EXHIBIT (p)(1)
SCUDDER KEMPER INVESTMENTS, INC.
CODE OF ETHICS
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Preamble
We will at all times conduct ourselves with integrity and distinction, putting
first the interests of our clients.
From the time of our Firm's inception, we have looked on our obligations to our
clients as fiduciary in nature. Our relationships were to be unencumbered in
fact or appearance by conflicts of interest, and the needs of our clients thus
represented a benchmark for assessing our own business decisions.
We believe and have always believed that our own long-term business interests
are best served by strict adherence to these principles. They are reflected in
the following internal policies and prescriptions and are implicit in the
judgment that our responsibilities exceed in scope and depth the literal
restrictions imposed by law on investor behavior (e.g., the prohibition on use
of inside information.).
The rules set forth in this Code have been adopted by Scudder Kemper
Investments, Inc. ("Scudder Kemper") and certain of its subsidiaries (the
"Covered Companies"), including Scudder Investor Services, Inc., Kemper
Distributors, Inc., Scudder Financial Services, Inc., Kemper Service
Corporation, Scudder Service Corporation, Scudder Trust Company, Scudder Fund
Accounting Corporation, and by Scudder Kemper-sponsored investment companies as
their codes of ethics applicable to Scudder Kemper-affiliated personnel.
Part 1: Conflicts of Interest
This Code does not attempt to spell out all possible cases of conflicts of
interest and we believe that members of the organization should be conscious
that areas other than personal investment transactions may involve conflicts of
interest. One such area would be accepting favors from brokers or other vendors
or service providers. We are a natural object of cultivation by firms wishing to
do business with us and it is possible that this consideration could impair our
objectivity.
A conflict of interest could also occur in securities which have a thin market
or are being purchased or sold in volume by any client or clients. Likewise, the
purchase of stocks or bonds in anticipation of (1) an upwards change to "Buy" in
the price rating, (2) their being added to the Investment Universe with a "Buy"
rating, or (3) their being purchased by a large account or group of accounts
would clearly be in conflict with our clients' interest.
Other examples of such conflicts would include the purchase or sale of a
security by a member of the organization prior to initiating a similar
recommendation to a client. Analysts occupy a particularly visible position. It
follows that analysts should be particularly careful to avoid the appearance of
"jumping the gun" before recommending a change in the rating on one of the
stocks for which he or she is responsible.
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Accordingly, all personnel are required to adhere to the following rules
governing their investment activities. These rules cannot cover all situations
which may involve a possible conflict of interest. If an employee becomes aware
of a personal interest that is, or might be, in conflict with the interest of a
client, that person should disclose the potential conflict to the Legal
Department for appropriate consideration, before any transaction is executed.
We are anxious to give every member of the Firm reasonable freedom with respect
to his/her own and family's investment activities. Furthermore, we believe that
we will be stronger and our product better if the members of the organization
have a personal interest in investing and the courage of their convictions with
respect to investment decisions. At the same time, in a profession such as ours,
it is possible to abuse the trust which has been placed in us and there could be
conflicts of interest between our clients and our personal investment
activities. In many cases such conflicts might be somewhat theoretical. On the
other hand, in a matter of this nature we must be almost as careful of
appearances as we are of the actual facts.
Our underlying philosophy has always been to avoid conflicts of interest
wherever possible and, where they unavoidably occur, to resolve them in favor of
the client. When a conflict does occur, an individual in an investment counsel
organization must recognize that the client's interests supercede the interests
of the Firm's employees and those of any members of the person's family whom he
or she may advise. This condition inevitably places some restriction on freedom
of investment for members of the organization and their families.
When any member of the organization thinks it possible that a personal
transaction can be misinterpreted as involving a conflict of interest, that
person is encouraged to write a short explanatory memorandum and attach it to
the confidential quarterly Personal Transaction Report (Form 1). Such a
memorandum should, of course, briefly document any discussion with and approval
by the Legal Department.
Personal Transaction Reports are reviewed by designees of the Ethics Committee,
who are responsible for determining whether violations have occurred, giving the
person involved an opportunity to supply additional information, and
recommending appropriate follow-up action including disciplinary measures for
late reports or other infractions.
