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EXHIBIT (P)(1)
EXCELSIOR FUNDS, INC.
(the "Company")
CODE OF ETHICS
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I. Legal Requirement.
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Rule 17j-1(b) under the Investment Company Act of 1940, as amended (the
"1940 Act"), makes it unlawful for any officer or director of the Company in
connection with the purchase or sale by such person of a security "held or to be
acquired" by the Company:
1. To employ any device, scheme or artifice to defraud the Company;
2. To make to the Company any untrue statement of a material fact or
omit to state to the Company a material fact necessary in order
to make the statements made, in light of the circumstances under
which they are made, not misleading;
3. To engage in any act, practice, or course of business which
operates or would operate as a fraud or deceit upon the Company;
or
4. To engage in any manipulative practice with respect to the
Company's investment portfolios.
II. Purpose of the Code of Ethics.
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The Company expects that its officers and directors will conduct their
personal investment activities in accordance with (1) the duty at all times to
place the interests of the Company's shareholders first, (2) the requirement
that all personal securities transactions be conducted consistent with this 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 (3) the fundamental standard that investment company personnel should not
take inappropriate advantage of their positions.
In view of the foregoing, the provisions of Section 17(j) of the 1940 Act,
the Securities and Exchange Commission's 1940 Act Release No. 23958 "Personal
Investment Activities of Investment Company Personnel" (August 24, 1999), the
"Report of the Advisory Group on Personal Investing" issued by the Investment
Company Institute on May 9, 1994 and the Securities and Exchange Commission's
September 1994 Report on "Personal Investment Activities of Investment Company
Personnel," the Company has determined to adopt this Code of Ethics on behalf of
the Company to specify a code of conduct for certain types of personal
securities transactions which might involve conflicts of interest or an
appearance of impropriety, and to establish reporting requirements and
enforcement procedures.
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III. Definitions.
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A. An "Access Person" means: (1) each director or officer of the Company;
(2) each employee (if any) of the Company (or of any company in a
control relationship to the Company) who, in connection with his or
her regular functions or duties, makes, participates in, or obtains
information regarding the purchase or sale of a security by the
Company or whose functions relate to the making of any recommendations
with respect to such purchases or sales; and (3) any natural person in
a control relationship to the Company who obtains information
concerning recommendations made to the Company with regard to the
purchase or sale of a security.
For purposes of this Code of Ethics, an "Access Person" does not
include any person who is subject to the securities transaction pre-
clearance requirements and securities transaction reporting
requirements of the Codes of Ethics adopted by the Company's
investment adviser or principal underwriter in compliance with Rule
17j-1 under the 1940 Act.
B. "Restricted Director" or "Restricted Officer" means each director or
officer of the Company who is not also a director, officer, partner,
employee or controlling person of the Company's investment adviser,
sub-adviser, administrator, custodian, transfer agent or distributor.
C. An Access Person's "immediate family" includes a spouse, minor
children and adults living in the same household as the Access Person.
D. A security is "held or to be acquired" if within the most recent 15
days it (1) is or has been held by the Company, or (2) is being or has
been considered by the Company, its investment adviser or sub-adviser
for purchase by the Company. A purchase or sale includes the writing
of an option to purchase or sell and any security that is exchangeable
for, or convertible into, any security that is held or to be acquired
by the Company.
E. An "Initial Public Offering" means an offering of securities
registered under the Securities Act of 1933, the issuer of which,
immediately before the registration, was not subject to the reporting
requirements of Sections 13 or 15(d) of the Securities Exchange Act of
1934.
F. "Investment Personnel" of the Company means:
a. Any employee of the Company (or of any company in a control
relationship to the Company) who, in connection with his or her
regular functions or duties, makes or participates in making
recommendations regarding the purchase or sale of securities by
the Company.
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b. Any natural person who controls the Company and who obtains
information concerning recommendations made to the Company
regarding the purchase or sale of securities by the Company.
G. A "Limited Offering" means an offering that is exempt from
registration under the Securities Act of 1933 pursuant to Section 4(2)
or Section 4(6) or pursuant to Rule 504, Rule 505, or Rule 506 under
the Securities Act of 1933.
H. "Covered Security" means a security as defined in Section 2(a)(36) of
the 1940 Act, except that it does not include direct obligations of
the Government of the United States; bankers' acceptances; bank
certificates of deposit; commercial paper; high quality short-term
debt instruments (any instrument having a maturity at issuance of less
than 366 days and that is rated in one of the two highest rating
categories by a nationally recognized statistical rating
organization), including repurchase agreements; and shares of
registered open-end investment companies.
