<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 31, 2000
FILE NO. 2-77048
FILE NO. 811-3451
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 / /
POST-EFFECTIVE AMENDMENT NO. 41 /X/
AND
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 / /
AMENDMENT NO. 40 /X/
------------------------
SEI DAILY INCOME TRUST
(Exact name of registrant as specified in charter)
C/O CT CORPORATION
2 Oliver Street
Boston, Massachusetts 02109
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code (800) 342-5734
EDWARD D. LOUGHLIN
c/o SEI Investments Company
Oaks, Pennsylvania 19456
(Name and Address of Agent for Service)
COPY TO:
Richard W. Grant, Esquire
Morgan, Lewis & Bockius LLP
1701 Market Street
Philadelphia, Pennsylvania 19103
------------------------
Title of Securities Being Registered Units of Beneficial Interest
------------------------
It is proposed that this filing become effective (check appropriate box)
<TABLE>
<C> <S>
/ / immediately upon filing pursuant to paragraph (b) of Rule
485
/ / on [date] pursuant to Paragraph (b) of Rule 485
/ / 60 days after filing pursuant to Paragraph (a) of Rule 485
/X/ on May 30, 2000 pursuant to Paragraph (a) of Rule 485
If appropriate, check the following box:
/ / This post-effective amendment designates a new effective
date for a previously filed post-effective amendment.
</TABLE>
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- --------------------------------------------------------------------------------
\<PAGE>
SEI DAILY INCOME TRUST
CONSOLIDATEDCASH SHARES
PROSPECTUS
MAY 31, 2000
PRIME OBLIGATION FUND
ADVISER:
WELLINGTON MANAGEMENT COMPANY, LLP
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
Page 1 of 11
<PAGE>
ABOUT THIS PROSPECTUS
SEI Daily Income Trust is a mutual fund family that offers different classes of
shares in separate investment portfolios (Funds). The Funds have individual
investment goals and strategies, and are designed primarily for institutional
investors. This prospectus gives you important information about the
ConsolidatedCash Shares of the Prime Obligation Fund that you should know before
investing. Please read this prospectus and keep it for future reference.
THIS PROSPECTUS HAS BEEN ARRANGED INTO DIFFERENT SECTIONS SO THAT YOU CAN EASILY
REVIEW THIS IMPORTANT INFORMATION. ON THE NEXT PAGE, THERE IS SOME GENERAL
INFORMATION YOU SHOULD KNOW ABOUT RISK AND RETURN. FOR MORE DETAILED INFORMATION
ABOUT THE FUND, PLEASE SEE:
<TABLE>
<CAPTION>
<S> <C>
PAGE
PRINCIPLE INVESTMENT STRATEGIES AND RISKS.......................................XXX
PERFORMANCE INFORMATION AND EXPENSES............................................XXX
MORE INFORMATION ABOUT FUND INVESTMENTS.........................................XXX
THE INVESTMENT ADVISER..........................................................XXX
PURCHASING AND SELLING FUND SHARES..............................................XXX
DIVIDENDS AND DISTRIBUTIONS.....................................................XXX
TAXES...........................................................................XXX
HOW TO OBTAIN MORE INFORMATION ABOUT SEI DAILY INCOME TRUST.....................BACK COVER
</TABLE>
Page 2 of 11
<PAGE>
RISK/RETURN INFORMATION
The Prime Obligation Fund is a mutual fund. A mutual fund pools shareholders'
money and, using professional investment managers, invests it in securities.
The Fund has its own investment goal and strategies for reaching that goal. The
Fund's assets are managed under the direction of its Adviser. The Adviser
invests the Fund's assets in a way it believes will help the Fund achieve its
goal. Still, investing in the Fund involves risk, and there is no guarantee that
the Fund will achieve its goal. In fact, no matter how good a job the Adviser
does, you could lose money on your investment in the Fund, just as you could
with other investments. A Fund share is not a bank deposit and it is not insured
or guaranteed by the FDIC or any other government agency.
ALTHOUGH THE FUND IS MANAGED TO MAINTAIN A CONSTANT PRICE PER SHARE OF
$1.00, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND.
Page 3 of 11
<PAGE>
PRIME OBLIGATION FUND
FUND SUMMARY
INVESTMENT GOAL Preserving principal and maintaining
liquidity while providing current
income
SHARE PRICE VOLATILITY Very low
PRINCIPAL INVESTMENT STRATEGY The Fund is professionally managed to
provide liquidity, diversification and
a competitive yield by investing in high
quality, short-term money market
instruments
INVESTMENT STRATEGY
The Prime Obligation Fund is comprised of short-term debt obligations of U.S.
issuers that are rated in one of the two highest rating categories by nationally
recognized statistical rating organizations or that the Adviser determines are
of comparable quality. The Fund invests in: (i) commercial paper and other
short-term corporate obligations (including asset-backed securities) rated in
the highest rating category; (ii) certificates of deposit, time deposits,
bankers' acceptances, bank notes and other obligations of U.S. commercial banks
or savings and loan institutions that meet certain asset requirements; (iii)
short-term obligations issued by state and local governments; and (iv) U.S.
Treasury obligations and obligations issued or guaranteed as to principal and
interest by agencies or instrumentalities of the U.S. government. The Fund may
also enter into fully-collateralized repurchase agreements.
Using a top-down strategy and bottom-up security selection, the Adviser seeks
securities with an acceptable maturity, that are marketable and liquid, offer
competitive yields, and are issued by issuers that are on a sound financial
footing. The Adviser also considers factors such as the anticipated level of
interest rates and the maturity of individual securities relative to the
maturity of the Fund as a whole. The Fund follows strict Investment Company Act
rules about the credit quality, maturity and diversification of its investments.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
An investment in the Fund is subject to income risk, which is the possibility
that the Fund's yield will decline due to falling interest rates.
Although the Fund's U.S. government securities are considered to be among the
safest investments, they are not guaranteed against price movements due to
changing interest rates. Obligations issued by some U.S. government agencies are
backed by the U.S. Treasury, while others are backed solely by the ability of
the agency to borrow from the U.S. Treasury or by the agency's own resources.
An investment in the Fund is not a bank deposit. Although the Fund seeks to
maintain a constant price per share of $1.00, you may lose money by investing in
the Fund.
Page 4 of 11
<PAGE>
PERFORMANCE INFORMATION
The bar chart and the performance table below illustrate the risks and
volatility of an investment in the Fund. Of course, the Fund's past performance
does not necessarily indicate how the Fund will perform in the future.
This bar chart shows changes in the performance of the Fund's Class A Shares
from year to year for ten years.* Since Class A Shares are invested in the same
portfolio of securities, returns for ConsolidatedCash Shares will be
substantially similar to those of the Class A Shares shown here, and will differ
only to the extent that each class has different expenses.
<TABLE>
<S> <C>
1990 8.39%
1991 6.25%
1992 3.84%
1993 3.11%
1994 4.22%
1995 5.99%
1996 5.40%
1997 5.57%
1998 5.53%
1999 X.XX%
BEST QUARTER WORST QUARTER
X.XX% X.XX%
(X/X/XX) (X/X/XX)
</TABLE>
* THE PERFORMANCE INFORMATION SHOWN ABOVE IS BASED ON A CALENDAR YEAR. THE
FUND'S CLASS A TOTAL RETURN FROM JANUARY 1, 2000, TO MARCH 31, 2000, WAS X.XX%.
THIS TABLE SHOWS THE FUND'S AVERAGE ANNUAL TOTAL RETURNS FOR CLASS A SHARES FOR
THE PERIODS ENDED DECEMBER 31, 1999.
<TABLE>
<CAPTION>
1 YEAR 5 YEARS 10 YEARS SINCE INCEPTION
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PRIME OBLIGATION FUND - CLASS A SHARES X.XX% X.XX% X.XX% X.XX%*
</TABLE>
* The inception date for Class A Shares of the Fund is December 22, 1987.
Please call 1-800-DIAL-SEI to obtain the Fund's current yield.
FUND FEES AND EXPENSES
THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND HOLD
FUND SHARES.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES DEDUCTED FROM FUND ASSETS) CONSOLIDATEDCASH SHARES
- ----------------------------------------------------------------------------------
<S> <C>
Investment Advisory Fees 0.02%
Distribution (12b-1) Fees None
Other Expenses 0.65%
-----
Total Annual Fund Operating Expenses 0.67% *
</TABLE>
The Fund's total actual annual fund operating expenses for the most recent
fiscal year were less than the amount shown above because the Adviser,
Administrator and/or Distributor are each waiving a portion of their fees in
order to keep total operating expenses at a specified level. The Adviser,
Administrator and/or Distributor may each discontinue all or part of their
waiver at any time. With this fee waiver, the Fund's actual total operating
expenses are as follows:
Prime Obligation Fund -- Consolidated Cash Shares 0.63%
For more information about these fees, see "Investment Adviser" and
"Distribution of Fund Shares."
Page 5 of 11
<PAGE>
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. The Example assumes that you
invest $10,000 in the Fund for the time periods indicated and that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, Fund operating expenses remain the same and you
reinvest all dividends and distributions. Although your actual costs and returns
might be different, your approximate costs of investing $10,000 in the Fund
would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PRIME OBLIGATION FUND - CONSOLIDATEDCASH SHARES $68 $214 $373 $835
</TABLE>
Page 6 of 11
<PAGE>
MORE INFORMATION ABOUT FUND INVESTMENTS
This prospectus describes the Fund's primary investment strategies. The Fund is
required to invest at least 80% of its assets, but normally will invest 100% of
its assets, in the types of securities described in this prospectus. However,
the Fund also may invest in other securities, use other strategies and engage in
other investment practices, which are described in detail in the Fund's
Statement of Additional Information ("SAI"). Of course, there is no guarantee
that the Fund will achieve its investment goal.
The investments and strategies described in this prospectus are those that the
Fund uses under normal conditions. During unusual economic or market conditions,
or for temporary defensive or liquidity purposes, the Fund may invest up to 100%
of its assets in cash or cash equivalents that would not ordinarily be
consistent with the Fund's objectives.
INVESTMENT ADVISER
The Investment Adviser makes investment decisions for the Fund and continuously
reviews, supervises and administers the Fund's investment program. The Board of
Trustees supervises the Adviser and establishes policies that the Adviser must
follow in its management activities.
Wellington Management Company, LLP ("Wellington Management"), serves as the
Adviser to the Fund. As of March 31, 2000, Wellington Management had
approximately $___ billion in assets under management. For the fiscal year ended
January 31, 2000, the Fund paid Wellington Management advisory fees of 0.01% of
its average daily net assets.
Timothy E. Smith is the portfolio manager of the Fund. Mr. Smith has been an
investment professional with Wellington Management since 1992.
PURCHASING AND SELLING FUND SHARES
This section tells you how to purchase and sell (sometimes called "redeem")
shares of the Fund. The Fund offers ConsolidatedCash Shares only to financial
institutions for its own or its customers' accounts. For information on how to
open an account and set up procedures for placing transactions, please call
1-800-DIAL-SEI.
HOW TO PURCHASE FUND SHARES
You may purchase shares on any day that the New York Stock Exchange ("NYSE") is
open for business (a "Business Day"). However, Fund shares cannot be purchased
by Federal Reserve wire on Federal holidays on which wire transfers are
restricted.
Financial institutions and intermediaries may purchase ConsolidatedCash Shares
by placing orders with the Fund's Transfer Agent (or its authorized agent).
Institutions and intermediaries that use certain SEI proprietary systems may
place orders electronically through those systems. Cash investments must be
transmitted or delivered in federal funds to the Fund's wire agent by the close
of business on the same day the order is placed. The Fund may reject any
purchase order if it determines that accepting the order would not be in the
best interests of the Fund or its shareholders.
Page 7 of 11
<PAGE>
When you purchase or sell Fund shares through certain financial institutions
(rather than directly from the Fund), you may have to transmit your purchase and
sale requests to your financial institution at an earlier time for your
transaction to become effective that day. This allows your financial institution
time to process your requests and transmit them to the Fund.
Certain other intermediaries, including certain broker-dealers and shareholder
organizations, are authorized to accept purchase and redemption requests for
Fund shares. These requests are normally executed at the net asset value per
share ("NAV") next determined after the intermediary receives the request. These
authorized intermediaries are responsible for transmitting requests and
delivering funds on a timely basis.
If you deal directly with a financial institution or financial intermediary, you
will have to follow the institution's or intermediary's procedures for
transacting with the Fund. For more information about how to purchase or sell
Fund shares through your financial institution, you should contact your
financial institution directly. Investors may be charged a fee for purchase
and/or redemption transactions effectuated through certain of these
broker-dealers or other financial intermediaries.
The Fund's NAV is calculated once each Business Day at 5:00 p.m., Eastern time.
So, for you to be eligible to receive dividends declared on the day you submit
your purchase order, generally the Fund must receive your purchase order and
federal funds (readily available funds) before the Fund calculates its NAV.
HOW THE FUND CALCULATES NAV
NAV for one Fund share is the value of that share's portion of all of the net
assets of the Fund.
The Fund values its securities by utilizing the amortized cost valuation method
(as described in the SAI). If the Fund thinks amortized cost is unreliable, fair
value prices may be determined in good faith using methods approved by the Board
of Trustees. The Fund expects its NAV to remain constant at $1.00 per share,
although there is no guarantee that the Fund can accomplish this.
HOW TO SELL YOUR FUND SHARES
If you hold ConsolidatedCash Shares, you may sell your shares on any Business
Day by following the procedures established when you opened your account or
accounts. If you have questions, call 1-800-DIAL-SEI. If you own shares through
an account with a broker or other institution, contact that broker or
institution to sell your shares. Your financial institution or intermediary may
charge a fee for its service. The sale price of each share will be the next NAV
determined after the Fund (or its authorized intermediary) receives your
request.
RECEIVING YOUR MONEY
Normally, the Fund will make payment on your sale as promptly as possible after
they receive your request, but it may take up to three Business Days. Your
proceeds will be wired to your bank account.
Page 8 of 11
<PAGE>
REDEMPTIONS IN KIND
The Fund generally pays sale (redemption) proceeds in cash. However, under
unusual conditions that make the payment of cash unwise (and for the protection
of the Fund's remaining shareholders) the Fund might pay all or part of your
redemption proceeds in liquid securities with a market value equal to the
redemption price (redemption in kind). Although it is highly unlikely that your
shares would ever be redeemed in kind, you would probably have to pay brokerage
costs to sell the securities distributed to you, as well as taxes on any capital
gains from the sale of your shares as with any redemption.
SUSPENSION OF YOUR RIGHT TO SELL YOUR SHARES
The Fund may suspend your right to sell your shares if the NYSE restricts
trading, the SEC declares an emergency or for other reasons. More information
about this is in the SAI.
DISTRIBUTION OF FUND SHARES
SEI Investments Distribution Co. ("SIDCo.") is the distributor of the shares of
the Fund. SIDCo. receives no compensation for distributing the Fund's
ConsolidatedCash Shares.
For ConsolidatedCash Shares, shareholder servicing fees, as a percentage of
average daily net assets, may be up to 0.25%, and administrative service fees,
as a percentage of average daily net assets, may be up to 0.18%.
DIVIDENDS AND DISTRIBUTIONS
The Fund declares dividends daily and distributes its income monthly. The Fund
makes distributions of capital gains, if any, at least annually.
You will receive dividends and distributions in cash unless otherwise stated.
TAXES
PLEASE CONSULT YOUR TAX ADVISOR REGARDING YOUR SPECIFIC QUESTIONS ABOUT FEDERAL,
STATE AND LOCAL INCOME TAXES. Below the Fund has summarized some important tax
issues that affect the Fund and its shareholders. This summary is based on
current tax laws, which may change.
The Fund will distribute substantially all of its income and capital gains, if
any. The dividends and distributions you receive may be subject to federal,
state and local taxation, depending upon your tax situation. If so, they are
taxable whether or not you reinvest them. Income distributions are generally
taxable at ordinary income tax rates. Capital gains distributions are generally
taxable at the rates applicable to long-term capital gains. EACH SALE OF FUND
SHARES IS A TAXABLE EVENT.
MORE INFORMATION ABOUT TAXES IS IN THE FUND'S SAI.
Page 9 of 11
<PAGE>
SEI DAILY INCOME TRUST
INVESTMENT ADVISER
Wellington Management Company, LLP
75 State Street
Boston, MA 02109
DISTRIBUTOR
SEI Investments Distribution Co.
One Freedom Valley Drive
Oaks, PA 19456
LEGAL COUNSEL
Morgan, Lewis & Bockius LLP
More information about the Fund is available without charge through the
following:
STATEMENT OF ADDITIONAL INFORMATION (SAI)
The SAI dated May 31, 2000, includes more detailed information about SEI Daily
Income Trust. The SAI is on file with the SEC and is incorporated by reference
into this prospectus. This means that the SAI, for legal purposes, is a part of
this prospectus.
ANNUAL AND SEMI-ANNUAL REPORTS
These reports typically list the Fund's holdings and contain information from
the Fund's managers about Fund strategies and market conditions and trends and
their impact on Fund performance. The reports also contain detailed financial
information about the Fund.
TO OBTAIN AN SAI, ANNUAL OR SEMI-ANNUAL REPORT, OR MORE INFORMATION:
BY TELEPHONE: Call 1-800-DIAL-SEI
BY MAIL: Write to the Fund at:
One Freedom Valley Drive
Oaks, PA 19456
BY INTERNET: http://www.seic.com
Page 10 of 11
<PAGE>
FROM THE SEC: You can also obtain the SAI or the Annual and Semi-Annual Reports,
as well as other information about SEI Daily Income Trust, from the EDGAR
Database on the SEC's website ("http://www.sec.gov"). You may review and copy
documents at the SEC Public Reference Room in Washington, DC (for information on
the operation of the Public Reference Room, call 1-202-942-8090). You may
request documents by mail from the SEC, upon payment of a duplicating fee, by
writing to: Securities and Exchange Commission, Public Reference Section,
Washington, DC 20549-0102. You may also obtain this information, upon payment of
a duplicating fee, by e-mailing the SEC at the following address:
[email protected].
The Fund's Investment Company Act registration number is 811-3451.
<PAGE>
SEI DAILY INCOME TRUST
Administrator:
SEI Investments Fund Management
Distributor:
SEI Investments Distribution Co.
Investment Adviser:
Wellington Management Company, LLP
This STATEMENT OF ADDITIONAL INFORMATION is not a Prospectus. It is intended
to provide additional information regarding the activities and operations of SEI
Daily Income Trust (the "Trust") and should be read in conjunction with the
Trust's Prospectus dated March 31, 2000. The Prospectus may be obtained without
charge by writing the Trust's distributor, SEI Investments Distribution Co.,
Oaks, Pennsylvania 19456, or by calling 1-800-342-5734.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
The Trust................................................... S-2
Investment Objective and Policies........................... S-2
Description of Permitted Investments and Risk Factors....... S-2
Investment Limitations...................................... S-6
Description of Ratings...................................... S-7
The Administrator........................................... S-11
The Adviser................................................. S-12
Distribution and Shareholder Servicing...................... S-14
Trustees and Officers of the Trust.......................... S-14
Performance................................................. S-17
Determination of Net Asset Value............................ S-20
Purchase and Redemption of Shares........................... S-21
Taxes....................................................... S-21
Portfolio Transactions...................................... S-22
Description of Shares....................................... S-23
Limitation of Trustees' Liability........................... S-23
Voting...................................................... S-24
Shareholder Liability....................................... S-24
Control Persons and Principal Holders of Securities......... S-24
Custodian................................................... S-24
Experts..................................................... S-24
Legal Counsel............................................... S-24
Financial Statements........................................ S-24
March 31, 2000
</TABLE>
SEI-F-045-10
<PAGE>
THE TRUST
The Trust is a diversified, open-end management investment company
established as a Massachusetts business trust pursuant to a Declaration of Trust
dated March 15, 1982. The Declaration of Trust permits the Trust to offer
separate series ("portfolios") of units of beneficial interest ("shares") and
separate classes of portfolios. Each share of the Fund represents an equal
proportionate interest in that Fund with each other share of that Fund. The
Trust changed its name from SEI Cash+Plus Trust to its current name in April,
1994.
This Statement of Additional Information relates to the Prime Obligation
Fund (the "Fund,") and any different classes of the Funds.
INVESTMENT OBJECTIVE AND POLICIES
PRIME OBLIGATION FUND--The Prime Obligation Fund seeks to preserve principal
value and maintain a high degree of liquidity while providing current income.
Under normal market conditions, the Fund invests exclusively in obligations of
U.S. issuers (excluding foreign branches of U.S. banks or U.S. branches of
foreign banks) consisting of: (i) commercial paper rated, at the time of
investment, in the highest short-term rating category by two or more NRSROs, or
one NRSRO if only one NRSRO has rated the security or, if not rated, determined
by the Adviser to be of comparable quality; (ii) obligations (including
certificates of deposit, time deposits, bankers' acceptances and bank notes) of
U.S. commercial banks or savings and loan institutions having total assets of
$500 million or more as shown on their last published financial statements at
the time of investment and that are insured by the Federal Deposit Insurance
Corporation; (iii) corporate obligations with a remaining term of not more than
397 days of issuers that issue commercial paper of comparable priority and
security meeting the above ratings or, if not rated, determined by the Adviser
to be of comparable quality; (iv) short-term obligations issued by state and
local governmental issuers which are rated, at the time of investment, in the
highest municipal bond rating categories by at least two NRSROs, or, if not
rated, determined by the Adviser to be of comparable quality, and which carry
yields that are competitive with those of other types of money market
instruments of comparable quality; (v) investments permitted for the
Government II Fund (see below); and (vi) repurchase agreements involving any of
the foregoing obligations.
