APPENDIX II
July 1, 2000
RS INVESTMENT MANAGEMENT CO. LLC
RS INVESTMENT MANAGEMENT, L.P.
RS INVESTMENT MANAGEMENT, INC.
RS GROWTH GROUP LLC
RS VALUE GROUP LLC
RS INVESTMENT TRUST
---------------------------
CODE OF ETHICS
including
RSIM POLICY ON PERSONAL TRADING
---------------------------
I. Scope and Summary
(a) Rule 17j-1 under the Investment Company Act of 1940, as amended (the "1940
Act"), requires every investment company, as well as every investment adviser to
and principal underwriter of an investment company, to have a written Code of
Ethics which specifically deals with trading practices by "Access Persons."
Access Persons are defined to include (1) officers, directors, general partners
and Advisory Persons of the two mutual fund advisers (RS Investment Management,
Inc. and RS Investment Management, L.P. -- collectively "RSIM"), as well as (2)
employees of RSIM and officers, directors, partners who have substantial
responsibility for or knowledge of the investments of the mutual funds
constituting series of the RS Investment Trust (each, a "Fund"), and (3) each
member of the Funds' Board of Trustees. The Rule also requires that reasonable
diligence is used and procedures instituted to prevent violations of this Code
of Ethics.
(b) Sections 21A and 15(f) of the Securities Exchange Act and Section 204A of
the Investment Advisers Act further require all broker-dealers and investment
advisers to establish, maintain and enforce written policies and procedures to
prevent the misuse of material nonpublic information.
(c) Common law fiduciary principles require that an investment adviser (like
RSIM) avoid placing itself in a position of conflict of interest with its
clients. Likewise, RSIM as a general partner to various partnerships, stands in
a fiduciary relationship to the limited partners investing in those
partnerships.
(d) The "Blue Ribbon" Advisory Group on Personal Investing in its report to the
Investment Company Institute also articulated the following three general
fiduciary principles which the Group believes should govern the personal
investment activities of mutual fund advisory and distributor personnel:
(i) the duty at all times to place the interests of Fund
shareholders first;
(ii) the requirement that all personal securities transactions be
conducted consistent with the Code of Ethics and in such a
manner as to avoid any actual or potential conflict of
interest or any abuse of an individual's position of trust
and responsibility; and
(iii)the fundamental standard that mutual fund advisory and
distribut or personnel should not take inappropriate
advantage of their positions.
(e) This Code of Ethics is designed to satisfy the above-referenced legal
requirements and ethical principles as applicable to RSIM in their roles as
adviser to the RSIM Funds. It is important that all partners, officers,
directors and employees of RSIM to whom this Code of Ethics applies observe the
ethical standards set forth in the Code.
<PAGE>
(f) This Code of Ethics is not intended to cover all possible areas of potential
liability under the 1940 Act or under the federal securities laws in general.
For example, other provisions of Section 17 of the 1940 Act prohibit various
transactions between a registered investment company and affiliated persons,
including the knowing sale or purchase of property to or from a registered
investment company on a principal basis, and joint transactions (e.g., combining
to achieve a substantial position in a security, concerted market activity, or
commingling of funds) between an investment company and an affiliated person.
(g) It is expected that Access Persons will be sensitive to all areas of
potential conflict, even if this Code of Ethics does not address
specifically an area of fiduciary responsibility.
(h) Exceptions to specific provisions of this Code of Ethics may be granted by
the compliance officer or an alternate if warranted by circumstances and if
the exception is requested in a timely manner.
(i) This Code of Ethics has been approved by the Board of Trustees of the RS
Investment Trust, including a majority of disinterested directors. Any
material change to the Code must be approved by the Board, including a
majority of disinterested directors, within 6 months of the change. The
standard for Board approval is a finding that the Code contains provisions
reasonably necessary to prevent Access Persons from violating the
anti-fraud provisions of Rule 17j-1.
(j) Summary. Under the Code of Ethics, all Access Persons, except independent
Trustees of the Funds, are required to:
(i) Pre-clear all trades in individual securities. [Note: certain
securities are excepted: mutual funds, stock index options,
SPDR's and money market instruments are "excepted securities."]