I. "De Minimis Security" means securities issued by any company included
in the Standard and Poor's 500 Stock Index and in an amount less than
[_____].
IV. Policies of the Company Regarding Personal Securities Transactions.
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A. General Policy.
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No Access Person of the Company shall engage in any act, practice or
course of business that would violate the provisions of Rule 17j-1(b)
set forth above, or in connection with any personal investment
activity, engage in conduct inconsistent with this Code of Ethics.
B. Specific Policies.
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1. Restrictions on Personal Securities Transactions By Access
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Persons Other Than Restricted Directors and Restricted Officers.
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a. Except as provided below in paragraph IV.B.1.d., no Access
Person who is not a Restricted Director or Restricted
Officer may buy or sell Covered Securities for his or her
personal portfolio or the portfolio of a member of his or
her immediate family without obtaining oral authorization
from the Compliance Officer of the Company's investment
adviser prior to effecting such security transaction.
A written authorization for such security transaction will
be provided by the investment adviser's Compliance Officer
to the person receiving the authorization (if granted) and
to the Company's administrator to memorialize the oral
authorization that was granted.
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Note: If an Access Person has questions as to whether
purchasing or selling a security for his or her
personal portfolio or the portfolio of a member of his
or her immediate family requires prior oral
authorization, the Access Person should consult the
investment adviser's Compliance Officer for clearance
or denial of clearance to trade prior to effecting any
securities transactions.
b. Pre-clearance approval under paragraph (a) will expire at
the close of business on the trading day after the date on
which oral authorization is received, and the Access Person
is required to renew clearance for the transaction if the
trade is not completed before the authority expires.
c. No clearance will be given to an Access Person other than a
Restricted Director or Restricted Officer to purchase or
sell any Covered Security (1) on a day when any portfolio of
the Company has a pending "buy" or "sell" order in that same
Covered Security until that order is executed or withdrawn
or (2) when the Compliance Officer has been advised by the
investment adviser or sub-adviser that the same Covered
Security is being considered for purchase or sale for any
portfolio of the Company.
d. The pre-clearance requirements contained in paragraph
IV.B.1.a, above, shall not apply to the following securities
("Exempt Securities"):
i. Securities that are not Covered Securities;
ii. De Minimis Securities;
iii. Securities purchased or sold in a transaction which is
non-volitional on the part of either the Access Person
or the Company;
iv. Securities acquired as part of an automatic dividend
reinvestment plan;
v. Securities acquired upon the exercise of rights issued
by an issuer pro rata to all holders of a class of its
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securities, to the extent such rights were acquired
from such issuer, and sales of such rights so acquired;
and
vi. Securities which the Company's investment portfolios
are not permitted to purchase under the investment
objectives and policies set forth in the Company's then
current
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prospectus(es) under the Securities Act of 1933 or the
Company's registration statement on Form N-1A.
e. The pre-clearance requirement contained in paragraph
IV.B.1.a, above, shall apply to all purchases of a
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beneficial interest in any security, through an Initial
Public Offering or a Limited Offering by any Access Person
who is also classified as Investment Personnel. A record of
any decision and the reason supporting such decision to
approve the acquisition by Investment Personnel of Initial
Public Offerings or Limited Offerings shall be made by the
Compliance Officer.
2. Restrictions on Personal Securities Transactions by Restricted
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Directors and Restricted Officers.
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The Company recognizes that a Restricted Director and a
Restricted Officer do not have on-going, day-to-day involvement
with the operations of the Company. In addition, it has been the
practice of the Company to give information about securities
purchased or sold by the Company or considered for purchase and
sale by the Company to Restricted Directors and Restricted
Officers in materials circulated more than 15 days after such
securities are purchased or sold by the Company or are considered
for purchase or sale by the Company. Accordingly, the Company
believes that less stringent controls are appropriate for
Restricted Directors and Restricted Officers, as follows:
a. The securities pre-clearance requirement contained in
paragraph IV.B.1.a. above shall only apply to a Restricted
Director or Restricted Officer if he or she knew or, in the
ordinary course of fulfilling his or her official duties as
a director or officer, should have known, that during the
fifteen day period before the transaction in a Covered
Security (other than an Exempt Security) or at the time of
the transaction that the Covered Security purchased or sold
by him or her other than an Exempt Security was also
purchased or sold by the Company or considered for the
purchase or sale by the Company.
b. If the pre-clearance provisions of the preceding paragraph
apply, no clearance will be given to a Restricted Director
or Restricted Officer to purchase or sell any Covered
Security (1) on a day when any portfolio of the Company has
a pending "buy" or "sell" order in that same Covered
Security until that order is executed or withdrawn or (2)
when the Compliance Officer has been advised by the
investment adviser or sub-adviser that the same Covered
Security is being considered for purchase or sale for any
portfolio of the Company.