There can be no assurance that the Fund will achieve its investment
objective.
DESCRIPTION OF PERMITTED INVESTMENTS
ASSET-BACKED SECURITIES--The Fund may invest in asset-backed securities.
Asset-backed securities are securities secured by non-mortgage assets such as
company receivables, truck and auto loans, leases and credit card receivables.
Such securities are generally issued as pass-through certificates, which
represent undivided fractional ownership interests in the underlying pools of
assets. Such securities also may be debt instruments, which are also known as
collateralized obligations and are generally issued as the debt of a special
purpose entity, such as a trust, organized solely for the purpose of owning such
assets and issuing such debt.
Asset-backed securities are not issued or guaranteed by the United States
Government or its agencies or instrumentalities; however, the payment of
principal and interest on such obligations may be guaranteed up to certain
amounts and for a certain period by a letter of credit issued by a financial
institution (such as a bank or insurance company) unaffiliated with the issuers
of such securities. The purchase of asset-backed securities raises risk
considerations peculiar to the financing of the instruments underlying such
securities. For example, there is a risk that another party could acquire an
interest in the obligations superior to that of the holders of the asset-backed
securities. There also is the possibility that recoveries on repossessed
collateral may not, in some cases, be available to support payments on those
securities. Asset-backed securities entail prepayment risk, which may vary
depending on the type of asset, but is generally less than
S-2
<PAGE>
the prepayment risk associated with mortgage-backed securities. In addition,
credit card receivables are unsecured obligations of the card holder.
The market for asset-backed securities is at a relatively early stage of
development. Accordingly, there may be a limited secondary market for such
securities.
BANKERS' ACCEPTANCES--A banker's acceptance is a bill of exchange or time
draft drawn on and accepted by a commercial bank. Bankers' acceptances are used
by corporations to finance the shipment and storage of goods and to furnish
dollar exchange. Maturities are generally six months or less.
CERTIFICATES OF DEPOSIT--A certificate of deposit is a negotiable,
interest-bearing instrument with a specific maturity. Certificates of deposit
are issued by banks and savings and loan institutions in exchange for the
deposit of funds, and normally can be traded in the secondary market, prior to
maturity.
COMMERCIAL PAPER--The Fund may invest in commercial paper. Commercial paper
is the term used to designate unsecured short-term promissory notes issued by
corporations and other entities. Maturities on these issues vary from a few days
to nine months.
COMMERCIAL PAPER RATINGS: The following descriptions of commercial paper
ratings have been published by Standard & Poor's Corporation ("S&P"), Moody's
Investors Service, Inc. ("Moody's"), Fitch Investors Service, Inc. ("Fitch"),
Duff & Phelps, Inc. ("Duff"), Thomson BankWatch ("Thomson") and IBCA Limited and
IBCA, Inc. (together, "IBCA").
Commercial paper rated A by S&P is regarded by S&P as having the greatest
capacity for timely payment. Issues rated A are further refined by use of the
numbers 1+, 1 and 2 to indicate the relative degree of safety. Issues rated A-1+
are those with an "overwhelming degree" of credit protection. Those rated A-1
reflect a "very strong" degree of safety regarding timely payment. Those rated
A-2 reflect a safety regarding timely payment, but not as high as A-1.
Moody's employs two designations, judged to be high grade commercial paper,
to indicate the relative repayment capacity of rated issuers as follows:
<TABLE>
<S> <C>
Prime-1 Superior Quality
Prime-2 Strong Quality
</TABLE>
The rating Fitch-1 (Highest Grade) is the highest commercial paper rating
assigned by Fitch. Paper rated Fitch-1 is regarded as having the strongest
degree of assurance for timely payment. The rating Fitch-2 (Very Good Grade) is
the second highest commercial paper rating assigned by Fitch and reflects an
assurance of timely payment only slightly lower in degree than the strongest
issues.
The rating Duff-1 is the highest commercial paper rating assigned by Duff.
Paper rated Duff-1 is regarded as having very high certainty of timely payment
with excellent liquidity factors that are supported by ample asset protection.
Risk factors are minor. Paper rated Duff-2 is regarded as having good certainty
of timely payment, good access to capital markets and sound liquidity factors
and company fundamentals. Risk factors are small.
The rating TBW-1 is the highest commercial paper rating assigned by Thomson.
Paper rated TBW-1 indicates a very high likelihood that principal and interest
will be paid on a timely basis. The rating TBW-2 is the second-highest rating
category assigned by Thomson. The relative degree of safety regarding timely
repayment of principal and interest is strong. However, the relative degree of
safety is not as high as for issues rated TBW-1.
The designation A1 by IBCA indicates that the obligation is supported by a
very strong capacity for timely repayment. Those obligations rated A1+ are
supported by the highest capacity for timely repayment. Obligations rated A2 are
supported by a strong capacity for timely repayment, although such capacity may
be susceptible to adverse changes in business, economic or financial conditions.
S-3
<PAGE>
FIXED INCOME SECURITIES--Fixed income securities are debt obligations issued
by corporations, municipalities and other borrowers. The market value of a
Fund's fixed income investments will change in response to interest rate changes
and other factors. During periods of falling interest rates, the values of
outstanding fixed income securities generally rise. Conversely, during periods
of rising interest rates, the values of such securities generally decline.
Securities with longer maturities are subject to greater fluctuations in value
than securities with shorter maturities. Fixed income securities rated in the
fourth highest rating category lack outstanding investment characteristics, and
have speculative characteristics as well. Changes by an NRSRO in the rating of
any fixed income security and in the ability of an issuer to make payments of
interest and principal also affect the value of these investments. Changes in
the value of a Fund's securities will not affect cash income derived from these
securities but will affect the Fund's net asset value.
Securities held by the Fund that are guaranteed by the U.S. Government, its
agencies or instrumentalities guarantee only the payment of principal and
interest, and do not guarantee the securities' yield or value or the yield or
value of the Fund's shares.
There is a risk that the current interest rate on floating and variable rate
instruments may not accurately reflect existing market interest rates.
MUNICIPAL SECURITIES--The Fund may invest in Municipal Securities. The two
principal classifications of Municipal Securities are "general obligation" and
"revenue" issues. General obligation issues are issues involving the credit of
an issuer possessing taxing power and are payable from the issuer's general
unrestricted revenues, although the characteristics and method of enforcement of
general obligation issues may vary according to the law applicable to the
particular issuer. Revenue issues are payable only from the revenues derived
from a particular facility or class of facilities or other specific revenue
source. The Fund may also invest in "moral obligation" issues, which are
normally issued by special purpose authorities. Moral obligation issues are not
backed by the full faith and credit of the state but are generally backed by the
agreement of the issuing authority to request appropriations from the state
legislative body. Municipal Securities include debt obligations issued by
governmental entities to obtain funds for various public purposes, such as the
construction of a wide range of public facilities, the refunding of outstanding
obligations, the payment of general operating expenses, and the extension of
loans to other public institutions and facilities. Certain private activity
bonds that are issued by or on behalf of public authorities to finance various
privately-owned or operated facilities are included within the term "Municipal
Securities." Private activity bonds and industrial development bonds are
generally revenue bonds, the credit and quality of which are directly related to
the credit of the private user of the facilities.
Municipal Securities may also include general obligation notes, tax
anticipation notes, bond anticipation notes, revenue anticipation notes, project
notes, certificates of indebtedness, demand notes, tax-exempt commercial paper,
construction loan notes and other forms of short-term, tax-exempt loans. Such
instruments are issued with a short-term maturity in anticipation of the receipt
of tax funds, the proceeds of bond placements or other revenues. Project notes
are issued by a state or local housing agency and are sold by the Department of
Housing and Urban Development. While the issuing agency has the primary
obligation with respect to its project notes, they are also secured by the full
faith and credit of the United States through agreements with the issuing
authority which provide that, if required, the federal government will lend the
issuer an amount equal to the principal of and interest on the project notes.
The quality of Municipal Securities, both within a particular classification
and between classifications, will vary, and the yields on Municipal Securities
depend upon a variety of factors, including general money market conditions, the
financial condition of the issuer (or other entity whose financial resources are
supporting the securities), general conditions of the municipal bond market, the
size of a particular offering, the maturity of the obligation and the rating(s)
of the issue. In this regard, it should be emphasized that the ratings of any
nationally recognized statistical rating organization ("NRSRO") are general and
are not absolute standards of quality. Municipal Securities with the same
maturity, interest
S-4
<PAGE>
rate and rating(s) may have different yields, while Municipal Securities of the
same maturity and interest rate with different rating(s) may have the same
yield.
An issuer's obligations under its Municipal Securities are subject to the
provisions of bankruptcy, insolvency, and other laws affecting the rights and
remedies of creditors, such as the Federal Bankruptcy Code, and laws, if any,
which may be enacted by Congress or state legislatures extending the time for
payment of principal or interest, or both, or imposing other constraints upon
the enforcement of such obligations or upon the ability of municipalities to
levy taxes. The power or ability of an issuer to meet its obligations for the
payment of interest on and principal of its Municipal Securities may be
materially adversely affected by litigation or other conditions.
MUNICIPAL NOTE RATINGS: Moody's highest rating for state and municipal and
other short-term notes is MIG-1 and VMIG-1. Short-term Municipal Securities
rated MIG-1 or VMIG-1 are of the best quality and such securities have strong
protection afforded by established cash flows, superior liquidity support and/or
demonstrated access to the market for refinancing. Short-term Municipal
Securities rated MIG-2 and VMIG-2 are of high quality and their margins of
protection are ample, although not so large as in the preceding group.
An S&P note rating reflects the liquidity concerns and market access risks
unique to notes. Notes due in three years or less will likely receive a note
rating. Notes maturing beyond three years will most likely receive a long-term
debt rating. The following criteria will be used in making that assessment.
- Amortization schedule (the larger the final maturity relative to other
maturities, the more likely it will be treated as a note).
- Source of payment (the more dependent the issue is on the market for its
refinancing, the more likely it will be treated as a note).
Note rate symbols are as follows:
SP-1. Very strong or strong capacity to pay principal and interest. Those
issues determined to possess overwhelming safety characteristics will be given a
plus (+) designation.
SP-2. Satisfactory capacity to pay principal and interest.
REPURCHASE AGREEMENTS--The Fund may invest in repurchase agreements.
Repurchase agreements are agreements under which securities are acquired from a
securities dealer or bank subject to resale on an agreed upon date and at an
agreed upon price, which includes principal and interest. The Fund involved
bears a risk of loss in the event that the other party to a repurchase agreement
defaults on its obligations and the Fund is delayed or prevented from exercising
its rights to dispose of the collateral securities. The Adviser will only enter
into repurchase agreements with financial institutions that it deems to present
minimal risk of bankruptcy during the term of the agreement based on guidelines
which are periodically reviewed by the Board of Trustees. Repurchase agreements
are considered to be loans collateralized by the underlying security. Repurchase
agreements entered into by the Fund will provide that the underlying security
shall be fully collateralized at all times. This underlying security will be
marked to market daily and the Adviser will monitor compliance with this
requirement. Under all repurchase agreements entered into by a Fund, the Fund
must take actual or constructive possession of the underlying collateral.
However, if the seller defaults, the Fund could realize a loss on the sale of
the underlying security to the extent the proceeds of the sale are less than the
resale price. In addition, even though the Bankruptcy Code provides protection
for most repurchase agreements, if the seller should be involved in bankruptcy
or insolvency proceedings, the Fund may incur delay and costs in selling the
security and may suffer a loss of principal and interest if that Fund is treated
as an unsecured creditor. Repurchase Agreements are considered loans under the
1940 Act.
S-5
<PAGE>
INVESTMENT LIMITATIONS
FUNDAMENTAL POLICIES
The following investment limitations are fundamental policies of the Fund
which cannot be changed with respect to the Fund without the consent of the
holders of a majority of the Fund's outstanding shares. The term "majority of
outstanding shares" means the vote of (i) 67% or more of the Fund's shares
present at a meeting, if not more than 50% of the outstanding shares of the Fund
are present or represented by proxy, or (ii) more than 50% of the Fund's
outstanding shares, whichever is less.
A Fund may not:
1. Purchase securities of any issuer (except securities issued or guaranteed by
the U.S. Government, its agencies or instrumentalities), if as a result,
more than 5% of the total assets of the Fund would be invested in the
securities of such issuer.
2. Purchase any securities which would cause more than 25% of the total assets
of the Fund to be invested in the securities of one or more issuers
conducting their principal business activities in the same industry,
provided that this limitation does not apply to investments in (a) domestic
banks and (b) obligations issued or guaranteed by the U.S. Government or its
agencies and instrumentalities.
3. Borrow money except for temporary or emergency purposes and then only in an
amount not exceeding 10% of the value of the total assets of that Fund. This
borrowing provision is included solely to facilitate the orderly sale of
portfolio securities to accommodate substantial redemption requests if they
should occur and is not for investment purposes. All borrowings will be
repaid before the Fund makes additional investments and any interest paid on
such borrowings will reduce the income of the Fund.
4. Make loans, except that the Fund may purchase or hold debt instruments in
accordance with its investment objective and policies and may enter into
repurchase agreements, provided that repurchase agreements maturing in more
than seven days, restricted securities and other illiquid securities are not
to exceed, in the aggregate, 10% of the Fund's net assets.
5. Pledge, mortgage or hypothecate assets except to secure temporary borrowings
permitted by (1) above in aggregate amounts not to exceed 10% of the net
assets of the Fund taken at fair market value at the time of the incurrence
of such loan.
6. Invest in companies for the purpose of exercising control.
7. Acquire more than 10% of the voting securities of any one issuer.
8. Purchase or sell real estate, real estate limited partnership interests,
commodities or commodities contracts including futures contracts. However,
subject to its permitted investments, the Fund may purchase obligations
issued by companies which invest in real estate, commodities or commodities
contracts.
9. Make short sales of securities, maintain a short position or purchase
securities on margin, except that the Fund may obtain short-term credits as
necessary for the clearance of security transactions.
10. Act as an underwriter of securities of other issuers except as it may be
deemed an underwriter in selling a portfolio security.
11. Purchase securities of other investment companies; provided that the Fund
may purchase such securities as permitted by the 1940 Act and the
rules and regulations thereunder but, in any event, the Fund may not
purchase securities of other open-end investment companies.
12. Issue senior securities (as defined in the 1940 Act) except in connection
with permitted borrowings as described in the Prospectuses and this
Statement of Additional Information or as permitted by rule, regulation or
order of the SEC.
S-6
<PAGE>
13. Purchase or retain securities of an issuer if, to the knowledge of the
Trust, an officer, trustee, partner or director of the Trust or any
investment adviser of the Trust owns beneficially more than 1/2 of 1% of the
shares or securities of such issuer and all such officers, trustees,
partners and directors owning more than 1/2 of 1% of such shares or
securities together own more than 5% of such shares or securities.
14. Purchase securities of any company which has (with predecessors) a record of
less than three years continuing operations, except (i) obligations issued
or guaranteed by the U.S. Government, its agencies or instrumentalities, or
(ii) municipal securities which are rated by at least two nationally
recognized municipal bond rating services if, as a result, more than 5% of
the total assets (taken at fair market value) would be invested in such
securities.
15. Purchase warrants, puts, calls, straddles, spreads or combinations thereof.
16. Invest in interests in oil, gas or other mineral exploration or development
programs.
17. Purchase restricted securities (securities which must be registered under
the Securities Act of 1933 before they may be offered or sold to the public)
or other illiquid securities except as described in the Prospectuses and
this Statement of Additional Information.
Unregistered securities sold in reliance on the exemption from registration
in Section 4(2) of the 1933 Act and securities exempt from registration on
re-sale pursuant to Rule 144A of the 1933 Act may be treated as liquid
securities under procedures adopted by the Board of Trustees. Rule 144A
securities are securities that are traded in the institutional market pursuant
to an exemption from registration. Rule 144A securities may not be as liquid as
exchange-traded securities since they may only be resold to certain qualified
institutional buyers.
Except with regard to the limitation on investing in illiquid securities,
the foregoing percentages will apply at the time of the purchase of a security
and shall not be considered violated unless an excess or deficiency occurs or
exists immediately after and as a result of a purchase of such security. These
investment limitations and the investment limitations in each Prospectus are
fundamental policies of the Trust and may not be changed without shareholders'
approval.
In addition, it is a non-fundamental policy of the Fund not to invest in
oil, gas or mineral leases.
DESCRIPTION OF RATINGS
DESCRIPTION OF CORPORATE BOND RATINGS
The following descriptions of corporate bond ratings have been published by
Moody's Investor's Service, Inc. ("Moody's"), Standard and Poor's Corporation
("S&P"), Duff and Phelps, Inc. ("Duff"), Fitch Investor's Services, Inc.
("Fitch"), IBCA Limited ("IBCA") and Thomson BankWatch ("Thomson"),
respectively.
DESCRIPTION OF MOODY'S LONG-TERM RATINGS
Aaa Bonds rated Aaa are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as "gilt
edged". Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective
elements are likely to change, such changes as can be visualized are most
unlikely to impair the fundamentally strong position of such issues.
Aa Bonds rated Aa are judged to be of high quality by all standards. Together
with the Aaa group they comprise what are generally known as high-grade
bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of
protective
S-7
<PAGE>
elements may be of greater amplitude or there may be other elements present
which make the long-term risk appear somewhat larger than the Aaa
securities.
A Bonds rated A possess many favorable investment attributes and are to be
considered as upper-medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment some time in the future.
Baa Bonds rated Baa are considered as medium-grade obligations (I.E., they are
neither highly protected nor poorly secured). Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any
great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
DESCRIPTION OF S&P'S LONG-TERM RATINGS
INVESTMENT GRADE
AAA Debt rated "AAA" has the highest rating assigned by S&P. Capacity to pay
interest and repay principal is extremely strong.
AA Debt rated "AA" has a very strong capacity to pay interest and repay
principal and differs from the highest rated debt only in small degree.
A Debt rated "A" has a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to adverse effects of changes in
circumstances and economic conditions than debt in higher-rated categories.
BBB Debt rated "BBB" is regarded as having an adequate capacity to pay interest
and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal
for debt in this category than in higher rated categories.
DESCRIPTION OF DUFF'S LONG-TERM RATINGS
AAA Highest credit quality. The risk factors are negligible, being only
slightly more than for risk-free U.S. Treasury debt.
AA+ High credit quality. Protection factors are strong.
AA- Risk is modest but may vary slightly from time to time because of economic
conditions.
A+ Protection factors are average but adequate. However,
A- Risk factors are more variable and greater in periods of economic stress.
BBB+ Below average protection factors but still considered
BBB- sufficient for prudent investment. Considerable variability in risk during
economic cycles.
DESCRIPTION OF FITCH IBCA LONG-TERM RATINGS
INVESTMENT GRADE
<TABLE>
<S> <C>
AAA Highest credit quality. "AAA" ratings denote the lowest
expectation of credit risk. They are assigned only in case
of exceptionally strong capacity for timely payment of
financial commitments. This capacity is highly unlikely to
be adversely affected by foreseeable events.
</TABLE>
S-8
<PAGE>
<TABLE>
<S> <C>
AA Very high credit quality. "AA" ratings denote a very low
expectation of credit risk. They indicate very strong
capacity for timely payment of financial commitments. This
capacity is not significantly vulnerable to foreseeable
events.
A High credit quality. "A" ratings denote a low expectation of
credit risk. The capacity for timely payment of financial
commitments is considered strong. This capacity may, never-
theless, be more vulnerable to changes in circumstances or
in economic conditions than is the case for higher ratings.
BBB Good credit quality. "BBB" ratings indicate that there is
currently a low expectation of credit risk. The capacity for
timely payment of financial commitments is considered
adequate, but adverse changes in circumstances and in
economic conditions are more likely to impair this capacity.
This is the lowest investment-grade category.
SPECULATIVE GRADE
BB Speculative. "BB" ratings indicate that there is a
possibility of credit risk developing, particularly as the
result of adverse economic change over time; however,
business or financial alternatives may be available to allow
financial commitments to be met. Securities rated in this
category are not investment grade.
B Highly speculative. "B" ratings indicate that significant
credit risk is present, but a limited margin of safety
remains. Financial commitments are currently being met;
however, capacity for continued payment is contingent upon a
sustained, favorable business and economic environment.
CCC, CC, C High default risk. Default is a real possibility. Capacity
for meeting financial commitments is solely reliant upon
sustained, favorable business or economic developments. A
"CC" rating indicates that default of some kind appears
probable. "C" ratings signal imminent default.
DDD, DD, D Default. The ratings of obligations in this category are
based on their prospects for achieving partial or full
recovery in a reorganization or liquidation of the obligor.
While expected recovery values are highly speculative and
cannot be estimated with any precision, the following serve
as general guidelines. "DDD" obligations have the highest
potential for recovery, around 90%-100% of outstanding
amounts and accrued interest. "DD" indicates potential
recoveries in the range of 50%-90%, and "D" the lowest
recovery potential, i.e., below 50%.
