DEUTSCHE ASSET MANAGEMENT
CODE OF ETHICS
MAY, 2000
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DEUTSCHE ASSET MANAGEMENT
CODE OF ETHICS
I. OVERVIEW................................................1
II. GENERAL RULE............................................1
III. DEFINITIONS.............................................2
IV. RESTRICTIONS.............................................3
Blackout Period Restrictions........................3
New Issues (IPOs)...................................3
Short-Term Trading..................................4
Restricted List.....................................4
Private Placements..................................4
V. COMPLIANCE PROCEDURES....................................4
Designated Brokerage Accounts.......................4
Pre-Clearance.......................................4
Reporting Requirements..............................5
Confirmation of Compliance with Policies............5
VI. OTHER PROCEDURES/RESTRICTIONS............................5
Service on Boards of Directors......................5
Gifts...............................................5
Rules for Dealing with Governmental Officials and
Political Candidates..............................7
Confidentiality.....................................8
VII. SANCTIONS ...............................................8
VIII. INTERPRETATIONS AND EXCEPTIONS...........................8
APPENDIX:
|_| Acknowledgement Form..............................................9
|_| Initial (and Annual) Holdings Report..............................10
|_| Deutsche Bank Policies and Procedures:............................11
- Employee/Employee Related Trading
- Procedures for Establishing Brokerage Accounts (not yet effective
for DeAM)
- Procedures for Pre-Clearing Personal Trades (not yet effective
for DeAM)
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DEUTSCHE ASSET MANAGEMENT - U.S.
CODE OF ETHICS
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I. OVERVIEW
This Code of Ethics ("Code") sets forth the specialized rules for business
conduct and guidelines for the personal investing activities that generally are
required of employees involved in the United States investment management areas
of the Deutsche Bank Group and its affiliates (collectively "Deutsche Asset
Management" or "DeAM").(1)
The provisions of this Code are effective May 26, 2000, and shall apply to all
employees deemed to be "Access Persons" (see definition on next page) and such
other employees as the Compliance Department ("Compliance") may determine from
time to time. This Code supplements the Deutsche Bank Code of Professional
Conduct, and Global Master Compliance Manual (available at
http://compliance.cc.db.com) on the intranet. Each Access Person must observe
those policies, as well as abide by the additional principles and rules set
forth in this Code.
II. GENERAL RULE
DeAM employees will, in varying degrees, participate in or be aware of fiduciary
and investment services provided to registered investment companies,
institutional investment clients, employee benefit trusts and other types of
investment advisory accounts. The fiduciary relationship mandates adherence to
the highest standards of conduct and integrity.
Accordingly, personnel acting in a fiduciary capacity must carry out their
duties for the EXCLUSIVE BENEFIT of the client accounts. Consistent with this
fiduciary duty, the interests of DeAM clients take priority over the investment
desires of DeAM and DeAM personnel. All DeAM personnel must conduct themselves
in a manner consistent with the requirements and procedures set forth in this
Code.
DeAM employees may also be required to comply with other policies imposing
separate requirements. Specifically, they may be subject to laws or regulations
that impose restrictions with respect to personal securities transactions,
including, but not limited to, Section 17(j) and Rule 17j-1 under the Investment
Company Act of 1940 (the "Act"). The purpose of this Code of Ethics is to ensure
that, in connection with his or her personal trading, no Access Person shall
conduct any of the following acts upon a client account:
|X| To employ any device, scheme or artifice to defraud;
|X| To make any untrue statement of a material fact, or omit to state a
material fact necessary in order to make the statement not misleading;
|X| To engage in any act, practice or course of business that operates or
would operate as a fraud or deceit; or
|X| To engage in any manipulative practice.
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(1) Deutsche Asset Management is the marketing name for the asset management
activities of Deutsche Bank AG, Deutsche Funds Management, Bankers Trust
Company, DB Alex.Brown LLC, Deutsche Asset Management Inc. (formerly Morgan
Grenfell Inc.), and Deutsche Asset Management Investment Services Limited.
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III. DEFINITIONS
A. "ACCESS PERSON" SHALL MEAN:
(i) All employees of DeAM, including investment personnel, traders and
portfolio managers who, in connection with their regular functions
or duties, participate in making decisions or obtain information
regarding the purchase or sale of a security by any client accounts,
or whose functions relate to the making of any recommendations with
respect to such purchases or sales;
(ii) All natural persons in a control relationship to DeAM who obtain
information concerning investment recommendations made to any client
account. The term "control" shall have the same meaning as that set
forth in Section 2(a)(9) of the Act; and
(iii) Any other personnel with asset management responsibilities or
frequent interaction with Access Persons as determined by Compliance
(e.g., Legal, Compliance, Risk, Operations, Sales & Marketing, as
well as long-term temporary employees and consultants).