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V. Procedures.
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In order to provide the Company with information to enable it to
determine with reasonable assurance whether the provisions of this
Code are being observed by its Access Persons:
A. Each Access Person of the Company, other than a director who is not an
"interested person" of the Company (as defined in the 1940 Act), shall
submit to the administrator an Initial Holdings Report in the form
attached hereto as Exhibit A that lists all Covered Securities
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beneficially owned1 by the Access Person except as stated below. This
report must be submitted within 10 days of becoming an Access Person
(or for persons already designated as Access Persons within 10 days of
the adoption of this Code of Ethics), and must include the title of
each security, the number of shares held, and the principal amount of
the security. The Report must also include a list of any securities
accounts maintained with any broker, dealer or bank.
B. Each Access Person of the Company other than a director who is not an
"interested person" of the Company (as defined in the 1940 Act) shall
also submit to the administrator an Annual Holdings Report attached
hereto as Exhibit A no later than 30 days after the end of the
calendar year. Except as stated below, the Annual Holdings Report must
list all Covered Securities beneficially owned by the Access Person,
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the title of each security, the number of shares held, and the
principal amount of the security, as well as a list of any securities
accounts maintained with any broker, dealer or bank.
___________________
/1/ You will be treated as the "beneficial owner" of a security under this
policy only if you have a direct or indirect pecuniary interest in the security.
(a) A direct pecuniary interest is the opportunity, directly or
indirectly, to profit, or to share the profit, from the transaction.
(b) An indirect pecuniary interest is any nondirect financial interest,
but is specifically defined in the rules to include securities held
by members of your immediate family sharing the same household;
securities held by a partnership of which you are a general partner;
securities held by a trust of which you are the settlor if you can
revoke the trust without the consent of another person, or a
beneficiary if you have or share investment control with the trustee;
and equity securities which may be acquired upon exercise of an
option or other right, or through conversion.
For interpretive guidance on this test, you should consult counsel.
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C. Each Access Person of the Company other than a Restricted Director or
Restricted Officer shall direct his or her broker to supply to the
Compliance Officer of the Company's administrator, on a timely basis,
duplicate copies of confirmations of all securities transactions in
which the person has, or by reason of such transaction acquires any
direct or indirect beneficial ownership and copies of periodic
statements for all securities accounts.
D. Except as stated below, each Access Person of the Company, other than
a director who is not an "interested person" (as defined in the 1940
Act), shall submit reports in the form attached hereto as Exhibit B to
the Company's administrator, showing all transactions in Covered
Securities in which the person has, or by reason of such transaction
acquires, any direct or indirect beneficial ownership, as well as all
accounts established with brokers, dealers or banks during the quarter
in which any Covered Securities were held for the direct or indirect
beneficial interest of the Access Person./2/ Such reports shall be
filed no later than 10 days after the end of each calendar quarter. An
Access Person of the Company need not make a quarterly transaction
report under this paragraph if all of the information required by this
paragraph D is contained in the brokerage confirmations or account
statements required to be submitted under paragraph V.C. and is
received by the administrator in the time period stated above.
E. Each director who is not an "interested person" of the Company need
not make an initial or annual holdings report but shall submit the
same quarterly report as required under paragraph V.D. to the
Company's administrator, but only for a transaction in a Covered
Security (except as stated below) where he or she knew at the time of
the transaction or, in the ordinary course of fulfilling his or her
official duties as a director or officer, should have known that
during the 15-day period immediately preceding or after the date of
the transaction, such Covered Security is or was purchased or sold, or
considered for purchase or sale, by the Company.
F. The reporting requirements of this Section V do not apply to
securities transactions effected for, and any Covered Securities held
in any account over which an Access Person does not have any direct or
indirect influence or control.
G. The Company's administrator shall notify each Access Person of the
Company who may be subject to the pre-clearance requirement or
required to make reports pursuant to this Code of Ethics that such
person is subject to the pre-clearance or reporting requirements and
shall deliver a copy of this Code of Ethics to each such person.
H. The Company's administrator shall review the initial holdings reports,
annual holdings reports, and quarterly transaction reports received,
and as appropriate
____________
/2/ See footnote 1 above.
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compare the reports with the pre-clearance authorization received, and
report to the Company's Board of Directors:
a. with respect to any transaction that appears to evidence a
possible violation of this Code of Ethics; and
b. apparent violations of the reporting requirement stated
herein.