Part 2: Personal Investments
Definitions
a. Access Person includes employees who have access to timely
information relating to investment management activities,
research and/or client portfolio holdings.
b. Affiliated person letter (407 letter) is a letter from the
compliance department on behalf of Scudder Kemper Investments,
Inc. authorizing an employee to open a brokerage account and
providing for the direction of duplicate trade confirmations
and account statements to the compliance department. All
access persons must apply for an affiliated person letter for
each personal account prior to making any personal trades for
the account. Employees who
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are not deemed access persons will receive an affiliated
person letter on request, but such letter will NOT require the
direction of duplicate trade confirmations and account
statements.
c. Beneficial Interest. You will be considered to have a
Beneficial Interest in any investment that is (whether
directly or indirectly) held by you, or by others for your
benefit (such as custodians, trustees, executors, etc.); held
by you as a trustee for members of your immediate family
(spouse, children, stepchildren, grandchildren, parents,
stepparents, grandparents, siblings, parents-in-law,
children-in-law, siblings-in-law); and held in the name of
your spouse, or minor children (including custodians under the
Uniform Gifts to Minors Act) or any relative of yours or of
your spouse (including an adult child) who is sharing your
home, whether or not you supervise such investments. You will
also be considered to have a Beneficial Interest in any
investment as to which you have a contract, understanding,
relationship, agreement or other arrangement that gives you,
or any person described above, a present or future benefit
substantially equivalent to an ownership interest in that
investment. For example, you would be considered to have a
Beneficial Interest in the following:
o an investment held by a trust of which you are the
settlor, if you have the power to revoke the trust
without obtaining the consent of all the
beneficiaries;
o an investment held by any partnership in which you
are a partner;
o an investment held by an investment club of which you
are a member;
o an investment held by a personal holding company
controlled by you alone or jointly with others.
If you have any question as to whether you have a Beneficial Interest in an
investment, you should review it with the Legal Department.
d. Covered Company is defined in the Preamble on page 1.
e. Derivative includes options, futures contracts, options on
futures contracts, swaps, caps and the like, where the
underlying instrument is a Security, a securities index, a
financial indicator, or a precious metal.
f. Employees includes all employees of each of the Covered
Companies who do not fall within the definition of Access
Person, Investment Personnel or Portfolio Manager.
g. Initial Public Offering shall include initial offerings in
equities.
h. Investment Personnel are traders, analysts, and other
employees who work directly with Portfolio Managers in an
assistant capacity, as well as those who in the course of
their job regularly receive access to client trading activity
(this
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would generally include members of the Investment Operations
and Mutual Fund Accounting groups). As those responsible for
providing information or advice to Portfolio Managers or
otherwise helping to execute or implement the Portfolio
Managers' recommendations, Investment Personnel occupy a
comparably sensitive position, and thus additional rules
outlined herein apply to such individuals.
i. Personal Account means an account through which an employee of
a Covered Company has a Beneficial Interest in any Security or
Derivative.
j. Personal Transaction means an investment transaction in a
Security or Derivative in which an employee of a Covered
Company has a Beneficial Interest.
k. Portfolio Managers are those employees of a Covered Company
entrusted with the direct responsibility and authority to make
investment decisions affecting a client. PIC Consultants are
included in this definition. In their capacities as
fiduciaries, Portfolio Managers occupy a more sensitive
position than many members of the Scudder Kemper organization
because they are originating transactions for their clients.
l. Private Placement is defined as an offering of a security,
which is being acquired in connection with an offering not
being made to "the public" but to a limited number of
investors and which has been deemed not to require
registration with the SEC.
m. Reportable Transaction includes any transaction in a Security
or Derivative; provided that Reportable Transaction does not
include any transaction in (i) direct obligations of the US
Government, or (ii) open-end investment companies for which
none of the Advisers serves as investment adviser.
n. Security includes without limitation stocks, bonds,
debentures, notes, bills and any interest commonly known as a
security, and all rights or contracts to purchase or sell a
security.
o. Scudder Kemper Funds means each registered investment company
to which an Adviser renders advisory services, other than
funds sponsored by an organization unaffiliated with Scudder
Kemper.
p. Waiver from preclearance exempts certain accounts from the
preclearance requirements. An access person may receive a
certificate of waiver from preclearance under the following
circumstances:
i. Account under the exclusive discretion of an access
person's spouse, where the spouse is employed by an
investment firm where the spouse is subject to
comparable preclearance requirements;
ii. The account is under the exclusive discretion of an
outside money manager; or
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iii. Any other situation where a waiver of preclearance is
appropriate.
A certificate of waiver from preclearance is available at the discretion of the
Ethics Committee. All accounts receiving a certificate of waiver from
preclearance must apply for a 407 letter. Transactions occurring in accounts
which have obtained a waiver from preclearance are not exempt from the quarterly
reporting requirement.
Specific Rules and Restrictions Applicable to all Employees
The following rules and restrictions are applicable to all Employees (including
Access Persons, Investment Personnel and Portfolio Managers):
a. Every Employee must file by the seventh day of the month
following the end of each quarter with the individual
designated by the Ethics Committee a confidential Personal
Transaction Report for the immediately preceding quarter (Form
1: Quarterly Personal Transaction Report). Each report must
set forth every Reportable Transaction for any Personal
Account in which the Employee has any Beneficial Interest.