B. "ACCOUNTS" SHALL MEAN all securities accounts, whether brokerage or
otherwise, and securities held directly outside of accounts, but shall not
include open-end mutual fund accounts in which securities transactions
cannot be effected.
C. "EMPLOYEE RELATED ACCOUNT" OF ANY PERSON SUBJECT TO THIS CODE SHALL
MEAN:
(i) The employee's own Accounts;
(ii) The employee's spouse's Accounts and the Accounts of minor children
and other members of the household (whether by marriage or similarly
committed status) living in the employee's home;
(iii) Accounts in which the employee, his/her spouse/domestic partner,
minor children or other persons living in their home have a
beneficial interest (i.e., share in the profits even if there is no
influence on voting or disposition of the shares); and
(iv) Accounts (including corporate Accounts and trust Accounts) over
which the employee or his/her spouse/domestic partner exercises
investment discretion or control.
NOTE: ANY PERSON SUBJECT TO THIS CODE IS RESPONSIBLE FOR
COMPLIANCE WITH THESE RULES WITH RESPECT TO ANY EMPLOYEE RELATED
ACCOUNT, AS APPLICABLE.
D. "SECURITIES" SHALL INCLUDE equity or debt securities, derivatives of
securities (such as options, warrants, and ADRs), closed-end mutual funds,
futures, commodities and similar instruments, but DO NOT INCLUDE:
(i) Shares of open-end mutual funds (unless otherwise directed by
Compliance);
(ii) Direct obligations of the United States government; or
(iii) Bankers' acceptances, bank certificates of deposit, commercial paper
and high quality short-term debt instruments, including repurchase
agreements.
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IV. RESTRICTIONS
A. BLACKOUT PERIOD RESTRICTIONS
(i) Access Persons shall not knowingly effect the purchase or sale of a
Security for an Employee Related Account on a day during which any
client account has a "buy" or "sell" order for the same Security,
until that order is executed or withdrawn;
(ii) Access Persons shall not effect the purchase or sale of a Security
for an Employee Related Account within SEVEN CALENDAR DAYS BEFORE OR
SEVEN CALENDAR DAYS AFTER the same Security is traded (or
contemplated to be traded) by a client account with which the Access
Person is associated.
(iii) Russell Reconstitution of the Index: Effective every June 30th, the
Frank Russell Company reconstitutes the various Russell Indices.
Several weeks prior to that date, Frank Russell announces the
changes to the indices (the "Announcement"). A significant portion
of the portfolios which DeAM advise utilize strategies involving
securities included in the various Russell indices, and thus DeAM
trades heavily in these securities. Therefore, for the period
commencing on the day of the Announcement, and continuing until
seven business days after June 30th, all Access Persons are
prohibited from transacting in any Security that is added to or
deleted from the Russell 3000 Index.
(iv) Deutsche Bank Securities: During certain times of the year, all
Deutsche Bank employees are prohibited from conducting transactions
in the equity and debt securities of Deutsche Bank, which affect
their beneficial interest in the firm. Compliance generally imposes
these "blackout" periods around the fiscal reporting of corporate
earnings. Blackouts typically begin two days prior to the expected
quarterly or annual earnings announcement, and end two days after
earnings are released publicly. Additional restricted periods may be
required for certain individuals and events, and Compliance will
announce when such additional restricted periods are in effect.
(V) EXCEPTIONS TO BLACKOUT PERIODS (ABOVE ITEMS I, II, AND III ONLY) The
following are exempt from the specified blackout periods:
|_| Securities that are within the S&P 100 Index;
|_| Futures and options transactions on indexes;
|_| ETF's (Exchange Traded Funds - e.g., SPDRs or "Spiders" (S&P
500 Index), DIAs or "Diamonds" (Dow Jones Industrial Average),
etc.);
|_| Shares purchased under an issuer sponsored Dividend
Reinvestment Plan ("DRIPs"), other than optional purchases;
|_| To the extent acquired from the issuer, purchases effected
upon the exercise of rights issued pro rata to holders of a
class of securities; and
|_| Securities purchased under an employer sponsored stock
purchase plan or upon the exercise of employee stock options.
B. NEW ISSUES (IPOS)
Access Persons are prohibited from purchasing or subscribing for
Securities pursuant to an initial public offering. This prohibition
applies even if Deutsche Bank (or any affiliate of Deutsche Bank) has no
underwriting role and/or is not involved with the distribution.