Entities rated in this category have defaulted on some or
all of their obligations. Entities rated "DDD" have the
highest prospect for resumption of performance or continued
operation with or without a formal reorganization process.
Entities rated "DD" and "D" are generally undergoing a
formal reorganization or liquidation process; those rated
"DD" are likely to satisfy a higher portion of their
outstanding obligations, while entities rated "D" have a
poor prospect for repaying all obligations.
</TABLE>
DESCRIPTION OF THOMSON'S LONG-TERM DEBT RATINGS
INVESTMENT GRADE
AAA Bonds rated AAA indicate that the ability to repay principal and interest
on a timely basis is very high.
AA Bonds rated AA indicate a superior ability to repay principal and interest
on a timely basis, with limited incremental risk compared to issues rated
in the highest category.
S-9
<PAGE>
A Bonds rated A indicate the ability to repay principal and interest is
strong. Issues rated A could be more vulnerable to adverse developments
(both internal and external) than obligations with higher ratings.
BBB Bonds rated BBB indicate an acceptable capacity to repay principal and
interest. Issues rated BBB are, however, more vulnerable to adverse
developments (both internal and external) than obligations with higher
ratings.
DESCRIPTION OF COMMERCIAL PAPER RATINGS
The following descriptions of commercial paper ratings have been published
by Moody's, Standard and Poor's, Duff and Phelps, Fitch, IBCA and Thomson
BankWatch, respectively.
DESCRIPTION OF MOODY'S SHORT-TERM RATINGS
PRIME-1 Issuers rated Prime-1 (or supporting institutions) have a superior
ability for repayment of senior short-term debt obligations. Prime-1
repayment ability will often be evidenced by many of the following
characteristics:
- Leading market positions in well-established industries.
- High rates of return on funds employed.
- Conservative capitalization structure with moderate reliance on debt and
ample asset protection.
- Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.
- Well-established access to a range of financial markets and assured
sources of alternate liquidity.
PRIME-2 Issuers rated Prime-2 (or supporting institutions) have a strong
ability for repayment of senior short-term debt obligations. This will
normally be evidenced by many of the characteristics cited above but to a
lesser degree. Earnings trends and coverage ratios, while sound, may be more
subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.
S&P'S SHORT-TERM RATINGS
<TABLE>
<S> <C>
A-1 This highest category indicates that the degree of safety
regarding timely payment is strong. Debt determined to
possess extremely strong safety characteristics is denoted
with a plus sign (+) designation.
A-2 Capacity for timely payment on issues with this designation
is satisfactory. However, the relative degree of safety is
not as high as for issues designated 'A-1'.
DESCRIPTION OF DUFF'S SHORT-TERM RATINGS
Duff 1+ Highest certainty of timely payment. Short-term liquidity,
including internal operating factors and/or access to
alternative sources of funds, is outstanding, and safety is
just below risk-free U.S. Treasury short-term obligations.
Duff 1 Very high certainty of timely payment. Liquidity factors are
excellent and supported by good fundamental protection
factors. Risk factors are minor.
Duff 1- High certainty of timely payment. Liquidity factors are
strong and supported by good fundamental protection factors.
Risk factors are very small.
</TABLE>
S-10
<PAGE>
<TABLE>
<S> <C>
GOOD GRADE
Duff 2 Good certainty of timely payment. Liquidity factors and
company fundamentals are sound. Although ongoing funding
needs may enlarge total financing requirements, access to
capital markets is good. Risk factors are small.
DESCRIPTION OF FITCH IBCA SHORT-TERM RATINGS
F1 Highest credit quality. Indicates the Best capacity for
timely payment of financial commitments; may have an added
"+" to denote any exceptionally strong credit feature.
F2 Good credit quality. A satisfactory capacity for timely
payment of financial commitments, but the margin of safety
is not as great as in the case of the higher ratings.
F3 Fair credit quality. The capacity for timely payment of
financial commitments is adequate; however, near-term
adverse changes could result in a reduction to
non-investment grade.
B Speculative. Minimal capacity for timely payment of
financial commitments, plus vulnerability to near-term
adverse changes in financial and economic conditions.
C High default risk. Default is a real possibility. Capacity
for meeting financial commitments is solely reliant upon a
sustained, favorable business and economic environment.
D Default. Denotes actual or imminent payment default.
DESCRIPTION OF THOMSON'S SHORT-TERM RATINGS
TBW-1 The highest category; indicates a very high likelihood that
principal and interest will be paid on a timely basis.
TBW-2 The second-highest category; while the degree of safety
regarding timely repayment of principal and interest is
strong, the relative degree of safety is not as high as for
issues rated "TBW-1".
</TABLE>
THE ADMINISTRATOR
The Trust and SEI Investments Fund Management ("SEI Management" or the
"Administrator") have entered into a Management Agreement (the "Management
Agreement"). The Management Agreement provides that the Administrator shall not
be liable for any error of judgement or mistake of law or for any loss suffered
by the Trust in connection with the matters to which the Management Agreement
relates, except a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Administrator in the performance of its duties or
from reckless disregard of its duties and obligations thereunder.
The continuance of the Management Agreement with respect to the Fund must be
specifically approved at least annually (i) by the vote of a majority of the
Trustees or by the vote of a majority of the outstanding voting securities of
the Fund, and (ii) by the vote of a majority of the Trustees of the Trust who
are not parties to the Management Agreement or an "interested person" (as that
term is defined in the 1940 Act) of any party thereto, cast in person at a
meeting called for the purpose of voting on such approval. The Management
Agreement is terminable, without penalty, at any time as to the Fund by the
Trustees of the Trust, by a vote of a majority of the outstanding shares of the
Fund or by the Administrator on not less than 30 days' nor more than 60 days'
written notice. This Agreement shall not be assignable by either party without
the written consent of the other party.
The Administrator, a Delaware business trust, has its principal business
offices at Oaks, Pennsylvania 19456. SEI Investments Management Corporation
("SIMC"), a wholly-owned subsidiary of SEI Investments Company ("SEI
Investments"), is the owner of all beneficial interest in the Administrator. SEI
S-11
<PAGE>
Investments and its subsidiaries and affiliates, including the Administrator,
are leading providers of funds evaluation services, trust accounting systems,
and brokerage and information services to financial institutions, institutional
investors, and money managers. The Administrator and its affiliates also serve
as administrator or sub-administrator to the following other mutual funds: The
Achievement Funds Trust, The Advisors' Inner Circle Fund, Alpha Select Funds,
Amerindo Funds, Inc., The Arbor Fund, ARK Funds, Armada Funds, Armada Advantage
Fund, Bishop Street Funds, Boston 1784 Funds-Registered Trademark-, CNI Charter
Funds, CUFUND, The Expedition Funds, First American Funds, Inc., First American
Investment Funds, Inc., First American Strategy Funds, Inc., Friends Ivory
Funds, HighMark Funds, Huntington Funds, Huntington VA Fund, The Nevis Funds,
Inc., Oak Associates Funds, The Parkstone Group of Funds, The PBHG Funds, Inc.,
PBHG Insurance Series Fund, Inc., The Pillar Funds, SEI Asset Allocation Trust,
SEI Index Funds, SEI Institutional Investments Trust, SEI Institutional Managed
Trust, SEI Institutional International Trust, SEI Liquid Asset Trust, SEI Tax
Exempt Trust, SEI Insurance Products Trust, STI Classic Funds, STI Classic
Variable Trust, TIP Funds, UAM Funds Trust, UAM Funds, Inc. II and UAM Funds,
Inc.
The Administrator is obligated under the Management Agreement to pay the
excess of a Fund's operating expenses as disclosed in the applicable
Prospectuses. If operating expenses of the Fund exceed limitations established
by certain states, the Administrator will pay such excess. The Administrator
will not be required to bear expenses of the Fund to an extent which would
result in the Fund's inability to qualify as a regulated investment company
under provisions of the Internal Revenue Code. The term "expenses" is defined in
such laws or regulations, and generally excludes brokerage commissions,
distribution expenses, taxes, interest and extraordinary expenses. In addition,
certain voluntary and contractual fee waivers and reimbursement arrangements by
the Administrator were in effect during the fiscal year ended January 31, 1999.
The Administrator has contractually agreed to waive up to all of its fee and, if
necessary, pay other operating expenses in order to limit the total operating
expenses to not more than 0.63% of the average daily net assets of the Prime
Obligation Fund's ConsolidatedCash Shares. The Administrator reserves the right,
in its sole discretion, to terminate these voluntary waivers at any time.
For the fiscal years ended January 31, 1998, 1999 and 2000 the Funds paid
fees to the Administrator as follows:
<TABLE>
<CAPTION>
FEES PAID (000) FEE WAIVERS (000)
------------------------------ ------------------------------
1998 1999 2000 1998 1999 2000
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Prime Obligation Fund....................... $4,887 $6,270 $1,357 $1,364
</TABLE>
THE ADVISER
The Trust and Wellington Management Company, LLP (the "Adviser" or
"Wellington Management") have entered into four advisory agreements (the
"Advisory Agreements," and each an "Advisory Agreement") dated September 30,
1983, December 15, 1986, August 4, 1993 and June 30, 1994, respectively. The
Advisory Agreements provide that the Adviser shall not be protected against any
liability to the Trust or its
S-12
<PAGE>
shareholders by reason of willful misfeasance, bad faith or gross negligence on
its part in the performance of its duties or from the reckless disregard of its
obligations or duties thereunder.
Wellington Management serves as the investment adviser for the Fund. The
Adviser is a professional investment counseling firm which provides investment
services to investment companies, employee benefit plans, endowments,
foundations, and other institutions and individuals. Under the advisory
agreement, the Adviser invests the assets of the Fund and continuously reviews,
supervises and administers the Fund's investment program. The Adviser is
independent of the Administrator and SEI and discharges its responsibilities
subject to the supervision of, and policies set by, the Trustees of the Trust.
The Adviser and its predecessor organizations have provided investment
advisory services to investment companies since 1928 and to investment
counseling clients since 1960. As of March 31, 2000, the Adviser had
discretionary management authority with respect to approximately $-- billion of
assets, including the assets of the Trust and SEI Liquid Asset Trust, each an
open-end management investment company administered by the Administrator. The
principal address of the Adviser is 75 State Street, Boston, Massachusetts
02109. Wellington Management is a Massachusetts limited liability partnership
whose managing partners are Laurie A. Gabriel, Duncan M. McFarland and John R.
Ryan.
The continuance of an Advisory Agreement with respect to the Fund after the
first two (2) years of such Agreement must be specifically approved at least
annually (i) by the vote of a majority of the outstanding shares of the Fund or
by the Trustees, and (ii) by the vote of a majority of the Trustees who are not
parties to such Advisory Agreement or "interested persons" of any party thereto,
cast in person at a meeting called for the purpose of voting on such approval.
An Advisory Agreement will terminate automatically in the event of its
assignment, and is terminable at any time without penalty by the Trustees of the
Trust or, with respect to the Fund, by a majority of the outstanding shares of
the Fund, on not less than 30 days' nor more than 60 days' written notice to the
Adviser, or by the Adviser on 90 days' written notice to the Trust.
The Adviser is entitled to a fee for its investment advisory services, which
is accrued daily and paid monthly at the following annual rates: .075% of the
combined daily net assets of the Prime Obligation Fund up to $500 million and
.02% of such net assets in excess of $500 million. Wellington Management may
voluntarily waive portions of its fees, although such waiver is not expected to
affect the Fund's total operating expenses, due to the nature of the
Administrator's fee waivers. Wellington Management may terminate its waiver at
any time.
For the fiscal years ended January 31, 1998, 1999 and 2000 the Fund paid
advisory fees as follows:
<TABLE>
<CAPTION>
FEES PAID (000) FEE WAIVERS (000)
------------------------------ ------------------------------
1998 1999 2000 1998 1999 2000
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Prime Obligation Fund................................ $233 $293 $557 $641
</TABLE>
S-13
<PAGE>
DISTRIBUTION AND SHAREHOLDER SERVICING
The Fund has adopted a Shareholder Servicing Plan (the "Service Plan"), and
an Administrative Services Plan its ConsolidatedCash Shares. Under these Service
and Administrative Services Plans, the Distributor may perform, or may
compensate other service providers for performing, the following shareholder and
administrative services: maintaining client accounts; arranging for bank wires;
responding to client inquiries concerning services provided on investments;
assisting clients in changing dividend options, account designations and
addresses; sub-accounting; providing information on share positions to clients;
forwarding shareholder communications to clients; processing purchase, exchange
and redemption orders; and processing dividend payments. Under the Service and
Administrative Services Plans, the Distributor may retain as a profit any
difference between the fee it receives and the amount it pays to third parties.
TRUSTEES AND OFFICERS OF THE TRUST
The Trustees and Executive Officers of the Trust, their respective dates of
birth, and their principal occupations for the last five years are set forth
below. Each may have held other positions with the named companies during that
period. Unless otherwise noted, the business address of each Trustee and each
Executive Officer is SEI Investments Company, Oaks, Pennsylvania 19456. Certain
officers of the Trust also serve as officers of some or all of the following:
The Achievement Funds Trust, The Advisors' Inner Circle Fund, Alpha Select
Funds, Amerindo Funds, Inc., The Arbor Fund, ARK Funds, Armada Funds, Armada
Advantage Funds, Bishop Street Funds, Boston 1784 Funds-Registered Trademark-,
CNI Charter Funds, CUFUND, The Expedition Funds, First American Funds, Inc.,
First American Investment Funds, Inc., First American Strategy Funds, Inc.,
Friends Ivory Funds, HighMark Funds, Huntington Funds, Huntington VA Fund, The
Nevis Fund, Inc., Oak Associates Funds, The Parkstone Group of Funds, The PBHG
Funds, Inc., PBHG Insurance Series Fund, Inc., The Pillar Funds, SEI Asset
Allocation Trust, SEI Index Funds, SEI Institutional Investments Trust, SEI
Institutional Managed Trust, SEI Institutional International Trust, SEI
Insurance Products Trust, SEI Liquid Asset Trust, SEI Tax Exempt Trust, STI
Classic Funds, STI Classic Variable Trust, TIP Funds, UAM Funds Trust, UAM
Funds, Inc. and UAM Funds, Inc. II, each of which is an open-end management
investment company managed by SEI Investments Fund Management or its affiliates
and, distributed by SEI Investments Distribution Co.
ROBERT A. NESHER (DOB 08/17/46)--Chairman of the Board of
Trustees*--Currently performs various services on behalf of SEI Investments for
which Mr. Nesher is compensated. Executive Vice President of SEI Investments,
1986-1994. Director and Executive Vice President of SIMC, the Administrator and
the Distributor, 1981-1994. Trustee of The Advisors' Inner Circle Fund, The
Arbor Fund, Bishop Street Funds, Boston 1784 Funds-Registered Trademark-, The
Expedition Funds, Oak Associates Funds, Pillar Funds, SEI Asset Allocation
Trust, SEI Index Funds, SEI Institutional Investments Trust, SEI Institutional
Managed Trust, SEI Institutional International Trust, SEI Insurance Products
Trust, SEI Liquid Asset Trust and SEI Tax Exempt Trust.
WILLIAM M. DORAN (DOB 05/26/40)--Trustee*--1701 Market St., Philadelphia, PA
19103. Partner, Morgan, Lewis & Bockius LLP (law firm) since 1976, counsel to
the Trust, SEI Investments, SIMC, the Administrator and the Distributor,
Director and Secretary of SEI Investments and Secretary of SIMC, the
Administrator and the Distributor. Trustee of The Advisors' Inner Circle Fund.
The Arbor Fund, The Expedition Funds, Oak Associates Funds, SEI Asset Allocation
Trust, SEI Index Funds, SEI Institutional Investments Trust, SEI Institutional
Managed Trust, SEI Institutional International Trust, SEI Insurance Products
Trust, SEI Liquid Asset Trust and SEI Tax Exempt Trust.
F. WENDELL GOOCH (DOB 12//03/32)--Trustee**--President, Orange County
Publishing Co., Inc.; Publisher, Paoli News and Paoli Republican; and Editor,
Paoli Republican, October 1981-January 1997. President, H&W Distribution, Inc.,
since July 1984. Executive Vice President, Trust Department, Harris Trust and
Savings Bank and Chairman of the Board of Directors of The Harris Trust Company
of Arizona
S-14
<PAGE>
before January 1981. Trustee of SEI Asset Allocation Trust, SEI Index Funds, SEI
Institutional Investments Trust, SEI Institutional Managed Trust, SEI
Institutional International Trust, SEI Insurance Products Trust, SEI Liquid
Asset Trust, SEI Tax Exempt Trust, STI Classic Funds and STI Classic Variable
Trust.
JAMES M. STOREY (DOB 04/12/31)--Trustee**--Partner, Dechert Price & Rhoads,
from September 1987-December 1993. Trustee of The Advisors' Inner Circle Fund,
The Arbor Fund, The Expedition Funds, Oak Associates Funds, SEI Asset Allocation
Trust, SEI Index Funds, SEI Institutional Investments Trust, SEI Institutional
Managed Trust, SEI Institutional International Trust, SEI Insurance Products
Trust, SEI Liquid Asset Trust, and SEI Tax Exempt Trust.
GEORGE J. SULLIVAN, JR. (DOB 11/13/42)--Trustee**--Chief Executive Officer,
Newfound Consultants Inc. since April 1997. General Partner, Teton Partners,
L.P., June 1991-December 1996; Chief Financial Officer, Noble Partners, L.P.,
March 1991-December 1996; Treasurer and Clerk, Peak Asset Management, Inc.,
since 1991; Trustee, Navigator Securities Lending Trust, since 1995, Trustee of
The Advisor's Inner Circle Fund, The Arbor Fund, The Expedition Funds, Oak
Associates Funds, SEI Asset Allocation Trust, SEI Index Funds, SEI Liquid Asset
Trust, SEI Institutional Investments Trust, SEI Institutional Managed Trust, SEI
Institutional International Trust, SEI Insurance Products Trust, and SEI Tax
Exempt Trust.
ROSEMARIE B. GRECO (DOB 3/31/46)--Trustee--Principal, Grecoventures
(consulting firm) since August 1997; President, Corestates Financial Corp., from
1991-1997; Chief Executive Officer and President, Corestates Bank, N.A., from
1991-1997; Director, Sonoco, Inc.; Director, PECO Energy; Director, Radian,
Inc.; Trustee, Pennsylvania Real Estate Investment Trust; Director, Cardone
Industries, Inc.; Director, Genuardi Markets, Inc.; Director, PRWT Compserve,
Inc.
EDWARD D. LOUGHLIN (DOB 03/07/51)--President and Chief Executive
Officer--Executive Vice President and President--Asset Management Division of
SEI Investments since 1993. Executive Vice President of the Adviser and
Administrator since 1994. Senior Vice President, SEI Investments, 1986-1991;
Vice President, SEI Investments, 1981-1986.
TIMOTHY D. BARTO (DOB 03/28/68)--Vice President and Assistant Secretary of
the Adviser, the Administrator and the Distributor since December 1999.
Associate at Dechert Price & Rhoads (1997-1999). Associate at Richter, Miller &
Finn (1994-1997).
TODD B. CIPPERMAN (DOB 02/14/66)--Vice President and Assistant
Secretary--Vice President, Assistant Secretary of SEI Investments, SIMC, the
Administrator and the Distributor since 1995. General Counsel of SEI
Investments, SIMC, the Administrator and the Distributor since 2000. Associate,
Dewey Ballantine (law firm), 1994-1995. Associate, Winston & Strawn (law firm),
1991-1994.
JAMES R. FOGGO (DOB 06/30/64)--Vice President and Assistant Secretary--Vice
President and Assistant Secretary of SEI Investments since 1998. Vice President
of the Administrator and Distributor since May 1999. Vice President of the
Adviser Corporation since December 1999. Associate, Paul Weiss, Rifkind, Wharton
& Garrison (law firm), 1998. Associate, Baker & McKenzie (law firm), 1995-1998.
Associate, Battle Fowler L.L.P. (law firm), 1993-1995. Operations Manager, The
Shareholder Services Group, Inc., 1986-1990.
LYDIA A. GAVALIS (DOB 06/05/64)--Vice President and Assistant
Secretary--Vice President and Assistant Secretary of the Administrator and the
Distributor since 1998. Assistant General Counsel and Director of Arbitration,
Philadelphia Stock Exchange, 1989-1998.
KATHY HEILIG (DOB 12/21/58)--Vice President and Assistant
Secretary--Treasurer of SEI Investments Company since 1997; Assistant Controller
of SEI Investments Company since 1995; Vice President of SEI Investments Company
since 1991; Director of Taxes of SEI Investments Company 1987 to 1991. Tax
Manager, Arthur Anderson LLP prior to 1987.
S-15
<PAGE>
CHRISTINE M. MCCULLOUGH (DOB 12/05/60)--Vice President and Assistant
Secretary--Employed by SEI Investments since November 1, 1999. Vice President
and Assistant Secretary of the Adviser, the Administrator and Distributor since
December 1999. Associate at White and Williams, LLP, 1991-1999. Associate at
Montgomery, Walker and Rhoads, 1990-1991.
CYNTHIA M. PARRISH (DOB 10/23/59)--Vice President and Assistant
Secretary--Vice President and Assistant Secretary of the SEI Investments, SIMC,
the Administrator and the Distributor since August 1997. Branch Chief, Division
of Enforcement, U.S. Securities and Exchange Commission, January 1995-August
1997. Senior Counsel--Division of Enforcement, U.S. Securities and Exchange
Commission, September 1992-January 1995. Staff Attorney--Division of
Enforcement, U.S. Securities and Exchange Commission, September 1990-September
1992.