In filing the reports for accounts within these rules please
note:
i. You must file a report every quarter whether or not
there were any Reportable Transactions. All Reportable
Transactions should be listed if possible on a single
form. For every Security listed on the report, the
information called for in each column must be completed
by all reporting individuals.
ii. Reports must show sales, purchases, or other
acquisitions, or dispositions, including gifts,
exercise of conversion rights and the exercise or sale
of subscription rights. Approved Personal Transaction
Preclearance Forms must be attached for all applicable
transactions. Reinvestment of dividends (but not
additional share purchases) through dividend
reinvestment plans of publicly held companies need be
indicated only on the line provided above PURCHASES on
the reverse side of the report.
iii. Quarterly reports on family and other accounts that are
fee-paying firm clients need merely list the Scudder
Kemper account number under Item #1 on Page 1 of the
report; these securities transactions do not have to be
itemized.
iv. Employees may not purchase securities issued as part of
an initial public offering until three business days
after the public offering date (i.e., the settlement
date), and then only at the prevailing market price. In
addition, employees may not participate in new issues
of municipal bonds until a CUSIP number has been
identified.
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b. Employees are not permitted to serve on the boards of publicly
traded companies unless such service is approved in advance by
the Ethics Committee or its designee on the basis that it
would be consistent with the interests of the Firm. In the
case of Investment Personnel service on the board of a public
company must be consistent with the interests of the Fund with
which the Investment Personnel is associated as well as the
shareholders of such Fund, and the Investment Personnel must
be isolated from participating in investment decisions
relating to that company. See Part 7: Fiduciary and Corporate
Activities for further detail on the approval process.
c. For purposes of this Code, a prohibition or requirement
applicable to any given person applies also to transactions in
securities for any of that person's Personal Accounts,
including transactions executed by that person's spouse or
relatives living in that person's household, unless such
account is specifically exempted from such requirement by the
Ethics Committee or its designee.
d. Employees may not purchase or sell securities on the
Restricted List absent a special exception from the Legal
Department. Employees may not disclose the identities of
issuers on the Restricted List to others outside the firm.
Please See Part 3: Insider Trading, which is incorporated by
reference.
Specific Rules and Restrictions Applicable to all Access Persons
a. Access Persons are subject to each of the foregoing rules and
restrictions applicable to Employees.
b. Access Persons may not purchase or sell a "private placement"
security without the prior written approval of the Ethics
Committee or its designee and, in the case of Portfolio
Managers and research analysts, the additional approval of
their departmental reviewer (see Form 3: Special Preclearance
Form). Typically, a purchase of a private placement will not
be approved where any part of the offering is being acquired
by a client.
c. All Access Persons must disclose promptly to the Ethics
Committee or its designee the existence of any Personal
Account and must direct their brokers to supply duplicate
confirmations of all Reportable Transactions and copies of
periodic statements for all such accounts to an individual
designated by the Ethics Committee. (Use Form 5: Affiliated
Persons Letter.) These confirmations will be used to check for
conflicts of interest by comparing the information on the
confirmations against the Firm's pre-clearance records (see
sub-section (f) below) and quarterly Personal Transaction
Reports.
d. All Access Persons are required to "pre-clear" their personal
transactions with the Ethics Committee's designee. (Use Form
2: Preclearance Form.) If circumstances are such that the Firm
lacks the ability to preclear a particular transaction,
permission to execute that transaction will not be granted.
Submissions for request of trade approval must be submitted no
later than 3:30pm. If preclearance is granted, the Access
Person has until the end of the day preclearance is granted to
execute his or her trade. After such time the
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Access Person must obtain preclearance again. (Limit orders
which have been precleared and placed within this time limit
need not be precleared on subsequent days so long as the terms
of the order are not changed.) Prior approval is not required
for the exercise of rights, the rounding out of fractional
shares and receipt of stock dividends or stock splits.
Similarly, prior approval is not required for transactions in
shares of registered open-end investment companies (except in
the case of a Portfolio Manager who wishes to purchase or sell
shares of his/her Fund when the Fund is other than a money
market fund) and U.S. Government securities transactions.
e. Access Persons may not purchase any Security where the
investment rating is upgraded to "Buy" (or any Security added
to the Investment Universe with a "Buy" rating until two weeks
after the date of the rating change or addition. (See SP&P
#31-5 regarding Price Rating System.)
f. Access Persons may not sell any Security where the investment
rating is downgraded to "Unattractive" until two weeks after
the date of the rating change.
g. Access Persons may not purchase securities that are added to
the PIC Universe until two weeks after the date of the
addition.
h. In the event that an Access Person desires to trade less than
$10,000 of a Security that has a market capitalization of at
least $5 billion, pre-clearance will be granted absent special
circumstances. (However, please note that even trades falling
within this de minimus exception must be pre-cleared with the
Ethics Committee or its designee.)