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C. SHORT -TERM TRADING
Access Persons are prohibited from transacting in the purchase and sale,
or sale and purchase, of the same (or equivalent) Securities within 30
calendar days. The following are exempted from this restriction:
|_| Futures and options transactions on indexes;
|_| ETF's (Exchange Traded Funds - e.g., SPDRs or "Spiders" (S&P
500 Index), DIAs or "Diamonds" (Dow Jones Industrial Average),
etc.);
|_| Shares purchased under an issuer sponsored Dividend
Reinvestment Plan ("DRIPs"), other than optional purchases;
|_| To the extent acquired from the issuer, purchases effected
upon the exercise of rights issued pro rata to holders of a
class of securities; and
|_| Securities purchased under an employer sponsored stock
purchase plan.
D. RESTRICTED LIST
All Deutsche Bank employees, including all Access Persons, are prohibited
from buying or selling any securities that are included on the Corporate
Restricted List (available on the intranet) and/or other applicable
departmental restricted lists.
E. PRIVATE PLACEMENTS
Prior to effecting a transaction in private securities (i.e., Securities
not requiring registration with the Securities and Exchange Commission,
and sold directly to the investor), all Access Persons must first obtain
the approval of his/her supervisor and then pre-clear the transaction with
the Compliance Department, including completing a questionnaire. Any
person who has previously purchased privately-placed Securities must
disclose such purchases to the Compliance Department before he or she
participates in a Fund's or an advisory client's subsequent consideration
of an investment in the Securities of the same or a related issuer.
NOTE: Transactions in Securities in derivative instruments, including
warrants, convertible Securities, futures and options, etc. shall be
restricted in the same manner as the underlying Security.
V. COMPLIANCE PROCEDURES
A. DESIGNATED BROKERAGE ACCOUNTS
All Access Persons are required to open and maintain their Employee
Related Accounts in accordance with the Deutsche Bank Employee
Trading and Pre-Clearance Policy, as well as additional
division-specific requirements, if any.
B. PRE-CLEARANCE
Proposed Securities transactions must be pre-cleared with the
Compliance Department in accordance with the Deutsche Bank Employee
Trading and Pre-Clearance Policy. The following are exempted from
this restriction:
|_| Futures and options transactions on indexes;
|_| ETF's (Exchange Traded Funds - e.g., SPDRs or "Spiders" (S&P
500 Index), DIAs or "Diamonds" (Dow Jones Industrial Average),
etc.);
|_| Shares purchased under an issuer sponsored Dividend
Reinvestment Plan ("DRIPs"), other than optional purchases;
|_| To the extent acquired from the issuer, purchases effected
upon the exercise of rights issued pro rata to holders of a
class of securities; and
|_| Securities purchased under an employer sponsored stock
purchase plan.
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C. REPORTING REQUIREMENTS
(i) Disclosure of Employee Related Accounts/Provision of Statements
Upon joining Deutsche Bank, new employees are required to disclose
all of their Employee Related Accounts to Compliance, and must carry
out the instructions provided to conform such accounts, if
necessary, to Deutsche Bank policies. In addition, pursuant to Rule
17j-1 of the Act, no later than ten days after an individual becomes
an Access Person, he or she must complete and return an "Initial
Holdings Report" (see Appendix).
(ii) Quarterly Personal Securities Trading Reports ("PSTs")
Pursuant to Rule 17j-1 of the Act, within ten (10) days of the end
of each calendar quarter, all Access Persons must sign and return to
Compliance a PST report, unless exempted by a division-specific
requirement, if any. All PSTs that have reportable personal
Securities transactions for the quarter will be reviewed by the
appropriate supervisory and/or compliance person.
(iii) Annual Holdings Report
Once each year, at a date to be specified by Compliance, each Access
Person must provide to Compliance an Annual Holdings Report (see
Appendix) current as of a date not more than 30 days prior to the
date of the report.
D. CONFIRMATION OF COMPLIANCE WITH POLICIES Annually, each Access Person is
required to sign a statement acknowledging that he or she has received
this Code, as amended or updated, and confirm his or her adherence to it.
VI. OTHER PROCEDURES/RESTRICTIONS
A. SERVICE ON BOARDS OF DIRECTORS
Employees may not maintain outside business affiliations (e.g., officer or
director, governor, trustee, part-time employment, etc.) without the prior
written approval of the appropriate senior officer of their respective
business units. Service on Boards of publicly traded companies should be
limited to a small number of instances. However, such service may be
undertaken based upon a determination that these activities are consistent
with the interests of DeAM and its clients. Employees serving as directors
will not be permitted to participate in the process of making investment
decisions on behalf of clients which involve the subject company.
B. GIFTS
(i) Accepting Gifts
Employees are prohibited from soliciting or accepting any personal payment
or gift to influence, support or reward any service, transaction or
business involving Deutsche Bank, or that appears to be made or offered in
anticipation of any future service, transaction or business opportunity. A
payment or gift includes any fee, compensation, remuneration or thing of
value.(2) However, subject to the prerequisites of honesty, absolute
fulfillment of fiduciary duty to Deutsche Bank, relevant laws and
regulations, and reasonable conduct on the part of the
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(2) Under the Bank Bribery Act and other applicable laws and regulations, severe
penalties may be imposed on anyone who offers or accepts such improper payments
or gifts. If you receive or are offered an improper payment or gift, or if you
have any questions as to the application or interpretation of Deutsche Bank's
rules regarding the acceptance of gifts, you must bring the matter to the
attention of the Compliance Department.
