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EXHIBIT (o)(2)
CODE OF ETHICS FOR
NORTHERN TRUST CORPORATION AFFILIATES
SERVING AS INVESTMENT ADVISERS TO
REGISTERED INVESTMENT COMPANIES
This Code of Ethics (the "Code") has been adopted by Northern Trust Corporation
affiliates (collectively, "Northern") serving as investment advisers to
registered investment companies in compliance with Rule 17j-1(b)(1) promulgated
by the Securities and Exchange Commission ("SEC") under the Investment Company
Act of 1940. That rule requires each investment adviser of a registered
investment company to adopt a written code of ethics. In certain respects the
Code imposes requirements that exceed those imposed by law.
The purpose of the Code is to establish general principles governing the conduct
of Northern's employees in connection with Northern's services as investment
adviser to registered investment companies, and to establish procedures to
enhance compliance with those general principles and, in particular, to prevent
Access Persons from engaging in any act, practice, or course of business
prohibited by SEC Rule 17j-1(a).
For the purposes of the Code, an Access Person is a Northern employee (1) who
serves as a director, officer, or general partner of a Northern affiliate that
is a registered investment adviser to a registered investment company
("Investment Company"); or (2) who, with respect to any Investment Company for
which Northern serves as investment adviser, (A) makes any recommendation,
participates in the determination of which recommendation shall be made, or
whose principal function or duties relate to the determination of which
recommendation shall be made to an Investment Company; (B) in connection with
his or her duties, obtains any information concerning securities recommendations
being made by Northern to an Investment Company; or (C) serves as a director,
officer or general partner. For purposes of the Code, an "Investment Person" -
which is a subcategory of all Access Persons - is a Northern employee who (1) is
engaged in the management of securities held by an Investment Company as a
portfolio manager, co-manager or member of the portfolio management team,
whether or not that person is primarily engaged in the management of other
accounts (hereinafter a "Portfolio Manager"); or (2) is engaged in investment
research or fixed income research activities related to securities held or to be
acquired by an Investment Company; or (3) is engaged in trade execution
activities for Investment Company portfolio securities.
Rule 17j-1(a) renders it unlawful for any affiliated person of an investment
adviser of 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/1/ by such registered investment company-
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1. To employ any device, scheme or artifice to defraud such registered
investment company;
2. To make to such registered investment company any untrue statement of
a material fact or omit to state to such registered investment company
a material
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fact necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading;
3. To engage in any act, practice, or course of business which operates
or would operate as a fraud or deceit upon such registered investment
company; or
4. To engage in any manipulative practice with respect to such registered
investment company.
PART I
General Provisions
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A. The Code governs the conduct of each Access Person of Northern.
B. All Access Persons shall act at all times to give priority to the interests
of each Investment Company and to the interests of the shareholders of each
Investment Company. All Access Persons shall conduct all personal securities
transactions consistent with the Code and in such manner as to avoid any actual
or potential conflict of interest or any abuse of the Access Person's position
of trust and responsibility with respect to any Investment Company. A
fundamental principle underlying the Code is that no Access Person should take
any inappropriate advantage of his or her position. In addition, Access Persons
are generally discouraged from engaging in short-term speculative trading,
excessive trading and trading which interferes with an employee's job
responsibilities. Compliance with the Code is a condition of employment of each
Access Person. Violation of any of the foregoing principles or of any other
specific provision of the Code is grounds for disciplinary action, including
termination of employment.
C. No Access Person shall engage in any of the conduct prohibited by Rule 17j-
1(a), quoted above, in connection with an Investment Company.
D. Access Persons are subject to and must comply with the policy on Gifts,
Bequests, Meals, Entertainment and Loans from Client or Vendors to Staff Members
contained in the Northern Trust Corporation Guidelines Relating to Standards of
Conduct.
E. An Access Person should not serve as a member of a board of directors of a
publicly-held company. Exceptions to this policy require the written approval
of the Access Person's Business Unit Head or President.
