AMERICAN FUND ADVISORS, INC.
CODE OF ETHICS
The conduct of officers, directors, and employees of American Fund
Advisors, Inc. ("AFA") on behalf of all registered investment companies and
advisory accounts (the "Funds") is governed by one basic principle: the
interests of the shareholders and investors of the Funds are paramount. The
personal interests of the officers, directors, and employees must be
subordinated to those of the shareholders and investors (collectively the
"shareholders"). Thus, no AFA officer, director, or employee may make personal
use of information available by reason of his or her position with AFA until
after the Funds have acted upon the information. In addition, each investment
opportunity which comes to the attention of any such officer, director, or
employee and which is appropriate for consideration by any of the Funds must be
first made available for the benefit of such Fund before the officer, director,
or employee can take any personal advantage of the opportunity. A conflict
between the interest of an individual and that of one of the Funds can arise
when the individual by virtue of his or her association with AFA anticipates
action on the part of the Fund and places himself or herself in a position to
profit by the Fund's action. A conflict can also arise when an individual by
reason of a pre-existing securities position in a personal account, has an
interest in whether the Fund buys, sells or holds a particular security. The
following guidelines are designed to assist those affiliated with AFA in their
personal transactions by clearly specifying some, but not all, of the areas
where personal investment transactions might raise questions of conflict with
the best interests of the Funds and the shareholders.
This Code of Ethics applies to everyone who is a director, officer, or
employee, whether full- or part-time, of AFA.
An employee ("associate") or person considered an associate under this
Code of Ethics should observe the following rules:
1. PRE-CLEARANCE FOR ALL TRADES
- ALL ASSOCIATES AND FAMILY MEMBERS1
Pre-clearance for Public Securities2:
1 For purposes of this Code, the term "family" or "family member" means an
associate's "significant other", spouse or other relative, whether related by
blood, marriage or otherwise, who either (i) shares the same home, or (ii) is
financially dependent upon the associate, or (iii) whose investments are
controlled by the associate. The term also includes any unrelated individual for
whom an associate controls investments and materially contributes to the
individual's financial support.
2 Excludes U.S. Government securities, bank CD's, commercial paper and open-end
mutual funds and physical commodities other than gold.
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Any personal trades, whether equity or debt, MUST be approved in advance.
This requirement applies to all associates. The pre-clearance policy
governs trades for all associates' personal accounts, those of a spouse,
"significant other" or family members sharing a household, as well as all
accounts over which the associate has discretion or gives advice or
information. The procedures for pre-clearance are contained in a document
attached to the Code of Ethics.
YOU MAY NOT TRADE UNTIL CLEARANCE IS RECEIVED. Clearance
approval is valid only for the date granted.
Clearance for Private Placements:
Clearance for purchase of private placement securities may be obtained by
contacting the Review Officer3 in writing. The procedures for private
placement pre-clearance are contained in a document attached to the Code
of Ethics.
Clearance of a private placement may be denied if the transaction would
raise issues regarding the appearance of impropriety.
2. BAN ON SHORT-TERM TRADING PROFITS
Associates and their family members cannot profit from the purchase and
sale or the sale and purchase of the same or equivalent securities held
91 or fewer days. A gift from an associate is considered a sale. Any
profits realized on such short-term trades must be disgorged and
contributed to a charity approved by the Board of Directors of AFA. This
restriction assures that personal trading is for investment purposes. Any
investments in an associate's or family member's account prior to the
date of this Code are not subject to this ban.
3. Purchase of Initial Public Offerings ("IPO's")
No associate nor any member of his or her family acting on advice or
information from the associate should purchase any newly issued or
publicly-offered securities4 until the next business (trading) day after
the offering date and after receipt of pre-clearance approval. No
purchase should be at other than the market price prevailing on, or
subsequent to, such business day. This restriction shall apply also to
anyone with whom the associate or family member covered by this Code has
any contract, understanding, relationship, agreement or other arrangement
providing benefits substantially equivalent to those of ownership of the
securities in question and to any owner of securities in which the
associate or family member has the right to vest or revest title at once
or at some future time , and also to any trust of which the associate or
family member is an income beneficiary or remainderman and over which the
associate or family member has any direct influence or control
("controlled trust").