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employee, the acceptance of some types of reasonable business gifts
received by employees may be permissible, and the rules are as follows:
o Cash gifts of any amount are prohibited. This includes cash
equivalents such as gift certificates, bonds, securities or other
items that may be readily converted to cash.
o Acceptance of non-cash gifts, souvenirs, tickets for sporting or
entertainment events, and other items with a value less than U.S.
$100 or its equivalent is generally permitted, when it is clear that
they are unsolicited, unrelated to a transaction and the donor is
not attempting to influence the employee.
o Acceptance of gifts, other than cash, given in connection with
special occasions (e.g., promotions, retirements, weddings,
holidays), that are of reasonable value in the circumstances are
permissible.
o Employees may accept reasonable and conventional business
courtesies, such as joining a customer or vendor in attending
sporting events, golf outings or concerts, provided that such
activities involve no more than the customary amenities.
o The cost of working session meals or reasonable related expenses
involving the discussion or review of business matters related to
Deutsche Bank may be paid by the customer, vendor or others,
provided that such costs would have otherwise been reimbursable to
the employee by Deutsche Bank in accordance with its travel and
entertainment and expense reimbursement policies.
(ii) Gift Giving (to Persons other than Government Officials) In appropriate
circumstances, it may be acceptable and customary for DeAM to extend gifts
to customers or others who do business with Deutsche Bank. Employees
should be certain that the gift will not give rise to a conflict of
interest, or appearance of conflict, and that there is no reason to
believe that the gift will violate applicable codes of conduct of the
recipient. Employees with appropriate authority to do so may make business
gifts at DeAM's expense, provided that the following requirements are met:
o Gifts in the form of cash or cash equivalents may not be given
regardless of amount.
o The gift must be of reasonable value in the circumstances, and
should not exceed a value of U.S. $100 unless the specific prior
approval of the appropriate Managing Officer(3) is obtained.
o The gift must be lawful and in accordance with generally accepted
business practices of the governing jurisdictions.
o The gift must not be given with the intent to influence or reward
any person regarding any business or transaction involving DeAM.
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(3) For purposes of this policy, "MANAGING OFFICER" is defined as an officer of
at least the Managing Director level to whom the employee directly or indirectly
reports, who is in charge of the employee's unit (e.g., a Department Head,
Division Head, Function Head, Group Head, General Manager, etc).
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(iii) Gifts to Government Officials
The Compliance Department must be contacted prior to making any gift to a
governmental employee or official. Various governmental agencies,
legislative bodies and jurisdictions may have rules and regulations
regarding the receipt of gifts by their employees or officials. In some
cases, government employees or officials may be prohibited from accepting
any gifts. (See next section for additional rules regarding political
contributions.)
C. RULES FOR DEALING WITH GOVERNMENTAL OFFICIALS AND POLITICAL CANDIDATES
(i) Corporate Payments or Political Contributions No corporate payments
or gifts of value may be made to any outside party, including any
government official or political candidate or official, for the
purpose of securing or retaining business for Deutsche Bank, or
influencing any decision on its behalf.
o The Federal Election Campaign Act prohibits corporations and
labor organizations from using their general treasury funds to
make contributions or expenditures in connection with federal
elections, and therefore DEUTSCHE BANK DEPARTMENTS MAY NOT
MAKE CONTRIBUTIONS TO U.S. FEDERAL POLITICAL PARTIES OR
CANDIDATES.
o Corporate contributions to political parties or candidates in
jurisdictions not involving U.S. Federal elections are
permitted only when such contributions are made in accordance
with applicable local laws and regulations, and the prior
approval of a member of the DeAM Executive Committee has been
obtained, and the Deutsche Bank Americas Regional Cost
Committee has been notified.
Under the Foreign Corrupt Practices Act, Bank Bribery Law,
Elections Law and other applicable regulations, severe
penalties may be imposed on Deutsche Bank and on individuals
who violate these laws and regulations. Similar laws and
regulations may also apply in various countries and legal
jurisdictions where Deutsche Bank does business.
(ii) Personal Political Contributions
No personal payments or gifts of value may be made to any outside
party, including any government official or political candidate or
official, for the purpose of securing business for Deutsche Bank or
influencing any decision on its behalf. Employees should always
exercise care and good judgment to avoid making any political
contribution that may give rise to a conflict of interest, or the
appearance of conflict. For example, if a DeAM business unit engages
in business with a particular governmental entity or official, DeAM
employees should avoid making personal political contributions to
officials or candidates who may appear to be in a position to
influence the award of business to Deutsche Bank.