(ii) Reverse trades that involve securities subsequently purchased or
sold by a Fund within the applicable blackout period.
(iii)Observe a minimum 60 day holding period for all securities
(except "excepted securities"). This policy only applies to
profitable trades.
(iv) Avoid IPO's.
(v) Receive special clearance for private placements.
(vi) Avoid directorships of companies in which Fund assets may be
invested. (Unless permission is obtained from the CEO.)
(vii)Promptly disclose all security transactions and file quarterly
transaction reports and annual ownership reports.
(viii) Avoid security transactions in which they possess material
non-public information with regard to the particular security.
<PAGE>
II. Definitions
(a) "Access Person" means: (i) officers, directors, general partners and
Advisory Persons of the four Registered Investment Advisers (RS Investment
Management, Inc. and RS Investment Management, L.P., RS Growth Group LLC and RS
Value Group LLC -- collectively "RSIM"), as well as (ii) employees of RSIM and
officers, directors, partners who have substantial responsibility for or
knowledge of the investments of the mutual funds constituting series of the RS
Trust (each, a "Fund"), hedge funds managed by RSIM, institutional accounts
where RSIM acts as a sub-adviser, separate accounts managed by RSIM and (iii)
each member of the Funds' Board of Trustees. Members of the immediate family of
an Access Person living in the same household are covered by this Code of Ethics
to the same extent as the Access Person.
(b) "Advisory person" means with respect to (i) the Funds, (ii) an investment
adviser to a Fund or (iii) any company in a control relationship to the Funds or
the investment adviser (i.e., RSIM), (A) any employee who, in connection with
his regular functions or duties, makes, participates in, or obtains information
regarding, the purchase or sale of a security by a Fund, or whose functions
relate to the making of any recommendations with respect to such purchases or
sales; and (B) any natural person in a control relationship to the Funds or an
investment adviser who obtains information concerning recommendations made to a
Fund with regard to the purchase or sale of a security.
(c) A security is "being considered for purchase or sale" when a recommendation
to purchase or sell a security has been made and communicated, and, with respect
to a person making a recommendation, when such person seriously considers making
such a recommendation.
(d) "Beneficial ownership" shall be interpreted in the same manner as it would
be in determining whether a person is subject to the provisions of Section 16 of
the Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder, with the exception that the determination of direct or indirect
beneficial ownership shall apply to all securities which an Access Person has or
acquires.
(e) "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, as further defined in Section 2(a)(9) of the 1940 Act.
(f) "Purchase or sale of a security" includes the writing of an option to
purchase or sell a security.
(g) "Security" shall have the meaning set forth in Section 2(a)(36) of the 1940
Act, and shall include options and warrants, except that it shall not include
excepted securities (as defined below).
(h) "Excepted securities" include shares of registered open-end investment
companies (except the RSIM Funds), securities issued by the Government of
the United States (including Government agencies), short term debt
securities which are "government securities" within the meaning of Section
2(a)(16) of the 1940 Act, stock index options, SPDRs, bankers' acceptances,
bank certificates of deposit, commercial paper and other money market
instruments.
(i) "Material Non-Public Information" is information relating to dividend
increases or decreases, earnings estimates, changes in previously released
earnings estimates, significant expansion or curtailment of operations, a
significant increase or decline of orders, significant merger or
acquisition proposals or agreements, significant new products or
discoveries, extraordinary borrowing, major litigation, liquidity problems,
extraordinary management developments, purchase or sale of substantial
assets or any information a reasonable investor might consider to be of
importance in making an investment decision to buy, sell or hold.
Information should be deemed non-public if it has not been widely
disseminated by wire service, in one or more newspapers of general
circulation, or by communication from the company involved to its
shareholders or in a press release.
<PAGE>
III. Prohibited Trading Practices
(a) General anti-fraud prohibition. If a security:
(i) is being considered for purchase or sale by a Fund;
(ii) is in the process of being purchased or sold by a Fund; or
(iii)is or has been held by a Fund within the most recent 15 day
period;
no Access Person shall knowingly purchase, sell or otherwise directly or
indirectly acquire or dispose of any direct or indirect beneficial ownership
interest in that security if such action by such Access Person would defraud a
Fund, operate as a fraud or deceit upon a Fund, or constitute a manipulative
practice with respect to a Fund.
