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EXHIBIT (p)
ASSET MANAGEMENT FUND
INSTITUTIONAL INVESTORS CAPITAL APPRECIATION FUND, INC.
M.S.B. FUND, INC.
SHAY ASSETS MANAGEMENT, INC.
SHAY FINANCIAL SERVICES, INC.
CODE OF ETHICS
1. Purpose
This Code of Ethics has been adopted by the Board of Directors/Trustees of
Asset Management Fund, Institutional Investors Capital Appreciation Fund, Inc.,
M.S.B. Fund, Inc., Shay Assets Management, Inc. and Shay Financial Services,
Inc. in accordance with Rule 17j-1 under the Investment Company Act of 1940 (the
"Act"). Rule 17j-1 under the Act generally proscribes fraudulent or manipulative
practices with respect to purchases or sales of securities held or to be
acquired by investment companies, if effected by associated persons of such
companies. The purpose of this Code of Ethics is to provide regulations and
procedures consistent with the Act and Rule 17j-1 designed to give effect to the
general prohibitions set forth in Rule 17j-1(b) as follows:
It is unlawful for any affiliated person of or principal underwriter for an
investment company registered under the Act, or any affiliated person of an
investment adviser of or principal underwriter for a registered investment
company, in connection with the purchase or sale, directly or indirectly, by
such person of a security held or to be acquired by the investment company:
(1) to employ any device, scheme or artifice to defraud the
investment company;
(2) to make any untrue statement of a material fact to the
investment company or omit to state a material fact necessary
in order to make the statements made to the investment company,
in light of the circumstances under which they are made, not
misleading;
(3) to engage in any act, practice, or course of business that
operates or would operate as a fraud or deceit on the
registered investment company; or
(4) to engage in any manipulative practice with respect to the
investment company.
2. Definitions
(a) "Access Person" means with respect to a Fund (i) any trustee, director,
officer, general partner or Advisory Person of the Fund or the Adviser; and (ii)
any director, officer or general partner of the Distributor who, in the ordinary
course of business, makes, participates in
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or obtains information regarding, the purchase or sale of Covered Securities by
the Fund, or whose functions or duties in the ordinary course of business relate
to the making of any recommendation to the Fund regarding the purchase or sale
of Covered Securities.
(b) "Adviser" means Shay Assets Management, Inc.
(c) "Advisory Person" of a Fund or the Adviser means (i) any employee of
the Fund or Adviser (or of any company in a control relationship to the Fund or
Adviser), who, in connection with his or her regular functions or duties, makes,
participates in, or obtains information regarding the purchase or sale of a
Covered Security by the Fund, or whose functions relate to the making of any
recommendations with respect to the purchase or sale of Covered Securities; and
(ii) any natural person in a control relationship to the Fund or Adviser who
obtains information concerning recommendations made to the Fund with regard to
the purchase or sale of Covered Securities by the Fund.
(d) "Beneficial ownership" shall be interpreted in the same manner as it
would be in Rule 16a-1(a)(2) under the Securities Exchange Act of 1934, except
that the determination of direct or indirect beneficial ownership shall apply to
all securities which an Access Person has or acquires (see Annex A).
(e) "Control" shall have the same meaning as that set forth in Section
2(a)(9) of the Act.
(f) "Covered Security" means a security as defined in Section 2(a)(36) of
the Act, except that it shall not include (i) direct obligations of the
Government of the United States; (ii) banker's acceptances, bank certificates of
deposit, commercial paper and high quality short-term debt instruments,
including repurchase agreements; and (iii) shares issued by registered open-end
investment companies.
(g) "Disinterested Director" means a director or trustee of a Fund who is
not an "interested person" of the Adviser or Distributor within the meaning of
Section 2(a)(19) of the Act. For purposes of this Code, trustees shall be
referred to as directors.
(h) "Distributor" means Shay Financial Services, Inc.
(i) "Ethics Committee" shall mean, with respect to each Fund, the Adviser
or the Distributor, the person or persons appointed or designated by the Adviser
to administer this Code of Ethics.
(j) "Funds" means Asset Management Fund; Institutional Investors Capital
Appreciation Fund, Inc.; and M.S.B. Fund, Inc. "Fund" means any of the Funds.
(k) "Initial Public Offering" means an offering of securities registered
under the Securities Act of 1933, the issuer of which, immediately before the
registration, was not subject to the reporting requirements of Sections 13 or
15(d) of the Securities Exchange Act of 1934.