RICHARD W. GRANT (DOB 10/25/45)--Secretary--1701 Market Street,
Philadelphia, PA 19103. Partner, Morgan, Lewis & Bockius LLP (law firm) since
1989, counsel to the Trust, SEI Investments, SIMC, the Administrator and the
Distributor.
MARK E. NAGLE (DOB 10/20/59)--Controller and Chief Financial
Officer--President and Senior Vice President of Fund Accounting and
Administration of the Administrator since 1998. Vice President of Fund
Accounting and Administration of the Administator, 1996-1998. Vice President of
the Distributor since December 1997. Vice President, Fund Accounting, BISYS Fund
Services September 1995 to November 1996. Senior Vice President and Site
Manager, Fidelity Investments 1981 to September 1995.
The Trustees and officers of the Trust own, as a group, less than 1% of the
outstanding shares of the Trust. The Trust pays the fees for unaffiliated
Trustees. Compensation of officers and affiliated Trustees of the Trust is paid
by the Administrator.
COMPENSATION TABLE
<TABLE>
<CAPTION>
PENSION OR
AGGREGATE RETIREMENT BENEFITS TOTAL COMPENSATION FROM
COMPENSATION ACCRUED AS ESTIMATED ANNUAL REGISTRANT AND FUND
NAME OF FROM REGISTRANT PART OF BENEFITS UPON COMPLEX PAID TO DIRECTORS FOR
PERSON AND POSITION FOR FYE 1/31/00 FUND EXPENSES RETIREMENT FYE 1/31/00
- ------------------- --------------- ------------------- ---------------- -----------------------------
<S> <C> <C> <C> <C>
Robert A. Nesher,
Trustee*................. $ 0 $0 $0 $0 for services on 8 boards
William M. Doran,
Trustee*................. $ 0 $0 $0 $0 for services on 8 boards
F. Wendell Gooch,
Trustee**................ $ $0 $0 $ for services on
8 boards
James M. Storey,
Trustee**................ $ $0 $0 $ for services on 8
boards
George J. Sullivan,
Trustee**................ $ $0 $0 $ for services on 8
boards
Rosemarie B. Greco***......
</TABLE>
- ------------------------
* Messrs. Nesher and Doran are Trustees who may be deemed to be "interested
persons" of the Trust as the term is defined in the Investment Company Act
of 1940.
** Messrs. Gooch, Storey, and Sullivan serve as members of the Audit Committee
of the Trust.
*** Ms. Greco was approved as a Trustee at the March 20, 2000 Board of Trustees
meeting.
Mr. Edward W. Binshadler is a Trustee Emeritus of the Trust. Mr. Binshadler
serves as a consultant to the Audit Committee and receives as compensation,
$5,000 per Audit Committee meeting attended.
S-16
<PAGE>
PERFORMANCE
From time to time, the Fund may advertise yield and/or total return. These
figures will be based on historical earnings and are not intended to indicate
future performance.
The current yield of the Fund is calculated daily based upon the 7 days
ending on the date of calculation ("base period"). The yield is computed by
determining the net change (exclusive of capital changes) in the value of a
hypothetical pre-existing shareholder account having a balance of one share at
the beginning of the period, subtracting a hypothetical charge reflecting
deductions from shareholder accounts and dividing such net change by the value
of the account at the beginning of the same period to obtain the base period
return and multiplying the result by (365/7). Realized and unrealized gains and
losses are not included in the calculation of the yield.
The Fund computes its effective compound yield by determining the net
changes, exclusive of capital changes, in the value of a hypothetical
pre-existing account having a balance of one share at the beginning of the
period, subtracting a hypothetical charge reflecting deductions from shareholder
accounts, and dividing the difference by the value of the account at the
beginning of the base period to obtain the base period return, and then
compounding the base period return by adding 1, raising the sum to a power equal
to 365 divided by 7, and subtracting 1 from the result, according to the
following formula: Effective Yield = {(Base Period Return + 1)TO THE POWER OF
365/7} - 1. The current and the effective yields reflect the reinvestment of net
income earned daily on portfolio assets.
Actual yields will depend on such variables as asset quality, average asset
maturity, the type of instrument in which the Fund invests, changes in interest
rates on money market instruments, changes in the expenses of the Fund and other
factors.
Yields are one basis upon which investors may compare the Fund with other
mutual funds; however, yields of other mutual funds and other investment
vehicles may not be comparable because of the factors set forth above and
differences in the methods used in valuing portfolio instruments.
S-17
<PAGE>
For the seven-day period ended January 31, 2000, the end of the Trust's most
recent fiscal year, the current and effective yields for the Fund was as
follows:
<TABLE>
<CAPTION>
SEVEN-DAY YIELD
-----------------------
FUND CURRENT EFFECTIVE
- ---- ---------- ----------
<S> <C> <C>
CONSOLIDATEDCASH
Prime Obligation Fund..................................... * *
</TABLE>
- ------------------------
* Not in operation during period.
The total return of a Fund refers to the average compounded rate of return
for a hypothetical investment for designated time periods (including, but not
limited to, the period from which the Fund commenced operations through the
specified date), assuming that the entire investment is redeemed at the end of
each period. In particular, total return will be calculated according to the
following formula: P(1 + T) TO THE POWER OF n = ERV, where P = a hypothetical
initial payment of $1,000; T = average annual total return; n = number of years;
and ERV = ending redeemable value of a hypothetical $1,000 payment made at the
beginning of the designated time period as of the end of such period.
S-18
<PAGE>
Based on the foregoing, the average annual total returns for the Funds from
inception through January 31, 2000 and for the one, five and ten year periods
ended January 31, 2000 were as follows:
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
--------------------------------------------------
<S> <C> <C> <C> <C> <C>
FIVE SINCE
FUND CLASS ONE YEAR YEAR TEN YEAR INCEPTION
- ------------------------------ --------------------------- ----- ----- ----- -----
Prime Obligation Fund
ConsolidatedCash(1)........ * * * *
</TABLE>
- ------------------------
(1) Prime Obligation ConsolidatedCash Shares were offered beginning
.
S-19
<PAGE>
The Fund may, from time to time, compare their performance to the
performance of other mutual funds tracked by mutual fund rating services, to
broad groups of comparable mutual funds or unmanaged indices which may assume
investment of dividends but generally do not reflect deductions for
administrative and management costs.
DETERMINATION OF NET ASSET VALUE
Securities of the Fund will be valued by the amortized cost method, which
involves valuing a security at its cost on the date of purchase and thereafter
(absent unusual circumstances) assuming a constant amortization to maturity of
any discount or premium, regardless of the impact of fluctuations in general
market rates of interest on the value of the instrument. While this method
provides certainty in valuation, there may be periods during which the value of
an instrument, as determined by this method, is higher or lower than the price
the Trust would receive if it sold the instrument. During periods of declining
interest rates, the daily yield of the Fund may tend to be higher than a like
computation made by a company with identical investments utilizing a method of
valuation based upon market prices and estimates of market prices for all of its
portfolio securities. Thus, if the use of amortized cost by the Trust resulted
in a lower aggregate portfolio value on a particular day, a prospective investor
in the Fund would be able to obtain a somewhat higher yield than would result
from investment in a company utilizing solely market values, and existing
shareholders in the Fund would experience a lower yield. The converse would
apply in a period of rising interest rates.
The Fund's use of amortized cost valuation and the maintenance of the Fund's
net asset value at $1.00 are permitted, provided certain conditions are met, by
Rule 2a-7, promulgated by the SEC under the 1940 Act. Under Rule 2a-7, as
amended, a money market portfolio must maintain a dollar-weighted average
maturity of 90 days or less and not purchase any instrument having a remaining
maturity of more than 397 days. In addition, money market funds may acquire only
U.S. dollar denominated obligations that present minimal credit risks and that
are "eligible securities." An "eligible security" is one that is (i) rated, at
the time of investment, by at least two NRSROs (one if it is the only
organization rating such obligation) in the highest short-term rating category
or, if unrated, determined to be of comparable quality (a "first tier
security"), or (ii) rated according to the foregoing criteria in the second
highest short-term rating category or, if unrated, determined to be of
comparable quality ("second tier security"). The Adviser will determine that an
obligation presents minimal credit risks or that unrated instruments are of
comparable quality in accordance with guidelines established by the Trustees. In
addition, investments in second tier securities are subject to the further
constraints that (i) no more than 5% of a money market portfolio's assets may be
invested in such securities in the aggregate, and (ii) any investment in such
securities of one issuer is limited to the greater of 1% of the Fund's total
assets or $1 million. The regulations also require the Trustees to establish
procedures which are reasonably designed to stabilize the net asset value per
share at $1.00 for the Fund. However, there is no assurance that the Trust will
be able to meet this objective for any Fund. The Trust's procedures include the
determination of the extent of deviation, if any, of the Fund's current net
asset value per share calculated using available market quotations from the
Fund's amortized cost price per share at such intervals as the Trustees deem
appropriate and reasonable in light of market conditions and periodic reviews of
the amount of the deviation and the methods used to calculate such deviation. In
the event that such deviation exceeds 1/2 of 1%, the Trustees are required to
consider promptly what action, if any, should be initiated, and, if the Trustees
believe that the extent of any deviation may result in material dilution or
other unfair results to shareholders, the Trustees are required to take such
corrective action as they deem appropriate to eliminate or reduce such dilution
or unfair results to the extent reasonably practicable. In addition, if the Fund
incurs a significant loss or liability, the Trustees have the authority to
reduce pro rata the number of shares of the Fund in each shareholder's account
and to offset each shareholder's PRO RATA portion of such loss or liability from
the shareholder's accrued but unpaid dividends or from future dividends.
S-20
<PAGE>
PURCHASE AND REDEMPTION OF SHARES
It is currently the Trust's policy to pay all redemptions in cash. The Trust
retains the right, however, to alter this policy to provide for redemptions in
whole or in part by a distribution in kind of readily marketable securities held
by a Fund in lieu of cash. Shareholders may incur brokerage charges on the sale
of any such securities so received in payment of redemptions. However, a
shareholder will at all times be entitled to aggregate cash redemptions from all
Funds of the Trust during any 90-day period of up to the lesser of $250,000 or
1% of the Trust's net assets.
A gain or loss for federal income tax purposes may be realized by a taxable
shareholder upon an in-kind redemption depending upon the shareholder's basis in
the shares of the Trust redeemed.
The Trust reserves the right to suspend the right of redemption and/or to
postpone the date of payment upon redemption for any period during which trading
on the New York Stock Exchange is restricted, or during the existence of an
emergency (as determined by the SEC by rule or regulation) as a result of which
disposal or evaluation of the portfolio securities is not reasonably
practicable, or for such other periods as the SEC may by order permit. The Trust
also reserves the right to suspend sales of shares of the Funds for any period
during which the New York Stock Exchange, the Manager, the Adviser(s), the
Distributor and/or the Custodian(s) are not open for business.
TAXES
The following is only a summary of certain additional federal tax
considerations generally affecting the Fund and its shareholders that are not
described in the Fund's prospectuses. No attempt is made to present a detailed
explanation of the federal, state or local tax treatment of the Funds or their
shareholders and the discussion here and in the Fund's prospectus is not
intended as a substitute for careful tax planning.
This discussion of federal income tax consequences is based on the Internal
Revenue Code of 1986, as amended (the "Code"), and the regulations issued
thereunder, in effect on the date of this Statement of Additional Information.
New legislation, as well as administrative changes or court decisions, may
significantly change the conclusions expressed herein, and may have a
retroactive effect with respect to the transactions contemplated herein.
QUALIFICATION AS A RIC
In order to qualify for treatment as a regulated investment company ("RIC")
under Subchapter M of the Code, the Fund must distribute annually to its
shareholders at least 90% of its investment company taxable income (generally,
net investment income plus the excess, if any, of net short-term capital gain
over net long-term capital loss) (the "Distribution Requirement") and also must
meet several additional requirements. Among these requirements are the following
(i) at least 90% of the Fund's gross income each taxable year must be derived
from dividends, interest, payments with respect to securities loans, and gains
from the sale or other disposition of stock or securities, or other income
derived with respect to its business of investing in such stock or securities;
(ii) at the close of each quarter of the Fund's taxable year, at least 50% of
the value of its total assets must be represented by cash and cash items, U.S.
Government securities, securities of other RICs and other securities, with such
other securities limited, in respect of any one issuer, to an amount that does
not exceed 5% of the value of the Fund's assets and that does not represent more
than 10% of the outstanding voting securities of such issuer; and (iv) at the
close of each quarter of a Fund's taxable year, not more than 25% of the value
of its assets may be invested in securities (other than U.S. Government
securities or the securities of other RICs) of any one issuer or of two or more
issuers which are engaged in the same, similar or related trades or businesses,
if the Fund owns at least 20% of the voting power of such issuers.
Notwithstanding the Distribution Requirement described above, which only
requires the Fund to distribute at least 90% of its annual investment company
taxable income and does not require any
S-21
<PAGE>
minimum distribution of net capital gain, the Fund will be subject to a
nondeductible 4% excise tax to the extent it fails to distribute, by the end of
any calendar year, at least 98% of its ordinary income for that year and 98% of
its capital gain net income for the one-year period ending on October 31 of that
year, plus certain other amounts.
If a Fund fails to qualify as a RIC for any year, all of its income will be
subject to tax at corporate rates, and its distributions (including capital
gains distributions) will be taxable as ordinary income dividends to its
shareholders, subject to the dividends received deduction for corporate
shareholders who have held shares for more than 45 days during the 90-day period
beginning on the date which is 45 days before the date on which such shares
become exdividend with respect to such dividend.
Rules of state and local taxation of dividend and capital gains
distributions from RICs often differ from the rules for federal income taxation
described above. Shareholders are urged to consult their tax advisers as to the
consequences of these and other state and local tax rules affecting an
investment in the Trust.
STATE TAXES
The Fund is not liable for any income or franchise tax in Massachusetts if
it qualifies as a RIC for federal income tax purposes. Distributions by the Fund
to shareholders and the ownership of shares may be subject to state and local
taxes.
PORTFOLIO TRANSACTIONS
The Trust has no obligation to deal with any broker-dealer or group of
brokers or dealers in the execution of transactions in portfolio securities.
Subject to policies established by the Trustees, the Adviser is responsible for
placing orders to execute fund transactions. In placing orders, it is the
Trust's policy to seek to obtain the best net results taking into account such
factors as price (including the applicable dealer spread), size, type and
difficulty of the transaction involved, the firm's general execution and
operational facilities, and the firm's risk in positioning the securities
involved. While the Adviser generally seeks reasonably competitive spreads or
brokerage commissions, the Trust will not necessarily be paying the lowest
spread or commission available. The Trust's policy of investing in securities
with short maturities will result in high portfolio turnover. The Trust will not
purchase portfolio securities from any affiliated person acting as principal
except in conformity with the regulations of the SEC.
The money market securities in which the Fund invests are traded primarily
in the over-the-counter market. Bonds and debentures are usually traded
over-the-counter, but may be traded on an exchange. Where possible, the Adviser
will deal directly with the broker-dealers who make a market in the securities
involved except in those circumstances where better prices and execution are
available elsewhere. Such broker-dealers usually are acting as principal for
their own account. On occasion, securities may be purchased directly from the
issuer. Money market securities are generally traded on a net basis and do not
normally involve either brokerage commissions or transfer taxes. The cost of
executing portfolio securities transactions of the Fund will primarily consist
of dealer spreads and underwriting commissions.
It is expected that the Fund may execute brokerage or other agency
transactions through the Distributor, a registered broker-dealer, for a
commission, in conformity with the 1940 Act, the Securities Exchange Act of 1934
and rules of the SEC. Under these provisions, the Distributor is permitted to
receive and retain compensation for effecting portfolio transactions for the
Fund on an exchange if a written contract is in effect between the Distributor
and the Trust expressly permitting the Distributor to receive and retain such
compensation. These provisions further require that commissions paid to the
Distributor by the Trust for exchange transactions not exceed "usual and
customary" brokerage commissions. The rules define "usual and customary"
commissions to include amounts which are "reasonable and fair compared to the
commission, fee or other remuneration received or to be received by other
brokers in connection with comparable transactions involving similar securities
being purchased or sold on a
S-22
<PAGE>
securities exchange during a comparable period of time." In addition, the Fund
may direct commission business to one or more designated broker-dealers,
including the Distributor, in connection with such broker-dealer's payment of
certain of the Fund's expenses. The Trustees, including those who are not
"interested persons" of the Trust, have adopted procedures for evaluating the
reasonableness of commissions paid to the Distributor and will review these
procedures periodically. For the fiscal years ended January 31, 1996, 1997 and
1998, the Fund paid any brokerage commissions.
Since the Trust does not market its shares through intermediary brokers or
dealers, it is not the Trust's practice to allocate brokerage or principal
business on the basis of sales of its shares which may be made through such
firms. However, the Adviser may place portfolio orders with qualified
broker-dealers who recommend the Trust to clients, and may, when a number of
brokers-dealers can provide best price and execution on a particular
transaction, consider such recommendations by a broker or dealer in selecting
among broker-dealers.
The Trust does not expect to use one particular dealer, but, subject to the
Trust's policy of seeking the best net results, dealers who provide supplemental
investment research to the Adviser may receive orders for transactions by the
Trust. Information so received will be in addition to and not in lieu of the
services required to be performed by the Adviser under the Advisory Agreement,
and the expenses of the Adviser will not necessarily be reduced as a result of
the receipt of such supplemental information.
The Trust is required to identify any securities of its "regular brokers or
dealers" (as such term is defined in the 1940 Act) which the Trust has acquired
during its most recent fiscal year. As of January 31, 2000 the Prime Obligation
Fund held a repurchase agreement issued by Lehman Brothers in the amount of
$ million.
DESCRIPTION OF SHARES
The Declaration of Trust authorizes the issuance of an unlimited number of
shares of the Fund, each of which represents an equal proportionate interest in
that Fund. Each share of the Fund upon liquidation of the Fund entitles a
shareholder to a PRO RATA share in the net assets of that Fund after taking into
account certain distribution expenses. Shareholders have no preemptive rights.
The Declaration of Trust provides that the Trustees of the Trust may create
additional portfolios of shares or classes of portfolios. Any consideration
received by the Trust for shares of any additional portfolio and all assets in
which such consideration is invested would belong to that portfolio and would be
subject to the liabilities related thereto. Share certificates representing the
shares will not be issued.
LIMITATION OF TRUSTEES' LIABILITY
The Declaration of Trust provides that a Trustee shall be liable only for
his or her own willful defaults and, if reasonable care has been exercised in
the selection of officers, agents, employees or administrators, shall not be
liable for any neglect or wrongdoing of any such person. The Declaration of
Trust also provides that the Trust will indemnify its Trustees and officers
against liabilities and expenses incurred in connection with actual or
threatened litigation in which they may be involved because of their offices
with the Trust unless it is determined in the manner provided in the Declaration
of Trust that they have not acted in good faith in the reasonable belief that
their actions were in the best interests of the Trust. However, nothing in the
Declaration of Trust shall protect or indemnify a Trustee against any liability
for his wilful misfeasance, bad faith, gross negligence or reckless disregard of
his or her duties.
CODE OF ETHICS
The Board of Trustees of the Trust has adopted a Code of Ethics pursuant to
Rule 17j-1 under the Investment Company Act of 1940. In addition, the Investment
Adviser, Sub-Adviser and Distributor have adopted Codes of Ethics pursuant to
Rule 17j-1. These Codes of Ethics apply to the personal investing activities of
trustees, officers and certain employees ("access persons"). Rule 17j-1 and the
Codes are
S-23
<PAGE>
designed to prevent unlawful practices in connection with the purchase or sale
of securities by access persons. Under each Code of Ethics, access persons are
permitted to engage in personal securities transactions, but are required to
report their personal securities transactions for monitoring purposes. In
addition, certain access persons are required to obtain approval before
investing in initial public offerings or private placements. Copies of these
Codes of Ethics are on file with the Securities and Exchange Commission, and are
available to the public.
VOTING
Where the prospectus for the Fund or this Statement of Additional
Information state that an investment limitation or a fundamental policy may not
be changed without shareholder approval, such approval means the vote of
(i) 67% or more of the Fund's shares present at a meeting if the holders of more
than 50% of the outstanding shares of the Fund are present or represented by
proxy, or (ii) more than 50% of the Fund's outstanding shares, whichever is
less.
SHAREHOLDER LIABILITY
The Trust is an entity of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders of the Trust could, under
certain circumstances, be held personally liable as partners for the obligations
of the Trust. Even if, however, the Trust were held to be a partnership, the
possibility of the shareholders incurring financial loss for that reason appears
remote because the Trust's Declaration of Trust contains an express disclaimer
of shareholder liability for obligations of the Trust and requires that notice
of such disclaimer be given in each agreement, obligation or instrument entered
into or executed by or on behalf of the Trust or the Trustees, and because the
Declaration of Trust provides for indemnification out of the Trust property for
any shareholders held personally liable for the obligations of the Trust.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of May , 2000, the following persons were the only persons who were
record owners (or, to the knowledge of the Trust, beneficial owners) of 5% or
more of the shares of the Fund. The Trust believes that most of the shares
referred to below were held by the following persons in accounts for their
fiduciary, agency, or custodial customers.
