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Exhibit (p)(1)
THE EMPIRE BUILDER TAX FREE BOND FUND
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Code of Ethics
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adopted as of July 7, 1997
as amended as of May 30, 2000
In order to ensure that personnel of The Empire Builder Tax Free Bond
Fund (the "Trust") comply with requirements of Section 17(j) of the Investment
Company Act of 1940 (the "Act") and of Rule 17j-1 thereunder, the Trust has
adopted the Code of Ethics (the "Code") set forth below.
The Trust's investment adviser and principal underwriter is Glickenhaus
& Co. ("Glickenhaus"), and the Trust's administrator is BISYS Fund Services
Ohio, Inc. (together with its ultimate parent company and any other companies
under common control with it, "BISYS").
1. Definitions
(1) "Access person" means any Trustee, officer or advisory person
of the Trust or any general partner, officer or advisory
person of Glickenhaus. As explained below, persons who are
partners, officers or employees of Glickenhaus will generally
be subject to the Glickenhaus code of ethics and, to avoid
duplicative reporting, will report their personal securities
transactions and holdings under that code, which has been
reviewed and approved by the Trustees of the Trust.
(2) "Advisory person" means (i) any employee of the Trust or
Glickenhaus or of any company in a control relationship to the
Trust or Glickenhaus, 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 Trust, or whose functions relate to the making
of any recommendations with respect to such purchases or
sales; and (ii) any natural person in a control relationship
to the Trust or of Glickenhaus who obtains information
concerning recommendations made to the Trust with regard to
the purchase or sale of a covered security. The phrase "makes
. . .the purchase or sale" refers to individuals who place
orders or otherwise arrange transactions.
(3) A security is "being considered for purchase or sale" when a
recommendation to purchase or sell a security has been made
and communicated or, with respect to
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the person making the recommendation, when such person
seriously considers making such a recommendation.
(4) A security is "being purchased or sold" by the Trust from the
time when a purchase or sale program has been communicated to
the person who places the buy and sell orders for the Trust
until the time when such program has been fully completed or
terminated.
(5) "Beneficial ownership" shall be interpreted in the same manner
as it would be under SEC Rule 16a-1(a)(2) under the Securities
Exchange Act of 1934. For purposes of compliance with this
Code, a person should consider himself or herself the
beneficial owner of securities held by his or her spouse, his
or her minor children or any relative or domestic partner who
shares his or her home. A person should also consider himself
or herself the beneficial owner of any other securities as to
which, by reason of any contract, understanding, relationship,
agreement or other arrangement with any other person, he or
she obtains from such securities benefits substantially
equivalent to those of ownership. He or she should also
consider himself or herself the beneficial owner of securities
if he or she can vest or revest title in himself or herself
now or in the future.
(6) "Control" shall have the same meaning as that set forth in
Section 2(a)(9) of the Act. Section 2(a)(9) provides that
"control" means the power to exercise a controlling influence
over the management or policies of a company, unless such
power is solely the result of an official position with such
company.
(7) "Covered security" shall have the meaning set forth in Section
2(a)(36) of the Act, except that it shall not include direct
obligations of the Government of the United States, high
quality short-term debt instruments, including repurchase
agreements, shares of registered open-end investment
companies, bankers' acceptances, bank certificates of deposit,
commercial paper and other money market instruments, or such
other securities as may be excepted under the provisions of
Rule 17j-1 from time to time in effect.
(8) "Disinterested Trustee" means a Trustee of the Trust who is
not an "interested person" of the Trust within the meaning of
Section 2(a)(19) of the Act.
(9) "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.
(10) "Investment personnel" means: (i) any employee of the Trust or
Glickenhaus (or of any company controlling the Trust or
Glickenhaus) who, in connection with his
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or her regular functions or duties, makes or participates in
making recommendations regarding the purchase or sale of
securities by the Trust; (ii) any natural person who controls
the Trust or Glickenhaus and who obtains information
concerning recommendations made to the Trust regarding the
purchase or sale of securities by the Trust. As of the date of
adoption of this Code, all investment personnel of the Trust
are persons who are also general partners, officers or
advisory persons of Glickenhaus.
