflict with or
adversely affect the interests and welfare of the Clients of Denver Investment
Advisors.
The general principles and procedures which guide the activities of all Access
Persons are augmented by these Ethics Rules, which are based upon the
fundamental recognition that Access Persons have a fiduciary relationship with
Denver Investment Advisors' clients, which requires the maintenance by all such
individuals of the highest standards of integrity and conduct.
Professional and legal responsibilities to Denver Investment Advisors' Clients
dictate that not only conflicts of interests, but the appearance of conflicts
of interests, be avoided. Although compliance by Access Persons with the
provisions of these Ethics Rules is mandatory, codes of ethics cannot define
all conflict and potential conflict situations. Therefore, in addition to
assuring that one's conduct comports with these Rules, Access Persons must
avoid engaging in any conduct that may create a conflict of interest or the
potential for a conflict of interest. Access Persons must adhere not only to
the letter but also to the spirit of the Ethics Rules and the principles
articulated herein.
B. THE ETHICS RULES
Denver Investment Advisors operates under this Code of Ethics, Insider Trading
Policy, and Gift and Outside Employment Policy (collectively the "Ethics
Rules") which apply to all members, officers and employees of Denver Investment
Advisors and, in certain instances, to their family members. PERSONS SUBJECT TO
THE ETHICS RULES ARE ENCOURAGED TO INVEST IN INVESTMENT COMPANIES ADVISED BY
DENVER INVESTMENT ADVISORS and are also permitted to personally invest in
individual securities in accordance with the Ethics Rules. Outside Directors of
Denver
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Investment Advisors advised investment companies who are not members, officers
or employees of Denver Investment Advisors are not subject to the Ethics Rules.
The Ethics Rules are intended to ensure that these persons (i) at all times
place first the interests of Denver Investment Advisors' clients (collectively
and as applicable "Clients"), (ii) recognize, respect, and act in the best
interests of the Clients, (iii) conduct all personal trading consistently with
the Ethics Rules and in such a manner as to avoid any actual or potential
conflict of interest or any abuse of the person's position of trust and
responsibility, (iv) not take inappropriate advantage of their positions with
Denver Investment Advisors, (v) not use any material nonpublic information in
securities trading, and (vi) avoid any situations which might compromise their
exercise of fully independent judgment in the interests of or on behalf of
Clients. In May 1994 the Investment Company Institute issued the REPORT OF THE
ADVISORY GROUP ON PERSONAL INVESTING. The Denver Investment Advisors' code
incorporates the general principles and virtually all of the suggestions of the
ICI report. The Ethics Rules also establish policies regarding other matters,
such as outside employment and the disbursement or receipt of gifts.
Each member, officer and employee will be provided a copy of the Ethics Rules,
as well as a copy of the Code of Ethics for any registered investment company
for which Denver Investment Advisors serves as investment Adviser or
Sub-Adviser. Each member, officer and employee of Denver Investment Advisors is
required to read and retain the Ethics Rules, as well as the Codes of Ethics
for various investment companies for which Denver Investment Advisors serves as
Adviser or Sub-Adviser, and to sign and return the attached Acknowledgment Form
to Designated Investment Representatives upon commencement of employment or
other services, and on an annual basis thereafter. The Acknowledgment (i)
confirms that the person signing it has received, read and asked any questions
necessary to understand the Ethics Rules, (ii) evidences the person's agreement
to conduct himself in accordance therewith, and (iii) confirms that the person
has complied with the Ethics Rules during such time as the person has been with
Denver Investment Advisors. Various persons will be required to submit reports
or obtain clearances as discussed more fully below and in the applicable
Appendices.
The Ethics Rules are administered by the Compliance Officer and the Management
Committee, and certain matters relating to the Ethics Rules are referred
specifically to a Designated Investment Representative, the Compliance Officer,
and other individuals with compliance responsibility. Such compliance personnel
and committee members are identified in Appendix 1 Part A. The supervisory
procedures relating to the Ethics Rules and the duties and operations of the
Management Committee are discussed in Appendix 5 Parts A and B, respectively.
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DENVER INVESTMENT ADVISORS LLC ETHICS RULES
SECTION II: SUMMARY OF ETHICS RULES
The Ethics Rules, including especially the Code of Ethics and the Insider
Trading Policy discussed below, apply to transactions in Covered Securities for
your personal accounts and any other accounts in which you have any BENEFICIAL
OWNERSHIP. Generally speaking, you may be deemed the beneficial owner of any
account in which you have a direct or indirect financial interest. Such
accounts include, without limitation, accounts held in the name of your spouse,
your minor children, a relative sharing your home, or a trust under which you
or such persons are a beneficiary. See Appendix 1 Part B for a more complete
discussion of beneficial ownership.
A. CODE OF ETHICS
The Code of Ethics (the "Code") imposes certain investment restrictions and
prohibitions, and requires certain reports as set forth below:
1 SECURITIES TO WHICH THE CODE APPLIES
The Code applies to Covered Securities, which are subject to various
trading prohibitions and reporting obligations. "Covered Securities"
generally include all securities and their derivatives, whether
publicly or privately traded. However, Covered Securities do not
include
o shares of registered open-end investment companies,
o direct obligations of the U.S. government,
o high quality short-term debt instruments, including but not
limited to bankers acceptances, bank certificates of deposit,
commercial paper, and repurchase agreements, and
o exempt investments.
Some Covered Securities, such as direct obligations of foreign
governments, derivatives on indices, and various securities acquired
through dividends, pro rata rights, or other corporate actions, must
be reported but are exempt from the trading prohibitions. See Appendix
2 Part A for additional information.
2 PERSONS TO WHOM THE CODE APPLIES AND APPLICABLE RULES
2.1 ACCESS PERSONS. For purposes of these Ethics Rules, "Access
Persons" include all members, officers and employees of
Denver Investment Advisors. The Code applies to all Access
Persons.
2.2 GENERAL. Any person subject to the Code is prohibited from:
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2.2.1 Engaging in short sales of Covered Securities known
by such person to be owned by Clients;
2.2.2 Purchasing initial public offerings and hot issues;
2.2.3 Short-term trading;
2.2.4 Benefitting personally from actions taken for
Clients;
2.2.5 Profiting from the market effect of Client
transactions;
2.2.6 Disclosing Client portfolio transactions without
prior approval;
2.2.7 Engaging in fraudulent conduct; or
2.2.8 Investing in derivatives to evade application of the
Code.
2.3 PRECLEARANCE AND REPORTING. Access Persons must preclear all
transactions in Covered Securities, must provide periodic
reports regarding their holdings and personal transactions in
Covered Securities, and are subject to various additional
investment restrictions.
2.4 RESTRICTIONS. The following is a list of some restrictions
applicable to Access Persons:
2.4.1 Blackout Period
2.4.2 Restrictions on Service as a Director
2.4.3 Disclosure of Interests
2.4.4 Broker-Dealer Investments
2.4.5 Hedge Funds, Investment Clubs, and Other Groups
See Appendix 2 Part C for additional information.
B. INSIDER TRADING POLICY
The Insider Trading Policy prohibits persons from communicating or acting on
material nonpublic information and requires persons to report such information
to a Designated Investment Representative or the Management Committee.