(l) "Investment Department Personnel" means with respect to any Fund (i)
any employee of the Fund or the Adviser (or of any company in a control
relationship to the Fund or
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the Adviser) who, in connection with his or her regular functions or duties,
makes or participates in making recommendations regarding the purchase or sale
of securities by the Fund or assists in the trading process; and (ii) any
natural person who controls the Fund or the Adviser and who obtains information
concerning recommendations made to the Fund regarding the purchase or sale of
securities by the Fund, but shall not include any person who is an officer or
director of a Fund who is not also an officer, director, partner or employee of
the Adviser or Distributor or of any affiliate of the Adviser or Distributor.
(m) "Limited Offering" means an offering that is exempt from registration
under the Securities Act of 1933 pursuant to Section 4(2) or Section 4(6) or
pursuant to Rule 504, Rule 505, or Rule 506 under the Securities Act of 1933.
(n) "Security Held or to be Acquired" by a Fund means: (i) any Covered
Security which, within the most recent 15 days (A) is or has been held by the
Fund or (B) is being or has been considered by the Fund or its Adviser for
purchase by the Fund; and (ii) any option to purchase or sell, and any security
convertible into or exchangeable for, a Covered Security described in clause
(n)(i).
(o) "Purchase or Sale of a Covered Security" includes, inter alia, the
writing of an option to purchase or sell a Covered Security.
(p) For purposes of this Code, (i) securities or instruments that are
convertible into or exchangeable for a security shall be considered to be the
same security as the security into which they are convertible or exchangeable,
(ii) options and warrants with respect to a security shall be considered to be
the same security as the security for which they are exercisable and (iii)
securities and instruments that otherwise are economically related to a security
shall be considered to be the same security as such other security.
3. Prohibited Purchases and Sales
(a) (i) (i) No Access Person of a Fund shall purchase or sell, directly or
indirectly, any Covered Security in which he or she has, or by reason of such
transaction acquires, any direct or indirect beneficial ownership and which to
his or her actual knowledge at the time of such purchase or sale:
(A) is being considered for purchase or sale by the Fund; or
(B) is being purchased or sold by the Fund,
"until either the Fund's transactions have been completed or consideration of
such transaction is abandoned."
(ii) No Investment Department Personnel shall purchase or sell, directly
or indirectly, any Covered Security in which he or she has, or by reason of such
transaction acquires, any direct or indirect beneficial ownership and which to
his or her actual knowledge at the time of such purchase or sale;
(A) is being considered for purchase or sale by any Fund; or
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(B) is being purchased or sold by any Fund
until either the Fund's transactions have been completed or consideration of
such transactions is abandoned.
(b) No Access Person of a Fund shall reveal to any other person (except in
the normal course of his or her duties on behalf of the Fund) any information
regarding securities transactions by the Fund or consideration by the Fund or
the Adviser of any securities transactions, other than information that is
contained in reports to shareholders of the Fund or otherwise is publicly
available.
(c) No Access Person of a Fund shall recommend any securities transactions
by the Fund without having disclosed his or her interest, if any, in such
securities or the issuer thereof, including without limitation (i) his or her
direct or indirect beneficial ownership of any securities of such issuer, (ii)
any contemplated transaction by such person in such securities, (iii) any
position with such issuer or its affiliates and (iv) any present or proposed
business relationship between such issuer or its affiliates, on the one hand,
and such person or any party in which such person has a significant interest, on
the other.
(d) No Investment Department Personnel may acquire beneficial ownership,
directly or indirectly, in any security in an Initial Public Offering or in a
Limited Offering without the express prior approval of the Ethics Committee.
Investment Department Personnel who have been authorized to acquire a security
in an Initial Public Offering or in a Limited Offering pursuant to this
subsection must disclose that investment if they participate in any subsequent
consideration by the Adviser of an investment in the issuer of that security.
The Adviser's investment decision with respect to such a security must be
independently reviewed by investment personnel with no personal interest in the
issuer of the security.
(e) No Investment Department Personnel of a Fund may execute a securities
transaction on a day during which the Fund has a pending "buy" or "sell" order
in that same security (other than transactions for the account of other bona
fide advisory clients of the Adviser) until that order is executed or withdrawn.