CUSTODIAN AND WIRE AGENT
First Union National Bank, Broad and Chestnut Streets, P.O. Box 7618,
Philadelphia, Pennsylvania 19101 (the "Custodian,"), serves as custodian and
wire agent. The Custodians hold cash, securities and other assets of the Trust
as required by the 1940 Act.
EXPERTS
The financial statements incorporated by reference into this Statement of
Additional Information and the Financial Highlights included in the prospectuses
have been audited by , independent public accountants, as indicated
in their report, with respect thereto, and are included herein in reliance upon
the authority of said firm as experts in giving said report.
LEGAL COUNSEL
Morgan, Lewis & Bockius LLP serves as legal counsel to the Trust.
FINANCIAL STATEMENTS
The Trust's financial statements for the fiscal year ended January 31, 2000,
including notes thereto and the report of thereon, are herein
incorporated by reference. A copy of the 2000 Annual Report must accompany the
delivery of this Statement of Additional Information.
S-24
<PAGE>
PART C: OTHER INFORMATION
Item 23. EXHIBITS:
<TABLE>
<S> <C>
(a) Declaration of Trust originally filed on March 15, 1982, in
the Post-Effective Amendment to Form N-1A, is incorporated
by reference to Exhibit (1) of Post-Effective Amendment
No. 33 to Form N-1A, filed March 31, 1995.
(b) By-Laws originally filed on March 15, 1982, in the
Post-Effective Amendment to Form N-1A, are incorporated by
reference to Exhibit (2) of Post-Effective Amendment
No. 33 to Form N-1A, filed March 31, 1995.
(b)(1) Amended By-Laws are incorporated by reference to Exhibit
(2)(a) of Post-Effective Amendment No. 37 to Form N-1A,
filed May 30, 1997.
(d)(1) Management Agreement dated May 23, 1986, as amended,
originally filed in the Post-Effective Amendment to
Form N-1A, is incorporated by reference to Exhibit (5)(a)
of Post-Effective Amendment No. 33 to Form N-1A, filed
March 31, 1995.
(d)(2) Investment Advisory Agreement with Wellington Management
Company, originally filed on December 15, 1986, in the
Post-Effective Amendment to Form N-1A, is incorporated by
reference to Exhibit 5(b) of Post-Effective Amendment
No. 33 to Form N-1A, filed March 31, 1995.
(d)(3) Investment Advisory Agreement with Bear Stearns Asset
Management, originally filed May 18, 1993, in
Post-Effective Amendment No. 28 to Form N-1A, is incor-
porated by reference to Exhibit (5)(e) of Post-Effective
Amendment No. 33 to Form N-1A, filed March 31, 1995.
(d)(4) Investment Advisory Agreement with Wellington Management
Company relating to the Registrant's Corporate Daily
Income Portfolio and Treasury Securities Daily Income
Portfolio (formerly, Government Securities Daily Income
Portfolio) originally filed on May 18, 1993, in
Post-Effective Amendment No. 28 to Form N-1A, is
incorporated by reference to Exhibit (5)(f) of
Post-Effective Amendment No. 33 to Form N-1A, filed
March 31, 1995.
(d)(5) Investment Advisory Agreement with Wellington Management
Company relating to the Registrant's Short-Term Mortgage
Portfolio and Short Duration Mortgage Portfolio is
incorporated by reference to Exhibit (5)(g) of
Post-Effective Amendment No. 33 to Form N-1A, filed
March 31, 1995.
(e)(1) Distribution Agreement originally filed on July 15, 1982, in
the Post-Effective Amendment to Form N-1A, is incorporated
by reference to Exhibit (6)(a) of Post-Effective Amendment
No. 33 to Form N-1A, filed March 31, 1995.
(e)(2) Supplement to Distribution Agreement originally filed on
May 29, 1990, in Post-Effective Amendment No. 22 to
Form N-1A, is incorporated by reference to Exhibit (6)(b)
of Post-Effective Amendment No. 33 to Form N-1A, filed
March 31, 1995.
(e)(3) Supplement to Distribution Agreement originally filed on
August 29, 1991, in Post-Effective Amendment No. 24 to
Form N-1A, is incorporated by reference to Exhibit (6)(c)
of Post-Effective Amendment No. 33 to Form N-1A, filed
March 31, 1995.
(f) Not Applicable.
(g)(1) Custodian Agreement with United States National Bank of
Oregon originally filed on July 15, 1982, in the
Post-Effective Amendment to Form N-1A, is incorporated by
reference to Exhibit (8)(a) of Post-Effective Amendment
No. 33 to Form N-1A, filed March 31, 1995.
(g)(2) Custodian Agreement with First Interstate Bank of Oregon,
N.A. originally filed on July 15, 1982, in the
Post-Effective Amendment to Form N-1A, is incorporated by
reference to Exhibit (8)(b) of Post-Effective Amendment
No. 33 to Form N-1A, filed March 31, 1995.
</TABLE>
<PAGE>
<TABLE>
<S> <C>
(g)(3) Custodian Agreement with Manufacturers National Bank of
Detroit originally filed on September 22, 1983, in the
Post-Effective Amendment to Form N-1A, is incorporated by
reference to Exhibit (8)(c) of Post-Effective Amendment
No. 33 to Form N-1A, filed March 31, 1995.
(g)(4) Custodian Agreement with Philadelphia National Bank
originally filed on August 30, 1985, in the
Post-Effective Amendment to Form N-1A, is incorporated by
reference to Exhibit (8)(d) of Post-Effective Amendment
No. 33 to Form N-1A, filed March 31, 1995.
(h)(1) Form of Class A Shareholder Service Plan and Agreement, is
incorporated by reference to Exhibit (9)(a) of
Post-Effective Amendment No. 36 to Form N-1A, filed
April 1, 1996.
(h)(2) Form of Class B Shareholder Service Plan and Agreement, is
incorporated by reference to Exhibit (9)(b) of
Post-Effective Amendment No. 36 to Form N-1A, filed
April 1, 1996.
(h)(3) Form of Class B Administrative Services Plan and Agreement,
is incorporated by reference to Exhibit (9)(c) of
Post-Effective Amendment No. 36 to Form N-1A, filed
April 1, 1996.
(h)(4) Form of Class C Shareholder Service Plan and Agreement, is
incorporated by reference to Exhibit (9)(d) of
Post-Effective Amendment No. 36 to Form N-1A, filed
April 1, 1996.
(h)(5) Form of Class C Administrative Services Plan and Agreement,
is incorporated by reference to Exhibit (9)(e) of
Post-Effective Amendment No. 36 to Form N-1A, filed
April 1, 1996.
(h)(6) Form of Class G Shareholder Service Plan and Agreement, is
incorporated by reference to Exhibit (9)(f) of
Post-Effective Amendment No. 36 to Form N-1A, filed
April 1, 1996.
(h)(7) Form of Sweep Class Shareholder Service Plan and Agreement
is incorporated by reference to Exhibit (9)(g) of
Post-Effective Amendment No. 37 to Form N-1A, filed May
30, 1997.
(h)(8) Consent to Assignment and Assumption of the Administration
Agreement between the Trust and SEI Financial Management
Corporation to SEI Fund Resources, is incorporated by
reference to Exhibit (9)(h) of Post-Effective Amendment
No. 37 to Form N-1A, filed May 30, 1997.
(i) Opinion and Consent of Counsel to be filed by later
amendment.
(j) Consent of Independent Public Accountants to be filed by
later amendment.
(k) Not Applicable.
(l) Not Applicable.
(m)(1) Class D Distribution Plan originally filed on April 1, 1993,
in Post-Effective Amendment No. 27 to Form N-1A, is
incorporated by reference to Exhibit (6)(d) of Post-
Effective Amendment No. 33 to Form N-1A, filed March 31,
1995.
(m)(2) Class A Distribution Plan is incorporated by reference to
Exhibit (15)(b) of Post-Effective Amendment No. 34 to
Form N-1A, filed December 28, 1995.
(m)(3) Class B Distribution Plan is incorporated by reference to
Exhibit (15)(c) of Post-Effective Amendment No. 34 to
Form N-1A, filed December 28, 1995.
(m)(4) Class C Distribution Plan is incorporated by reference to
Exhibit (15)(d) of Post-Effective Amendment No. 34 to
Form N-1A, filed December 28, 1995.
(m)(5) Class G Distribution Plan is incorporated by reference to
Exhibit (15)(e) of Post-Effective Amendment No. 35 to
Form N-1A, filed March 21, 1996.
(m)(6) Class D Amended and Restated Distribution Plan is
incorporated by reference to Exhibit (15)(f) of
Post-Effective Amendment No. 36 to Form N-1A, filed
April 1, 1996.
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
(m)(7) Sweep Class Distribution Plan is incorporated by reference
to Exhibit (15)(g) of Post-Effective Amendment No. 37 to
Form N-1A, filed May 30, 1997.
(n) Not Applicable.
(o)(1) Rule 18f-3 Multiple Class Plan is incorporated by reference
to Exhibit (18)(a) of Post-Effective Amendment No. 34 to
Form N-1A, filed December 28, 1995.
(o)(2) Amendment No. 1 to Rule 18f-3 Multiple Class Plan relating
to Class A, B, C, D and G shares, is incorporated by
reference to Exhibit (18)(b) of Post-Effective Amendment
No. 36 to Form N-1A, filed April 1, 1996.
(o)(3) Amendment No. 2 to Rule 18f-3 Multiple Class Plan relating
to Sweep Class is incorporated by reference to Exhibit
(18)(c) of Post-Effective Amendment No. 37 to Form N-1A,
filed May 30, 1997.
(p)(1) The Code of Ethics for SEI Investments Company is filed
herewith.
(p)(2) The Code of Ethics for SEI Daily Income Trust is filed
herewith.
(p)(3) The Code of Ethics for Wellington Management Company, LLP is
incorporated by reference to Exhibit (p)(4) of
Post-Effective Amendment No. 26 to Arbor Fund's
Registration Statement on Form N-1A (File No. 33-50718)
filed with the SEC March 16, 2000.
(q) Powers of Attorney for Robert A. Nesher, William M. Doran,
Mark E. Nagle, F. Wendell Gooch, George J. Sullivan, Jr.,
James M. Storey and Edward D. Loughlin are incorporated by
reference to Exhibit (p) Post-Effective Amendment No. 39
to Form N-1A filed on April 1, 1999.
</TABLE>
Item 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
See the Prospectuses and Statement of Additional Information filed herewith
regarding the Trust's control relationships. The Manager is a subsidiary of SEI
Investments Company which also controls the distributor of the Registrant, SEI
Investments Distribution Co., and other corporations engaged in providing
various financial and record keeping services, primarily to bank trust
departments, pension plan sponsors and investment managers.
Item 25. INDEMNIFICATION:
Article VIII of the Agreement and Declaration of Trust filed as Exhibit 1 to
the Registration Statement is incorporated by reference. Insofar as
indemnification for liabilities arising under the Securities Act of 1933 maybe
permitted to trustees, directors, officers and controlling persons of the
Registrant by the Registrant pursuant to the Declaration of Trust or otherwise,
the Registrant is aware that in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Act and, therefore, is unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by trustees, directors, officers or
controlling persons of the Registrant in connection with the successful defense
of any act, suit or proceeding) is asserted by such trustees, directors,
officers or controlling persons in connection with the shares being registered,
the Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issues.
Item 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISERS:
Wellington Management Company, LLP ("WMC") serves as an investment adviser
for each of the Funds. The principal address of WMC is 75 State Street, Boston,
Massachusetts 02109. WMC is an investment adviser registered under the Advisers
Act.
3
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION WITH CONNECTION WITH OTHER
INVESTMENT ADVISER NAME OF OTHER COMPANY COMPANY
- --------------------------------- ------------------------- --------------------------------
<S> <C> <C>
Kenneth Lee Abrams -- --
General Partner
Nicholas Charles Adams -- --
General Partner
Rand Charles Alexander -- --
General Partner
Deborah Louise Allison -- --
General Partner
James Halsey Averill -- --
General Partner
Karl E. Bandtel -- --
General Partner
Mark James Beckwith -- --
General Partner
Marie-Claude Petit Bernal -- --
General Partner
William Nicholas Booth -- --
General Partner
Paul Braverman -- --
General Partner
Robert A. Bruno -- --
General Partner
Pamela Dippel -- --
General Partner
Robert Lloyd Evans -- --
General Partner
Charles Townsend Freeman -- --
General Partner
Laurie Allen Gabriel -- --
General Partner
Lisa de la Fuente Finkel -- --
General Partner
John Herrick Gooch Wellington Management Partner
General Partner International
Wellington Trust Company, Director & Vice President
NA
Nicholas Peter Greville Wellington Management Partner
General Partner International
Paul J. Hammel -- --
General Partner
Lucus Tuttle Hill, III -- --
General Partner
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION WITH CONNECTION WITH OTHER
INVESTMENT ADVISER NAME OF OTHER COMPANY COMPANY
- --------------------------------- ------------------------- --------------------------------
<S> <C> <C>
Paul David Kaplan -- --
General Partner
John Charles Keogh -- --
General Partner
George Cabot Lodge, Jr. -- --
General Partner
Nancy T. Lukitsh Wellington Trust Company, Director & Vice President
General Partner NA
Mark T. Lynch -- --
General Partner
Christine Smith Manfredi -- --
General Partner
Patrick John McCloskey -- --
General Partner
Earl Edward McEvoy -- --
General Partner
Duncan Mathieu McFarland Wellington Management Partner
General Partner International
Wellington Trust Company, Director & Vice Chairman
NA
Paul Mulford Mecray, III -- --
General Partner
Matthew Edward Megargel -- --
General Partner
James Nelson Mordy -- --
General Partner
Diane Carol Nordin -- --
General Partner
Stephen T. O'Brien -- --
General Partner
Edward Paul Owens -- --
General Partner
Saul Joseph Pannell -- --
General Partner
Thomas Louis Pappas -- --
General Partner
Jonathan Martin Payson Wellington Trust Company, Director & President
General Partner NA
Stephen Michael Pazuk Wellington Management Partner
General Partner International
Philip H. Perelmuter -- --
General Partner
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION WITH CONNECTION WITH OTHER
INVESTMENT ADVISER NAME OF OTHER COMPANY COMPANY
- --------------------------------- ------------------------- --------------------------------
<S> <C> <C>
Robert Douglas Rands -- --
General Partner
Eugene Edward Record, Jr. -- --
General Partner
James Albert Rullo -- --
General Partner
John Robert Ryan -- --
General Partner
Joseph Harold Schwartz -- --
General Partner
Theodore E. Shasta -- --
General Partner
Binkley Calhoun Shorts -- --
General Partner
Trond Skramstad -- --
General Partner
Catherine Anne Smith -- --
General Partner
Stephen Albert Soderberg -- --
General Partner
Eric Stromquist -- --
General Partner
Brendan James Swords -- --
General Partner
Harriett Tee Taggart -- --
General Partner
Perry Marques Traquina -- --
General Partner
Gene Roger Tremblay -- --
General Partner
Michael Aaron Tyler -- --
General Partner
Mary Ann Tynan -- --
General Partner
Clare Villari -- --
General Partner
Ernst Hans von Metzsch -- --
General Partner
James Leland Walters Wellington Trust Company, Director, Senior Trust Officer &
General Partner NA Trust Counsel
Kim Williams -- --
General Partner
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION WITH CONNECTION WITH OTHER
INVESTMENT ADVISER NAME OF OTHER COMPANY COMPANY
- --------------------------------- ------------------------- --------------------------------
<S> <C> <C>
Francis Vincent Wisneski, Jr. -- --
General Partner
</TABLE>
Item 27. PRINCIPAL UNDERWRITERS:
(a) Furnish the name of each investment company (other than the Registrant)
for which each principal underwriter currently distributing securities of the
Registrant also acts as a principal underwriter, depositor or investment
adviser:
Registrant's distributor, SEI Investments Distributions Co., acts as
distributor for:
<TABLE>
<S> <C>
SEI Liquid Asset Trust November 29, 1982
SEI Tax Exempt Trust December 3, 1982
SEI Index Funds July 10, 1985
SEI Institutional Managed Trust January 22, 1987
SEI Institutional International Trust August 30, 1988
The Advisors' Inner Circle Fund November 14, 1991
The Pillar Funds February 28, 1992
CUFUND May 1, 1992
STI Classic Funds May 29, 1992
First American Funds, Inc. November 1, 1992
First American Investment Funds, Inc. November 1, 1992
The Arbor Fund January 28, 1993
Boston 1784 Funds-Registered Trademark- June 1, 1993
The PBHG Funds, Inc. July 16, 1993
The Achievement Funds Trust December 27, 1994
Bishop Street Funds January 27, 1995
STI Classic Variable Trust August 18, 1995
ARK Funds November 1, 1995
Huntington Funds January 11, 1996
SEI Asset Allocation Trust April 1, 1996
TIP Funds April 28, 1996
SEI Institutional Investments Trust June 14, 1996
First American Strategy Funds, Inc. October 1, 1996
HighMark Funds February 15, 1997
Armada Funds March 8, 1997
PBHG Insurance Series Fund, Inc. April 1, 1997
The Expedition Funds June 9, 1997
Alpha Select Funds January 1, 1998
Oak Associates Funds February 27, 1998
The Nevis Fund, Inc. June 29, 1998
The Parkstone Group of Funds September 14, 1998
CNI Charter Funds April 1, 1999
The Parkstone Advantage Fund May 1, 1999
Armada Advantage Fund May 1, 1999
Amerindo Funds, Inc. July 13, 1999
Huntington VA Fund October 15, 1999
Friends Ivory Funds December 16, 1999
</TABLE>
The Distributor provides numerous financial services to investment managers,
pension plan sponsors, and bank trust departments. These services include
portfolio evaluation, performance measurement
7
<PAGE>
and consulting services ("Funds Evaluation") and automated execution,
clearing and settlement of securities transactions ("MarketLink").
(b) Furnish the Information required by the following table with respect to
each director, officer or partner of each principal underwriter named in the
answer to Item 21 of Part B. Unless otherwise noted, the business address of
each director or officer is Oaks, PA 19456.
<TABLE>
<CAPTION>
POSITION AND OFFICE POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
- ------------------------- ------------------------------------------ -----------------------
<S> <C> <C>
Alfred P. West, Jr. Director, Chairman of the Board of --
Directors
Richard B. Lieb Director, Executive Vice President --
Carmen V. Romeo Director --
Mark J. Held President & Chief Operating Officer --
Gilbert L. Beebower Executive Vice President --
Richard B. Lieb Executive Vice President --
Dennis J. McGonigle Executive Vice President --
Robert M. Silvestri Chief Financial Officer & Treasurer --
Leo J. Dolan, Jr. Senior Vice President --
Carl A. Guarino Senior Vice President --
Larry Hutchison Senior Vice President --
Jack May Senior Vice President --
Hartland J. McKeown Senior Vice President --
Kevin P. Robins Senior Vice President & General Counsel Vice President and
Assistant Secretary
Patrick K. Walsh Senior Vice President --
Timothy D. Barto Vice President & Assistant Secretary Vice President &
Assistant Secretary
Robert Aller Vice President --
Gordon W. Carpenter Vice President --
Todd Cipperman Vice President & Assistant Secretary Vice President and
Assistant Secretary
S. Courtney E. Collier Vice President & Assistant Secretary --
Robert Crudup Vice President & Managing Director --
Barbara Doyne Vice President --
Jeff Drennen Vice President --
James R. Foggo Vice President & Assistant Secretary Vice President &
Assistant Secretary
Vic Galef Vice President & Managing Director --
Lydia A. Gavalis Vice President & Assistant Secretary Vice President and
Assistant Secretary
Greg Gettinger Vice President & Assistant Secretary --
Kathy Hellig Vice President --
Jeff Jacobs Vice President --
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
POSITION AND OFFICE POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
- ------------------------- ------------------------------------------ -----------------------
<S> <C> <C>
Samuel King Vice President --
Kim Kirk Vice President & Managing Director --
John Krzeminski Vice President & Managing Director --
Christine M. McCullough Vice President & Assistant Secretary Vice President &
Assistant Secretary
Carolyn McLaurin Vice President & Managing Director --
Mark Nagle Vice President Controller & Chief
Financial Officer
Joanne Nelson Vice President --
Cynthia M. Parrish Vice President & Assistant Secretary Vice President and
Assistant Secretary
Rob Redican Vice President --
Maria Rinehart Vice President --
Steve Smith Vice President --
Daniel Spaventa Vice President --
Kathryn L. Stanton Vice President & Assistant Secretary --
Lynda J. Striegel Vice President & Assistant Secretary Vice President and
Assistant Secretary
Lori L. White Vice President & Assistant Secretary --
Wayne M. Withrow Vice President & Managing Director --
</TABLE>
Item 28. LOCATION OF ACCOUNTS AND RECORDS:
Books or other documents required to be maintained by Section 31(a) of the
Investment Company Act of 1940, as amended ("1940 Act"), and the rules
promulgated thereunder, are maintained as follows:
(a) With respect to Rules 31a-1(a); 31a-1(b)(1); (2)(a) and (b); (3);
(6); (8); (12); and 31a-1(d), the required books and records are maintained
at the offices of Registrant's Custodians:
<TABLE>
<S> <C>
First Union National Bank
Broad and Chestnut Streets
P.O. Box 7618
Philadelphia, PA19101
</TABLE>
(b) With respect to Rules 31a-1(a); 31a-1(b)(1); 31a-1(b)(4); (2)(C) and
(D); (4); (5); (6); (8); (9); (10); (11); and 31a-1(c), the required books
and records are maintained at the offices of Registrant's Manager:
SEI Investments Fund Management
Oaks, PA 19456
(c) With respect to Rules 31a-1(b)(5), (6), (9) and (10) and 31a-1(f),
the required books and records are maintained at the principal offices of
the Registrant's Adviser:
Wellington Management Company, LLP
75 State Street
Boston, Massachusetts 02109
9
<PAGE>
Item 29. MANAGEMENT SERVICES:
None
Item 30. UNDERTAKINGS:
Registrant hereby undertakes that whenever shareholders meeting the
requirements of Section 16(c) of the 1940 Act inform the Board of Trustees of
their desire to communicate with shareholders of the Trust, the Trustees will
inform such shareholders as to the approximate number of shareholders of record
and the approximate costs of mailing or afford said shareholders access to a
list of shareholders.