1 GENERAL
The Insider Trading Policy (the "Policy") applies to every member,
officer and employee of Denver Investment Advisors and prohibits such
persons, as well as their spouses and others, from trading on material
nonpublic information, either personally or on behalf of others
(including Clients), and from communicating material nonpublic
information to others in violation of the law. Material nonpublic
information is commonly known as "Inside Information," and trading on
such information is commonly referred to as "Insider Trading." The
Policy is drafted broadly, and will be applied and interpreted in a
similar manner. See Appendix 3 Part B for additional information on
Insider Trading and the proper treatment of Inside Information.
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2 WHAT TO DO IF IN POSSESSION OF MATERIAL NONPUBLIC INFORMATION
If you think you may have Inside Information, you should immediately
report such information to one of the Designated Investment
Representatives and refrain from discussing it with any other person.
See Appendix 3 Part B for additional information on these and related
procedures.
C. GIFT AND OUTSIDE EMPLOYMENT POLICY
The Ethics Rules prohibit persons from giving or receiving certain
business-related gifts. The Ethics Rules also prohibit any member, officer or
employee from engaging in outside employment unless he or she has given written
notice to a Designated Investment Representative and, in the case of
securities-related employment, has received the prior written approval of a
Designated Investment Representative. See Appendix 4 for additional
information.
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DENVER INVESTMENT ADVISORS LLC ETHICS RULES
SECTION III: GENERAL INFORMATION
A. ENFORCEMENT
Upon discovering a violation of the Ethics Rules, Denver Investment Advisors
may impose such sanctions as it deems appropriate, including termination of
employment. For more information about sanctions which may be imposed, see
Appendix 5 Part C.
B. CAUTION REGARDING PERSONAL TRADING ACTIVITIES
Certain personal trading activities may be risky not only because of the nature
of the transactions, but also because the potential action necessary to close
out a position may, for some personnel, become prohibited while the position
remains open. For example, the fulfillment of the obligations owed by Access
Persons to Denver Investment Advisors may heighten the risks associated with
various investments, such as short sales and transactions in derivatives.
Furthermore, if Denver Investment Advisors becomes aware of material nonpublic
information, or if a Client is active in a given security, some personnel may
find themselves "frozen" in a position. Denver Investment Advisors will not
bear any losses in personal accounts resulting from the implementation of these
Ethics Rules.
C. COMMUNICATIONS WITH OUTSIDE DIRECTORS AND TRUSTEES OF INVESTMENT COMPANIES
ADVISED BY DENVER INVESTMENT ADVISORS
As a regular business practice, Denver Investment Advisors attempts to keep the
Trustees and Directors of its investment company clients informed with respect
to its investment activities through reports and other information provided to
them in connection with board meetings and other events. In addition, personnel
are encouraged to respond to inquiries from Trustees and Directors,
particularly as they relate to general strategy considerations or economic or
market conditions affecting the funds. However, it is Denver Investment
Advisors' policy not to communicate specific trading information and advice on
specific securities to the Trustees and Directors; i.e., no information should
be given on securities for which current activity is being considered for
Clients. Any pattern of repeated requests by a Trustee or Director should be
reported to the Compliance Officer.
D. INTERNAL USE
The Ethics Rules are intended solely for internal use. For more information
regarding limitations on disclosing to others the Ethics Rules and actions
taken pursuant to the Rules, see Appendix 5 Part C.
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E. FORMS
Blank forms for use in complying with the Ethics Rules are contained in
Appendix 6. Such forms may be revised from time to time, as the Management
Committee shall determine. Please contact the Compliance Officer if you need
additional forms or if you have any questions.
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DENVER INVESTMENT ADVISORS LLC ETHICS RULES
SECTION IV: APPENDICES DETAILING THE ETHICS RULES
(INDEX)
The following appendices set forth in detail the Ethics Rules summarized above.
Such appendices are incorporated herein by reference.
APPENDICES
<TABLE>
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1 DEFINITIONS
A. Personnel.......................................................................................1-1
B. Beneficial Ownership............................................................................1-1
2 CODE OF ETHICS
A. Overview and Covered Securities (including exemptions)..........................................2-1
B. Periodic Acknowledgments and General Prohibitions...............................................2-2
C. Investment and Trade Limitations ...............................................................2-4
3 INSIDER TRADING POLICY
A. Background Information..........................................................................3-1
B. Procedures to Implement Policy..................................................................3-3
4 GIFT AND OUTSIDE EMPLOYMENT POLICY
A. Gifts...........................................................................................4-1
B. Outside Employment..............................................................................4-1
5 OTHER
A. Supervisory and Compliance Review Procedures....................................................5-1
B. Role of the Management Committee in Compliance..................................................5-4
C. General Information About the Ethics Rule.......................................................5-5
6 FORMS
A. Forms...........................................................................................6-1
- Request for Preclearance
- Request for Special Preclearance
- Acknowledgment
- Securities Ownership and Business Positions
- Account Information
- Certification of Non-influence and Non-control over Beneficially Owned
Accounts
- Quarterly Verification
</TABLE>
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DENVER INVESTMENT ADVISORS LLC ETHICS RULES
APPENDIX 1 DEFINITIONS
A. PERSONNEL
References in the Ethics Rules to the following persons shall mean:
Designated Investment Representatives - Todger Anderson and Ken
Penland
Designated Trading Representatives - Equities - Mary Ellen Cox
and Paul Baryames
Designated Trading Representatives - Corporate Bonds - Jeff Payne and
Jerry Powers
Designated Trading Representatives - Municipal Bonds - Tom Stevens
Compliance Specialist - Barbara Brewer
Compliance Officer - Lou Kahanek
The above information shall be updated from time to time to reflect any changes
in personnel that may occur.
B. BENEFICIAL OWNERSHIP
The provisions of the Ethics Rules apply to transactions in securities for any
account "beneficially owned" by a person subject to the Rules. "Beneficial
ownership" shall be interpreted in the same manner as it would be in
determining whether a person is subject to the provisions of Rule 16a-1(a)(2)
of the Securities Exchange Act of 1934 and the rules and regulations
thereunder. Thus, for example, you should be aware that the term "beneficial
ownership" encompasses securities held in the name of your spouse, your minor
children, or a relative sharing your home (collectively "Related Parties"), or
held in the name of a trust under which you or a Related Party are a
beneficiary, or held under any other arrangement in which you share a pecuniary
interest (that is, the opportunity, directly or indirectly, to profit or share
in any profit derived from a transaction in a Covered Security). The Management
Committee may, on a case-by-case basis, exempt certain accounts and
transactions from any provision of the Ethics Rules, if, in its view,
application of the Ethics Rules is not necessary or appropriate.
The provisions of these Ethics Rules shall not apply to purchases or sales
effected in any account over which there is no direct or indirect influence or
control. Access Persons relying upon this provision will be required to file a
certification form with the Compliance Officer regarding any such accounts (see
form entitled "Certification of Non-influence and Non-control Over Beneficially
Owned Accounts" in Appendix 6).