In addition, a portfolio manager of a Fund may not buy or sell a security within
seven calendar days before or after a portfolio that he or she manages trades in
that security; provided, however, a portfolio manager may sell a security within
seven calendar days after the portfolio executed a sales transaction in that
same security if the portfolio no longer has a position in that security. Any
profits realized by Investment Department Personnel in contravention of this
subsection must be disgorged, as determined by the Ethics Committee, to either
the Fund or a charitable entity. Any payments to a charity will be directed by
the Ethics Committee in a manner that does not produce any benefits to the
Adviser or the person violating the Code.
4. Exempted Transactions
The prohibitions of Section 3 of this Code shall not apply to:
(a) Purchases or sales effected in any account over which the Access Person
has no direct or indirect influence or control.
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(b) Purchases or sales which are non-volitional on the part of the Access
Person.
(c) Purchases which are part of an automatic dividend reinvestment plan.
(d) Purchases effected upon the exercise of rights issued by an issuer pro
rata to all holders of a class of its securities, to the extent such
rights were acquired from such issuer, and sales of such rights so
acquired.
(e) Purchases or sales which are determined by the Ethics Committee for the
applicable Fund to be only remotely potentially harmful to the Fund
because they would be very unlikely to affect the market for the
securities involved, or because they clearly are not related
economically to the securities to be purchased, sold or held by a Fund.
(f) Purchases or sales of securities which are not eligible for
purchase or sale by the applicable Fund, except that Section 3(d) of
this Code shall continue to apply.
5. Preferential Treatment, Gifts and Entertainment
No Access Person of a Fund, other than a Disinterested Director, may seek
or accept gifts, favors, preferential treatment or valuable consideration of
more than a de minimis nature from any broker-dealer or other company or person
that does business with or has proposed doing business with the Fund or any
company in a control relationship with the Fund. No Disinterested Director of a
Fund may seek or accept gifts, favors, preferential treatment or valuable
consideration of more than a de minimis nature, because of his or her
association with the Fund, from a broker/dealer or other company or person that
does business with or has proposed doing business with the Fund or any company
in a control relationship with the Fund. For purposes of this subsection, de
minimis is defined as reasonable and customary business entertainment, such as
lunch or dinner or tickets to sporting or cultural events, but does not include
trips or similar activities.
6. Service as a Director
Investment Department Personnel are prohibited from serving on the board of
directors of any publicly traded company, absent prior authorization by the
Ethics Committee based upon a determination that the board service would be
consistent with the interests of the Funds and that adequate procedures exist to
ensure isolation from those making investment decisions.
7. Reporting
(a) Unless excepted by Section 7(b) of this Code, every Access Person of a
Fund or of the Adviser or the Distributor of such Fund must report to the Ethics
Committee for such Fund:
(1) Initial Holdings Reports. No later than 10 days after the
person becomes an Access Person, the following information:
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(A) The title, number of shares and principal amount of each
Covered Security in which the Access Person had any direct or
indirect beneficial ownership as of the date the person became
an Access Person;
(B) The name of any broker, dealer or bank with whom the Access
Person maintained an account in which any securities were held
for the direct or indirect benefit of the Access Person as of
the date the person became an Access Person; and
(C) The date that the report is submitted by the Access Person.
(2) Quarterly Transaction Reports. No later than 10 days after the end
of a calendar quarter the following information:
(A) With respect to any transaction during the quarter in a Covered
Security in which the Access Person had any direct or indirect
beneficial ownership:
(i) The date of the transaction, the title, the interest
rate and maturity date (if applicable), the number of
shares and the principal amount of each Covered
Security involved;
(ii) The nature of the transaction (i.e., purchase, sale or
any other type of acquisition or disposition);
(iii) The price of the Covered Security at which the
transaction was effected;
(iv) The name of the broker, dealer or bank with or through
which the transaction was effected; and
(v) The date that the report is submitted by the Access
Person.
(B) With respect to any account established by the Access Person in
which any securities were held during the quarter for the
direct or indirect benefit of the Access Person:
(i) The name of the broker, dealer or bank with whom the
Access Person established the account;
(ii) The date the account was established; and
(iii) The date that the report is submitted by the Access
Person.
(3) Annual Holdings Reports. Annually, the following information (which
information must be current as of a date no more than 30 days before
the report is submitted):
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(A) The title, number of shares and principal amount of each
Covered Security in which the Access Person had any direct or
indirect beneficial ownership;
(B) The name of any broker, dealer or bank with whom the Access
Person maintains an account in which any securities are held
for the direct or indirect benefit of the Access Person; and
(C) The date that the report is submitted by the Access Person.