i. No Access Person will receive approval to execute a securities
transaction when any client has a pending "buy" or "sell"
order in that same (or a related) Security until that order is
executed or withdrawn. Examples of related securities include
options, warrants, rights, convertible securities and American
Depository Receipts, each of which is considered "related" to
the Security into which it can be converted or exchanged.
j. Within 10 days of the commencement of employment (or within 10
days of obtaining Access Person status) all Access Persons
must disclose all holdings of securities and/or derivatives in
which they have a Beneficial Interest (and indicate which of
those holdings are private placements). Access Persons must
file an initial report even if they have no holdings. Holdings
in direct obligations of the U.S. Government and mutual (i.e.,
open-end) funds other than Scudder Kemper Funds need not be
listed.
k. Access Persons shall submit an Annual Statement of Securities
Holdings as part of the annual ethics questionnaire. The
Annual Statement of Securities Holdings shall only include
holdings that are not received by the Legal Department in the
form of duplicate statements.
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Specific Rules and Restrictions Applicable to Investment Personnel
a. Investment Personnel are subject to each of the foregoing
rules and restrictions applicable to Employees and Access
Persons.
b. Investment Personnel are prohibited from profiting from the
buying and selling, or selling and buying, of the same (or
related) securities within a 60 calendar-day period.
c. Investment Personnel who hold a privately placed Security of
an issuer whose securities are being considered for purchase
by a client must disclose to their departmental reviewer that
preexisting interest where they are involved in the
consideration of the investment by the client (using Form 3:
Special Transaction Preclearance Form). The client's purchase
of such securities must be approved by the relevant
departmental reviewer.
d. Research analysts are required to obtain special preclearance
(using Form 3: Special Transaction Preclearance Form) and
approval from their supervisor prior to purchasing or selling
a Security in an industry or country he or she follows.
Specific Rules and Restrictions Applicable to Portfolio Managers
a. Portfolio Managers are subject to each of the foregoing rules
and restrictions applicable to Employees, Access Persons and
Investment Personnel.
b. Portfolio Managers may not buy or sell a Security within seven
calendar days before and after a portfolio that he or she
manages trades in that Security.
c. When a Portfolio Manager wants to sell from his or her
Personal Account securities held by his or her clients, the
Portfolio Manager must receive prior written approval from the
Ethics Committee or its designee (Using Form 3) before acting
for the Personal Account. The Portfolio Manager must explain
his or her reasons for selling the securities.
d. When a Portfolio Manager wants to purchase for a Personal
Account a Security eligible for purchase by one of his or her
clients, the Portfolio Manager must receive prior written
approval from the Ethics Committee or its designee (Using Form
3) before acting for the Personal Account. The Portfolio
Manager must explain his or her reasons for purchasing the
securities.
e. A Portfolio Manager may not engage in short sales other than
"short sales against the box" for which both Regular and
Special Preclearance are required.
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General
a. Apart from these specific rules, purchases and sales should be
arranged in such a way as to avoid any conflict with clients
in order to implement the intent of this Code. Any attempt by
an employee to do indirectly what this Code is meant to
prohibit will be deemed a direct violation of the Code. If
there is any doubt whether you may be in conflict with
clients, particularly with respect to securities with thin
markets, you should check before buying or selling with the
Ethics Committee or its designee.
b. Hardship exceptions may be granted, in the sole discretion of
the Ethics Committee or its designee, with respect to certain
provisions of this Code in rare instances where unique
circumstances exist.
c. The Ethics Committee or its designee, on behalf of the Firm,
will report annually to each Scudder Kemper Fund's board of
directors concerning existing procedures and any material
changes to those procedures as well as any instances requiring
significant remedial action during the past year which relate
to that Fund.
d. Access Persons are permitted to maintain Margin Accounts.
Nonetheless, sales by Access Persons pursuant to margin calls
must be precleared in accordance with standard preclearance
procedures.
Excessive Trading
The firm believes that it is appropriate for its members to participate in the
public securities markets as part of their overall personal investment programs.
As in other areas, however, this should be done in a way that creates no
potential conflicts with the interests of our clients or our firm. Further, it
is important that members recognize that otherwise appropriate trading, if
excessive (measured in terms of frequency, complexity of trading programs or
numbers of trades), or if conducted during work-time or using firm resources,
can give rise to conflicts of a different category such as by distracting time,
focus, and energy from our efforts on behalf of our clients or by exceeding a
reasonable standard of firm accommodation of members' basic personal needs.
Accordingly, personal trading rising to such dimension as to create this
possibility is not consistent with the Code of Ethics, should be avoided, and
will not be approved. This provision is consistent with Group policies and by
Zurich Basics, which sets out the Group's core values and basic principles.