Registrant undertakes to call a meeting of shareholders for the purpose of
voting upon the question of the removal of a Trustee(s) when requested in
writing to do so by the holders of at least 10% of Registrant's outstanding
shares and in connection with each meeting to comply with the provisions of
Section 16(c) of the Investment Company Act of 1940 Act relating to shareholder
communications.
Registrant undertakes to furnish, upon request and without charge, to each
person to whom a prospectus is delivered, a copy of the Registrant's latest
annual report to shareholders, when such annual report is issued containing
information called for by Item 5A of Form N-1A.
NOTICE
A copy of the Agreement and Declaration of Trust of SEI Daily Income Trust
(formerly now known as SEI Cash + Plus Trust) is on file with the Secretary of
State of the Commonwealth of Massachusetts and notice is hereby given that this
Registration Statement has been executed on behalf of the Trust by an officer of
the Trust as an officer and by its Trustees as trustees and not individually and
the obligations of or arising out of this Registration Statement are not binding
upon any of the Trustees, officers, or shareholders individually but are binding
only upon the assets and property of the Trust.
10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and
the Investment Company Act of 1940, as amended, the Registrant has duly caused
this Post-Effective Amendment No. 41 to Registration Statement No. 2-77048 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Oaks, Commonwealth of Pennsylvania on the 31st day of March, 2000.
SEI DAILY INCOME TRUST
By: /s/ EDWARD D. LOUGHLIN
-----------------------------------------
EDWARD D. LOUGHLIN
PRESIDENT & CHIEF EXECUTIVE OFFICER
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below by the following persons in
the capacity on the date(s) indicated.
<TABLE>
<C> <C> <S> <C>
*
- ------------------------------------ Trustee March 31, 2000
William M. Doran
*
- ------------------------------------ Trustee March 31, 2000
F. Wendell Gooch
*
- ------------------------------------ Trustee March 31, 2000
George J. Sullivan, Jr.
*
- ------------------------------------ Trustee March 31, 2000
James M. Storey
*
- ------------------------------------ Trustee March 31, 2000
Robert A. Nesher
/s/ EDWARD D. LOUGHLIN President & Chief
- ------------------------------------ Executive Officer March 31, 2000
Edward D. Loughlin
/s/ MARK E. NAGLE Controller & Chief
- ------------------------------------ Financial Officer March 31, 2000
Mark E. Nagle
*By: /s/ EDWARD D. LOUGHLIN
------------------------------
Edward D. Loughlin
ATTORNEY-IN-FACT
</TABLE>
11
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
---------------
<S> <C>
EX.99.B(a) Declaration of Trust originally filed on March 15, 1982, in
the Post-Effective Amendment to Form N-1A, is incorporated
by reference to Exhibit (1) of Post-Effective Amendment
No. 33 to Form N-1A, filed March 31, 1995.
EX.99.B(b) By-Laws originally filed on March 15, 1982, in the
Post-Effective Amendment to Form N-1A, is incorporated by
reference to Exhibit (2) of Post-Effective Amendment
No. 33 to Form N-1A, filed March 31, 1995.
EX.99.B(b)(1) Amended By-Laws are incorporated by reference to
Exhibit (2)(a) of Post-Effective Amendment No. 37 to
Form N-1A, filed May 30, 1997.
EX.99.B(d)(1) Management Agreement dated May 23, 1986, as amended,
originally filed in the Post-Effective Amendment to
Form N-1A, is incorporated by reference to Exhibit (5)(a)
of Post-Effective Amendment No. 33 to Form N-1A, filed
March 31, 1995.
EX.99.B(d)(2) Investment Advisory Agreement with Wellington Management
Company, originally filed on December 15, 1986, in the
Post-Effective Amendment to Form N-1A, is incorporated by
reference to Exhibit (5)(b) of Post-Effective Amendment
No. 33 to Form N-1A, filed March 31, 1995.
EX.99.B(d)(3) Investment Advisory Agreement with Bear Stearns Asset
Management, originally filed May 18, 1993, in
Post-Effective Amendment No. 28 to Form N-1A, is
incorporated by reference to Exhibit (5)(e) of
Post-Effective Amendment No. 33 to Form N-1A, filed
March 31, 1995.
EX.99.B(d)(4) Investment Advisory Agreement with Wellington Management
Company relating to the Registrant's Corporate Daily
Income Portfolio and Government Securities Daily Income
Portfolio originally filed on May 18, 1993, in
Post-Effective Amendment No. 28 to Form N-1A, is
incorporated by reference to Exhibit (5)(f) of
Post-Effective Amendment No. 33 to Form N-1A, filed
March 31, 1995.
EX.99.B(d)(5) Investment Advisory Agreement with Wellington Management
Company relating to the Registrant's Short-Term Mortgage
Portfolio and Short Duration Mortgage Portfolio is
incorporated by reference to Exhibit (5)(g) of
Post-Effective Amendment No. 33 to Form N-1A, filed
March 31, 1995.
EX.99.B(e)(1) Distribution Agreement originally filed on July 15, 1982, in
the Post-Effective Amendment to Form N-1A, is incorporated
by reference to Exhibit (6)(a) of Post-Effective Amendment
No. 33 to Form N-1A, filed March 31, 1995.
EX.99.B(e)(2) Supplement to Distribution Agreement originally filed on
May 29, 1990, in Post-Effective Amendment No. 22 to
Form N-1A, is incorporated by reference to Exhibit (6)(b)
of Post-Effective Amendment No. 33 to Form N-1A, filed
March 31, 1995.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
---------------
<S> <C>
EX.99.B(e)(3) Supplement to Distribution Agreement originally filed on
August 29, 1991, in Post-Effective Amendment No. 24 to
Form N-1A, is incorporated by reference to Exhibit (6)(c)
of Post-Effective Amendment No. 33 to Form N-1A, filed
March 31, 1995.
EX.99.B(f) Not Applicable.
EX.99.B(g)(1) Custodian Agreement with United States National Bank of
Oregon originally filed on July 15, 1982, in the
Post-Effective Amendment to Form N-1A, is incorporated by
reference to Exhibit (8)(a) of Post-Effective Amendment
No. 33 to Form N-1A, filed March 31, 1995.
EX.99.B(g)(2) Custodian Agreement with First Interstate Bank of Oregon,
N.A. originally filed on July 15, 1982, in the
Post-Effective Amendment to Form N-1A, is incorporated by
reference to Exhibit (8)(b) of Post-Effective Amendment
No. 33 to Form N-1A, filed March 31, 1995.
EX.99.B(g)(3) Custodian Agreement with Manufacturers National Bank of
Detroit originally filed on September 22, 1983, in the
Post-Effective Amendment to Form N-1A, is incorporated by
reference to Exhibit (8)(c) of Post-Effective Amendment
No. 33 to Form N-1A, filed March 31, 1995.
EX.99.B(g)(4) Custodian Agreement with Philadelphia National Bank
originally filed on August 30, 1985, in the Post-Effective
Amendment to Form N-1A, is incorporated by reference to
Exhibit (8)(d) of Post-Effective Amendment No. 33 to
Form N-1A, filed March 31, 1995.
EX.99.B(h)(1) Form of Class A Shareholder Service Plan and Agreement is
incorporated by reference to Exhibit (9)(a) of
Post-Effective Amendment No. 36 to Form N-1A, filed
April 1, 1996.
EX.99.B(h)(2) Form of Class B Shareholder Service Plan and Agreement is
incorporated by reference to Exhibit (9)(b) of
Post-Effective Amendment No. 36 to Form N-1A, filed
April 1, 1996.
EX.99.B(h)(3) Form of Class B Administrative Services Plan and Agreement
is incorporated by reference to Exhibit (9)(c) of
Post-Effective Amendment No. 36 to Form N-1A, filed
April 1, 1996.
EX.99.B(h)(4) Form of Class C Shareholder Service Plan and Agreement is
incorporated by reference to Exhibit (9)(d) of
Post-Effective Amendment No. 36 to Form N-1A, filed
April 1, 1996.
EX.99.B(h)(5) Form of Class C Administrative Services Plan and Agreement
is incorporated by reference to Exhibit (9)(e) of
Post-Effective Amendment No. 36 to Form N-1A, filed
April 1, 1996.
EX.99.B(h)(6) Form of Class G Shareholder Service Plan and Agreement is
incorporated by reference to Exhibit (9)(f) of
Post-Effective Amendment No. 36 to Form N-1A, filed
April 1, 1996.
EX.99.B(h)(7) Form of Sweep Class Shareholder Service Plan and Agreement
is incorporated by reference to Exhibit (9)(g) of
Post-Effective Amendment No. 37 to Form N-1A, filed
May 30, 1997.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
---------------
<S> <C>
EX.99.B(h)(8) Consent to Assignment and Assumption of the Administration
Agreement between the Trust and SEI Financial Management
Corporation to SEI Fund Resources, is incorporated by
reference to Exhibit (9)(h) of Post-Effective Amendment
No. 37 to Form N-1A, filed May 30, 1997.
EX.99.B(i) Opinion and Consent of Counsel to be filed by later
amendment.
EX.99.B(j) Consent of Independent Public Accountants to be filed by
later amendment.
EX.99.B(k) Not Applicable.
EX.99.B(l) Not Applicable.
EX.99.B(m)(1) Class D Distribution Plan originally filed on April 1, 1993,
in Post-Effective Amendment No. 27 to Form N-1A, is
incorporated by reference to Exhibit (6)(d) of
Post-Effective Amendment No. 33 to Form N-1A, filed
March 31, 1995.
EX.99.B(m)(2) Class A Distribution Plan is incorporated by reference to
Exhibit (15)(b) of Post-Effective Amendment No. 34 to
Form N-1A, filed December 28, 1995.
EX.99.B(m)(3) Class B Distribution Plan is incorporated by reference to
Exhibit (15)(c) of Post-Effective Amendment No. 34 to
Form N-1A, filed December 28, 1995.
EX.99.B(m)(4) Class C Distribution Plan is incorporated by reference to
Exhibit (15)(d) of Post-Effective Amendment No. 34 to
Form N-1A, filed December 28, 1995.
EX.99.B(m)(5) Class G Distribution Plan is incorporated by reference to
Exhibit (15)(e) of Post-Effective Amendment No. 35 to
Form N-1A, filed March 21, 1996.
EX.99.B(m)(6) Class D Amended and Restated Distribution Plan is
incorporated by reference to Exhibit (15)(f) of
Post-Effective Amendment No. 36 to Form N-1A, filed
April 1, 1996.
EX.99.B(m)(7) Sweep Class Distribution Plan is incorporated by reference
to Exhibit (15)(g) of Post-Effective Amendment No. 37 to
Form N-1A, filed May 30, 1997.
EX.99.B(o)(1) Rule 18f-3 Multiple Class Plan is incorporated by reference
to Exhibit (18)(a) of Post-Effective Amendment No. 34 to
Form N-1A, filed December 28, 1995.
EX.99.B(o)(2) Amendment No. 1 to Rule 18f-3 Multiple Class Plan relating
to Class A, B, C, D and G shares, is incorporated by
reference to Exhibit (18)(b) of Post-Effective Amendment
No. 36 to Form N-1A, filed April 1, 1996.
EX.99.B(o)(3) Amendment No. 2 to Rule 18f-3 Multiple Class Plan relating
to Sweep Class is incorporated by reference to
Exhibit (18)(c) of Post-Effective Amendment No. 37 to Form
N-1A, filed May 30, 1997.
(p)(1) The Code of Ethics for SEI Investments Company is filed
herewith.
(p)(2) The Code of Ethics for SEI Daily Income Trust is filed
herewith.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
---------------
<S> <C>
(p)(3) The Code of Ethics for Wellington Management Company, LLP is
incorporated by reference to Exhibit (p)(4) of
Post-Effective Amendment No. 26 to Arbor Fund's
Registration Statement on Form N-1A (File No. 33-50718)
filed with the SEC March 16, 2000.
EX.99.B(q) Powers of Attorney for Robert A. Nesher, William M. Doran,
Mark E. Nagle, F. Wendell Gooch, George J. Sullivan, Jr.,
James M. Storey and Edward D. Loughlin are incorporated by
reference to Exhibit (p) of Post-Effective Amendment
No. 39 to Form N-1A filed on April 1, 1999.
</TABLE>
<PAGE>
SEI INVESTMENTS COMPANY
CODE OF ETHICS AND
INSIDER TRADING POLICY
January, 2000
<PAGE>
SEI INVESTMENTS COMPANY
CODE OF ETHICS AND INSIDER TRADING POLICY
TABLE OF CONTENTS
I. GENERAL POLICY
II. CODE OF ETHICS
A. PURPOSE OF CODE
B. EMPLOYEE CATEGORIES
C. RESTRICTIONS ON PERSONAL SECURITIES TRANSACTIONS
D. PRE-CLEARANCE OF PERSONAL SECURITIES TRANSACTIONS
E. REPORTING REQUIREMENTS
F. DETECTION AND REPORTING OF CODE VIOLATIONS
G. VIOLATIONS OF THE CODE OF ETHICS
H. CONFIDENTIAL TREATMENT
I. DEFINITIONS APPLICABLE TO THE CODE OF ETHICS
III. INSIDER TRADING POLICY
A. WHAT IS "MATERIAL" INFORMATION?
B. WHAT IS "NONPUBLIC INFORMATION"?
C. WHO IS AN INSIDER?
D. WHAT IS MISAPPROPRIATION?
E. WHAT IS TIPPING?
F. IDENTIFYING INSIDE INFORMATION?
G. TRADING IN SEI INVESTMENTS COMPANY SECURITIES
H. VIOLATIONS OF THE INSIDER TRADING POLICY
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<PAGE>
I. GENERAL POLICY
SEI Investments Company, through various subsidiaries (jointly "SEI"), is an
investment adviser, administrator, distributor, and/or trustee of investment
companies, collective investment trusts, investment partnerships, and asset
management accounts (jointly "Investment Vehicles"). As an investment adviser,
SEI is subject to various U.S. securities laws and regulations governing the use
of confidential information and personal securities transactions. This Code of
Ethics and Insider Trading Policy (jointly "Policy") was developed based on
those laws and regulations, and sets forth the procedures and restrictions
governing the personal securities transactions of all SEI employees.
SEI has a highly ethical business culture and expects that all employees will
conduct any personal securities transactions consistent with this Policy and in
such a manner as to avoid any actual or potential conflict of interest or abuse
of a position of trust and responsibility. When an employee invests for his or
her own account, conflicts of interest may arise between a client's and the
employee's interest. Such conflicts may include using an employee's advisory
position to take advantage of available investment opportunities, taking an
investment opportunity from a client for an employee's own portfolio, or
frontrunning, which occurs when an employee trades in his or her personal
account before making client transactions. As a fiduciary, SEI owes a duty of
loyalty to clients which requires that an employee must always place the
interests of clients first and foremost and shall not take inappropriate
advantage of his or her position. Thus, SEI employees must conduct themselves
and their personal securities transactions in a manner that does not create
conflicts of interest with the firm's clients.
Pursuant to this Policy, employees will be subject to various pre-clearance and
reporting standards, based on their responsibilities within SEI. As a result, it
is important that all employees pay special attention to the employee category
section within this Policy to determine what provisions of the Policy applies to
them, as well as to the sections on restrictions, pre-clearance, and reporting
of personal securities transactions.
Employees outside the United States are subject to this Policy and the
applicable laws of the jurisdictions in which they are located. These laws may
differ substantially from U.S. law and may subject employees to additional
requirements. To the extent any particular portion of the Policy is inconsistent
with foreign law not included herein or within the firm's Compliance Manual,
employees should consult their designated Compliance Officer or the Compliance
Department at SEI's Oaks facility.
EACH EMPLOYEE SUBJECT TO THIS POLICY MUST READ AND RETAIN A COPY AND AGREE TO
ABIDE BY ITS TERMS. FAILURE TO COMPLY WITH THE PROVISIONS OF THIS POLICY MAY
RESULT IN THE IMPOSITION OF SERIOUS SANCTIONS, INCLUDING, BUT NOT LIMITED TO
DISGORGEMENT OF PROFITS, DISMISSAL, SUBSTANTIAL PERSONAL LIABILITY AND/OR
REFERRAL TO REGULATORY OR LAW ENFORCEMENT AGENCIES.
3
<PAGE>
Any questions regarding SEI's policy or procedures should be referred to the
Compliance Department, which currently includes Cyndi Parrish, the Compliance
Director. (x2807).
II. CODE OF ETHICS
A. PURPOSE OF CODE
This Code of Ethics ("Code") was adopted pursuant to the provisions of
Section 17(j) of the Investment Company Act of 1940, as amended, and Rule 17j-1
thereunder, as amended. Those provisions of the U.S. securities laws were
adopted to prevent persons who are actively engaged in the management, portfolio
selection or underwriting of registered investment companies from participating
in fraudulent, deceptive or manipulative acts, practices or courses of conduct
in connection with the purchase or sale of securities held or to be acquired by
such companies. Employees (including contract employees) will be subject to
various pre-clearance and reporting standards based on their responsibilities
within SEI and accessibility to certain information. Those functions are set
forth in the categories listed below.
B. EMPLOYEE CATEGORIES
1. ACCESS PERSON - any director, officer or employee of SEI Investments Mutual
Fund Services who, in connection with his or her regular functions or
duties, makes, participates in, or obtains prior or contemporaneous
information regarding the purchase or sale of an Investment Vehicle's
portfolio securities for which SEI acts as distributor and/or
administrator.
2. INVESTMENT PERSON - any director, officer or employee of the Asset
Management Group who (1) directly oversees the performance of one or more
sub-advisers for any Investment Vehicle for which SEI acts as investment
adviser, (2) executes or helps execute portfolio transactions for any such
Investment Vehicle, or (3) obtains or is able to obtain prior or
contemporaneous information regarding the purchase or sale of an Investment
Vehicle's portfolio securities.
3. PORTFOLIO PERSONS - any director, officer or employee entrusted with direct
responsibility and authority to make investment decisions affecting one or
more client portfolios.
4. REGISTERED REPRESENTATIVE - any director, officer or employee who is
registered with the National Association of Securities Dealers as a
registered representative (Series 6, 7 or 63), a registered principal
(Series 24 or 26) or an investment representative (Series 65), regardless
of job title or responsibilities.
4
<PAGE>
5. ASSOCIATE - any director, officer or employee who does not fall within
definitions 1, 2, 3 or 4 above.
C. RESTRICTIONS ON PERSONAL SECURITIES TRANSACTIONS
When buying or selling securities, SEI employees may not employ any device,
scheme or artifice to defraud, mislead, or manipulate any fund or investment
client. The following restrictions are applicable to an employee's personal
securities transactions.
1. ACCESS PERSONS:
- may not purchase or sell, directly or indirectly, any Security
within 24 HOURS before or after the time that the same (or a
related) Security is being purchased or sold by any Investment
Vehicle for which SEI acts as advisor, distributor and/or
administrator.
- may not acquire Securities as part of an Initial Public
Offering("IPO") without obtaining the written approval of the
designated Compliance Officer at Mutual Fund Services before
directly or indirectly acquiring a beneficial ownership in such
securities.
- may not acquire a beneficial ownership interest in Securities
issued in a private placement transaction without obtaining
prior written approval from the designated Compliance Officer
at Mutual Fund Services.
2. INVESTMENT PERSONS:
- may not purchase or sell, directly or indirectly, any Security
within 24 HOURS before or after the time that the same (or a
related) Security is being purchased or sold by any Investment
Vehicle for which SEI or one of its sub-advisers acts as
investment adviser or sub-adviser to the Investment Vehicle.
- may not profit from the purchase and sale or sale and purchase
of a Security within 60 DAYS of acquiring or disposing of
Beneficial Ownership of that Security. This prohibition does
not apply to transactions resulting in a loss, or to futures or
options on futures on broad-based securities indexes or U.S.
government securities.
- may not acquire Securities as part of an Initial Public
Offering without obtaining the written approval of the
Compliance Department before directly or indirectly acquiring a
beneficial ownership in such securities.
5
<PAGE>
- may not acquire a beneficial ownership interest in Securities
issued in a private placement transaction without obtaining
prior written approval from the Compliance Department.
- may not receive any gift of more than de minimus value
(currently $100.00 per year) from any person or entity that
does business with or on behalf of any Investment Vehicle.