"Managed Accounts," defined as accounts for members, officers or employees, or
their family members, that are managed by Denver Investment Advisors or other
investment advisers in a discretionary capacity, except for reporting
requirements, are not covered by these Ethics Rules so long as such person has
no direct or indirect influence or control over the account. The employment
relationship between the account holder and the individual managing the
account, in the absence of other facts indicating control, will not be deemed
to give such account holder influence or control over the account.
Appendix 1 page 1
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DENVER INVESTMENT ADVISORS LLC ETHICS RULES
APPENDIX 2 CODE OF ETHICS
A. OVERVIEW AND COVERED SECURITIES (INCLUDING EXEMPTIONS)
Following is an overview of the Code and a discussion of securities covered by,
and exempted from the Code.
1 OVERVIEW
In general, it is unlawful for persons affiliated with investment
advisers and investment companies to engage in personal transactions
in securities which are held or are to be acquired by the investment
adviser or the registered investment company, if such personal
transactions are made in contravention of rules which the Securities
and Exchange Commission (the "SEC") has adopted to prevent fraudulent,
deceptive and manipulative practices. Such rules require each
registered investment company and each investment adviser for such
investment company to adopt its own written code of ethics containing
provisions reasonably necessary to prevent its access persons from
engaging in such conduct, and to maintain records, use reasonable
diligence, and institute such procedures as are reasonably necessary
to prevent violations of such code. This Code and information reported
hereunder will enable Denver Investment Advisors to fulfill its
obligations under such rules.
2 COVERED SECURITIES (INCLUDING EXEMPTIONS)
2.1 CODE APPLICABILITY AND DEFINITION OF COVERED SECURITIES. The
trading prohibitions and reporting obligations of the Code
apply to all direct or indirect acquisitions or dispositions
of Covered Securities, whether by purchase, sale, gift,
inheritance, or otherwise, including Covered Securities
acquired in any Denver Investment Advisors compensation
benefit or retirement plan. Employees do not need to
separately report on Denver Investment Advisors benefit and
retirement plan. The Compliance Specialist will review files
maintained by the personnel department to ensure compliance.
"Covered Securities" generally include all securities,
whether publicly or privately traded, and any option, or
forward contract, or other obligation, including a security
whose value is derived or based on any of the above (a
"derivative").
However, the following shall not be deemed to be Covered
Securities and shall be exempt from the trading prohibitions,
preclearance requirements, and reporting obligations of this
Code:
2.1.1 Shares of registered open-end investment companies;
Appendix 2 page 1
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2.1.2 Direct obligations of the U.S. government;
2.1.3 High quality short-term debt instruments, including,
but not limited to, bank certificates of deposit,
bankers' acceptances, repurchase agreements, and
commercial paper; and
2.1.4 "Exempt Investments" include all obligations that
are not securities as defined in the Investment
Company Act of 1940, as amended, including, but not
limited to; commodities, derivatives not traded on a
national securities exchange on commodities or
currencies, and life insurance or annuity contracts.
2.2 COVERED SECURITIES AND TRANSACTIONS EXEMPT FROM TRADING
PROHIBITIONS (BUT REPORTABLE)
The following Covered Securities and transactions are exempt
from the trading prohibitions and preclearance requirements,
but are nevertheless subject to the reporting obligations, of
this Code:
2.2.1 the purchase or receipt of direct obligations of a
foreign government for which a liquid market exists;
2.2.2 the purchase or receipt of any derivative on any
index of securities (not otherwise exempted as an
Exempt Investment above);
2.2.3 the acquisition of securities through stock
dividends, dividend reinvestments, stock splits,
reverse stock splits, mergers, consolidations,
spin-offs, or other similar corporate
reorganizations or distributions generally
applicable to all holders of the same class of such
securities;
2.2.4 the acquisition of securities through the exercise
of rights issued by an issuer pro rata to all
holders of a class of securities, to the extent the
rights were acquired in the issue; and
B. PERIODIC ACKNOWLEDGMENTS AND GENERAL PROHIBITIONS
All Access Persons must provide Acknowledgment Forms and comply with the
General Prohibitions as discussed below and must also comply with the
applicable provisions of Part C below.
Appendix 2 page 2
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1 ACKNOWLEDGMENT FORMS
Each ACCESS PERSON must, upon commencement of services and annually
thereafter, complete an Acknowledgment Form stating that he or she has
reviewed and complied with the Ethics Rules including the Code of
Ethics, Insider Trading Policy, and Gift and Outside Employment Policy
and has disclosed or reported all applicable securities transactions.
Each Access Person must also complete the "Securities Owned and
Business Position form" and attach it to the Acknowledgment form.
Unless otherwise directed, such forms should be given to the
Compliance Specialist.
2 GENERAL PROHIBITIONS
Any Access Person subject to this Code is prohibited from:
2.1 Engaging in short sales of Covered Securities that such
person knows are held by or being considered for sale by, any
Client.
2.2 Purchasing, in an initial public offering, Covered Securities
for which no public market in the same or similar securities
of that issuer has previously existed. No securities may be
purchased in an offering that constitutes a "hot issue" as
defined in the rules of the NASD. Such securities may be
purchased, however, where the individual has an existing
right to purchase the security based on his or her status as
an investor, policyholder or depositor of the issuer. In
addition, securities issued in reorganizations are also
outside the scope of this prohibition if the transaction
involves no investment decision on the part of the employee
except in connection with a shareholder vote.
2.3 Inducing or causing a Client to take action, or to fail to
take action, to benefit an account in which the person has a
beneficial interest, rather than to benefit such Client. For
example, an employee would violate this Code by causing a
Client to purchase a security owned by the employee for the
purpose of supporting or increasing the price of that
security or causing a Client to refrain from selling a
security in an attempt to protect a personal investment, such
as an option on that security.
2.4 Using knowledge of portfolio transactions made or
contemplated for Clients to profit by the market effect of
such transactions.
2.5 Disclosing current portfolio transactions made or
contemplated for Clients as well as any other nonpublic
information to anyone outside of Denver Investment Advisors
without the prior written approval of a Designated Investment
Representative. "Current" transactions shall include
transactions for which information is not provided to
investment company customers as a matter of policy. Such
policy is separately set by the Management Committee and may
be amended from time to time.
Appendix 2 page 3
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2.6 Engaging in fraudulent conduct in connection with the
purchase or sale, directly or indirectly, of a security held
or to be acquired by a Client, including without limitation:
o Employing any device, scheme or artifice to defraud
any Client;
o Making to any Client any untrue statement of
material fact or omitting to state to any Client a
material fact necessary in order to make the
statements made, in light of the circumstances under
which they are made, not misleading;
o Engaging in any act, practice or course of business
which operates or would operate as a fraud or deceit
upon any Client; or
o Engaging in any manipulative practice with respect
to any Client.
For purposes of this Section 2.6, a security held or to be
acquired by a Client means any Covered Security as defined
herein which, within the most recent 15-day period, is or has
been held by a Client or is being or has been considered by
Denver Investment Advisors for purchase by a Client.
The provisions of these Ethics Rules have been instituted, in
part, in an effort to ensure that Access Persons do not,
inadvertently or otherwise, violate these proscriptions.
2.7 Investing in derivatives to evade the restrictions of this
Code. Accordingly, individuals may not use derivatives to
take positions in securities which the Code would prohibit if
the positions were taken directly.