F. Each Access Person shall certify annually on the prescribed form that he or
she has read and understood the Code, recognizes that he or she is subject
thereto, has complied with the Code, including the securities trading provisions
in Part II thereof, and will continue to comply with the Code so long as he or
she remains an Access Person.
G. The Investment Compliance Department shall review all reports of securities
holdings and securities transactions submitted pursuant to the Code or to Rule
17j-1 in order to seek to
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identify any possible violation of the Code. The Investment Compliance
Department shall report any apparent violation of the Code to the Ethics
Committee for appropriate action.
H. Northern shall preserve in an easily accessible place:
. (i) a copy of the predecessor of the Code, of the Code and of any
amendments to the Code for a period of five years after it was last in
effect;
. (ii) a record of any violation of the Code and of any action taken as
a result of such violation, for a period of five years from the end of
the fiscal year in which the violation occurred;
. (iii) a copy of each report made by an Access Person pursuant to Rule
17j-1 for a period of five years from the end of the fiscal year in
which the report was made;
. (iv) a list of all persons who are, or within the prior five years
have been, required to make reports pursuant to Rule 17j-1 and a list
of all persons responsible for reviewing such reports; and
. (v) a copy of each report furnished to the Board of any Investment
Company pursuant to Rule 17j-1(c)(2)(ii), describing issues arising
under this Code and certifying that Northern has adopted procedures
reasonably designed to prevent Access Persons from violating this
Code.
. (vi) a record of any decisions and supporting reasons approving the
acquisition of securities under Part II of this Code.
I. All questions of interpretation of provisions of the Code shall be
submitted in writing to and resolved by the Ethics Committee and the General
Counsel or his designee/2/ ("Legal Counsel"). Pending resolution of any issue
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submitted to the Ethics Committee and Legal Counsel, any uncertainty about the
scope of any provision of the Code should be resolved in favor of a broader
rather than narrower interpretation. The Ethics Committee and Legal Counsel
also reserve the right in appropriate circumstances to grant waivers from any
requirements under this Code.
PART II
Provisions Regarding Personal Securities Transactions
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The following provisions pertain to securities transactions in all accounts of
an Access Person (including accounts of an Investment Person or a Portfolio
Manager whenever specifically indicated). For purposes of these provisions, the
accounts of a person include all accounts in the name of the person, all
accounts of the person's spouse, all accounts of any minor children or other
relatives (by marriage or otherwise) living in the person's home and all such
accounts in which any of the foregoing persons has any beneficial ownership
interest and over which he or
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she exercises control or investment influence. References in this Part II to
transactions by a person refer to transactions in any account of the person as
defined in this paragraph. Limitations on the scope of the meaning of "all
accounts of an Access Person" in the circumstances of a particular person may be
made by the Ethics Committee and Legal Counsel upon the written request of an
Access Person. Any such request shall set forth in reasonable detail the facts
and circumstances, and shall include an explanation why the requested
limitations will not enable the person to circumvent the objectives of the Code.
A. All securities accounts of an Access Person shall be maintained at Northern
Trust Securities, Inc. ("NTSI"), or at another brokerage firm or bank selected
by the Access Person, provided that notice pursuant to the prescribed form has
been provided by the Access Person to the Investment Compliance Department
before placing any orders.
B. Duplicate confirmations for all transactions and duplicate statements for
all accounts of an Access Person, whether or not all such accounts are
maintained at NTSI, shall be provided by the broker/dealer directly to the
Investment Compliance Department, which shall review all such information to
assure that each Access Person has complied with the Code in all respects.
C. Each Access Person shall inform the Investment Compliance Department, using
the prescribed form, of all securities (whether or not publicly traded) in which
the Access Person has any beneficial ownership not later than ten (10) days
after commencing employment as an Access Person. Not later than January 30 each
year, each Access Person shall provide the Investment Compliance Department with
a list of all securities (whether or not publicly traded) in which the Access
Person had any beneficial ownership as of the preceding December 31. In lieu of
a separate listing of holdings, where all securities in question are held in an
account with a broker-dealer, another bank or other custodian, the Access Person
may provide written certification of the accuracy and completeness of statements
provided by the Investment Person's agent(s). An Access Person may exclude from
such lists all securities of the types described in footnote 4. The concept of
beneficial ownership is defined in footnote 5.