- may not serve on the board of directors of any publicly
traded company.
3. PORTFOLIO PERSONS:
- may not purchase or sell, directly or indirectly, any Security
within 7 DAYS before or after a client portfolio has executed a
trade in that same (or an equivalent) Security, unless the
order is withdrawn.
- may not acquire Securities as part of an Initial Public
Offering without obtaining the written approval of the
designated Compliance Officer before directly or indirectly
acquiring a beneficial ownership in such securities.
- may not acquire a beneficial ownership interest in Securities
issued in a private placement transaction without obtaining
prior written approval from the Compliance Department.
- may not profit from the purchase and sale or sale and purchase
of a Security within 60 DAYS of acquiring or disposing of
Beneficial Ownership of that Security. This prohibition does
not apply to transactions resulting in a loss, or to futures or
options on futures on broad-based securities indexes or U.S.
government securities.
- may not receive any gift of more than de minimus value
(currently $100.00 per year) from any person or entity that
does business with or on behalf of any Investment Vehicle.
- may not serve on the board of directors of any publicly traded
company.
4. REGISTERED REPRESENTATIVES:
- may not acquire Securities as part of an Initial Public Offering.
D. PRE-CLEARANCE OF PERSONAL SECURITIES TRANSACTIONS
1. ACCESS, INVESTMENT AND PORTFOLIO PERSONS:
6
<PAGE>
- must pre-clear each proposed securities transaction with the
Compliance Department or the designated Compliance Officer for
Accounts held in their names or in the names of others in which
they hold a Beneficial Ownership interest. No transaction in
Securities may be effected without the prior written approval of
the Compliance Department or the designated Compliance Officer,
except as set forth below in Section D.4 which sets forth the
securities transactions that do not require pre-clearance.
- the Compliance Department or the designated Compliance Officer
will keep a record of the approvals, and the rationale supporting,
investments in IPO and private placement transactions.
2. REGISTERED REPRESENTATIVES/ASSOCIATES:
- must pre-clear transactions with the Compliance Department or
designated Compliance Officer ONLY IF the Registered
Representative or Associate knew or should have known at the time
of the transaction that, during the 24 HOUR period immediately
preceding or following the transaction, the Security was purchased
or sold or was being considered for purchase or sale by any
Investment Vehicle.
3. TRANSACTIONS THAT DO NOT HAVE TO BE PRE-CLEARED:
- Purchases or sales over which the employee pre-clearing the
transaction (the "Pre-clearing Person") has no direct or indirect
influence or control;
- Purchases, sales or other acquisitions of Securities which are
non-volitional on the part of the Pre-clearing Person or any
Investment Vehicle, such as purchases or sales upon exercise of
puts or calls written by the Pre-clearing Person, sales from a
margin account pursuant to a BONA FIDE margin call, stock
dividends, stock splits, mergers, consolidations, spin-offs, or
other similar corporate reorganizations or distributions;
- Purchases which are part of an automatic dividend reinvestment
plan or automatic employee stock purchase plans;
- 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;
- Acquisitions of Securities through gifts or bequests; and
- Transactions in OPEN-END mutual funds.
7
<PAGE>
4. PRE-CLEARANCE PROCEDURES:
- All requests for pre-clearance of securities transactions must be
submitted to the Compliance Department or the designated
Compliance Officer by completing a Pre-clearance Request Form
(attached as EXHIBIT 1). SEI Employees located in the U.S. with
access to the I drive may also complete an electronic version of
the form located at I:\register\preform.doc.
- The following information MUST be provided on the Form:
a. Name, date, extension, title;
b. Transaction detail, i.e., whether the transaction is a
buy or sell; the security name and security type; number
of shares; price; date acquired if a sale; and whether the
security is held in a portfolio or Investment Vehicle,
part of an initial public offering, or part of a private
placement transaction; and
c. Signature and date; if electronically submitted, initial
and date.
- The Compliance Department or the designated Compliance Officer
will notify the employee whether the request is approved or denied
by telephone or email, and by sending a copy of the signed form to
the employee. An employee is not officially notified that the
transaction has been pre-cleared until he or she receives a copy
of the signed form. Employees should retain copies of the signed
form.
- Employees may not submit a Pre-clearance Request Form for a
transaction that he or she does not intend to execute.
- Pre-clearance authorization is valid for 3 BUSINESS DAYS ONLY.
Transactions, which are not completed within this period, must be
resubmitted with an explanation why the previous pre-cleared
transaction was not completed.
- Investment persons must submit to the Compliance Department or the
designated Compliance Officer transaction reports showing the
transactions in all the Investment Vehicles for which SEI or a
sub-adviser serves as an investment adviser for the 24 hour period
before and after the date on which their securities transactions
were effected. Transaction reports need only be submitted for the
portfolios that hold or are eligible to purchase and sell the
types of securities proposed to be bought or sold by the
Investment Person. For example, if the Investment Person seeks to
obtain approval for a proposed equity trade, only the transaction
reports for the portfolios effecting transactions in equity
securities are required.
8
<PAGE>
- The Compliance Department or the designated Compliance Officer
will maintain pre-clearance records for 5 years.
9
<PAGE>
E. REPORTING REQUIREMENTS
1. DUPLICATE BROKERAGE STATEMENTS [ALL EMPLOYEES]
- All SEI Employees are required to instruct their brokers/dealers
to file duplicate brokerage statements with the Compliance
Department at SEI Oaks. Employees in SEI's global offices are
required to have their duplicate statements sent to the offices in
which they are located. Statements must be filed for all Accounts
(including those in which employees have a Beneficial Ownership
interest), except those that trade exclusively in open-end mutual
funds, government securities, or SEI stock through the employee
stock/stock option plan. Failure of a broker-dealer to send
duplicate statements will not excuse an Employee's violation of
this Section, unless the Employee demonstrates that he or she took
every reasonable step to monitor the broker's or dealer's
compliance.
- Sample letters instructing the brokers/dealers to send the
statements to SEI are attached as EXHIBIT 2, and may be found at
I:\register\407pers.doc and I:\register\permltr.doc. If the broker
or dealer requires a letter authorizing a SEI employee to open an
account, the permission letter may used and may be found at
I:\register\permltr.doc. Please complete the necessary information
in the letter and forward a signature ready copy to the Compliance
Department.
- If no such duplicate statement can be supplied, the Employee
should contact the Compliance Department or the designated
Compliance Officer.
2. INITIAL HOLDINGS REPORT [ACCESS, INVESTMENT AND PORTFOLIO PERSONS]
- Access, Investment and Portfolio Persons must submit an Initial
Holdings Report to the Compliance Department or designated
Compliance Officer disclosing EVERY security beneficially owned
directly or indirectly by such person within 10 days of becoming
an Access, Investment or Portfolio Person.
- The Initial Holdings Report must include the following
information: (1) the title of the security; (2) the number of
shares held; (3) the principal amount of the security; and (4) the
name of the broker, dealer or bank where the security is held. The
information disclosed in the report must be current as of a date
no more than 30 days before the report is submitted.
- The Initial Holdings Report is attached as EXHIBIT 3 to this Code
and can be found on the I drive at I:register\inhold.doc.
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3. QUARTERLY REPORT OF SECURITIES TRANSACTIONS [ACCESS, INVESTMENT AND
PORTFOLIO PERSONS]
- Access, Investment and Portfolio Persons must submit quarterly
transaction reports of the purchases and/or sales of securities in
which such persons have a direct or indirect Beneficial Ownership
interest (SEE EXHIBIT 4- Quarterly Transaction Report). The report
will be provided to all Investment Persons before the end of each
quarter by the Compliance Department or the designated Compliance
Officer and must be completed and returned NO LATER THAN 10 DAYS
after the end of each calendar quarter. Quarterly Transaction
Reports that are not returned by the date they are due WILL be
considered late and will be reported as violations of the Code of
Ethics. Investment and Portfolio Persons who repeatedly return the
reports late (5 late filings) will be subject to a monetary fine
for their Code of Ethics violations.
- The following information must be provided on the report:
a. The date of the transaction, the description and number of
shares, and the principal amount of each security involved;
b. Whether the transaction is a purchase, sale or other
acquisition or disposition;
c. The transaction price; and
d. The name of the broker, dealer or bank through whom the
transaction was effected.
4. ANNUAL REPORT OF SECURITIES HOLDINGS [ACCESS, INVESTMENT AND
PORTFOLIO PERSONS]
- On an annual basis, Investment and Portfolio Persons must submit
to the Compliance Department or the designated Compliance Officer
an Annual Report of Securities Holdings that contains a list of
all securities subject to this Code in which they have any direct
or indirect Beneficial Ownership interest (SEE EXHIBIT 5 - ANNUAL
SECURITIES HOLDINGS REPORT). The information disclosed in the
report must be current as of a date no more than 30 days before
the report is submitted.
- Annual reports must be returned to the Compliance Department or
the designated Compliance Officer within 30 DAYS after the end of
the calendar year-end.
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4. ANNUAL CERTIFICATION OF COMPLIANCE [ALL EMPLOYEES]
- All employees will be required to certify annually that they:
- have read the Code of Ethics;
- understand the Code of Ethics; and
- have complied with the provisions of the Code of Ethics.
- The Compliance Department or the designated Compliance Officer
will send out annual forms (attached as EXHIBIT 6) to all
employees that must be completed and returned NO LATER THAN 30
DAYS after the end of the calendar year.
F. DETECTION AND REPORTING OF CODE VIOLATIONS
The Compliance Department or the designated Compliance Officer will :
- review the trading activity reports or duplicate statements
filed by Employees, focusing on patterns of personal trading;
- review the trading activity of Investment Vehicles;
- review the holdings reports submitted by Access, Investment
and Portfolio Persons;
- prepare an Annual Issues and Certification Report to the Board
of Trustees or Directors of the Investment Vehicles that, (1)
describes the issues that arose during the year under this
Code, including, but not limited to, material violations of
and sanctions under the Code, and (2) certifies that SEI has
adopted procedures reasonably necessary to prevent its access,
investment and portfolio personnel from violating this Code;
and
- prepare a written report to SEI management personnel outlining
any violations of the Code together with recommendations for
the appropriate penalties.
G. VIOLATIONS OF THE CODE OF ETHICS
1. PENALTIES:
- Employees who violate the Code of Ethics may be subject to serious
penalties which may include:
- written warning;
12
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- reversal of securities transaction;
- restriction on trading privileges;
- disgorgement of trading profits;
- fine;
- suspension or termination of employment; and/or
- referral to regulatory or law enforcement agencies.
2. PENALTY FACTORS:
- Factors which may be considered in determining an appropriate
penalty include, but are not limited to:
- the harm to clients;
- the frequency of occurrence;
- the degree of personal benefit to the employee;
- the degree of conflict of interest;
- the extent of unjust enrichment;
- evidence of fraud, violation of law, or reckless disregard of a
regulatory requirement; and/or
- the level of accurate, honest and timely cooperation from the
employee.
H. CONFIDENTIAL TREATMENT
- The Compliance Department or the designated Compliance Officer
will use their best efforts to assure that all requests for
pre-clearance, all personal securities transaction reports and all
reports for securities holding are treated as "Personal and
Confidential." However, such documents will be available for
inspection by appropriate regulatory agencies and other parties
within and outside SEI as are necessary to evaluate compliance
with or sanctions under this Code.
I. DEFINITIONS APPLICABLE TO THE CODE OF ETHICS
1. ACCOUNT - a securities trading account held by an Employee and by any such
person's spouse, minor children and adults residing in his or her household
(each such person, an "immediate family member"); any trust for which the person
is a trustee or from which the Employee benefits directly or indirectly; any
partnership (general, limited or otherwise) of which the Employee is a general
partner or a principal of the general partner; and any other account over which
the Employee exercises investment discretion.
2. BENEFICIAL OWNERSHIP - Security ownership in which a person has a direct or
indirect financial interest. Generally, an employee will be regarded as a
beneficial owner of Securities that are held in the name of:
a. a spouse or domestic partner;
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b. a minor child;
c. a relative who resides in the employee's household; or
d. any other person IF: (a) the employee obtains from the
securities benefits substantially similar to those of
ownership (for example, income from securities that are held
by a spouse); or (b) the employee can obtain title to the
securities now or in the future.
3. INITIAL PUBLIC OFFERING - an offering of securities for which a registration
statement has not been previously filed with the U.S. SEC and for which there is
no active public market in the shares.
4. PURCHASE OR SALE OF A SECURITY - includes the writing of an option to
purchase or sell a security.
5. SECURITY - includes notes, bonds, stocks (including closed-end funds),
convertibles, preferred stock, options on securities, futures on broad-based
market indices, warrants and rights. A "Security" DOES NOT INCLUDE direct
obligations of the U.S. Government ; bankers' acceptances, bank certificates of
deposit, commercial paper and high quality short-term debt instruments,
including repurchase agreements; and, shares issued by open-end mutual funds.
III. INSIDER TRADING POLICY
All Employees are required to refrain from investing in Securities based on
material nonpublic inside information. This policy is based on the U.S. federal
securities laws that prohibit any person from:
1. trading on the basis of material, nonpublic information;
2. tipping such information to others;
3. recommending the purchase or sale of securities on the basis of
such information;
4. assisting someone who is engaged in any of the above activities; and
5. trading a security, which is the subject of an actual or impending
tender offer when in possession of material nonpublic information
relating to the offer.
This includes any confidential information that may be obtained by Access,
Investment and Portfolio Persons regarding the advisability of purchasing or
selling specific securities for any Investment Vehicles or on behalf of clients.
Additionally, this policy includes any confidential information that may be
obtained about SEI Investments Company or any of its affiliated entities. This
Section outlines basic definitions and provides guidance to Employees with
respect to this Policy.
14
<PAGE>
A. WHAT IS "MATERIAL" INFORMATION?
INFORMATION IS MATERIAL WHEN THERE IS A SUBSTANTIAL LIKELIHOOD THAT A REASONABLE
INVESTOR WOULD CONSIDER IT IMPORTANT IN MAKING HIS OR HER INVESTMENT DECISIONS.
Generally, if disclosing certain information will have a substantial effect on
the price of a company's securities, or on the perceived value of the company or
of a controlling interest in the company, the information is material, but
information may be material even if it does not have any immediate direct effect
on price or value. There is no simple "bright line" test to determine when
information is material; assessments of materiality involve a highly
fact-specific inquiry. For this reason, any question as to whether information
is material should be directed to the Compliance Department.
B. WHAT IS "NONPUBLIC" INFORMATION?
INFORMATION ABOUT A PUBLICLY TRADED SECURITY OR ISSUER IS "PUBLIC" WHEN IT HAS
BEEN DISSEMINATED BROADLY TO INVESTORS IN THE MARKETPLACE. TANGIBLE EVIDENCE OF
SUCH DISSEMINATION IS THE BEST INDICATION THAT THE INFORMATION IS PUBLIC. For
example, information is public after it has become available to the general
public through a public filing with the SEC or some other governmental agency,
the Dow Jones "tape" or the Wall Street Journal or some other publication of
general circulation, and after sufficient time has passed so that the
information has been disseminated widely.
Information about securities that are not publicly traded, or about the issuers
of such securities, is not ordinarily disseminated broadly to the public.
However, for purposes of this Policy, such private information may be considered
"public" private information to the extent that the information has been
disclosed generally to the issuer's security holders and creditors. For example,
information contained in a private placement memorandum to potential investors
may be considered "public" private information with respect to the class of
persons who received the memorandum, BUT MAY STILL BE CONSIDERED "NONPUBLIC"
INFORMATION WITH RESPECT TO CREDITORS WHO WERE NOT ENTITLED TO RECEIVE THE
MEMORANDUM. As another example, a controlling shareholder may have access to
internal projections that are not disclosed to minority shareholders; such
information would be considered "nonpublic" information.
C. WHO IS AN INSIDER?
Unlawful insider trading occurs when a person, who is considered an insider,
with a duty not to take advantage of material nonpublic information violates
that duty. Whether a duty exists is a complex legal question. This portion of
the Policy is intended to provide an overview only, and should not be read as an
exhaustive discussion of ways in which persons may become subject to insider
trading prohibitions.
Insiders of a company include its officers, directors (or partners), and
employees, and may also include a controlling shareholder or other controlling
person. A person who has access
15
<PAGE>
to information about the company because of some special position of trust or
has some other confidential relationship with a company is considered a
temporary insider of that company. Investment advisers, lawyers, auditors,
financial institutions, and certain consultants AND ALL OF THEIR OFFICERS,
DIRECTORS OR PARTNERS, AND EMPLOYEES are all likely to be temporary insiders of
their clients.
Officers, directors or partners, and employees of a controlling shareholder may
be temporary insiders of the controlled company, or may otherwise be subject to
a duty not to take advantage of inside information.
D. WHAT IS MISAPPROPRIATION?
Misappropriation usually occurs when a person acquires inside information about
Company A in violation of a duty owed to Company B. For example, an employee of
Company B may know that Company B is negotiating a merger with Company A; the
employee has material nonpublic information about Company A and must not trade
in Company A's shares.
For another example, Employees who, because of their association with SEI,
receive inside information as to the identity of the companies being considered
for investment by SEI Investment Vehicles or by other clients, have a duty not
to take advantage of that information and must refrain from trading in the
securities of those companies.
E. WHAT IS TIPPING?
Tipping is passing along inside information; the recipient of a tip (the
"tippee") becomes subject to a duty not to trade while in possession of that
information. A tip occurs when an insider or misappropriator (the "tipper")
discloses inside information to another person, who knows or should know that
the tipper was breaching a duty by disclosing the information and that the
tipper was providing the information for an improper purpose. Both tippees and
tippers are subject to liability for insider trading.
F. IDENTIFYING INSIDE INFORMATION
Before executing any securities transaction for your personal account or for
others, you must consider and determine WHETHER YOU HAVE ACCESS TO MATERIAL,
NONPUBLIC INFORMATION. If you THINK that you might have access to material,
nonpublic information, you MUST take the following steps:
1. Report the information and proposed trade immediately to the Compliance
Department or designated Compliance Officer;
2. Do not purchase or sell the securities on behalf of yourself or others; and
3. Do not communicate the information inside or outside SEI, other than to the
Compliance Department or designated Compliance Officer.
16
<PAGE>
These prohibitions remain in effect until the information becomes public.
Employees managing the work of consultants and temporary employees who have
access to material nonpublic information are responsible for ensuring that
consultants and temporary employees are aware of this Policy and the
consequences of non-compliance.
G. TRADING IN SEI INVESTMENTS COMPANY SECURITIES
This Policy applies to ALL EMPLOYEES with respect to trading in the securities
of SEI Investments Company, including shares held directly or indirectly in the
Company's 401(k) plan. Employees, particularly "officers" (as defined in Rule
16(a)-1(f) in the Securities Exchange Act of 1934, as amended), of the company
should be aware of their fiduciary duties to SEI and should be sensitive to the
appearance of impropriety with respect to any of their personal transactions in
SEI's publicly traded securities. Thus, the following restrictions apply to all
transactions in SEI's publicly traded securities occurring in an employee's
Account and in all other accounts in which the employee benefits directly or
indirectly, or over which the employee exercises investment discretion.
- - BLACKOUT PERIOD - DIRECTORS AND OFFICERS are prohibited from buying or
selling SEI's publicly traded securities during the blackout period. The
blackout periods are as follows:
- for the first, second and third quarterly financial reports begins
at the close of the prior quarter and ends after SEI publicly
announces the financial results for that quarter.
- for the annual and fourth quarter financial reports - begins on
the 6th business day of the first month following the end of the
calendar year-end and ends after SEI publicly announces its
financial results.
All securities trading during this period may only be conducted with the
approval of SEI's General Counsel or the Compliance Director. In no event
may securities trading in SEI's stock be conducted while an Director or
Officer of the company is in possession of material nonpublic information
regarding SEI.
- - MAJOR EVENTS - Employees who have knowledge of any SEI events or
developments that may have a "material" impact on SEI's stock that have not
been publicly announced are prohibited from buying or selling SEI's
publicly traded securities before such announcements. (SEE definition of
"material information" contained in III. A. above.)
- - SHORT SELLING AND DERIVATIVES TRADING PROHIBITION - All employees are
prohibited from engaging in short sales and options trading of SEI's common
stock.
Section 16(a) directors and officers are subject to the following additional
trading restriction.
17
<PAGE>
- - SHORT SWING PROFITS - Directors and Officers may not profit from the
purchase and sale or sale and purchase of SEI's securities within 6 MONTHS
of acquiring or disposing of Beneficial Ownership of that Security.
H. VIOLATIONS OF THE INSIDER TRADING POLICY
Unlawful trading of securities while in possession of material nonpublic
information, or improperly communicating that information to others, is a
violation of the federal securities laws and may expose violators to stringent
penalties. Criminal sanctions may include a fine of up to $1,000,000 and/or ten
years imprisonment. The SEC can recover the profits gained or losses avoided
through the violative trading, a penalty of up to three times the illicit
windfall or loss avoided, and an order permanently enjoining violators from such
activities. Violators may be sued by investors seeking to recover damages for
insider trading violations. In addition, violations by an employee of SEI may
expose SEI to liability. SEI views seriously any violation of this Policy, even
if the conduct does not, by itself, constitute a violation of the federal
securities laws. Violations of this Policy constitute grounds for disciplinary
sanctions, including dismissal.