3 "Review Officer" means the Chairman and President of AFA, or in his absence
the Senior Vice President, or in their absence such person as the Chairman and
President shall designate.
4 This provision applies to all initial public offerings except those defined in
Footnote 2.
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4. Proprietary Information
Investment opportunities and ideas brought to AFA are considered
proprietary to AFA and its Funds. Associates have an obligation to share
any proprietary information in their possession with the investment staff
prior to submitting a request for pre-clearance. All written credit or
company reports produced by AFA are also considered proprietary. This
information should not be used for personal trading until pre-clearance
has been received.
An associate cannot make available to others any information acquired
solely by reason of his or her position with AFA even though the
associate may have conflicting duties as a director, trustee or agent of
another entity with portfolio management or investment responsibilities.
Information not generally available and obtained through an associate's
position is not available to another person or entity and may not be used
in discharging duties to the other person or entity.
5. Dealings with Brokers
No associate nor any family member, controlled trust or nominee shall
seek or accept favors or preferential treatment from securities brokers
or dealers or other organizations with which AFA might transact business.
Occasional participation in lunches, dinners, cocktail parties, sporting
activities or similar gatherings conducted for business purposes is not
prohibited. For the protection of both the associate and AFA, however,
the appearance of a possible conflict of interest must be avoided.
Caution is to be exercised in any instance in which business travel and
lodging are paid for by other than AFA's funds. Associates, their family
members, controlled trusts or nominees may subscribe to private offerings
placed through a securities firm or to public offerings made to a
restricted or limited number of investors, subject to the pre-clearance
provisions in Section 1 and the initial public offering bar in Section 3.
Compliance with Section 5 on Dealings with Brokers minimizes the basis
for any charge that AFA associates use AFA's position to obtain for
themselves issues and opportunities which otherwise would not be offered
to them.
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6. Reports
Associates deemed to be "advisory representatives"5 and others so
designated are required quarterly to file a report of individual security
transactions not otherwise excepted. See exceptions set forth below.6 An
advisory representative is not required to report transactions for an
account over which the advisory representative has no direct or indirect
influence or control. The report is due not later than 10 days after the
end of each calendar quarter in which a transaction to which the report
relates was effected and shall be filed with the Review Officer. To the
extent not otherwise required by a Securities and Exchange Commission
Rule or Regulation, the securities transaction reports will be kept
confidential. The reports are required to be preserved for a period of
not less than 5 years from the end of the fiscal year in which they are
made and must remain in an easily accessible place for the first 2 years.
7. REPORT OF BOARD, TRUSTEE OR LEADERSHIP POSITIONS IN COMPANIES
ISSUING SECURITIES
Those deemed to be "advisory representatives" as noted in Section 6 must
report promptly to the Review Officer for the Code of Ethics any board,
trustee or leadership position the "advisory representative" holds in a
private, public or private non-profit company which issues or plans to
issue any security.
8. ANNUAL DISCLOSURE OF PERSONAL HOLDINGS
BY QUARTERLY REPORTING PERSONS
All those deemed to be "advisory representatives" as noted in Section 6
must disclose all personal securities holdings upon commencement of
employment and thereafter by March 15 for holdings as of December 31 of
the prior calendar year.
5 The definition of "advisory representative" is contained in Rule
204-2(a)(12)(A) of the Advisers Act of 1940. "Advisory representatives" include
any employee who makes any recommendation, who participates in the
determination of which recommendation shall be made, or whose functions
or duties relate to the determination of which recommendation shall be
made; any employee who, in connection with his [or her] duties, obtains
any information concerning which securities are being recommended prior
to the effective dissemination of such recommendations or the
information concerning such recommendations.