(b) Exceptions from Reporting Requirements
(1) A person need not make a report under Section 7(a) of this Code with
respect to transactions effected for, and Covered Securities held in,
any account over which the person has no direct or indirect influence
or control.
(2) A director of a Fund who is not an "interested person" of the Fund
within the meaning of Section 2(a)(19) of the Act, and who would be
required to make a report solely by reason of being a Fund director,
need not make:
(A) An initial holdings report under Section 7(a)(1) of this Code
and an annual holdings report under Section 7(a)(3) of this
Code; and
(B) A quarterly transaction report under Section 7(a)(2) of this
Code, unless the director knew or, in the ordinary course of
fulfilling his or her official duties as a Fund director,
should have known that during the 15-day period immediately
before or after his or her transaction in a Covered Security,
the Fund purchased or sold the Covered Security, or the Fund or
its Adviser considered purchasing or selling the Covered
Security.
(3) An Access Person to a Fund's principal underwriter need not make a
report to the principal underwriter under Section 7(a) of this Code if:
(A) The principal underwriter is not an affiliated person of any
Fund or the Adviser; and
(B) The principal underwriter has no officer, director or general
partner who serves as an officer, trustee, director or general
partner of the Fund or of the Adviser.
(4) An Access Person of the Adviser need not make a quarterly transaction
report to the Adviser under Section 7(a)(2) of this Code if all the
information in the report would duplicate information recorded under
Rule 204-2(a)(12) or 204-2(a)(13) under the Investment Advisers Act of
1940.
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(5) An Access Person need not make a quarterly transaction report
under Section 7(a)(2) of this Code if the report would
duplicate information contained in broker trade confirmations
or account statements received by the Compliance Officer with
respect to the Access Person in the time period required by
Section 7(a)(2) of this Code, if all of the information
required by that Section is contained in the broker trade
confirmations or account statements, or in the records of the
Fund, the Adviser or the Distributor.
(c) Any report required by Section 7(a) of this Code may contain a
statement that the report will not be construed as an admission that the person
making the report has any direct or indirect beneficial ownership in the Covered
Security to which the report relates.
8. Review of Reports
The Ethics Committee must review the reports submitted pursuant to
Section 7(a) of this Code and monitor personal trading activity of all Access
Persons for compliance with this Code.
9. Notification of Reporting Obligation
Each Fund and the Adviser and the principal underwriter of each Fund
must identify all of their respective Access Persons who are required to make
reports pursuant to Section 7(a) of this Code and must inform those Access
Persons of their reporting obligations.
10. Reporting of Violations; Sanctions
(a) The Adviser shall provide a written report to the Board of Directors
of each Fund, and the Board of Directors shall consider, at least quarterly any
issues arising under this Code or related compliance procedures since the most
recent prior report, including but not limited to any material violations of
this Code or related compliance procedures and the nature of any action taken by
the Ethics Committee in respect of such violation.
(b) Upon discovering a violation of this Code by any officer, director,
employee or general partner of the Adviser or Distributor or of any company
that, directly or indirectly, controls or is under common control with the
Adviser or Distributor, the Ethics Committee may impose such sanctions as it
deems appropriate, including, inter alia, a letter of censure or suspension,
termination of the employment of the violator or disgorgement of profits.
(c) With respect to a violation of this Code by any officer, director,
or employee of a Fund, the Board of Directors of the Fund may impose such
sanctions as it deems appropriate, including inter alia, a letter of censure,
suspension of any officer or employee, termination of the employment of the
violator or disgorgement of profits.
11. Miscellaneous
(a) Management of each Fund and the Adviser and the Distributor shall
certify to the Board of Directors of such Fund, no less frequently than
annually, that the Fund, Adviser or Distributor, as applicable, has adopted such
procedures as are reasonably necessary to prevent
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Access Persons who are directors, officers, general partners or controlling
persons of the Adviser or Distributor from violating this Code of Ethics and to
monitor compliance with this Code of Ethics by access persons who are officers,
directors or employees of the Fund.
(b) The Ethics Committee on behalf of the Funds, Adviser and Distributor
shall prepare an annual report to the Board of Directors of each Fund that (i)
summarizes existing procedures concerning personal investing and any changes in
the procedures made during the past year, (ii) identifies any violations
requiring significant remedial action during the past year, and (iii) identifies
any recommended changes in existing restrictions or procedures based upon the
Fund's experience under this Code of Ethics, evolving industry practices, or
developments in applicable laws or regulations.