Persons who violate any prohibition in this Section 2 shall disgorge any
profits realized on such trades to the appropriate Client(s), or alternatively,
to a charitable organization, as the Management Committee, in its sole
discretion, shall determine.
C. INVESTMENT AND TRADE LIMITATIONS
The following sets forth various investment and trade limitations. If
reimbursement is required under more than one of the following, the Management
Committee shall, in its sole discretion, determine under which provision
reimbursement shall be required.
1 PROCEDURES AND LIMITATIONS REGARDING TRADE EXECUTION
Appendix 2 page 4
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ACCESS PERSONS must preclear and execute trades as noted below. Access
persons who fail to preclear a trade or who execute a trade by means
of a prohibited brokerage arrangement must disgorge any profits
realized on such trades to the appropriate Client(s), or
alternatively, to a charitable organization, as the Management
Committee, in its sole discretion, shall determine.(1)
1.1 PRECLEARANCE OF TRANSACTIONS. ACCESS PERSONS must obtain
preclearance prior to engaging in any personal transaction in
Covered Securities. The procedures for preclearing
transactions are set forth below.
Clearances to trade will be in effect only for the day of
their authorization by a Designated Trading Representative or
a Designated Investment Representative. Open orders,
including stop loss orders, will not be allowed. Precleared
transactions not executed on the day of their authorization
must be precleared again before execution. The preclearance
requirement applies to transactions in which the Access
Person has a beneficial interest as defined in Appendix 1
Part B. An Access Person must complete the Preclearance, a
copy of which is attached, in order to obtain preclearance.
Copies of completed requests for Preclearance must be
promptly forwarded to, and maintained by the Compliance
Specialist.
Any Access Person who has obtained written approval to
purchase a restricted security and who has purchased and
continues to maintain the security in reliance upon such
approval must disclose the investment to appropriate
personnel in any instance in which the Access Person is
involved in consideration by a client of an
----------
(1) Restrictions on personal transactions apply to transactions
involving Covered Securities as well as any derivatives thereof. When
determining the amount of disgorgement required with respect to derivatives,
consideration will be given to price differences in both the derivative and the
underlying securities, with the smaller difference being used for purposes of
computing disgorgement. For example, in determining whether a reimbursement is
required when the applicable personal trade is in a derivative and the Client
transaction is in the underlying security, the amount shall be calculated using
the lesser of (a) the difference between the price paid or received for the
derivative and the closing bid or ask price (as appropriate) for the derivative
on the date of the Client transaction, or (b) the difference between the last
sale price, or the last bid or ask price (as appropriate) of the underlying
security on the date of the derivative transaction, and the price received or
paid by the Client for the underlying security. Neither preclearance nor
disgorgement shall be required if such person's transaction is to close, sell
or exercise a derivative within five days of its expiration.
Appendix 2 page 5
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investment in the issuer of the restricted security. In any
such instance, the decision of a client to purchase an
investment in the issuer of the restricted security must be
reviewed independently by one or more investment personnel of
Denver Investment Advisors, selected by a Designated
Investment Representative, who has no personal interest in
the issuer, who must execute written approval of the
investment in the issuer prior to the investment's being
made.
For purposes of the above paragraph, a restricted security is
defined as a security which is not readily marketable and a
security which cannot be resold or distributed to the public
or to qualified institutional buyers pursuant to Rule 144A
under the Securities Act of 1933, as Amended (the "1933
Act"), without an effective registration statement under the
1933 Act. A security which is not readily marketable is one
which, for whatever reason, cannot be disposed of within
seven days in the ordinary course of business at
approximately the amount at which the security is reasonably
valued.
1.2 PRECLEARANCE. General preclearance may be obtained from a
Designated Trading Representative using a Request for
Preclearance.
o A Designated Trading Representative may provide
clearance if the security is not being purchased or
sold for a Client. A security is being purchased or
sold when, within the most recent seven calendar day
period, a transaction in such security has been
effected for a Client, or when a transaction in such
security is pending or in progress for a Client. Any
profits realized on transactions which occur during
the proscribed period shall be disgorged, with the
profit to be allocated in whole or in part to the
appropriate Client(s), if any, or alternatively to a
charitable organization, as the Management Committee
in its sole discretion shall determine; provided,
however, that such disgorgement of short-term trading
profits shall not apply to securities transactions of
Access Persons under circumstances, determined in the
sole discretion of the Management Committee, in which
disgorgement of profits would be inequitable.
1.3 SPECIAL PRECLEARANCE. Special Preclearance may be obtained
from a Designated Investment Representative for an investment
by an Access Person that would otherwise be prohibited by the
Code. To obtain special preclearance, an Access Person must
submit both a Request for Preclearance and a Request for
Special Preclearance to a Designated Investment
Representative. The Designated Investment Representative may
provide specific preclearance if the Designated Investment
Representative determines that the particular circumstances
of the person's proposed trade make it unlikely that the
trade would disadvantage any Client.
1.4 EVALUATION OF CLIENT INTERESTS. The Ethics Rules require
Access Persons to at all times place the interests of Clients
first and to conduct all personal trading
Appendix 2 page 6
<PAGE> 18
consistently with the Ethics Rules and in such a manner as to
avoid any actual or potential conflict of interest. Accordingly,
any Access Person contemplating a personal investment that has
not been made or considered for Client accounts for which the
Access Person has investment responsibility is reminded to
evaluate the appropriateness or inappropriateness of the
investment for those accounts.
2 SEVEN DAY AFTER RULE
If a transaction in a security has been effected for a Client or when
a transaction in the security is pending or in progress, preclearance
may be given on the eighth calendar day after the transaction is
executed or withdrawn. The existence of pending transactions will be
checked as a part of the preclearance process discussed above.
3 SHORT-TERM TRADING RULE
Every Access Person who obtains a profit from a purchase and sale, or
a sale and purchase, of the same or equivalent securities within sixty
(60) calendar days shall disgorge such profit, with the profit to be
allocated in whole or in part to the appropriate Client(s), if any, or
alternatively to a charitable organization, as the Management
Committee in its sole discretion shall determine; provided, however,
that such disgorgement of short-term trading profits shall not apply
to securities transactions of Access Persons under circumstances,
determined in the sole discretion of the Management Committee, in
which disgorgement of profits would be inequitable.
The Compliance Officer may provide for preclearance of a short-term
trading transaction in instances in which no abuse would be involved
and the equities of the situation support an exemption from the
prohibition.
4 SERVICE AS A DIRECTOR
No ACCESS PERSON may serve on the board of directors of a publicly
traded company without prior authorization of the Management
Committee. No such service shall be approved without a finding by the
Committee that the board service would not be inconsistent with the
interests of Clients. If board service is authorized, the Access
Person serving as a director normally should be isolated through
"Chinese Walls" or other procedures from persons making investment
decisions with respect to the company involved.
5 DISCLOSURE OF INTERESTS
No ACCESS PERSON shall, for or on behalf of a Client, recommend or
invest in entities with which the Access Person or a Related Party (as
defined in Appendix 1 Part B) has a material business interest,
without first disclosing such interest to the Designated Investment
Representatives or subjecting the recommendation or investment to an
independent review and approval by the Management Committee with no
such interest.