(iii) Entertainment of Government Officials
Entertainment and other acts of hospitality toward government or
political officials should never compromise or appear to compromise
the integrity or reputation of the official or Deutsche Bank. When
hospitality is extended, it should be with the expectation that it
will become a matter of public knowledge.
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D. CONFIDENTIALITY
Access Persons must not divulge contemplated or completed securities
transactions or trading strategies of DeAM clients to any person, except
as required by the performance of such person's duties, and only on a
need-to-know basis. In addition, the Deutsche Bank policies on
confidential information, which are contained within the Code of
Professional Conduct must be observed.
VII. SANCTIONS
Any Access Person who violates this Code may be subject to disciplinary actions,
including possible dismissal. In addition, any Securities transactions executed
in violation of this Code, such as short-term trading or trading during blackout
periods, may subject the employee to a financial penalty, including but not
limited to, unwinding the trade and/or disgorging of the profits. Finally,
violations and suspected violations of criminal laws will be reported to the
appropriate authorities as required by applicable laws and regulations.
VIII. INTERPRETATIONS AND EXCEPTIONS
Compliance shall have the right to make final and binding interpretations of
this Code, and may grant an exception to certain of the above restrictions, as
long as no abuse or potential abuse is involved. Each Access Person must obtain
approval from the Compliance Department before taking action regarding such an
exception. Any questions regarding the applicability, meaning or administration
of this Code shall be referred in advance of any contemplated transaction, to
Compliance.
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DEUTSCHE ASSET MANAGEMENT
ACKNOWLEDGEMENT
In connection with my employment with one or more of the legal entities which
make up Deutsche Asset Management, I acknowledge that I have received, read and
understand the Deutsche Asset Management Code of Ethics issued May, 2000, and
agree to adhere to and abide by its provisions.
I understand that any violation(s) of this Code of Ethics is grounds for
immediate disciplinary action up to, and including, dismissal.
Signature _______________________________
Print Name _______________________________
Legal Entity _______________________________
Date _______________________________
PLEASE RETURN THIS FORM TO DEAM COMPLIANCE AT 130 LIBERTY STREET, 17TH FLOOR
(MAIL STOP 2172).
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DEUTSCHE ASSET MANAGEMENT
TO: "Access Person"
FROM: DeAM Compliance
RE: Initial/Annual Holdings Report - Personal Securities Accounts
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In conformance with Securities and Exchange Commission Rule 17j-1 pursuant to
the Investment Company Act of 1940 you are required to provide Compliance with
this "Initial Holdings Report" within 10 days of joining Deutsche Asset
Management ("DeAM"), and annually thereafter.
Accordingly, please fill in the following requested information (or attach a
copy of your most recent statement) for all securities(4) either held directly
or held in your Employee-Related Accounts(5).
BROKER/ACCT.# NAME OF ISSUER NO. OF SHARES PRINCIPAL AMOUNT
--------------------- --------------------- ----------------- -----------------
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Signature: _______________________________ Date:___________________________
Print Name:_______________________________ Expense Code:___________________
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(4) "Securities" includes equity or debt securities (both privately and publicly
offered), derivatives of securities (such as options, warrants, indexes and
ADRs), futures, commodities and similar instruments, BUT DOES NOT INCLUDE: (i)
shares of open-end mutual funds (unless otherwise directed by compliance) or
(ii) direct obligations of the United States government.
(5) "Employee Related Accounts" include (i) employee's own accounts; (ii) the
employee's spouse's accounts and the accounts of minor children and other
members of the household (whether by marriage or similarly committed status)
living in the employee's home; (iii) accounts in which the employee, his/her
spouse/domestic partner, minor children or other persons living in their home
have a beneficial interest (i.e., share in the profits even if there is no
influence on voting or disposition of shares); and (iv) accounts (including
corporate accounts and trust accounts) over which the employee or his/her
spouse/domestic partner exercises investment discretion or control.
**PLEASE COMPLETE AND RETURN TO COMPLIANCE AT MAIL STOP 2172**
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NOTICE
On the following pages are the Deutsche Bank Compliance Policies and Procedures
relating to personal trading by employees. All employees of Deutsche Bank in the
Americas (including employees of Deutsche Asset Management and the Mutual Funds
Group of DeAM) are required to comply with the policies therein in addition to
complying with the DeAM Code of Ethics ("the Code").
Since the Deutsche Bank Compliance Policies and Procedures are a SEPARATE set of
rules which correspond to the Deutsche Bank Code of Professional Conduct, terms
and definitions may differ from those used in the Code. In some cases, the rules
in the Code are more restrictive than the rules in the Deutsche Bank Compliance
Policies and Procedures. Please note specifically:
Outside Accounts.