(b) Pre-clearance. No Access Person shall purchase or sell any individual
security (i.e., any security except an "excepted security") without
pre-clearance. Once pre-clearance has been obtained, the trade must be executed
by the end of the business day or new clearance must be obtained. (See attached
Pre-clearance Form).
(c) Blackout period. An Access Person may not execute a securities transaction
(other than an "excepted security") on any day during which any Fund in the RSIM
Funds complex has a pending "buy" or "sell" order in that same security or a
related security of the same issuer (e.g., common stock is a related security to
an option on common stock). However, it is not always possible to determine
which orders were executed until the following day. The fact of pre-clearance
does not mean that a trade will not end up being unwound if it is later
ascertained that one of the Funds traded in that security on the same day.
Blackout periods may be extended for certain securities. This policy applies to
all Access Persons.
Additionally, portfolio managers and others who make investment
decisions with respect to a Fund are prohibited for seven (7) calendar days
preceding and following any Fund purchase or sale of that security and will
include the entire business day on which the last Fund purchase or sale activity
occurs. Any profits realized on a trade effected during the blackout period by a
portfolio manager or other individual with investment decision-making authority
will be disgorged to the appropriate Fund. The blackout period only applies to
securities traded by a Fund or Funds over which the individual exercises
investment decision-making authority. It does not apply to all Funds in the
complex. The fact of pre-clearance and execution within the same day of
pre-clearance is not relevant. Blackout periods may be extended for certain
securities
(d) Trades in shares of RSIM Funds. Please note that purchases and sales of
shares of an RS Fund do not need pre-clearance, but the possibility of
appearance of conflict of interest in such transactions is high. Accordingly,
all purchases and sales of shares of an RS Fund:
(i) should be made well in advance of the closing price
calculation each day, and
(ii) should not be made when in possession of material nonpublic
information.
<PAGE>
(e) No IPO's. No Access Person shall acquire any securities offered in an
initial public offering.
(f) Private placements. No Access Person shall acquire any securities in a
private placement without both pre-clearance and special approval by the CEO.
The Compliance Department shall maintain a record of the approval of, and the
rationale supporting, any acquisition of securities in a private placement.
(g) Other restrictions. No Access Person shall engage in short term trading or
make other investments in contravention of the general policies that may be
established from time to time as set forth. An Access Person must hold a
security (other than an "excepted security") for a minimum of 60 days. This
policy only applies to profitable trades.
IV. Exempted Transactions/Securities
The prohibitions of Section III 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.
(b) Purchases or sales of securities which are not eligible for purchase or sale
by any Fund.
(c) Purchases or sales which are non-volitional on the part of either the Access
Person or the Trust (e.g., receipt of gifts).
(d) Purchases that are part of an automatic dividend reinvestment plan.
(e) 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.
(f) Purchases and sales which have received the prior approval of the Compliance
Officer.
(g) Purchases and sales of securities, which are not included in the definition
of "Security" in Section II.g or are "excepted securities" as defined in Section
II.h. -- i.e., mutual fund shares (but not RS Fund shares), stock index options,
SPDRs, government securities and money market instruments.
V. Reporting
(a) Pre-clearance and immediate reporting. All RSIM employees are currently
required to report all individual security transactions (and purchase/sales of
RSIM Funds) under rules specifically applicable to advisory and broker-dealer
organizations. Access persons must also seek pre-clearance of individual
security transactions and are required to have a duplicate confirmation of the
transaction sent to the RSIM compliance officer promptly following the
transaction. The only securities for which such pre-clearance and immediate
reporting is not required are "excepted securities" and shares of the RSIM
Funds.
(b) Quarterly reports. In addition to contemporaneous reporting, all Access
Persons are required to review, and if necessary, correct or make additions to
quarterly reports generated within 10 days of the end of each calendar quarter,
listing all securities transactions except transactions in "excepted
securities." See subsection (c) below. Please note that purchases and sales of
shares of an RSIM Fund, which are not subject to pre-clearance and
contemporaneous reporting, are subject to quarterly reporting.