Appendix 2 page 7
<PAGE> 19
A material business interest may be direct or indirect and may
include, without limitation, beneficial ownership of publicly or
privately traded securities (including derivatives, options, warrants
or rights), offices, directorships, significant contracts, or similar
interests or relationships held by such person or a Related Party,
which might affect such person's judgment.
6 INVESTMENTS IN BROKER-DEALERS
No ACCESS PERSON may purchase Covered Securities issued by
broker-dealers unless brokerage commissions or implied commissions on
principal transactions directed by Denver Investment Advisors on
behalf of Clients constitute less than 2% of such broker-dealer's
gross revenues for the prior calendar year. Information regarding the
amount of gross revenues may be relied upon if obtained from the
issuer's most recent (i) annual report to shareholders, or (ii)
periodic reports or registration statements filed with the SEC, or
from other sources if there is reason to believe any of the
information contained in (i) or (ii), above, is inaccurate.
7 HEDGE FUNDS AND OTHER GROUPS
No ACCESS PERSON may participate in hedge funds or similar investment
groups except as a passive investor.
8 INVESTMENT CLUBS
ACCESS PERSONS may participate in investment clubs provided the club's
transactions are reported as if they were made directly on behalf of
the Access Person, and all trades by the investment club are effected
in conformance with the prohibitions, restrictions and procedures in
this Code of Ethics.
9 PROHIBITED BROKERAGE ARRANGEMENTS
No ACCESS PERSON may place his or her personal securities transactions
through a Denver Investment Advisors trading desk employee or a
brokerage firm that such Access Person deals with in his or her
professional capacity unless such brokerage firm (i) is a discount
broker that does not underwrite or make markets in securities; (ii) is
a local branch of a brokerage firm, if the local branch is not used to
effect transactions for Clients and the Access Person's transactions
do not involve an underwriting, private placement or security in which
such brokerage firm is making a market; or (iii) is a local branch or
local brokerage firm used by the Access Person to effect precleared
transactions in Colorado tax exempt securities, precleared pursuant to
this Code of Ethics. The Designated Investment Representatives may,
from time to time, grant exceptions from this prohibition when
particular circumstances make it unlikely that such trading activity
would disadvantage Clients, such as, for example, when different types
of securities are involved in the Client and personal trading or when
foreign securities are involved which
Appendix 2 page 8
<PAGE> 20
are not handled by brokerage firms referenced in (i) or (ii) above.
The Designated Investment Representative's approval can be noted on
the Preclearance Form.
10 REQUIRED REPORTS
10.1 DUPLICATE ACCOUNT INFORMATION AND NOTIFICATION. ACCESS
PERSONS must arrange for their brokers, investment advisers,
trustees or custodians to provide, on a timely basis, to the
Designated Investment Representative, duplicate account
statements and confirmation of all transactions in Covered
Securities for all accounts in which they have a beneficial
interest (see Appendix 1 Part B regarding beneficial
ownership). Access Persons must also notify the Designated
Investment Representative of each such account, indicating
the name of the brokerage firm and the name under which the
account is carried. An Account Information Form should be
completed for this purpose. Duplicate account information
will be organized and filed by the Compliance Specialist and
exceptions will be reviewed by the Designated Investment
Representative to determine that no trades violate the Code
of Ethics and that there is no pattern of trading that
suggests a potential violation.
10.2 QUARTERLY VERIFICATION. Access persons must, on a quarterly
basis, verify that their trading activity as shown on a
report provided to them by the trade monitoring specialist is
complete and accurate or make appropriate corrections.
10.3 MONTHLY REPORTS. Access Persons must provide monthly reports
within 15 days after month end with respect to all
transactions for which confirmations are not timely provided,
including without limitation, brokered and nonbrokered
private placements, gifts, inheritances, and other
transactions in Covered Securities otherwise not reported.
Such monthly reports must provide the following information:
o The date of the transaction;
o The name of the security and its CUSIP number (if
any);
o The number of shares and principal amount of each
security involved;
o The nature of the transaction (i.e., purchase, sale
or any other type of acquisition or disposition);
o The price at which the transaction was effected; and
o The name of the broker, dealer, bank, or other
entity with or through whom the transaction was
effected.
The Designated Investment Representative may request Access
Persons to provide monthly reports regardless of whether
their broker has been instructed to provide duplicate
confirmations. Such reports may be requested, for example, to
check that all applicable confirmations are being received or
to supplement the requested confirmations where a broker is
difficult to work with or otherwise fails to provide
duplicate confirmations on a timely basis. Such reports will
be requested if the confirmations do not provide the
foregoing information.
Appendix 2 page 9
<PAGE> 21
10.4 ANNUAL ACKNOWLEDGMENTS AND REPORTS. Access Persons must also
submit an Acknowledgment Form as discussed under Part B, 1
above. Access Persons must attach to each such
Acknowledgment, as of the date thereof, a Securities
Ownership and Business Positions Form, listing of any Covered
Securities beneficially held that have not been reported
under 10.1, 10.2, and/or 10.3 above, and briefly describing
any positions held (e.g., director, officer, other) with
for-profit entities other than Denver Investment Advisors.
10.5 REVIEW OF REPORTS. The Compliance Officer shall, on a timely
basis, review all reports submitted pursuant to this Section
10 to determine whether trading patterns and other activities
of Access Persons may suggest either violations of the Ethics
Rules or a failure to comply not only with the letter, but
also with the spirit, of the Ethics Rules and their general
principles.
Appendix 2 page 10
<PAGE> 22
DENVER INVESTMENT ADVISORS LLC ETHICS RULES
APPENDIX 3 INSIDER TRADING POLICY
A. BACKGROUND INFORMATION
The term "insider trading" is not defined in the federal securities statutes,
but generally is used to refer to the use of material nonpublic information to
trade in securities (whether or not one is an "insider") or to communications
of material nonpublic information to others.
While the law concerning insider trading is not settled, it is appropriate to
assume that the law prohibits:
o trading by an insider, while in possession of material nonpublic
information, or
o trading by a non-insider, while in possession of material nonpublic
information, where the information either was disclosed to the
non-insider (directly or through one or more intermediaries) in
violation of an insider's duty to keep it confidential or was
misappropriated or otherwise improperly obtained by the non-insider,
or
o communicating material nonpublic information to others in breach of a
duty not to disclose such information.
Trading based on material nonpublic information about an issuer does not
violate this policy unless the trader (i) is an "insider" with respect to an
issuer; (ii) receives the information from someone that the trader knows
received the information from an insider, either directly or indirectly, or
(iii) misappropriates the nonpublic information or obtains or misuses it in
breach of a duty of trust and confidence. Accordingly, trading based on
material nonpublic information about an issuer can be, but is not necessarily,
a violation of this Policy.
Application of the law of insider trading to particular transactions can be
difficult, particularly if it involves a determination about trading based on
material nonpublic information. An individual legitimately may be uncertain
about the application of this Policy in particular circumstances. If you have
any questions regarding the application of the Policy, you should contact a
Designated Investment Representative. You should also notify a Designated
Investment Representative immediately if you have any reason to believe that a
violation of the Policy has occurred or is about to occur.