(11) A "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.
(12) A "limited offering security" means a security offered
pursuant to a limited offering.
(13) "Purchase or sale of a security" includes, inter alia, the
writing of an option to purchase or sell a security.
(14) "Security held or to be acquired" by the Trust means any
covered security which, within the most recent fifteen (15)
days, (i) is or has been held by the Trust, or (ii) is being
or has been considered by the Trust or its investment adviser
for purchase by the Trust.
A person who normally only assists in the preparation of public reports, or
receives public reports but receives no information about current
recommendations or trading, is neither an "advisory person" nor an "access
person." A single instance or infrequent, inadvertent instances of obtaining
knowledge does not make one either then or for all times an advisory person.
2. Exempted Transactions
The prohibitions of Section III of this Code shall not apply to the
following transactions by access persons:
(1) Purchases or sales effected for any account over which the
access person has no direct or indirect influence or control.
(2) Purchases or sales of securities which are not eligible for
purchase or sale by the Trust, as determined by reference to
the Act and blue sky laws and regulations thereunder, the
investment objectives and policies and investment restrictions
of the Trust, undertakings made to regulatory authorities, and
other policies adopted from time to time by the Trust,
Glickenhaus or BISYS.
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(3) Purchases or sales which are nonvolitional on the part of
either the access person or the Trust, including purchases or
sales upon exercise of puts or calls written by the access
person and sales from a margin account pursuant to a bona fide
margin call.
(4) Purchases which are part of an automatic dividend reinvestment
plan.
(5) 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.
(6) Transactions which appear to present no reasonable likelihood
of harm to the Trust, which are otherwise in accordance with
Rule 17j-1, and which the President of the Trust has
authorized in advance. Such transactions would normally
include purchases or sales of any securities other than New
York Tax Exempt Bonds, as defined in the prospectus of the
Trust from time to time.
(7) Transactions which the Disinterested Trustees, after
consideration of all the facts and circumstances, determine to
have not been fraudulent, deceptive or manipulative as to the
Trust.
3. Prohibited Purchases and Sales
(1) No access person shall, in connection with the purchase or
sale, directly or indirectly, by such person of a security
held or to be acquired by the Trust:
(1) employ any device, scheme or artifice to defraud the
Trust;
(2) make to the Trust any untrue statement of a material
fact or omit to state to the Trust a material fact
necessary in order to make the statements made, in
light of the circumstances under which they are made,
not misleading;
(3) engage in any act, practice or course of business
which would operate as a fraud or deceit upon the
Trust; or
(4) engage in any manipulative practice with respect to
the Trust.
(2) In this connection, subject to the exceptions stated in
Section II of this Code, it shall be impermissible for any
access person to purchase or sell, directly or indirectly, any
security (or any option to purchase or sell such security) in
which he or she had, or by reason of such transaction
acquires, any direct or indirect
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beneficial ownership and which he or she knows or should have
known at the time of such purchase or sale:
(1) is being considered for purchase or sale by the
Trust; or
(2) is being purchased or sold by the Trust.
(3) Any access person who questions whether a contemplated
transaction is prohibited by this Code should discuss the
transaction with the President of the Trust or the officer of
the Trust responsible for code of ethics compliance prior to
proceeding with the transaction.
4. Purchases and Sales Requiring Pre-Clearance
(1) Investment personnel shall obtain approval from the officer of
the Trust responsible for code of ethics compliance (provided,
however, that investment personnel who are general partners,
officers or employees of Glickenhaus may obtain approval as
provided under the Glickenhaus Code of Ethics) before
acquiring beneficial ownership of securities issued pursuant
to:
(1) an initial public offering or
(2) a limited offering.