<PAGE>
(c) Every quarterly report shall be made not later than ten (10) days after the
end of each calendar quarter and shall contain the following information:
(i) The date of the transaction, the title and 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.
(d) Copies of statements or confirmations containing the information specified
in paragraph (c) above may be submitted in lieu of listing the transactions.
Persons submitting statements will be deemed to have satisfied this reporting
requirement, and need only sign off quarterly on having complied.
(e) For periods in which no reportable transactions were effected, the quarterly
report shall contain a representation that no transactions subject to the
reporting requirements were effected during the relevant time period.
(f) Annual report. Annually, in conjunction with the quarterly report for the
quarter ending June 30, each Access Person shall be required to review, and if
necessary, correct or make additions to, an annual report, which lists all
security positions in which such Access Person has a direct or indirect
beneficial interest. (g) Any quarterly or annual report may contain a statement
that the report shall not be construed as an admission by the person making such
report that he has any direct or indirect beneficial ownership in the security
to which the report relates.
(h) An initial holdings report of all securities beneficially owned by such
person and the name of the broker with whom the Access Person maintained a
securities account must be submitted to Scott Smith or Marianne Clark for review
no later than 10 days after an employee of RSIM becomes an Access Person.
VI. Exceptions to Reporting Requirements
(a) An independent Trustee, i.e., a Trustee of the RS Investment Trust who is
not an "interested person" (as defined in Section 2(a)(19) of the 1940 Act) of
the Funds, is not required to file a report on a transaction in a security
provided such Trustee neither knew nor, in the ordinary course of fulfilling his
or her official duties as a trustee of the Funds, should have known that, during
the 15-day period immediately preceding or after the date of the transaction by
the Trustee, such security is or was purchased or sold by a Fund or is or was
being considered for purchase or sale by a Fund by its investment adviser.
(b) Although an independent Trustee is exempt from the reporting requirements of
this Code, such Trustee may nevertheless voluntarily file a report representing
that he or she did not engage in any securities transactions which, to his or
her knowledge, involved securities that were being purchased or sold or
considered for purchase by any Fund during the 15-day period preceding or after
the date(s) of any transaction(s) by such Trustee. The failure to file such a
report, however, shall not be considered a violation of this Code of Ethics.
(c) Access Persons are not required to make a report with respect to an exempted
transactions/securities as described in Section V of this Code.
(d) Access Persons do not need to file multiple reports. Copies of a single
report can be used to satisfy the personal trading reports required by RSIM.
<PAGE>
VII. Implementation
(a) In order to implement this Code of Ethics, a compliance officer and three
alternates have been designated for RSIM and the Funds. These individuals are:
Scott R. Smith
Marianne E. Clark (alternate)
Steven M. Cohen (alternate)
G. Randy Hecht -President and CEO (alternate)
(b) The compliance officer shall create a list of all "Access Persons" and
update the list with reasonable frequency.
(c) The compliance officer shall circulate a copy of this Code of Ethics to each
Access Person, together with an acknowledgment of receipt, which shall be signed
and returned to the Compliance Officer by each Access Person at least once each
year.
(d) The compliance officer or a compliance officer delegate is charged with
responsibility for ensuring that the pre-clearance and reporting requirements of
this Code of Ethics are adhered to by all Access Persons. The compliance officer
or compliance officer delegate shall be responsible for ensuring that the review
requirements of this Code of Ethics (see Section VIII) are performed in a prompt
manner. The compliance officer shall be responsible for enforcing the policies
set forth herein.
VIII. Review
(a) The compliance officer shall review all quarterly reports of personal
securities transactions and annual holdings reports and compare such reports
with pre-clearance forms and with completed and contemplated portfolio
transactions of each Fund to determine whether noncompliance with the Code of
Ethics and/or other applicable trading procedures may have occurred. The
compliance officer may delegate this function to one or more persons.
(b) No person shall review his or her own reports. Before making any
determination that a non-compliant transaction may have been made by any person,
the compliance officer shall give such person an opportunity to supply
additional explanatory material. If a securities transaction of the compliance
officer is under consideration, an alternate shall act in all respects in the
manner prescribed herein for the designated compliance officer.