The following discussion is intended to help you understand the principal
concepts involved in insider trading.
Appendix 3 page 1
<PAGE> 23
1 WHO IS AN INSIDER?
The concept of "insider" is broad. It includes officers, directors and
employees of a company. In addition, a person can be a "temporary
insider" if he or she enters into a special confidential relationship
in the conduct of a company's affairs and as a result is given access
to information solely for the company's purposes. A temporary insider
can include, among others, a company's attorneys, accountants,
consultants, bank lending officers, and the employees of such
organizations. In addition, Denver Investment Advisors may become a
temporary insider of a company it advises or for which it performs
other services. To be considered an insider, the company must expect
the outsider to keep the disclosed nonpublic information confidential
and/or the relationship must at least imply such a duty.
2 WHEN IS INFORMATION NONPUBLIC?
Information remains nonpublic until it has been made public.
Information becomes public when it has been effectively communicated
to the market place, such as by a public filing with the SEC or other
governmental agency, inclusion in the Dow Jones "tape" or publication
in the Wall Street Journal or another publication of general
circulation. Moreover, sufficient time must have passed so that the
information has been disseminated widely.
3 WHAT IS MATERIAL INFORMATION?
Trading on inside information is not a basis for liability unless the
information is material. "Material information" generally means
information for which there is a substantial likelihood that a
reasonable investor would consider it important in making his or her
investment decisions, or information that is reasonably certain to
have a substantial effect on the price of a company's securities.
Information that should be considered material includes, but is not
limited to: dividend changes, earnings estimates, changes in
previously released earnings estimates, significant merger or
acquisition proposals or agreements, major litigation, liquidation
problems, and extraordinary management developments.
Material information may also relate to the market for a company's
securities. Information about a significant order to purchase or sell
securities may, in some contexts, be deemed material. Similarly,
prepublication information regarding reports in the financial press
also may be deemed material. For example, the Supreme Court upheld the
criminal convictions of insider trading defendants who capitalized on
prepublication information about the Wall Street Journal's "Heard on
the Street" column.
4 PENALTIES FOR INSIDER TRADING
Appendix 3 page 2
<PAGE> 24
Penalties for trading on or communicating material nonpublic
information are severe, both for individuals involved in such unlawful
conduct and their employers or other controlling persons. A person can
be subject to some or all of the penalties below even if he or she
does not personally benefit from the violation. Penalties include:
o civil injunctions
o treble damages
o disgorgement of profits
o jail sentences for up to 10 years
o fines up to $1,000,000 (or $2,500,000 for corporations and
other entities)
o civil penalties for the person who committed the violation of
up to three times the profit gained or loss avoided, whether
or not the person actually benefitted, and
o civil penalties for the employer or other controlling person
of up to the greater of $1,000,000 or three times the amount
of the profit gained or loss avoided.
In addition, any violation can be expected to result in serious
sanctions by Denver Investment Advisors, including termination of
employment.
5 WHO IS A CONTROLLING PERSON?
Included as controlling persons are Denver Investment Advisors and its
members and officers. If you are a member or officer, you have a duty
to act to prevent insider trading. Failure to fulfill such a duty may
result in penalties as described in Part A, 4, above.
B. PROCEDURES TO IMPLEMENT POLICY
The following procedures have been established to aid the members, officers and
employees of Denver Investment Advisors in avoiding insider trading, and to aid
Denver Investment Advisors in preventing, detecting and imposing sanctions
against insider trading.
1 IDENTIFYING INSIDE INFORMATION
Before trading for yourself or others, including Clients, in the
securities of a company about which you may have potential inside
information, ask yourself the following questions:
1.1 To whom has this information been provided? Has the
information been effectively communicated to the marketplace?
1.2 Is the information material? Is this information that an
investor would consider important in making his or her
investment decisions? Is this information that would affect
the market price of the securities if generally disclosed?
Appendix 3 page 3
<PAGE> 25
2 REPORTING INSIDE INFORMATION
If, after consideration of the above, you believe that the information
is material and nonpublic, or if you have questions as to whether the
information is material and nonpublic, you should take the following
steps.
2.1 Do not purchase or sell the securities on behalf of yourself
or others, including Clients.
2.2 Do not communicate the information inside or outside of
Denver Investment Advisors, other than to the Compliance
Officer.
2.3 Immediately advise a Designated Investment Representative of
the nature and source of such information, and he will
determine if the information needs to be reviewed by the
Management Committee.
2.4 Depending upon the determination made by the Management
Committee, or by a Designated Investment Representative until
the Committee can be convened, you, or you and others may be
instructed to continue the prohibition against trading and
communication. Alternatively, if it is determined that the
information obtained is not material nonpublic information,
you may be allowed to trade and communicate the information.
3 PROTECTING INFORMATION
Members, officers and employees of Denver Investment Advisors shall
not disclose any nonpublic information (whether or not it is material)
relating to Denver Investment Advisors or its securities transactions
to any person outside Denver Investment Advisors (unless such
disclosure has been authorized by the Compliance Officer). Material
nonpublic information may not be communicated to anyone, including any
member, officer or employee of Denver Investment Advisors, except as
provided in this Policy. Access to such information must be
restricted. For example, access to files containing material nonpublic
information and computer files containing such information should be
restricted, and conversations pertaining to such information, if
appropriate at all, should be conducted in private.
To avoid unintended disclosures, it is important that all employees
take the following steps to safeguard the confidentiality of material
and nonmaterial nonpublic information:
o Do not discuss confidential information in public places such
as elevators, hallways or social gatherings;
Appendix 3 page 4
<PAGE> 26
o To the extent practical, limit access to the areas of the
firm where confidential information could be observed or
overheard by employees with a business need for being in the
area;
o Avoid use of speaker phones in areas where unauthorized
persons may overhear conversations;
o Avoid use of wireless and cellular phones, or other means of
communication which may be intercepted;
o Where appropriate, maintain the confidentiality of Client
identities by using code names or numbers for confidential
projects;
o Exercise care to avoid placing documents containing
confidential information in areas where they may be read by
unauthorized persons and to store such documents in secure
locations when they are not in use; and
o Destroy copies of confidential documents no longer needed for
a project unless required to be saved pursuant to applicable
recordkeeping policies or requirements.
4 RESPONSIBILITY TO MONITOR TRANSACTIONS
The Compliance Specialist will monitor Client and employee
transactions for which reports are received to detect the existence of
any unusual trading activities. The Compliance Specialist will
immediately report any unusual trading activity directly to a
Designated Investment Representative, who will be responsible for
determining what, if any, action should be taken.
5 PRECLEARANCE AND OTHER REQUIREMENTS
No person to whom this Policy applies may trade, either personally or
on behalf of others (including Clients), while in possession of
material nonpublic information, nor may such Denver Investment
Advisors personnel communicate material nonpublic information to
others in violation of the law. Even if information is not deemed to
be material nonpublic information, Denver Investment Advisors
personnel must nevertheless comply with the other provisions of the
Ethics Rules. For example, please refer to Appendix 2 Part C, 1.1 of
the Ethics Rules, regarding the preclearance requirement applicable to
Access Persons.