Disgorgement; Other Penalties
Any profits realized from a transaction that was not precleared or from a
transaction that otherwise violates a provision of this Code will be disgorged
to an appropriate charity. The Ethics Committee, in its discretion, may waive
disgorgement in exceptional circumstances. The Ethics Committee also reserves
the right to impose other penalties for violations of the Code, including
requiring reversal of a trade, fines, suspension of trading privileges and,
under the most serious of violations, termination of employment.
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Part 3: Insider Trading
I. Introduction
Employees may not transact in a security while in possession of material,
nonpublic information relating to the issuer of the security. This prohibition
applies to trading on behalf of client accounts and personal accounts. In
addition, employees may not convey material, nonpublic information about public
traded issuers to others outside the company.
SP&P 16 -11B sets forth the company policy on Insider Trading, and is
incorporated into the Code of Ethics by reference.
II. General guidelines
Employees may not transact in a security, on behalf of a client account or a
personal account, while in possession of material, nonpublic information
concerning the issuer of the security.
a. Employees who receive information which they believe may be
material and nonpublic are required to contact the Legal
Department immediately. In such circumstances, employees
should not share the information with other employees,
including supervisors. Employees may not share material,
nonpublic information with others outside the firm.
b. Employees may not purchase or sell securities on the
Restricted List absent a special exception from the Legal
Department. Employees may not disclose the identities of
issuers on the Restricted List to others outside the firm.
c. Employees may not solicit material, nonpublic information from
officers, directors or employees of public issuers.
d. Employees may not knowingly transact in securities prior to
trades made on behalf of clients, or prior to the publication
of research relating to the security.
e. Employees may not cause nonpublic information about a security
to be passed across a firewall.
III. Definitions
Material information is information that a reasonable investor would find
relevant to making an investment decision. Any information which if announced to
the public, would likely cause a change in the price of a security, is likely to
be material.
The following types of information are likely to be material: earnings, mergers
and acquisitions, dividends and special dividends, product developments,
licenses, changes in management, major litigation or regulatory action, and/or
actions by prominent investors.
Nonpublic information is information that has not been disclosed to the public.
Information available in newspapers, magazines, radio, television, and/or news
services is generally public information.
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Restricted List is a document disseminated by the Legal Department setting forth
securities which employees may not buy and/or sell for personal and client
accounts.
A firewall is a procedure designed to prevent the misuse of material, nonpublic
information received by the firm in the course of its business. Employees with
questions concerning firewall procedures and their applicability should contact
the Legal Department for further guidance. SP&P 16 - 11C sets forth the company
policy on Firewall Procedures, and is incorporated into the Code of Ethics by
reference.
Part 4: Confidentiality
Our obligation as fiduciaries to act at all times in our clients' best interests
requires that we share information concerning our clients -- including
particularly information concerning their identities, holdings and account
transactions -- with those outside the Firm only on a "need to know" basis.
Accordingly, no member of the organization may discuss with, or otherwise inform
others of, the identity of any client, or any actual or contemplated transaction
for the account of a client, except in the performance of employment duties or
in an official capacity and then only for the benefit of the client, and in no
event for a direct or indirect personal benefit.
Part 5: Proprietary Rights of the Firm
When a member of the organization leaves the firm, for whatever reason, certain
business principles and procedures should be observed. Some are obvious and
inherent in the basic ethical relationship between any person and his or her
firm. In our case, there are many additional constraints as a result of our
being a confidential fiduciary in a field involving special ethical, regulatory
and professional considerations.
By way of background, the firm does not wish to deter any individuals from
furthering their careers, if they think their situation can be improved with
another firm. But if any member of the organization does move on to another
firm, he or she does so subject to those constraints.
The collective efforts of everyone at Scudder Kemper have contributed over a
period of years to what our firm is today. This includes our recognized
reputation as professional investors with a high sense of personal integrity and
ethics. Many persons have contributed to the investment product we offer and
have participated in the development of our roster of existing and prospective
clients. The central principle is that the client has retained the firm, not any
individual. Members of the firm should also understand that our clients and our
employees are central to the value of the firm. Accordingly, for at least six
quarters after the departure (unless a longer period has been agreed to),
departing members of the firm may not solicit clients to retain, or other firm
employees to join, another investment management firm.
Any member of the organization must recognize that these elements of our
business are the property of the firm and its clients. In addition, the firm has
certain obligations not to disclose the confidential and proprietary information
of third party suppliers. None of such materials
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or information may be removed from the firm or used in any way outside of
Scudder Kemper either during or after association with the firm.