(c) If the compliance officer determines that noncompliance with the Code of
Ethics has or may have occurred, he or she shall, following consultation with
counsel, submit his or her written determination, together with the transaction
report, if any, and any additional explanatory material provided by the
individual, to G. Randall Hecht, who shall make an independent determination of
whether a violation has occurred.
(d) The Compliance Department will provide to the Board of Trustees of the RS
Investment Trust, no less than annually, a written report that
(i) details issues that have arisen under the Code of Ethics, including,
but not limited to, information about violations of the Code and sanctions
imposed in response to such violations, and
(ii) certifies to the Board that RSIM has adopted procedures reasonably
necessary to prevent its Access Persons from violating the Code.
<PAGE>
(e) The compliance officer shall be responsible for maintaining a current list
of all Access Persons (including all Fund Trustees) and for identifying all
reporting Access Persons on such list, and shall take steps to ensure that all
reporting Access Persons have submitted reports in a timely manner. The
compliance officer may delegate the compilation of this information to
appropriate persons. Failure to submit timely reports will be communicated to G.
Randall Hecht and to the Funds' Board of Trustees.
IX. Sanctions
(a) If a material violation of this Code occurs or a preliminary determination
is made that a violation may have occurred, a report of the alleged violation
shall be made to the Board of Trustees.
(b) The Board of Trustees may impose such sanctions as it deems appropriate,
including, a letter of censure, suspension, or termination of employment, and/or
a disgorging of any profits made.
Please sign and date the attached form.
Detach and return to RSIM Compliance.
I fully understand and hereby subscribe to this Code of Ethics.
___________________________________
Name
___________________________________
Signature
___________________________________
Date
<PAGE>
Appendix III
July 1, 2000
RS INVESTMENT MANAGEMENT CO. LLC
RS INVESTMENT MANAGEMENT, L.P.
RS INVESTMENT MANAGEMENT, INC.
RS GROWTH GROUP LLC
RS VALUE GROUP LLC
RS INVESTMENT TRUST
---------------------------
POLICY ON PERSONAL TRADING
---------------------------
Summary
The following policy on personal trading, together with the enclosed Code of
Ethics, outlines all existing restrictions on personal securities transactions
for Access Persons of RS Mutual Funds. While it is our belief that personal
investing can lead an individual to be a better, more knowledgeable investor,
these guidelines have been written not only to ensure compliance with relevant
securities laws, but also to protect our investors and prevent any perception of
a potential conflict of interest.
Access Persons are defined as (i) officers, directors, general partners and
Advisory Persons of the two mutual fund advisers (RS Investment Management, Inc.
and RS Investment Management, L.P. -- collectively "RSIM"), as well as (ii)
employees of RSIM and officers, directors, partners who have substantial
responsibility for or knowledge of the investments of the mutual funds
constituting series of the RS (each, a "Fund"), and (iii) each member of the
Funds' Board of Trustees. Members of the immediate family of an Access Person
living in the same household are covered by this policy to the same extent as
the Access Person. The policy also applies to the immediate families living in
the same household of all Access Persons. The highlights of the policy are as
follows:
1) PERSONAL ACCOUNTS
All personal brokerage accounts must be maintained at FleetBoston Robertson
Stephens, Charles Schwab or Fidelity Investments. Any exceptions to this policy
must be approved by the Compliance Department.
2) PRE-CLEARANCE
All personal trades for individual securities for all Access Persons must be
pre-cleared by the Compliance Department using the attached form. After
pre-clearance has been granted, the trade must be completed by the end of the
business day, or the approval is void and the form must be resubmitted. Trades
for which pre-clearance is required include all securities except, open-end
mutual funds, stock index options, SPDR's, government securities and money
market securities. Obtaining pre-clearance for a trade does not guarantee that
the trade will not be later reversed should a Fund effect a subsequent trade in
the same security.
<PAGE>
3) BLACKOUT PERIODS
An Access Person may not execute a securities transaction (other than an
"excepted securities") on any day during which any Fund in the RSIM Funds
complex has a pending "buy" or "sell" order in that same security or a related
security of the same issuer (e.g., common stock is a related security to an
option on common stock). However, it is not always possible to determine which
orders were executed until the following day. The fact of pre-clearance does not
mean that a trade will not end up being unwound if it is later ascertained that
one of the Funds traded in that security on the same day. Blackout periods may
be extended for certain securities. This policy applies to all Access people.