The rule allowing employees to maintain personal securities accounts at Deutsche
Bank or another "approved brokerage firm" does not apply to employees of the
Mutual Funds Group of DeAM. Employees of the Mutual Funds Group are required to
maintain personal accounts (except open-end mutual fund only accounts) only at
Deutsche Bank (Alex.Brown), unless they have received an exemption from Mutual
Funds Compliance.
Pre-Clearance.
The rules relating to pre-clearance differ for employees of the Mutual Funds
Group of DeAM. Until the Mutual Funds Group receives the Employee Trade Request
System, the pre-clearance process requires the submission of an Employee Trading
Pre-Clearance Form to Sarah Reilly in Mutual Funds Compliance (410-895-3499) and
calling Corporate Compliance (212-469-8787).
Blackout Period.
The blackout period(s) in the Code is more broad than the blackout period in the
Deutsche Bank Compliance Policies and Procedures. DeAM employees are subject to
an additional blackout period surrounding trades by DeAM client accounts, as
described in the Code.
Initial Public Offerings.
DeAM employees are prohibited from purchasing securities in any initial public
offering. This prohibition applies even if Deutsche Bank has no underwriting
role and/or is not involved with the distribution.
QUESTIONS ABOUT THESE REQUIREMENTS? Please call Jeff Silver (212-250-8053) or
Mary Mullin (212-250-8353) in DeAM Compliance or Felicia Emry (410-895-3826) or
Sarah Reilly (410-895-3499) in DeAM Mutual Funds Compliance.
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NOTE: Parts of the procedure (the section dealing with approved brokerages in
particular) detailed below was not yet effective for DeAM employees at the time
this Code was approved and is provided for future reference. You will be
notified in advance of implementation and applicability. Until such time, you
must CONTINUE TO CALL 212-469-8787 TO PRE-CLEAR ALL Securities transactions, and
maintain accounts with and transact only through current legacy approved
brokers.
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COMPLIANCE POLICIES AND PROCEDURES
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No.: 101 Subject: Employee/Employee Related Trading
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Effective Date: 10/1/97 Approved By: Mary Owen MD/Compliance
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Revision Date: 5/20/99 Applicability: All Personnel
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EMPLOYEE TRADING POLICY -- EMPLOYEE ACCOUNTS
INTRODUCTION
The Employee/Employee-Related Trading Policy is designed to prevent legal,
business and ethical conflicts and to guard against the misuse of proprietary or
confidential information. In addition, the policy is intended to discourage
employees from engaging in personal trading on a scale that would distract them
from their daily responsibilities to the Firm. Employees are cautioned not to
engage in trading that might result in the appearance of impropriety. Deutsche
Bank ("DB") strongly encourages investment by employees that is long-term in
nature, and strongly discourages short-term, speculative trading.
TO WHOM DOES THIS POLICY APPLY?
This policy applies to the brokerage accounts of employees, long-term
temporary employees, full-time consultants, and to those accounts over which
such persons expect to exercise influence or control, including (1) accounts of
your spouse, minor children or relatives of you or your spouse to whom
substantial support is contributed; (2) accounts of any other member of your
household, such as a relative (of you or your spouse) living in your home; (3)
trust accounts for which you act as trustee, custodian, power-of-attorney or
otherwise exercise any type of guidance or influence; and (4) corporate accounts
that you directly or indirectly control. All such accounts are referred to as
"Employee/Employee-Related Accounts".
a. EMPLOYEE/EMPLOYEE-RELATED ACCOUNTS (IN-HOUSE--AT AN APPROVED BROKERAGE
FIRM)
DB requires that its employees maintain their brokerage accounts at an
"Approved Brokerage Firm" as determined by DB. If you choose to maintain your
accounts "in-house", your accounts will be established and serviced by Alex
Brown. If you decide to maintain your accounts outside of DB you are required to
make written application identifying yourself as a DB employee. Transactions
effected in Employee/Employee-Related Accounts are subject to continuous review
by the Control Group on a regular basis. The Control Group will receive
duplicate confirmations and monthly statements for every account. Accounts
established without the prior approval of your Supervisor and the Control Group
may be frozen.
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b. TRADING PRE-CLEARANCE
All trades in an Employee/Employee-Related Account must be pre-cleared by
your Supervisor and by Compliance. Until your group has received the Employee
Trade Request ("ETR") System, the pre-clearance process requires the submission
of an "Employee Trading Pre-Clearance Form" to your Supervisor, or respective
delegate, and Compliance. Execution of a trade may not take place until you have
received both approvals. Failure to obtain the required approvals will result in
cancellation of your transaction. Losses incurred by you as the result of the
cancellation of unauthorized trading will be charged to the account in question.