In brief, the actions of anyone in the organization or of any departing member
of the organization are expected to be consistent with the spirit and intent of
this memorandum which reasserts the fact that no one of us can take away, use or
otherwise make available to a third party what belongs to the firm or its
supplier.
For example, the following items are representative of the property of the firm
or its suppliers and are not to be removed whether they are original documents,
copies, tapes or reproductions of any kind:
o Names, addresses, telephone numbers and other client contact
and correspondence procedures.
o Records and files of our clients' accounts including the
computer database.
o Account operational procedures and instructions.
o Asset listings for clients and prospects including cost
prices, dates of acquisition and the like.
o All firm research memoranda, procedures and files, including
drafts thereof, as well as procedures, notes or tapes of
research interviews, discussions, annual reports and company
releases, brokers' reports, outside consultants' reports and
any other material pertaining to investments.
o All operating memoranda such as Standard Policy and Procedures
memoranda, operations manuals, procedures and memoranda, and
compliance checklists, manuals, procedures and memoranda.
o All computer software programs, databases and related
documentation pertaining to account or research operations,
procedures or controls including access to and use of such
programs.
o Presentation materials (including drafts, memoranda and other
materials related thereto) prepared for marketing purposes or
client meetings, including computer software programs and
documentation of third party suppliers.
o All information pertaining to investment counsel and fund
prospects including lists and contact logs.
o Account performance data for all accounts which have been or
are under the supervision of the firm.
o Internal analyses, management information reports and
worksheets such as marketing and business plans, profit margin
studies, and compensation reviews.
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These examples are only illustrative and not intended as all inclusive. In
addition, you are reminded of our long and strong tradition of confidentiality
with respect to client affairs and the confidential information of third party
suppliers and the representations we make to our clients and our suppliers in
this regard.
In order to maintain the professional nature of the firm, we have an obligation
to protect vigorously the rights of our clients and the firm. The firm may
enforce these rights pursuant to appropriate judicial proceedings.
Alternatively, the firm, in its discretion, may initiate proceedings before the
American Arbitration Association in order to resolve any controversy or claim it
may have arising out of or relating to this policy, or breach of it, and
judgment on an award rendered by the arbitrator may be entered in any court
having jurisdiction.
Part 6: Gifts and Entertainment
I. Overview
It is appropriate for employees to maintain friendly but professional
relationships with persons with whom Scudder Kemper conducts its business. These
business counterparts may include persons who are associated with Scudder
Kemper's vendors, contractors, providers of service, and members of the
investment community. It is appropriate for employees to give and/or receive
gifts, business meals and/or entertainment from such business counterparts,
provided that they are not excessive in value or frequency. The good judgment of
our employees and their supervisors is of paramount importance in ensuring
compliance with this provision.
SP&P 16-11A sets forth the company policy on Gifts and Entertainment, and is
incorporated into the Code of Ethics by reference.
II. General Guidelines
a. Employees may not accept gifts that are excessive in value or
frequency.
b. The following types of transactions should be approved by a
supervisor using Form 6 (The Scudder Kemper Gift Form; See
Section III):
i. Gifts valued in excess of $100;
ii. Business meals valued in excess of $200; and
iii. Entertainment valued in excess of $300.
c. Invitations which involve the payment of substantial expenses
generally should be avoided (See SP&P 16-2A). Under most
circumstances lodging and transportation charges should be
considered the obligation of Scudder Kemper.
d. The frequency of invitations should also be taken into
account, especially entertainment. Employees generally should
not accept more than three invitations a year from any single
individual, group or organization, subject to
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approval from a supervisor.
e. When analysts and product leaders accept broker invitations to
research and investment meetings, an effort should be made to
use firms on our "Approved List" or those which are bona fide
candidates for the list. It is not good business practice to
accept assistance and invitations from firms with which we are
not likely to do business.
f. Employees may not accept gifts of cash. Employees may not
accept gifts of favorable rates on financial transactions such
as loans or brokerage commissions.
III. Reporting and Supervision
As described above, gifts valued at over $100 and the other items outlined in
II(b) hereof, must be approved by a supervisor. The supervisor must have a
corporate title of Managing Director or Senior Vice President, and must be in
the same department as the employee receiving the gift. The Scudder Kemper Gift
Form (Form 6) must be completed within ten days of receipt of the gift.
Completed gift forms are sent to Carol Beckett, at 345 Park Avenue, NY, NY
10154. In addition, gifts subject to Form 6 must be reported on the Quarterly
Personal Transaction Report.
Part 7: Fiduciary and Corporate Activities
In many fiduciary and corporate activities, members of the organization are, or
will become, engaged in responsible duties involving the expenditure of time and
the application of information and experience which properly belong to the firm
or are derived from the Scudder Kemper relationship. With certain exceptions
referred to below, any compensation or profits from these activities are,
accordingly, considered to be Scudder Kemper's income.