(c) Recordkeeping: The Adviser shall maintain the following records in
the manner specified for the benefit of the Funds:
(1) A copy of this Code and any amendment thereof and a copy of
each code of ethics which is or at any time within the past
five years has been in effect with respect to a Fund or the
Adviser or Distributor shall be preserved in an easily
accessible place;
(2) A record of any violation of this Code, as in effect from time
to time, and of any action taken as a result of such
violation, shall be preserved in an easily accessible place
for a period 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 Access Person pursuant to
this Code (including any information provided pursuant to
Section 7(b)(5)) shall be preserved by the entity receiving
the report 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;
(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;
(5) A list of the names of all persons who are, or within the past
five years, have been, responsible for reviewing the reports
filed pursuant to Section 7 of this Code shall be maintained
in an easily accessible place;
(6) A record of any approvals granted pursuant to Section 3(d)
shall be preserved for a period of five years from the end of
the fiscal year in which such approval is given; and
(7) A copy of each report made pursuant to Section 11(b) of this
Code must be maintained for at least five years after the end
of the fiscal year in which it was made, the first two years
in an easily accessible place.
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I acknowledge that I have read the Code of Ethics (a copy of which has
been supplied to me, which I will retain for future reference) and agree to
comply in all respects with the terms and provisions thereof. I have disclosed
or reported all personal securities transactions required to be disclosed or
reported by this Code of Ethics.
Print Name
----------------------------
Date Signature
-------------------------- ----------------------------
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Annex A
The term "beneficial ownership" of securities would include not only
ownership of securities held by an Access Person for his or her own benefit,
whether in bearer form or registered in his or her own name or otherwise, but
also ownership of securities held for his or her benefit by others (regardless
of whether or how they are registered) such as custodians, brokers, executors,
administrators, or trustees (including trusts in which he or she has only a
remainder interest), and securities held for his or her account by pledgees,
securities owned by a partnership in which he or she is a member, and securities
owned by any corporation which he or she should regard as a personal holding
corporation and securities in which the Access Person otherwise has a direct or
indirect pecuniary interest as defined in Rule 16a-1(2) under the Securities
Exchange Act of 1934. It would exclude securities held by a corporation or
similar entity in which the Access Person is a shareholder if the Access Person
is not a controlling shareholder of the corporation or entity and the Access
Person does not have or share investment control over the entity's portfolio.
Correspondingly, this term would exclude securities held by an Access Person for
the benefit of someone else.
Ordinarily, this term would not include securities held by executors or
administrators in estates in which an Access Person is a legatee or beneficiary
unless there is a specific legacy to such person of such securities or such
person is the sole legatee or beneficiary and there are other assets in the
estate sufficient to pay debts ranking ahead of such legacy, or the securities
are held in the estate more than a year after the decedent's death.
Securities held in the name of another should be considered as
"beneficially" owned by an Access Person where such person enjoys "benefits
substantially equivalent to ownership." The SEC has said that although the final
determination of beneficial ownership is a question to be determined in the
light of the facts of the particular case, generally a person is regarded as the
beneficial owner of securities held in the name of his or her spouse and their
minor children. Absent special circumstances such relationship ordinarily
results in such person obtaining benefits substantially equivalent to ownership,
e.g., application of the income derived from such securities to maintain a
common home, to meet expenses which such person otherwise would meet from other
sources, or the ability to exercise a controlling influence over the purchase,
sale or voting of such securities.
An Access Person also may be regarded as the beneficial owner of
securities held in the name of another person, if by reason of any contract,
understanding, relationship, agreement or other arrangement, he or she obtains
therefrom benefits substantially equivalent to those of ownership. Moreover, the
fact that the holder is a relative or relative of a spouse and sharing the same
home as an Access Person may in itself indicate that the Access Person would
obtain benefits substantially equivalent to those of ownership from securities
held in the name of such relative. Thus, absent countervailing facts, it is
expected that securities held by relatives who share the same home as an Access
Person will be treated as being beneficially owned by the Access Person.
An Access Person also is regarded as the beneficial owner of securities
held in the name of a spouse, children, or other person, even though he or she
does not obtain therefrom the aforementioned benefits of ownership, if he or she
can vest or revest title in him/herself at once or at some future time
A-1