6 Securities exempted from individual security transaction reporting
("Quarterlies") are those which are direct obligations of the United States and
shares of non-affiliated registered open-end investment companies.
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9. BLACKOUT PERIOD FOR PORTFOLIO MANAGERS
Portfolio managers are prohibited from buying or selling a security
within seven calendar days before and after an investment company that he
or she manages trades in that security. Any profits realized on trades
within the proscribed periods are required to be disgorged and
contributed to a charity approved by the Board of Directors of AFA. The
names of portfolio managers subject to this provision will be submitted
annually by the Review Officer and updated as needed.
10. INSIDE INFORMATION
All AFA associates are also subject to the Policy and Procedures of
American Fund Advisors, Inc. Designed to Detect and Prevent Insider
Trading.
INTERPRETATION AND ENFORCEMENT
The Code of Ethics cannot anticipate every situation in which personal
interests may be in conflict with the interests of the shareholders. Associates
should be responsive to the spirit and intent of the Code as well as its
specific provisions.
When any doubt exists regarding any provision of the Code or whether a
conflict of interest with shareholders might exist, the transaction should be
discussed beforehand with the Review Officer for the Code of Ethics.
The Code of Ethics is designed to detect and prevent fraud against fund
investors, and to avoid the appearance of impropriety. To provide assurance that
policies are effective, personal securities transaction reports will be
monitored and checked against fund portfolio transactions by the Review Officer.
In addition, other internal auditing procedures may be adopted from time to
time.
Violations of the Code will be referred by the Review Officer to the
Board of Directors of AFA for review and appropriate action. Sanctions for
violations could include fines, suspension or termination of the violator's
position with AFA and/or a report to the appropriate regulatory authority.
Adopted by the Board of Directors of American Fund
Advisors, Inc. on July 11, 1995.
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AMERICAN FUND ADVISORS, INC.
CODE OF ETHICS
PRE-CLEARANCE PROCEDURES
An employee ("associate") or person considered an associate under the
Code of Ethics should observe the following procedures:
PRE-CLEARANCE FOR ALL TRADES
- ALL ASSOCIATES AND FAMILY MEMBERS1
Pre-clearance for Public Securities2:
Any personal trades, whether equity or debt, MUST be approved in
advance. This requirement applies to all associates ("associates"). The
pre-clearance policy governs trades for all associates' personal accounts, or
those of a spouse, "significant other" or other family members sharing a
household, as well as all accounts over which the associate has discretion or
gives advice or information.
Requests to pre-clear trades should be sent to the Review Officer prior
to 4:30 p.m. (Eastern Time). All required information must be included.
Associates will be notified by 11:00 a.m. the next business day as to whether
clearance has been granted. The request must include:
a. The associate's name and name of individual trading, if different,
b. Name of security and ticker symbol,
c. CUSIP number,
c. Whether sale or purchase, and
e. If sale, date of purchase.
YOU MAY NOT TRADE UNTIL CLEARANCE IS RECEIVED. Clearance approval is valid only
for the date granted.
Clearance for Private Placements:
Clearance for purchase of private placement securities may be obtained
by contacting the Review Officer in writing. The written request must include:
a. The associate's name,
b. The complete name of the security;
1 For purposes of these Guidelines, the term "family member" means an
associate's "significant other", spouse or other relative, whether related by
blood, marriage or otherwise, who either (i) shares the same home, or (ii) is
financially dependent upon the associate, or (iii) whose investments are
controlled by the associate. The term also includes any unrelated individual for
whom an associate controls investments and materially contributes to the
individual's financial support.
2 Excludes U.S. Government securities, bank certificates of deposit, commercial
paper and open-end mutual funds.
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c. The seller and whether or not the seller is one with whom the associate
does business on a regular basis,
d. Any potential conflict, present or future, with fund trading activity
and whether the security might be offered as inducement to later
recommend publicly traded securities for any fund; and
e. The date of the request.
Clearance of private placements may be denied if the transaction would
raise issues regarding the appearance of impropriety.