D. No Access Person shall engage in any securities transaction without prior
approval by the Investment Compliance Department. Requests for approval shall
be submitted on the prescribed form. The purpose of this "preclearance"
requirement is to foster compliance with other provisions of the Code. Each
approval for a proposed securities transaction shall be valid until 5 p.m.
Central Time on the first day the financial markets are open for trading
following the day of approval.
E. The foregoing prohibition on engaging in securities transactions without
prior approval does extend to securities purchased in a private placement. In
addition, the purchase of securities in a private placement by an Investment
Person must be approved in writing by the Chief Investment Officer ("CIO"). In
determining whether an Investment Person's transaction in privately placed
securities will be approved, the CIO shall take into account, among other
factors, whether the investment opportunity should be reserved for an Investment
Company and whether the investment opportunity is being offered to the
Investment Person by virtue of his or her relationship to an Investment Company.
A transaction in a privately placed security by the CIO must be approved in
writing by the CIO's immediate supervisor.
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F. The fact of an Investment Person's ownership of privately placed securities
shall be disclosed to the CIO at any time when, to the knowledge of the
Investment Person, an Investment Company is considering the purchase or sale of
other securities issued by the issuer of the privately placed securities. This
separate disclosure must be made even though the Investment Person has
previously disclosed the ownership of the privately placed securities in
compliance with Parts II.C and II.E of the Code. No Investment Person may
participate in any investment decision on behalf of an Investment Company which
involves the issuer of securities whose privately placed securities are held by
the Investment Person without first disclosing in writing the fact of his or her
ownership of the privately placed securities to the CIO and the Investment
Compliance Department. The CIO shall determine whether the proposed investment
is consistent with the Investment Company's investment objectives and is
consistent with the best interests of the Investment Company before the
Investment Company may purchase the security. The CIO's determination shall be
in writing and forwarded to the Investment Compliance Department.
G. Restrictions Applicable to all Access Persons
1. No Access Person shall purchase any equity securities in an initial
public offering. Access Persons may only purchase such securities in
the after-market not sooner than three business days after the public
offering date.
2. No Access Person shall engage in a securities transaction at a time
when an Investment Company has a pending "buy" or "sell" order in that
same security until that order is executed or withdrawn.
3. No Access Person shall purchase or sell any security for a period of
five business days after the security has been added to the Guidance
List, the Institutional List or the International List. In addition,
no Access Person shall purchase or sell any security for a period of
five business days after the internal rating on a security within the
Guidance List has moved away from Neutral in either direction.
4. No Access Person shall engage in a securities transaction when the
Access Person knows at the time of the transaction that such security
is being considered for purchase or sale by an Investment Company.
H. In addition to the restrictions contained in Part II.G. above, no Portfolio
Manager shall engage in a securities transaction during the period beginning
seven calendar days before and ending seven calendar days after the day on which
an Investment Company managed, co-managed or for which the individual is part of
the portfolio management team has purchased or sold that same security.
I. The foregoing prohibitions on transactions by Access Persons and Portfolio
Managers set forth in Part II G and H above do not apply where the Investment
Company in question
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limits its investments to purchases of securities or derivatives for the purpose
of replicating a major stock or bond index./3/
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J. Except for the requirement that any purchase of such securities in a
private placement be pre-cleared in accordance with Part II D above, the
provisions of this Part II do not apply to transactions in direct obligations of
the United States Government, its agencies or instrumentalities, banker's
acceptances, bank certificates of deposit, commercial paper, high quality short-
term debt instruments, including repurchase agreements, and shares of registered
open-end investment companies. In addition, securities issued by Northern Trust
are not subject to the pre-clearance requirement of Part II D, above. HOWEVER,
TRANSACTIONS IN SECURITIES ISSUED BY NORTHERN TRUST ARE SUBJECT TO THE
REQUIREMENTS SET FORTH IN THE NORTHERN TRUST CORPORATION STATEMENT OF
CONFIDENTIAL INFORMATION AND SECURITIES TRADING.