The Ethics Committee must give written approval to all existing or prospective
relationships and activities as described below, and no new relationship should
be initiated without written authorization on Form 7: Request For Approval of
Fiduciary, Corporate or Other Outside Activity. In those instances when approval
of a prospective fiduciary relationship, e.g., executor or trustee, has been
given and the individual subsequently is in a position to qualify and act in the
fiduciary capacity, that person is required to reapply for approval if the
character of the activity changes. The same procedures should be followed as
those for the approval of any fiduciary activity except that reference should be
made to the earlier obtained approval under "Salient Facts" on the approval
form.
Executorships
The duties of an executor are often arduous, time consuming and, to a
considerable extent, foreign to our business. As a general rule, Scudder Kemper
wishes to discourage acceptance of executorships by members of the organization.
However, business considerations or family relationships may make it desirable
to accept executorships under certain wills. In these instances follow the
procedures set forth in SP&P #16-15, Acting As Executor Under A Client's Will.
In all cases, it is necessary for the individual to have the written
authorization
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of the firm to act as an executor.
When members of the organization accept executorships under clients' wills, the
organization has consistently held to the belief that these individuals are
acting for Scudder Kemper and that fees received for executors' services
rendered while associated with the firm are exclusively Scudder Kemper income.
In such instances, the firm will indemnify the individual, and the individual
will be required at the time of qualifying as executor to make a written
assignment to the firm of any executor's fees due under such executorship.
Copies of this assignment and Scudder Kemper's authorization to act as executor
are to be filed in the client's file.
Generally speaking, it is not desirable for members of the organization to
accept executorships under the wills of non-clients. Normally, however,
authorization will be given in the case of executorships for members of an
individual's immediate family assuming that arrangements for the anticipated
work load can be made without undue interference with the individual's
responsibilities to Scudder Kemper. (For example, this may require the
employment of an agent to handle the large amount of detail which is usually
involved.) In such a case, the firm would expect the individual to retain the
commission. There may be other exceptions which will be determined by the facts
of each case. All such existing or prospective relationships should be reported
in writing.
Trusteeships
It is often desirable for members of the organization to act individually as
trustees for clients' trusts. Such relationships are not inconsistent with the
nature of our business. As a general rule, Scudder Kemper does not accept
trustee's commissions where it acts as investment counsel. As in the case of
executorships, all trusteeships must have the written approval of the firm.
It is our standard practice to indemnify those individuals who act as trustees
for clients' trusts at the request of the firm. In this connection, the
individual member of the organization acting as a trustee will be asked to agree
not to claim or accept trustee's commissions for acting. This applies to trusts
which employ Scudder Kemper as investment counsel or those which are invested in
one or more of the Funds administered by Scudder Kemper.
It is recognized that individuals may be asked to serve as trustees of trusts
which do not employ Scudder Kemper. As in the case of executorships, the firm
will normally authorize individuals to act as trustees for trusts of their
immediate family. Other non-client trusteeships can conflict with our clients'
interests so that acceptance of such trusteeships will be authorized only in
unusual circumstances.
Custodianships for Minors
It is expected that most custodianships will be for minors of an individual's
immediate family. These will be considered as automatically authorized and do
not require written approval of the firm. However, the written approval of
Scudder Kemper is required for all other custodianships for minors.
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Directorships and Consultant Positions in Business Corporations
Occasionally, members of the organization are asked to serve as directors or
consultants in business organizations. As a general policy, Scudder Kemper
considers it inadvisable for such individuals to serve in these capacities. No
such position may be accepted without the written authorization of the Ethics
Committee or its designee. In the exceptional instances where such authorization
is granted, the fees or other income resulting from such a relationship are to
be turned over to Scudder Kemper (unless the firm decides otherwise) to
compensate it for the resources made available. Scudder Kemper reserves the
right to require that any member of the organization relinquish any outside
business connection when it believes that such connection is unduly time
consuming or conflicts with the interests of the firm or its clients.
Public and Charitable Positions
Scudder Kemper has consistently encouraged members of the organization to take
part in community activities and to take an active role in public and charitable
organizations. The firm expects that when accepting such duties, members of the
organization will consider possible conflicts of interest with our business as
well as the demands that such positions make upon their time. Several examples
of possible conflicts might be helpful.
When agreeing to serve in a public or charitable position, a member of the
organization should clarify in advance in writing that he or she will not
provide free continuous investment advice and management. This should be made
particularly clear where Investment Committee responsibilities are considered.
Serving without compensation on the Investment Committee of a charity which
might appropriately employ Scudder Kemper would ordinarily not be in our best
interest and prior written approval is required.