18
<PAGE>
SEI INVESTMENTS COMPANY
CODE OF ETHICS AND INSIDER TRADING POLICY
EXHIBITS
EXHIBIT 1 PRE-CLEARANCE REQUEST FORM
EXHIBIT 2 ACCOUNT OPENING LETTERS TO BROKERS/DEALERS
EXHIBIT 3 INITIAL HOLDINGS REPORT
EXHIBIT 4 QUARTERLY TRANSACTION REPORT
EXHIBIT 5 ANNUAL SECURITIES HOLDINGS REPORT
EXHIBIT 6 ANNUAL COMPLIANCE CERTIFICATION
19
<PAGE>
EXHIBIT 1
20
<PAGE>
<TABLE>
<S><C>
- -------------------------------------------------------------------------------------------
PRECLEARANCE REQUEST FORM
- -------------------------------------------------------------------------------------------
Name: Date:
Ext #: Title/Position:
- -------------------------------------------------------------------------------------------
TRANSACTION DETAIL: I REQUEST PRIOR WRITTEN APPROVAL TO EXECUTE THE FOLLOWING TRADE:
- -------------------------------------------------------------------------------------------
Buy: / / Sell: / / Security Name: Security type:
No. of Shares: Price: If sale, date acquired:
Held in an SEI Portfolio: Yes / / No / / If yes, provide: (a) the Portfolio's name:
(b) the date Portfolio bought or sold the security:
Initial Public Offering: Private Placement:
/ / Yes / / No / / Yes / / No
- ----------------------------------------------------------------------------------------------------------------
DISCLOSURE STATEMENTS
- ----------------------------------------------------------------------------------------------------------------
I hereby represent that, to the best of my knowledge, neither I nor the
registered account holder: (1) have knowledge of a possible or pending purchase
or sale of the above security in any of the portfolios for which SEI acts as an
investment adviser, distributor, administrator, or for which SEI oversees the
performance of one or more it sub-advisers; (2) is in possession of any material
nonpublic information concerning the security to which this request relates; and
(3) is engaging in any manipulative or deceptive trading activity.
I acknowledge that if the Compliance Officer to whom I submit this written
request determines that the above trade would contravene SEI Investments
Company's Code of Ethics and Insider Trading Policy ("the Policy"), the
Compliance Officer in his or her sole discretion has the right not to approve
the trade, and I undertake to abide by his or her decision.
I acknowledge that this authorization is valid for a period of three (3) business days.
- ----------------------------------------------------------------------------------------------------------------
Signature: Date:
- ----------------------------------------------------------------------------------------------------------------
COMPLIANCE OFFICER'S USE ONLY
- ----------------------------------------------------------------------------------------------------------------
Approved: / / Disapproved: / / Date:
- ----------------------------------------------------------------------------------------------------------------
By: Comments:
Transaction Report Received: Yes / / No / /
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
21
<PAGE>
NOTE: This preclearance will lapse at the end of the day on , 20. If you decide
not to effect the trade, please notify the Compliance Department or designated
Compliance Officer immediately.
22
<PAGE>
EXHIBIT 2
23
<PAGE>
Date:
Your Broker
street address
city, state zip code
Re: Your Name
your S.S. number or account number
Dear Sir or Madam:
Please be advised that I am an employee of SEI Investments Distribution, Co., a
registered broker/dealer an/or SEI Investments Management Corporation, a
registered investment adviser. Please send DUPLICATE STATEMENTS ONLY of this
brokerage account to the attention of:
SEI Investments Company
Attn: The Compliance Department
One Freedom Valley Drive
Oaks, PA 19456
This request is made pursuant to SEI's Code of Ethics and Insider Trading Policy
and Rule 3050 of the NASD's Code of Conduct.
Thank you for your cooperation.
Sincerely,
Your name
24
<PAGE>
Date:
[Address]
Re: Employee Name
Account #
SS#
Dear Sir or Madam:
Please be advised that the above referenced person is an employee of SEI
Investments Distribution, Co., a registered broker/dealer and/or SEI Investments
Management Corporation, a registered investment adviser. We grant permission for
him/her to open a brokerage account with your firm and request that you send
DUPLICATE STATEMENTS ONLY of this employee's brokerage account to:
SEI Investments Company
Attn: The Compliance Department
One Freedom Valley Drive
Oaks, PA 19456
This request is made pursuant to SEI's Code of Ethics and Insider Trading Policy
and Rule 3050 of the NASD's Code of Conduct.
Thank you for your cooperation.
Sincerely,
Cynthia M. Parrish
Compliance Director
25
<PAGE>
EXHIBIT 3
<PAGE>
<TABLE>
<S><C>
SEI INVESTMENTS MANAGEMENT CORPORATION
INITIAL HOLDINGS REPORT
NAME:_____________________________________________________________
SIGNATURE:__________________
SUBMISSION DATE:_____________________
NUMBER OF NAME OF BROKER, DEALER OR
TITLE OF SECURITY SHARES HELD PRINCIPAL AMOUNT BANK WHERE SECURITY IS HELD
=======================================================================================
===
=======================================================================================
===
This report must be submitted within 10 days of becoming an Access, Investment
or Portfolio Person under SEI Investments Company's Code of Ethics. All
securities holdings must be reported on this form.
I confirm that the above list is an accurate and complete listing of all
securities in which I have a direct or indirect beneficial interest.
- -----------------
Signature
- ---------
Date
- -----------------
</TABLE>
<PAGE>
Received by:
EXHIBIT 4
2
<PAGE>
<TABLE>
<S><C>
SEI INVESTMENTS MANAGEMENT CORPORATION
QUARTERLY TRANSACTION REPORT
TRANSACTION RECORD OF SECURITIES DIRECTLY OR INDIRECTLY BENEFICIALLY OWNED
________________, 2000 TO ____________, 2000
NAME:_________________________________________________________________________________________________________
SIGNATURE:_____________________________________________________________________________________________________
SUBMISSION
DATE:_________________________________________________________________________________________________________
NUMBER OF
BROKER/
SHARES AND ISSUER &
DEALER
TYPE OF TITLE OF
PRINCIPAL OR
DATE TRANSACTION SECURITY PRICE
AMOUNT BANK
==============================================================================================================
=========================================
==============================================================================================================
=========================================
</TABLE>
This report is required of all officers, directors and certain other persons
under Section 204 of the Investment Advisers Act of 1940 and Rule 17j-1 of the
Investment Company Act of 1940 and is subject to examination. Transactions in
direct obligations of the U.S. Government need not be reported. In addition,
persons need not report transactions in bankers' acceptances, certificates of
deposit, commercial paper or open-end investment companies. THE REPORT MUST BE
RETURNED WITHIN 10 DAYS OF THE APPLICABLE CALENDAR QUARTER END. The reporting of
transactions on this record shall not be construed as an admission that the
reporting person has any direct or indirect beneficial ownership in the security
listed.
By signing this document, I represent that all reported transactions were
pre-cleared through the Compliance Department or the designated Compliance
Officer in compliance with the SEI Investments Company Code of Ethics and
Insider Trading Policy.
3
<PAGE>
EXHIBIT 5
4
<PAGE>
<TABLE>
<S><C>
SEI INVESTMENTS
ANNUAL SECURITIES HOLDINGS REPORT
AS OF DECEMBER 31, 19__
EMPLOYEE NAME: __________________
- ---------------------------- ------------------------------ ------------------------------- ----------------------------------------
0 SECURITY 1 NUMBER OF TYPE OF OWNERSHIP (DIRECT ACCOUNT NUMBER AND
- ------------- --------------------- OR INDIRECT) NAME OF BROKERAGE FIRM
SHARES WHERE SECURITIES ARE HELD
--------
- ---------------------------- --------------------------- ---------------------------------- ----------------------------------------
- ---------------------------- --------------------------- ---------------------------------- ----------------------------------------
- ---------------------------- --------------------------- ---------------------------------- ----------------------------------------
- ---------------------------- --------------------------- ---------------------------------- ----------------------------------------
- ---------------------------- --------------------------- ---------------------------------- ----------------------------------------
- ---------------------------- --------------------------- ---------------------------------- ----------------------------------------
- ---------------------------- --------------------------- ---------------------------------- ----------------------------------------
- ---------------------------- --------------------------- ---------------------------------- ----------------------------------------
I confirm that the above list is an accurate and complete listing of all securities in which I have a direct or indirect
beneficial interest.
- ------------------------ -------------------------
Name Received by
- ---------
Date
Note: DO NOT report holdings of U.S. Government securities, bankers' acceptances, certificates of deposit, commercial paper and
mutual funds.
</TABLE>
5
<PAGE>
EXHIBIT 6
<PAGE>
SEI INVESTMENTS
CODE OF ETHICS
ANNUAL COMPLIANCE CERTIFICATION
TO: COMPLIANCE DEPARTMENT
FROM:
DATE:
1. I hereby acknowledge receipt of a copy of the Code of Ethics and Insider
Trading Policy.
2. I have read and understand the Code of Ethics and Insider Trading Policy
and recognize that I am subject thereto.
3. I hereby declare that I have complied with the terms of the Code of Ethics
and Insider Trading Policy.
Signature: __________________
Date:_________
Received by: ________________
7
<PAGE>
<PAGE>
CODE OF ETHICS
Adopted Under Rule 17j-1
While affirming its confidence in the integrity and good faith of all of
its officers and trustees, SEI Liquid Asset Trust, SEI Tax Exempt Trust, SEI
Daily Income Trust, SEI Index Funds, SEI Institutional Managed Trust, SEI
International Trust and the Insurance Investment Products Trust (the "Trust"),
recognizes that the knowledge of present or future portfolio transactions and,
in certain instances, the power to influence portfolio transactions which may be
possessed by certain of its officers, employees and trustees could place such
individuals, if they engage in personal transactions in securities which are
eligible for investment by the Trust, in a position where their personal
interest may conflict with that of the Trust.
In view of the foregoing and of the provisions of Rule 17j-1(b)(1) under
the Investment Company Act of 1940 (the "1940 Act"), the Trust has determined to
adopt this Code of Ethics to specify and prohibit certain types of transactions
deemed to create conflicts of interest (or at least the potential for or the
appearance of such a conflict), and to establish reporting requirements and
enforcement procedures.
I. STATEMENT OF GENERAL PRINCIPLES.
In recognition of the trust and confidence placed in the Trust by its
shareholders, and to give effect to the Trust's belief that its operations
should be directed to the benefit of its shareholders, the Trust hereby adopts
the following general principles to guide the actions of its trustees, officers
and employees.
(1) The interests of the Trust's shareholders are paramount, and all of
the Trust's personnel must conduct themselves and their operations to
give maximum effect to this tenet by assiduously placing the
interests of the shareholders before their own.
(2) All personal transactions in securities by the Trust's personnel must
be accomplished so as to avoid even the appearance of a conflict of
interest on the part of such personnel with the interests of the
Trust and its shareholders.
(3) All of the Trust's personnel must avoid actions or activities that
allow (or appear to allow) a person to profit or benefit from his or
her position with respect to the Trust, or that otherwise bring into
question the person's independence or judgment.
<PAGE>
II. DEFINITIONS.
(1) "Access Person" shall mean (i) each trustee or officer of the Trust,
(ii) each employee of the Trust (or of any company in a control
relationship to the Trust) 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 Trust or any
series thereof (herein a "Fund"), or whose functions relate to the
making of any recommendations with respect to such purchases or
sales, and (iii) any natural person in a control relationship to the
Trust who obtains information concerning recommendations made to or
by the Trust with respect to the purchase or sale of a security by
any Fund.
(2) "Beneficial ownership" of a security is to be determined in the same
manner as it is for purposes of Section 16 of the Securities Exchange
Act of 1934. This means that a person should generally consider
himself the beneficial owner of any securities in which he has a
direct or indirect pecuniary interest. In addition, a person should
consider himself the beneficial owner of securities held by his
spouse, his minor children, a relative who shares his home, or other
persons by reason of any contract, arrangement, understanding or
relationship that provides him with sole or shared voting or
investment power.
(3) "Control" shall have the same meaning as that set forth in
Section 2(a)(9) of the 1940 Act. Section 2(a)(9) provides that
"control" means the power to exercise a controlling influence over
the management or policies of a company, unless such power is solely
the result of an official position with such company. Ownership of
25% or more of a company's outstanding voting security is presumed to
give the holder thereof control over the company. Such presumption
may be countered by the facts and circumstances of a given situation.
(4) "Independent Trustee" means a Trustee of the Trust who is not an
"interested person" of the Trust within the meaning of
Section 2(a)(19) of the 1940 Act.
(5) "Special Purpose Investment Personnel" means each Access Person who,
in connection with his or her regular functions (including, where
appropriate, attendance at Board meetings and other meetings at
- 2 -
<PAGE>
which the official business of the Trust or any Fund thereof is
discussed or carried on), obtains contemporaneous information
regarding the purchase or sale of a security by the Trust. Special
Purpose Investment Personnel shall occupy this status only with
respect to those securities as to which he or she obtains such
contemporaneous information.
(6) "Purchase or sale of a security" includes, among other things, the
writing of an option to purchase or sell a security.
(7) "Security" shall have the same meaning as that set forth in
Section 2(a)(36) of the 1940 Act, except that it shall not include
securities issued by the Government of the United States or an agency
thereof, bankers' acceptances, bank certificates of deposit,
commercial paper and registered, open-end mutual funds.
(8) A "Security held or to be acquired" by the Trust or any Fund means
any Security which, within the most recent fifteen days, (i) is or
has been held by the Trust or any Fund thereof, or (ii) is being or
has been considered by the Fund's investment adviser for purchase by
the Fund.
(9) A Security is "being purchased or sold" by the Trust from the time
when a purchase or sale program has been communicated to the person
who places the buy and sell orders for the Trust until the time when
such program has been fully completed or terminated.
III. PROHIBITED PURCHASES AND SALES OF SECURITIES.
(1) No Access Person shall, in connection with the purchase or sale,
directly or indirectly, by such person of a Security held or to be
acquired by any Fund of the Trust:
(A) employ any device, scheme or artifice to defraud such Fund;
(B) make to such Fund any untrue statement of a material fact or
omit to state to such Fund a material fact necessary in order
to make the statements made, in light of the circumstances
under which they are made, not misleading;
- 3 -
<PAGE>
(C) engage in any act, practice or course of business which would
operate as a fraud or deceit upon such Fund; or
(D) engage in any manipulative practice with respect to Fund.
(2) No Special Purpose Investment Personnel may purchase or sell,
directly or indirectly, any Security as to which such person is a
Special Purpose Investment Personnel in which he had (or by reason
of such transaction acquires) any Beneficial Ownership at any time
within 7 calendar days before or after the time that the same (or a
related) Security is being purchased or sold by any Fund.
(3) No Special Purpose Investment Personnel may sell a Security as which
he or she is a Special Purpose Investment Personnel within 60 days of
acquiring beneficial ownership of that Security.
IV. ADDITIONAL RESTRICTIONS AND REQUIREMENTS
(1) No Access Person shall accept or receive any gift of more than DE
MINIMIS value from any person or entity that does business with or on
behalf of the Trust.
(2) Each Access Person (other than the Trust's Independent Trustees and
its Trustees and officers who are not currently affiliated with or
employed by the Trust's investment adviser or principal underwriter)
who is not required to provide such information under the terms of a
code of ethics described in Section VII hereof must provide to the
Review Officer a complete listing of all securities owned by such
person as of December 31, 1994. Thereafter, each such person shall
submit a revised list of such holdings to the Review Officer as of
December 31st of each subsequent year. The initial listing must be
submitted no later than March 31, 1995 (or within 10 days of the date
upon which such person first becomes an Access Person of the Trust),
and each update thereafter must be provided no later than 30 days
after the start of the subsequent year.
V. REPORTING OBLIGATION.
(1) Each Access Person (other than the Trust's Independent Trustees)
shall report all transactions in Securities in which the person has,
or by reason of such transaction acquires, any direct or indirect
- 4 -
<PAGE>
beneficial ownership. Reports shall be filed with the Review Officer
quarterly. The Review Officer shall submit confidential quarterly
reports with respect to his or her own personal securities
transactions to an officer designated to receive his or her reports
("Alternate Review Officer"), who shall act in all respects in the
manner prescribed herein for the Review Officer.
(2) Every report shall be made not later than 10 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:
(A) The date of the transaction, the title and the number of shares
or the principal amount of each security involved;
(B) The nature of the transaction (i.e., purchase, sale or any other
type of acquisition or disposition);
(C) The price at which the transaction was effected;
(D) The name of the broker, dealer or bank with or through whom the
transaction was effected; and
(E) The date the report was signed.
(3) In the event no reportable transactions occurred during the quarter,
the report should be so noted and returned signed and dated
(4) An Access Person who would otherwise be required to report his or her
transactions under this Code shall not be required to file reports
pursuant to this Section VI where such person is required to file
reports pursuant to a code of ethics described in Section VII,
hereof.
(5) An Independent Trustee shall report transactions in Securities only
if the Trustee knew at the time of the transaction or, in the
ordinary course of fulfilling his or her official duties as a
trustee, should have known, that during the 15 day period immediately
preceding or following the date of the transaction, such security was
purchased or sold, or was being considered for purchase or sale, by
the Trust. (The "should have known" standard implies no duty of
inquiry, does not presume there should have been any deduction or
extrapolation from discussions or memoranda dealing with tactics to
be employed
- 5 -
<PAGE>
meeting the Trust's investment objectives, or that any knowledge is
to be imputed because of prior knowledge of the Trust's portfolio
holdings, market considerations, or the Trust's investment policies,
objectives and restrictions.)
(6) 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
has any direct or indirect beneficial ownership in the security to
which the report relates.
(7) Each Independent Trustee shall report the name of any publicly-owned
company (or any company anticipating a public offering of its equity
securities) and the total number of its shares beneficially owned by
him or her if such total ownership is more than 1/2 of 1% of the
company's outstanding shares. Such report shall be made promptly
after the date on which the Trustee's ownership interest equalled or
exceeded 1/2 of 1%.
VI. REVIEW AND ENFORCEMENT.
(1) The Review Officer shall compare all reported personal securities
transactions with completed portfolio transactions of the Trust and a
list of securities being considered for purchase or sale by the
Trust's adviser(s) to determine whether a violation of this Code may
have occurred. Before making any determination that a violation has
been committed by any person, the Review Officer shall give such
person an opportunity to supply additional explanatory material.
(2) If the Review Officer determines that a violation of this Code may
have occurred, he shall submit his written determination, together
with the confidential monthly report and any additional explanatory
material provided by the individual, to the President of the Trust
and outside counsel, who shall make an independent determination as
to whether a violation has occurred.
(3) If the President and outside counsel find that a violation has
occurred, the President shall impose upon the individual such
sanctions as he or she deems appropriate and shall report the
violation and the sanction imposed to the Board of Trustees of the
Trust.
- 6 -
<PAGE>
(4) No person shall participate in a determination of whether he has
committed a violation of the Code or of the imposition of any
sanction against himself. If a securities transaction of the
President is under consideration, any Vice President shall act
in all respects in the manner prescribed herein for the President.
VII. INVESTMENT ADVISER'S, ADMINISTRATOR'S OR PRINCIPAL UNDERWRITER'S CODE OF
ETHICS.
Each investment adviser (including, where applicable, any sub-adviser),
administrator or manager (where applicable), and principal underwriter of the
Trust shall:
(1) Submit to the Board of Trustees of the Trust a copy of its code of
ethics adopted pursuant to Rule 17j-1, which code shall comply with
the recommendations of the Investment Company Institute's Advisory
Group on Personal Investing or be accompanied by a written statement
explaining any differences and supplying the rationale therefor;
(2) Promptly report to the Trust in writing any material amendments to
such Code;
(3) Promptly furnish to the Trust upon request copies of any reports made
pursuant to such Code by any person who is an Access Person as to the
Trust; and
(4) Shall immediately furnish to the Trust, without request, all material
information regarding any violation of such Code by any person who is
an Access Person as to the Trust.
VIII. RECORDS.
The Trust shall maintain records in the manner and to the extent set forth
below, which records may be maintained under the conditions described in
Rule 31a-2 under the Investment Company Act and shall be available for
examination by representatives of the Securities and Exchange Commission.
(1) A copy of this Code and any other code which is, or at any time
within the past five years has been, in effect shall be preserved in
an easily accessible place;
(2) A record of any violation of this Code and of any action taken as a
result of such violation shall be preserved in an easily accessible
place for a period
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of not less than five years following the end of the fiscal year in
which the violation occurs;
(3) A copy of each report made by an officer or trustee pursuant to this
Code shall be preserved for a period of not less than five years from
the end of the fiscal year in which it is made, the first two years
in an easily accessible place; and
(4) A list of all persons who are, or within the past five years have
been, required to make reports pursuant to this Code shall be
maintained in an easily accessible place.
IX. MISCELLANEOUS
(1) CONFIDENTIALITY. All reports of securities transactions and any other
information filed with the Trust pursuant to this Code shall be
treated as confidential.
(2) INTERPRETATION OF PROVISIONS. The Board of Trustees may from time to
time adopt such interpretations of this Code as it deems appropriate.
(3) PERIODIC REVIEW AND REPORTING. The President of the Trust shall
report to the Board of Trustees at least annually as to the operation
of this Code and shall address in any such report the need (if any)
for further changes or modifications to this Code.
Adopted this 6th day
of March, 1995.
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