(2) The officer of the Trust responsible for code of ethics
compliance shall promptly notify the person of approval or
denial for the transaction. Notification of approval or denial
for the transaction may be given orally; however, it shall be
confirmed in writing within 72 hours of oral notification. In
reviewing the request, the officer of the Trust responsible
for code of ethics compliance may consult with the President
of the Trust, and shall take into account, among other
factors, whether the investment opportunity should be reserved
for the Trust, and whether the opportunity is being offered to
such person as a result of his or her position with the Trust.
(1)
5. Reporting
(1) For purposes of this Section V, each access person of the
Trust who is a general partner, officer or employee of
Glickenhaus may satisfy his or her reporting obligations by
filing the reports required to be filed by such access person
with the compliance officer of Glickenhaus, in accordance with
the code of ethics of Glickenhaus.
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(2) Within ten (10) days after becoming an access person (except
persons who would be included in this subsection solely
because of their capacity as a Disinterested Trustee of the
Trust), each access person shall report to the officer of the
Trust responsible for code of ethics compliance:
(1) the title, number of shares or principal amount of
all covered securities beneficially owned by the
access person (regardless of whether such transaction
is listed in Section II(2)-(7)),
(2) the name of any broker, dealer or bank with whom the
access person (or a person whose ownership would be
attributed to the access person under the definition
of beneficial ownership) maintains an account in
which any securities (whether or not covered
securities) were held for the direct or indirect
benefit of the access person as of the date the
person became an access person, and
(3) the date of the report.
(3) Annually, by January 30 of each year, each access person
(other than a Disinterested Trustee of the Trust), shall
report to the officer of the Trust responsible for code of
ethics compliance:
(1) the title, number of shares or principal amount of
all covered securities beneficially owned by the
access person (regardless of whether such transaction
is listed in Section II(2)-(7)),
(2) the name of any broker, dealer or bank with whom the
access person (or a person whose ownership would be
attributed to the access person under the definition
of beneficial ownership) maintains an account in
which any securities (whether or not covered
securities) are held for the direct or indirect
benefit of the access person, and
(3) the date of the report.
This information must be current as of a date no more than 30
days before the report is submitted. The first annual holdings
report submitted will be for the year ending December 31, 2000
and must be provided to the officer of the Trust responsible
for code of ethics compliance by January 30, 2001.
(4) Each access person (other than a Disinterested Trustee of the
Trust) who effects (directly or indirectly) a transaction in a
covered security during a calendar quarter shall make a
quarterly report not later than 10 days after the end of the
calendar
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quarter in which the transaction to which the report relates
was effected, and shall contain the following information:
(1) The date of the transaction and the title, interest
rate and maturity date (if applicable) and number of
shares or principal amount of each covered security
involved;
(2) The nature of the transaction (i.e., purchase, sale
or any other type of acquisition or disposition),
including information sufficient to establish any
exemption listed in Sections II(2)-(7) which is
relied upon;
(3) The price at which the transaction was effected;
(4) The name of the broker, dealer or bank with or
through whom the transaction was effected; and
(5) the date of the report.
If an access person establishes a new securities account
during any quarterly period in which any securities (whether
or not covered securities) are held for the direct or indirect
benefit of such access person, the quarterly report must also
report the name of the broker, dealer or bank with whom the
account is established and the date the account is
established.
(5) If an access person is not required to file such a report for
any quarter because:
(1) No reportable transactions were effected by such
access person or because any transaction effected was
for an account over which he or she has no direct or
indirect influence or control; and
(2) No accounts were established by the access person
during such quarter in which any securities were held
for the direct or indirect benefit or such access
person;
Such access person (other than a Disinterested Trustee of the
Trust) shall certify these facts to the Trust within 10 days
after the end of such calendar quarter.
(6) The making of such report shall not be construed as an
admission by the person making such report that he or she has
any direct or indirect beneficial ownership in the security to
which the report relates, and the existence of any report
shall not be construed as an admission that any event reported
on constitutes a violation of Section III(A) hereof.