Profits in trades that were not pre-cleared must be given to a charitable
organization.
Approvals are good for the day on which they are issued. The one exception
is for trade requests placed after 4:00 PM ET; these will be valid for the next
trading day.
GTC ORDERS (GOOD TILL CANCELED): GTC orders will not be approved. The sole
exception is the entering of a STOP-LIMIT order simultaneously with the
initial BUY order.
c. BLACK-OUT, HOLDING PERIODS AND OTHER PROHIBITIONS
The following black-out and holding periods apply to each transaction in
your account or in an Employee-Related Account, as previously defined. These
requirements enable Compliance to more efficiently monitor the trading
activities of DB employees and to prevent trading by employees in sensitive
departments (i.e., Investment Banking, Research, Capital Markets) that could be
perceived as inappropriate.
BLACK-OUT PERIOD: The "black-out" period is described as two business days
immediately preceding the release of quarterly earnings, and two business
days after the release of quarterly earnings. No employee of Investment
Banking, Research, or Capital Markets areas will receive clearance from
their Reviewing Department Head ("RDH") to purchase or sell securities
during this period. Exceptions may be granted only on a case-by-case basis,
by Compliance.
HOLDING PERIODS: The firm imposes a holding period for all investments in
equity, non-investment grade debt, preferred instruments and any security
that is convertible into such securities. Exceptions may be granted only on
a case-by-case basis, by Compliance. The standard holding periods are:
o Investment Banking - 6 months
o All Others - 30 days
o Alex Brown Retail - None
As a general rule, no employee of the Research Division, Investment Banking
Division, or Capital Markets Division may trade in the securities of issuers
that are covered by you, i.e., the Research Analyst covering XYZ may not trade
XYZ securities, the Investment Banker servicing XYZ may not trade XYZ
securities. Exceptions to this general rule will be made on a case by case
basis, at the sole discretion of Compliance.
d. OPTIONS, FUTURES, OPTIONS ON FUTURES AND OTHER DERIVATIVE SECURITIES
You may trade options (except for uncovered options), futures, options
on futures, forwards, warrants or options on physical commodities or currencies
subject to a 30 day holding period. You may not write covered calls, unless you
have held the underlying security for the required 30 day or 6 month holding
period.
Short sales are permitted only to the extent they are "short vs. the box"
or covered. Compliance monitors employee-trading carefully for adherence to
these guidelines. Employees found violating these policies may be subject to
sanctions, including the suspension of trading privileges and termination.
-13-
<PAGE>
e. PRIMARY AND SECONDARY PUBLIC OFFERINGS
You may not purchase any security that is part of a primary or secondary
offering on which DB is acting as a lead or co-managing underwriter until the
offering is priced and the syndicate is terminated.
Please keep in mind that the NASD has regulations prohibiting associated
persons of member firms from purchasing public offerings that are considered HOT
ISSUES. Hot Issues are defined as public offerings that are trading in the
secondary market at a price above the offering price.
f. RESTRICTIONS ARISING FROM DB'S RESEARCH RECOMMENDATIONS
You are restricted from trading in an issuer's securities for a period of
two days from the time a DB research analyst initiates coverage, or changes the
recommendation on that issuer. If you are aware of any such research
recommendation prior to publication, you are prohibited from trading for your
own account from the time you learn of the research recommendation until two
business days after its publication. The New York Stock Exchange and the
National Association of Securities Dealers regularly inquire about trades
executed ahead of a research rating change or initiation of coverage.
g. INFORMATION REGARDING CUSTOMER OR FIRM ORDERS
You are prohibited from "frontrunning" customer or Firm orders, i.e.,
trading for your own account with knowledge and in advance of a customer or Firm
order in the same security.
In addition, you are strongly discouraged from "piggybacking" on customer or
Firm trades, i.e., engaging in identical trades as those that a client or Firm
account has completed. While piggybacking is not itself illegal, it can create
the appearance of impropriety.
h. TRADING SECURITIES THAT ARE ON DB'S RESTRICTED LIST
Employees of DB may not effect trades in securities that appear on the
Restricted List. For your information and convenience, the Restricted List is
posted daily on CCMail under the Compliance Department's Bulletin Board and is
also available on the Intranet Homepage.
-14-
<PAGE>
Deutsche Bank @
PROCEDURES FOR ESTABLISHING BROKERAGE ACCOUNTS
The Deutsche Bank ("DB") Compliance Policy requires all DB personnel to take a
number of steps with respect to their personal securities accounts and
transactions. The Policy requires that all personal securities accounts be
maintained at an "Approved Brokerage Firm."