Additionally, portfolio managers and others who make investment decisions with
respect to a Fund are prohibited for seven (7) calendar days preceding and
following any Fund purchase or sale of that security and will include the entire
business day on which the last Fund purchase or sale activity occurs. Any
profits realized on a trade effected during the blackout period by a portfolio
manager or other individual with investment decision-making authority will be
disgorged to the Fund. The blackout period only applies to securities traded by
a Fund or Funds over which the individual exercises investment-making authority.
It does not apply to all Funds in the complex. The fact of pre-clearance and
execution within the same day of pre-clearance is not relevant. Blackout periods
may be extended for certain securities.
4) RESTRICTIONS ON SHORT-TERM TRADING
Access Persons are strongly discouraged from entering into securities
transactions for the purpose of achieving short-term gains. In addition to the
general prohibition against acquiring securities in the blackout period before
and immediately following Fund transactions, an Access Person must hold a
security (other than an excepted security, e.g., a stock index option) for a
minimum of 60 days. This policy only applies to profitable trades. Exceptions
may be made in the case of a medical or other emergency, provided that relevant
details are communicated at the time of pre-clearance.
5) INITIAL PUBLIC OFFERINGS
All Access Persons are strictly prohibited from acquiring securities in any
initial public offering.
6) PRIVATE PLACEMENTS
Investments by Access Persons in private placements require both pre-clearance
and special approval from the CEO.
7) SERVICE AS A DIRECTOR
Portfolio Managers and Access Persons will be permitted to serve as directors of
publicly traded companies and private companies in which the Funds may invest
only if the CEO determines that doing so would be in the best interest and would
not present a conflict of interest. All Fund investment decisions made or
participated in by such Director/Access Persons require pre-clearance from the
CEO.
<PAGE>
8) DISCLOSURE
To the extent an Access Person maintains permitted brokerage accounts at
broker/dealers other than FleetBoston Robertson Stephens, Charles Schwab & Co.,
or Fidelity Investments that Access Person must ensure that copies of trade
confirmations for their brokerage accounts and accounts of immediate family
living in the same household, are forwarded to the Compliance Department. Trade
confirmations will be cross-referenced against pre-clearance forms to ensure
that approval had been granted. In addition, Access Persons must make required
quarterly reports of securities transactions (or furnish brokerage statements)
and must sign off, at least annually, on receipt of and compliance with the Code
of Ethics.
[GRAPHIC OMITTED][GRAPHIC OMITTED]
Pre-authorization for Personal Trades
To: RSIM Compliance
Phone: (415) 591-2779
(415) 591-2728
Fax: (415) 591-2851
From: _____________________________ Date: _____________________
I wish to effect the following trade for my personal account, an account in
which I have a beneficial interest, or an account belonging to one of my
immediate relatives living in the same household.
NAME of Security ________________________ TICKER _________________
# OF SHARES ________________ BUY SELL (CIRCLE ONE) PRICE ________
BROKERAGE FIRM ___________________________ & ACCOUNT # _____________________
THE PURCHASE/SALE IS BASED ON PERSONAL RESEARCH YES [ ] NO [ ]
(You may be required to provide documentation should there be a potential
conflict).
I AM AWARE OF AN INTENDED OR POSSIBLE MUTUAL FUND TRADE IN THIS SECURITY
YES [ ] NO [ ]
I agree that if I do not effect the above trade on the day indicated below, the
approval is null and void and the request must be resubmitted. I realize that if
I am an employee with investment decision making authority, and any RS FUNDS
transactions occur within 7 days of my transaction that involve a fund over
which I have authority and the above security, the trade will be broken at my
expense. I realize that if I do not have such authority, and any fund
transactions occur on the same day as my transaction, the trade will be broken
at my expense. Furthermore, I affirm that if this is a sale of stock, I have
either held it for at least 60 days or I am selling the stock at a loss.
___________________________________
AUTHORIZED
_________________________ ___________________________________
SIGNED DATE