Appendix 3 page 5
<PAGE> 27
6 TENDER OFFERS
Tender offers represent a particular concern in the law of insider
trading for two reasons. First, tender offer activity often produces
extraordinary gyrations in the price of the target company's
securities. Trading during this time period is more likely to attract
regulatory attention (and produces a disproportionate percentage of
insider trading cases). Second, the SEC has adopted a rule which
expressly forbids trading and "tipping" while in possession of
material nonpublic information regarding a tender offer received from
the tender offeror, the target company or anyone acting on behalf of
either. Denver Investment Advisors employees and others subject to
this Policy should exercise particular caution any time they become
aware of nonpublic information relating to a tender offer.
Appendix 3 page 6
<PAGE> 28
DENVER INVESTMENT ADVISORS LLC ETHICS RULES
APPENDIX 4 GIFT AND OUTSIDE EMPLOYMENT POLICY
A. GIFTS
The following outlines the policy on giving and receiving gifts.
1 GIVEN
No MEMBER, OFFICER OR EMPLOYEE shall, directly or indirectly, give or
permit to be given anything of value, including gratuities, in excess
of $100 per year, to any principal, proprietor, employee, agent, or
representative of a broker-dealer if such payment is in relation to
the business of the employer of the recipient.
2 RECEIVED
No MEMBER, OFFICER OR EMPLOYEE may receive any gift or other thing of
value in excess of $100 per year from any person or entity that does
business with or on behalf of Denver Investment Advisors or any
Client, provided however, receipt of the following shall not be
prohibited:
o an occasional dinner, ticket to a sporting event or
the theater, or comparable entertainment, which is neither so
frequent nor so costly as to raise any question of impropriety; or
o a breakfast, luncheon, dinner, reception, or
cocktail party given in conjunction with a bona fide business
meeting.
B. OUTSIDE EMPLOYMENT
No MEMBER, OFFICER OR EMPLOYEE of Denver Investment Advisors shall be employed
by, or accept compensation from any other person as a result of any business
activity, other than a passive investment, outside the scope of his
relationship with Denver Investment Advisors unless such person has provided
prompt written notice of such employment to the Compliance Officer, and, in the
case of securities-related employment or compensation, has received the prior
written approval of the Compliance Officer.
Appendix 4 page 1
<PAGE> 29
DENVER INVESTMENT ADVISORS LLC ETHICS RULES
APPENDIX 5 OTHER
A. SUPERVISORY AND COMPLIANCE REVIEW PROCEDURES
Supervisory procedures can be divided into two classifications: prevention of
violations and detection of violations. Compliance review procedures include
preparation of special and annual reports, record maintenance and review, and
confidentiality preservation.
1 PREVENTION OF VIOLATIONS
In an effort to prevent violations of the Ethics Rules, the
Designated Investment Representative should, in addition to the
procedures previously outlined in the Ethics Rules:
1.1 Review and update the Ethics Rules as necessary,
at least once annually, including but not limited to a review
of the Code by the Compliance Officer, the Management
Committee and/or counsel;
1.2 Answer questions regarding the Ethics Rules;
1.3 With such assistance from the Designated
Investment Representatives, outside counsel, or Human
Resources Manager as may be appropriate, maintain a
continuing education program consisting of the following:
1.3.1 orienting members,
officers, and employees who are new to Denver
Investment Advisors. The orientation shall include
without limitation a discussion of the Ethics Rules,
1.3.2 further educating members,
officers, and employees by distributing memos or
other materials that may be issued by outside
organizations such as the Investment Company
Institute discussing the issue of insider trading
and other issues raised by the Ethics Rules;
1.4 Request from all persons upon commencement
of services and annually thereafter, any applicable forms and
reports as required by the Ethics Rules;
1.5 Write letters to securities firms
requesting duplicate confirmations and account
statements where necessary; and
Appendix 5 page 1
<PAGE> 30
1.6 Resolve with the Management Committee
issues of whether information received by a member, officer
or employee of Denver Investment Advisors is material and
nonpublic and determine what action, if any, should be taken.
2 DETECTION OF VIOLATIONS
In an effort to detect violations of these Ethics Rules, the
Compliance Officer and Designated Investment Representative should, in
addition to the procedures previously outlined in the Ethics Rules:
2.1 Review reports, confirmations, and statements relative to
applicable restrictions, as provided under the Code;
2.2 Spot checks of certain information are permitted as noted
under the Code.
3 REPORTS OF POTENTIAL DEVIATIONS OR VIOLATIONS
Upon learning of a potential deviation or violation of the Ethics
Rules, a Designated Investment Representative should promptly report
to the Management Committee providing full details and recommendations
for further action. The Management Committee shall thereafter take
such action as deemed appropriate.
4 ANNUAL REPORTS
The Designated Investment Representative should prepare at least
annually a written report for the Management Committee and for the
Boards of Directors of any registered investment company for which
Denver Investment Advisors serves as investment adviser. This report
shall be confidential and set forth the following information:
4.1 Copies of the Ethics Rules, as revised, including a summary
of any changes made during the past year;
4.2 Identification of any violations requiring remedial action
during the past year, and the sanctions imposed for each such
violation;
4.3 Recommendations, if any, regarding changes in existing
restrictions or procedures based upon Denver Investment
Advisor's experience under these Ethics Rules, evolving
industry practices, or developments in applicable laws or
regulations; and
4.4 Certification that, in the opinion of the Compliance Officer,
the Ethics Rules include such procedures as are reasonably
necessary to prevent Access Persons from violating the Ethics
Rules.
Appendix 5 page 2
<PAGE> 31
5 RECORDS
The Compliance Officer is responsible for ensuring that the following
records are created and maintained:
5.1 A copy of the Ethics Rules which are, or at any time within
the past five years have been, in effect;
5.2 Files for personal securities transaction confirmations and
account statements, all reports and other forms submitted
pursuant to these Ethics Rules and any other pertinent
information;
5.3 A copy of each preclearance;
5.4 A record of any violation of the Ethics Rules and of any
action taken as a result of such violation;
5.5 A log noting the dates of review, annual update activity and
any other information pertaining to implementation of these
procedures; and
5.6 A list of all persons who are, or have been, required to make
reports pursuant to these Ethics Rules.
6 INSPECTION
The records and reports maintained by the Designated Investment
Representative, Designated Trading Representatives, the Compliance
Specialist, and the Compliance Officer pursuant to the Ethics Rules
shall at all times be available for inspection, without prior notice,
by any member of the Management Committee.
7 RECORD RETENTION
Copies of the records specified in Section 5 above and of memoranda
and minutes regarding the administration of these procedures shall be
maintained by the Compliance Officer for a minimum of six years. All
records listed in Section 5 above shall be kept in an easily
accessible place except that the records specified in Section 5.1 need
only be kept in an easily accessible place for two years.
8 CONFIDENTIALITY
All procedures, reports and records monitored, prepared or maintained
relating to the Code of Ethics shall be considered confidential and
proprietary to Denver Investment Advisors and shall be maintained and
protected accordingly. Except as otherwise required by law or this
Ethics Code no disclosure shall be made about Ethics Code issues other
than to members of the Management Committee.