Firms currently designated as "Approved Brokerage Firms"
The Compliance Department has established procedures that have allowed the
designation of the majority of Broker/Dealers as "Approved Brokerage Firms", the
main requirement being the Carrying Broker/Dealer's ability to deliver
confirmations of transactions electronically to the DB's Employee Trading &
Surveillance Group.
The following firms are the only Broker/Dealers not approved for use by DB
employees.
1. Datek On-Line Securities
2. Ernst & Company
If you choose to establish/maintain your accounts at an Approved Brokerage Firm,
you are required to make a written application to that Firm, identifying
yourself as a DB employee (see attachment).
Special arrangements have been established with Alex.Brown, Fidelity Investment,
Merrill Lynch, Morgan Stanley Dean Witter, Quick & Reilly, and Salomon Smith
Barney for DB employees wishing to establish accounts with these firms.
Contacts: Alex.Brown, Employee Brokerage Center 1-800-776-7564 (ext. 3).
Fidelity Brokerage Services 212-371-2327
Merrill Lynch Account Manager, Richard Verlin, 212-236-5044
Morgan Stanley Dean Witter Account Manager, Doug Dalmedo, 212-883-7750
Quick & Reilly 212-232-4728
Salomon Smith Barney (Rasweiler Group) 212-643-5769
-15-
<PAGE>
Deutsche Bank @
--------------------------
- DATE
--------------------------
ACCOUNT NUMBER
--------------------------
ACCOUNT TITLE
--------------------------
TAX ID NUMBER
-------------------------------
NAME OF CARRYING BROKER DEALER
-------------------------------
ADDRESS
-------------------------------
RE: Intent to open an account
To Whom it may concern;
As an employee, or an associated person of a Member Firm, Deutsche Bank Group
("DB"), I am obligated under NYSE Rule 407(a) to express my intention to open a
securities or commodities account with your firm in writing both to you as the
carrying firm and to my employer.
This letter shall serve as notification that I intend to establish such an
account with your firm and the signature of the Reviewing Department Head (or
his Authorized Delegate) below shall evidence said notification of my employer.
You will receive detailed instructions regarding the delivery of duplicate
confirmations and statements directly from DB's Compliance Department once the
account has been established and an account number has been provided.
Should you require further information please contact Milagros Fernandez at
(212) 469-8614.
Very truly yours,
------------------------------ ------------------------------
Reviewing Dept. Head Employee
CC: Reviewing Department Head
COMPLIANCE DEPARTMENT (WITH ACCOUNT #)
<PAGE>
------------------------------------------------------------------------------
NOTE: The procedure detailed below was not yet effective for DeAM at the time
this Code was approved and is provided for future reference. You will be
notified in advance of implementation and availability. Until such time, you
must CONTINUE TO CALL 212-469-8787 TO PRE-CLEAR ALL Securities transactions.
------------------------------------------------------------------------------
PROCEDURES FOR PRE-CLEARING PERSONAL TRADES
In order to facilitate the above referenced process with as little inconvenience
as possible, Compliance has designed a web site on the IntraNet. The site
includes a Compliance Home Page with a Restricted List query facility and a menu
of "Employee Trading Pre-Clearance Forms". The form that you are required to
fill out and submit for approval will depend upon your place of employment. Be
sure to select the appropriate form. The site provides for the automatic
submission of the form to your supervisor and Compliance. When the form is
approved it will be routed back to you for your records, at which point you may
proceed with the execution of your transactions.
The following are instructions for placing an Employee Trade Request ("ETR"):
1. Launch Netscape
2. Double click on U.S. Compliance (located under Staff Services on the DB
Intranet Home Page)
3. Select Employee Trade Request from the Compliance Department Webpage
4. Type in User Name and Password (case sensitive)
5. The system will ask you to verify your user information. Click "Here to
Submit".
6. Type the Security Name in the query box. (If the security is on the
Restricted List, ETR will prompt you to call Compliance. If the security
is not on the Restricted List, ETR will let you proceed to the Forms
Webpage.)
7. Select the Request Form that corresponds to your department. Upon
submitting your request, ETR will send an e-mail message informing your
supervisor that a trade request is open. Once your supervisor approves
your request, you will receive another e-mail giving you authorization to
execute your trade.
If your supervisor is not available, input your request ticket and contact
Compliance on extension 8787 for approval.
With the exception of discretionary or third party managed account, all employee
and/or employee related accounts must be pre-cleared. Failure to adhere to DB's
Employee Trading Policy may result in trades being revoked and/or removal of 407
authorization letter.
PLEASE NOTE: ALL EMPLOYEES ARE SUBJECT TO A 30-DAY HOLDING PERIOD WITH THE
EXCEPTION OF INVESTMENT BANKING EMPLOYEES WHO HAVE A 6-MONTH HOLDING PERIOD, AND
ALEX BROWN RETAIL BROKERS WHO HAVE NO HOLDING PERIOD.