Another example of a possible conflict which should be avoided arises when a
charity is involved in fund raising. Our work gives us access to detailed
knowledge of each client's capacity to contribute and is compounded by the close
relationship which should exist between consultant and client. For any member of
the organization in the course of a charitable solicitation to take advantage of
this confidential relationship -- or even to seem to do so -- would be
unprofessional. Even under the best circumstances, the solicitation of a client
by a member of the organization is awkward and discouraged.
Members of the organization should also make it clear in writing to the public
or charitable organization that they will not participate in any search or
selection process for a future investment adviser. It is expected that the
participation of a member of the Scudder Kemper organization in a charitable
organization will not preclude the firm from being a candidate for employment as
investment counsel to that organization.
Outside Activities
The foregoing does not cover all situations in which a member of the
organization may be in a position to realize financial gain which should be
treated as belonging to Scudder Kemper. It is expected that opportunities for
substantial compensation or profit from sources outside of the firm may, for
example, be offered to a member of the organization by reason of his association
with the firm or because of his investment and financial skill or experience.
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Scudder Kemper reserves the right to decide if such compensation or profit
should be accepted and, if accepted, whether or not it should be turned over to
Scudder Kemper. All such cases must be reported promptly in writing for Ethics
Committee review and before they are operative.
New Employees
It is desirable that any fiduciary or corporate activities of a prospective
employee be reviewed by Scudder Kemper prior to the conclusion of arrangements
for employment. However, if such activities have not been reported prior to
employment, they should be reported in writing as promptly as possible
thereafter. It is recognized that there may be justification for treating such
activities which ante-date the individual's association with the firm on a
different basis than might otherwise apply. However, Scudder Kemper reserves the
right to make what it considers an appropriate determination in each case. It
also reserves the right to require that any employee give up any fiduciary or
corporate activity which it finds in conflict with the best interests of the
firm or any of its clients.
Written Approval
Where written approval is required, Form 7 should be filed with the Ethics
Committee. A separate form should be filed for each trust, executorship and the
like. Note that once an activity has been approved, no additional requests for
approval need be filed unless the character of the activity changes, e.g., if a
member of the organization has obtained approval to be named as a prospective
executor or trustee, that individual should submit a new request to qualify and
serve in this capacity by resubmitting a new Form 7 for review.
Part 8: External Communications
In our sales, marketing, client reporting and corporate communications
activities, the Firm's products, services, capabilities, and past and potential
accomplishments must be presented fairly, accurately and clearly. All marketing
materials must be reviewed by the Global Compliance Group in accordance with
SP&P #12-7. All press interviews must be cleared in advance by Public Relations.
Reports to clients, including client account valuation and performance data,
must be fair.
Part 9: Reporting Apparent Violations
Scudder Kemper believes that maintaining a strong compliance culture is in the
best interest of the firm and its clients, in that it helps both to maintain
client and employee confidence, and to avoid the costs (both reputational and
monetary) associated with compliance violations. While reducing compliance
violations to a minimum is our goal, realistically speaking, violations may
occur from time to time in an organization as large as ours. When violations
occur, it is important that they be dealt with immediately by the appropriate
members of the organization. We encourage all Scudder Kemper employees to report
apparent compliance violations to the Legal Department. Violations that go
unreported have the potential to cause far more damage than violations that are
taken care of immediately upon discovery.
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It is extremely important that apparent compliance violations be reported
through the appropriate channels. The Legal Department should be contacted in
all cases except cases involving potential violations of Human Resources
policies, which should be reported directly to Human Resources. While resolving
apparent compliance violations should virtually always involve the management of
the business unit involved, it is not necessarily appropriate (nor is it
required) that an employee report apparent violations to his or her manager, as
well as to the Legal Department.
Reports of apparent compliance violations will be treated confidentially to the
fullest extent possible. In no event will the firm tolerate retaliation against
persons who report apparent compliance violations. We realize that employees may
lack the training to distinguish actual from apparent compliance violations, and
accordingly, the fact that a reported incident proves, after investigation, not
to have involved a compliance violation will not result in any sanction against
the reporter, provided that the report was made in good faith.
Part 10: Condition of Employment or Service
Compliance with the Code of Ethics is a condition of employment or continued
affiliation with Scudder Kemper and the Scudder Kemper Funds, and conduct not in
accordance shall constitute grounds for actions including termination of
employment or removal from office.
Employees must certify annually that they have read and agree to comply in all
respects with this Code of Ethics and that they have disclosed or reported all
personal transactions it requires to be disclosed or reported. (See Form 4:
Annual Acknowledgement of Obligations Under Code of Ethics). In addition, each
year every member of the organization is required to file with the Legal
Department a complete list of all fiduciary, corporate, and other relationships
of the nature described in Part 7 above. The report is titled Form 8: Annual
Review of Personal Activities and is attached to this memorandum.
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