K. Personal securities transactions by Access Persons in stocks of companies
with market capitalization of $50 billion or more at the time of purchase or
sale are not subject to the blackout periods or pending buy or sell order
restrictions noted in Parts II G 2, 3 and 4 and H, above. However, such
transactions are still subject to the preclearance requirement noted in Part II
D above.
L. If review of an Access Person's personal trading activity reveals any
transaction that was not in compliance with the Code or if such review detects
any other abuse inconsistent with the General Provisions set forth in Part I,
above, appropriate disciplinary action may be taken. Such action may include,
but is not limited to, restricting the Access Person's ability to conduct
personal securities transactions, imposing holding periods on securities
acquired by the Access Person, disgorgement of any profit realized as a result
of any transaction that was not in compliance with the Code or termination of
employment. Any profit disgorged pursuant to this paragraph shall be paid to
the Northern Trust Company Charitable Trust for such disposition as such
Charitable Trust determines in its sole discretion.
M. Each Access Person shall provide Northern with the following information
with respect to transactions in any security/4/ in which such Access Person has,
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or by reason of such transaction acquires, any direct or indirect beneficial
ownership/5/ in the security or over which such Access Person has direct or
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indirect influence or control:
. (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 security involved;
. (ii) The nature of the transaction (i.e., purchase, sale or any other
type of acquisition or disposition);
. (iii) The price at which the transaction was effected; and
. (iv) The name of the broker, dealer or bank with or through whom the
transaction was effected.
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Also, if the Access Person establishes any account described in Part II A above,
the Access Person must provide to the Compliance Department the following
information: (i) the name of the broker or bank; (ii) the date the account was
established; and (iii) the date that the report is submitted.
Northern shall inform each Access Person who is under a duty to make such
reports. These reports must state the date the report is submitted and must be
submitted within 10 days after the end of the calendar quarter in which the
transaction to which the report relates was effected. Northern will accept in
lieu of such report duplicate trade confirmations and monthly accounts
statements, provided they contain the required information and are received
within the required time frame.
Revised July 2000
Footnotes
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/1/ For these purposes, a security held or to be acquired by a registered
investment company is a security which, within the most recent 15 days, is or
has been held by the investment company or is being or has been considered by
it, or by Northern as adviser, for purchase by the investment company, and
includes an option to purchase or sell such a security and any security
convertible into or exchangeable for such security.
/2/ Any written communication provided for under the Code may be accomplished by
facsimile or electronic transmission.
/3/ It should be noted, however, that the "blackout" periods specified in Part
II do not supersede, but rather supplement, the general prohibitions against
deceptive, fraudulent and manipulative practices in connection with securities
held or to be acquired by a registered investment company. See footnote 1 on
page 1.
/4/ For purposes of this requirement, "security" does not include direct
obligations of the United States Government, bankers' acceptances, bank
certificates of deposit, commercial paper, high quality short-term debt
instruments, including repurchase agreements, and shares of registered open-end
investment companies.
/5/ A person is a "beneficial owner" of a security for purposes of the Code and
Rule 17j-1 if he or she, directly or indirectly, through any contract,
arrangement, understanding, relationship or otherwise, has or shares a direct or
indirect pecuniary interest in the securities. A pecuniary interest means the
opportunity, directly or indirectly, to profit or share in any profit derived
from a transaction in the subject securities. An indirect pecuniary interest
includes, but is not limited to: (1) securities held by members of a person's
immediate family sharing the same household; (2) a general partner's
proportionate interest in the portfolio securities held by a general or limited
partnership; (3) a person's right to dividends that is separated or separable
from the underlying securities; (4) a person's interest in securities held by a
trust; and (5) a person's right
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to acquire securities through the exercise or conversion of any derivative
security, whether or not presently exercisable. An indirect pecuniary interest
would include, for example, the right of a Northern employee to acquire Northern
stock pursuant to an employee stock option.
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