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(7) A Disinterested Trustee of the Trust need only report a
transaction in a covered security, if at the time of that
transaction, such Trustee knew or, in the ordinary course of
fulfilling his official duties as a Trustee should have known,
that, during the 15-day period immediately preceding or
following the date of the transaction by the Trustee, such
covered security was purchased or sold by the Trust or was
being considered by the Trust or by Glickenhaus for purchase
or sale by the Trust. (The "should have known" standard
implies no duty of inquiry, does not presume that there should
have been any deduction or extrapolation from discussions or
memoranda dealing with tactics to be employed in meeting the
Trust's investment objectives, or that any knowledge is to be
imputed because of prior knowledge of the Trust's portfolio
holdings, market considerations or the Trust's investment
policies, objectives and restrictions.)
(8) No reports are required under this Section V with respect to
transactions effected for, and securities held in, any account
over which the access person has no direct or indirect
influence or control.
6. Review and Enforcement
(1) Review
(1) The officer of the Trust responsible for code
compliance shall cause the reported personal
securities transactions to be compared with completed
and contemplated portfolio transactions of the Trust
to determine whether any transactions (each a
"Reviewable Transaction") listed in Section III may
have occurred.
(2) If the officer of the Trust responsible for code
compliance determines that a Reviewable Transaction
may have occurred, he or she shall then determine
whether a violation of this Code may have occurred,
taking into account all the exemptions provided under
Section II. Before making any determination that a
violation has been committed by an individual, the
officer of the Trust responsible for code compliance
shall give such person an opportunity to supply
additional information regarding the transaction in
question.
(2) Enforcement
(1) If the officer of the Trust responsible for code
compliance determines that a violation of this Code
may have occurred, he or she shall promptly report
the possible violation to the Trustees of the Trust,
who, with the exception of any person whose
transaction is under consideration, shall take such
actions as they consider appropriate, including
imposition of any sanctions
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that they consider appropriate, which sanctions may
include, among others, a letter of censure,
suspension of the right to trade for his or her own
account or suspension or termination of the
employment of the violator.
(2) No person shall participate in a determination of
whether he or she has committed a violation of this
Code or in the imposition of any sanction against
himself or herself.
7. Investment Adviser's and Principal Underwriter's Codes of Ethics
Any investment manager, adviser, sub-adviser or principal underwriter
of the Trust shall:
(1) Submit to the Board of Trustees of the Trust a copy
of a Code of Ethics adopted by such entity pursuant
to Rule 17j-1 and satisfactory to the Trust;
(2) Promptly report to the Trust in writing any material
amendments to such Code;
(3) Promptly furnish to the Trust upon request at any
time and from time to time copies of any reports made
pursuant to such Code by any person who is an access
person as to the Trust;
(4) Immediately furnish to the Trust, without request,
all material information relating to any violations
or circumstances that could reasonably suggest a
violation, or potential violation, of such Code, by
any person subject to such Code who is an access
person of the Trust; and
(5) Submit to the Board of Trustees of the Trust, at
least annually, a written report summarizing any
violations of such Code that have taken place in the
past year, or, if no such violations or circumstances
have taken place during such period, a statement to
that effect.
8. Records
(1) The Trust shall maintain records in the manner and to the
extent set forth below, which records may be maintained on
microfilm under the conditions described in Rule 31a-2(f)(1)
under the Act and shall be available for appropriate
examination by representatives of the Securities and Exchange
Commission.
(1) A copy of this Code and any other Code which is, or
at any time within the past five years has been, in
effect shall be preserved in an easily accessible
place.
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(2) A record of any violation of this Code and of any
action taken as a result of such violation shall be
preserved in an easily accessible place for a period
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 pursuant to this Code by
any access person shall be preserved by the Trust 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 (other than persons who are
also subject to the code of ethics of Glickenhaus) or
are responsible for reviewing reports pursuant to
this Code shall be maintained in an easily accessible
place.
(2) Confidentiality
All reports of securities transactions and any other
information filed with the Trust pursuant to this Code shall
be treated as confidential, except as regards appropriate
examinations by representatives of the Securities and Exchange
Commission.
9. Amendment; Interpretation of Provisions
The Trustees may from time to time amend this Code or adopt such
interpretations of this Code as they deem appropriate.