Appendix 5 page 3
<PAGE> 32
B. ROLE OF THE MANAGEMENT COMMITTEE IN COMPLIANCE
One of the roles of the Management Committee is to provide an effective
mechanism for monitoring compliance with the standards and procedures contained
in the Ethics Rules and to take appropriate action at such times as violations
or potential violations are discovered.
1 MEMBERSHIP OF THE COMMITTEE
The members of the Committee will be the Executive Managers and the
three Managers elected annually pursuant to the LLC Operating
Agreement.
2 COMMITTEE MEETINGS
The Committee shall review on a quarterly basis or as often as
necessary the operations of the compliance program and consider
technical deviations from operational procedures, inadvertent
oversights, or any other potential violation of the Ethics Rules. The
Designated Investment Representative shall report information about
potential violations, together with all documents relating to the
matter at the next regular meeting of the Committee, or convene a
special meeting.
Deviations alternatively may be addressed by including them in the
employee's personnel records maintained by Denver Investment Advisors.
Management Committee reviews are primarily intended for consideration
of the general operation of the compliance program and substantive or
serious departures from standards and procedures in the Ethics Rules.
A Committee meeting may be attended, at the discretion of the
Committee, by such other persons as the Committee shall deem
appropriate. Any individual whose conduct has given rise to the
meeting may also be called upon, but shall not have the right, to
appear before the Committee.
It is not required that minutes of Committee meetings be maintained;
in lieu of minutes the Committee may issue a report describing any
action taken. The report shall be included in the confidential file
maintained by the Designated Investment Representative with respect to
the particular employee or employees whose conduct has been the
subject of the meeting.
The Committee will also prepare reports or make copies of minutes
available as needed for Directors/Trustees of investment companies
advised by Denver Investment Advisors.
3 SPECIAL DISCRETION
The Committee shall have the authority by a majority vote to exempt
any person or class of persons from all or a portion of the Ethics
Rules, provided that:
Appendix 5 page 4
<PAGE> 33
3.1 The Committee determines, on advice of counsel, that the
particular application of all or a portion of the Ethics
Rules is not legally required;
3.2 The Committee determines that the likelihood of any abuse of
the Ethics Rules by such exempted person(s) is remote;
3.3 The terms or conditions upon which any such exemption is
granted is evidenced in a written instrument; and
3.4 The exempted person(s) agrees to execute and deliver to the
Compliance Officer, at least annually, a signed
Acknowledgment Form, a copy of which can be found in Appendix
6 of the Ethics Rules, which Acknowledgment shall, by
operation of this provision, include such exemptions and the
terms and conditions upon which it was granted.
The Committee shall also have the authority by a majority vote to
impose such additional requirements or restrictions as it, in its sole
discretion, determines appropriate or necessary.
Any exemption, and any additional requirement or restriction, may be
withdrawn by the Committee at any time.
C. GENERAL INFORMATION ABOUT THE ETHICS RULES
The following describes additional information generally applicable to the
Ethics Rules.
1 DESIGNEES
The Management Committee, the Designated Investment Representatives,
and the Compliance Officer may appoint designees to carry out certain
functions pursuant to these Ethics Rules.
2 ENFORCEMENT
In addition to the penalties described elsewhere in the Ethics Rules,
upon discovering a violation of the Ethics Rules, Denver Investment
Advisors may impose such sanctions as it deems appropriate, including
without limitation, a letter of censure or suspension or termination
of employment or personal trading privileges of the violator or
disgorgement of any profits realized on certain transactions to the
appropriate client(s), or alternatively to a charitable organization,
as the Management Committee in its sole discretion shall determine.
All material violations of the Ethics Rules and any sanctions imposed
with respect thereto shall be reported periodically to the Management
Committee.
Appendix 5 page 5
<PAGE> 34
3 INTERNAL USE
The Ethics Rules are intended solely for internal use by Denver
Investment Advisors and do not constitute an admission, by or on
behalf of Denver Investment Advisors, as to any fact, circumstance or
legal conclusion. The Ethics Rules are not intended to evidence,
describe or define any relationship of control between or among any
persons. Further, the Ethics Rules are not intended to form the basis
for describing or defining any conduct by a person that should result
in such person being liable to any other person, except insofar as the
conduct of such person in violation of the Ethics Rules may constitute
sufficient cause for Denver Investment Advisors to terminate or
otherwise adversely affect such person's relationship with Denver
Investment Advisors.
Appendix 5 page 6
<PAGE> 35
DENVER INVESTMENT ADVISORS LLC ETHICS RULES
APPENDIX 6 FORMS
A. FORMS
Following are blank forms for your use in complying with the foregoing Policy.
Appendix 6 page 1
<PAGE> 36
NOTE: FORMS ARE IN SEPARATE FILE
Appendix 6 page 2
<PAGE> 37
[DENVER INVESTMENT ADVISORS LLC LETTERHEAD]
DATE: December 6, 1999
TO: Denver Investment Advisors Employees
FROM: Lou Kahanek
SUBJECT: Changes to the Ethics Rules - REVISED
Please print and insert the following policies adoptions for the Code of Ethics
into your manual:
RESTRICTIONS ON EMPLOYEE INVESTMENTS IN WESTCORE FUNDS
The following Code of Ethics policy amendment is effective December 1st 1999.
Westcore funds net asset values for funds with assets under management of less
than $50 million are especially sensitive to the market effects of initial
public offerings that are allocated to these accounts. Therefore, in order to
diminish the possibility of what could appear to be improper personal trading,
the following policy has been adopted.
1. Denver Investment Advisors' employees new investments greater than
$10,000 in Westcore equity funds with less than $50 million in assets
may only be made on a payroll date.
2. If the investment is made directly through Westcore, employees need to
provide a copy of the confirmation of each such transaction to Denver
Investment Advisors' compliance department.
3. Denver Investment Advisors money purchase plan and employee retirement
savings plans are not currently subject to these restrictions.
Employees that do not follow this procedure will have their trades canceled and
monies returned to them.
DE MINIMUS RULE APPLICABLE TO GENERAL SECURITIES TRADES:
The following Code of Ethics policy amendment is effective December 1st 1999.
Employees will be allowed to make de minimus trades which would otherwise be
subject to the preclearance requirements of Denver Investment Advisors' Code of
Ethics without the necessity for preclearance receipt if the following
guidelines are adhered to:
1. Employees are allowed two de minimus trades in any calendar month.
2. A de minimus trade may be made for any security in which the issuer
has a market capitalization of equal to or greater than $10 billion.
3. The total dollar amount of a de minimus trade may not exceed $15,000.
4. De minimus trades will not be subject either to the seven day
preclearance or the seven day post-trade blackout period provisions of
the Code of Ethics.
Employees must fill out a de minimus approval form. The form is available from
compliance and is on the Intranet on the compliance department page. The
trading desk does not have to approve this form for open orders on the desk.
The form must be approved by compliance personnel. Compliance must be notified
of unexecuted de minimus approvals.
De minimus trades continue to be subject to the sixty day short-term trading
provisions of the Code of Ethics. Employees should also note that the de
minimus rule does not exempt employees from violations of the insider trading
rules. Employee trades will be monitored to ensure that a pattern of trading
with client accounts is not present.
Appendix 6 page 3