I. The Board shall consider reports made to it hereunder and shall
determine whether the policies established in Sections IV and V of
this Code of Ethics have been violated, and what sanctions, if any,
should be imposed on the violator, including but not limited to a
letter of censure, suspension or termination of the employment of the
violator, or the unwinding of the transaction and disgorgement of any
profits to the Company. The Board shall review the operation of this
Code of Ethics at least once a year.
J. The Company's investment adviser, sub-advisers and principal
underwriter shall adopt, maintain and enforce separate codes of ethics
with respect to their personnel in compliance with Rule 17j-1 under
the 1940 Act, and shall forward to the Company's administrator and the
Company's counsel copies of such codes and all future amendments and
modifications thereto. The Board of Directors, including a majority of
the directors who are not "interested persons" of the Company (as
defined in the 1940 Act), shall approve this Code of Ethics, and the
codes of ethics of each investment adviser and principal underwriter
of the Company, and any material amendments to such codes. Such
approval must be based on a determination that such codes contain
provisions reasonably necessary to prevent Access Persons of the
Company from engaging in any conduct prohibited under such codes and
under Rule 17j-1 under the 1940 Act. The Board shall review and
approve such codes at least once a year. Furthermore, any material
changes to an investment adviser's or principal underwriter's code
will be approved by the Board at the next scheduled quarterly board
meeting and in no case more than six months after such change. Before
approving any material amendments to the investment adviser's, sub-
adviser's or principal underwriter's code of ethics, the Board must
receive a certification from the investment adviser, sub-adviser or
principal underwriter that it has adopted procedures reasonably
necessary to prevent Access Persons from violating its code of ethics
and under Rule 17j-1 under the 1940 Act.
K. At each quarterly Board of Directors' meeting, the administrator (on
behalf of the Company), investment adviser, sub-advisers and principal
underwriter of the Company shall provide a written report to the
Company's Board of Directors stating:
a. any reported securities transaction that occurred during the
prior quarter that may have been inconsistent with the
provisions of the codes of ethics adopted by the Company's
investment adviser, sub-advisers or principal underwriter;
and
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b. all disciplinary actions/3/ taken in response to such
violations.
L. At least once a year, the administrator shall provide to the Board
with respect to this Code of Ethics, and the Company's investment
adviser, sub-advisers, and principal underwriter shall provide to the
Board with respect to their codes of ethics, a written report which
contains: (a) a summary of existing procedures concerning personal
investing by advisory persons and any changes in the procedures during
the past year; (b) an evaluation of current compliance procedures and
a report on any recommended changes in existing restrictions or
procedures based upon the Company's experience under this Code of
Ethics, industry practices, or developments in applicable laws and
regulations; (c) a description of any issues arising under the Code of
Ethics or procedures since the last report, including but not limited
to, information about material violations of the code or procedures
and sanctions imposed in response to material violations; and (d) a
certification that the procedures which have been adopted are those
reasonably necessary to prevent Access Persons from violating the
respective Codes of Ethics.
M. This Code of Ethics, the codes of the investment adviser, sub-advisers
and principal underwriter, a record of any violation of such codes and
any action taken as a result of the violation, a copy of each report
by an Access Person, any written report hereunder by the Company's
administrator, investment adviser, sub-advisers or principal
underwriter, records of approvals relating to Initial Public Offerings
and Limited Offerings, lists of all persons required to make reports,
and a list of all persons responsible for reviewing such reports shall
be preserved with the Company's records for the period and the manner
required by Rule 17j-1.
VI. Certification.
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Each Access Person will be required to certify annually that he or she has
read and understood this Code of Ethics, and will abide by it. Each Access
Person will further certify that he or she has disclosed or reported all
personal securities transactions required to be disclosed or reported under the
Code of Ethics. A form of such certification is attached hereto as Exhibit B.
The Board of Directors of
Excelsior Funds, Inc.
_______________________
/3/ Disciplinary action includes but is not limited to any action that has a
material financial effect upon the employee, such as fining, suspending, or
demoting the employee, imposing a substantial fine or requiring the disgorgement
of profits.
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Exhibit A
EXCELSIOR FUNDS, INC.
Holdings Report
For the Year/Period Ended ________________________________
(month/day/year)
[_] Check Here if this is an Initial Holdings Report
To: Chase Global Funds Service Company, as Co-Administrator of the above listed
Company
As of the calendar year/period referred to above, I have a direct
or indirect beneficial ownership interest in the securities listed below which
are required to be reported pursuant to the Code of Ethics of the Company:
Title of Number of Principal
Security Shares Amount
-------- ------ ------
The name of any broker, dealer or bank with whom I maintain an
account in which my securities are held for my direct or indirect benefit are as
follows:
This report (i) excludes transactions with respect to which I had
no direct or indirect influence or control, (ii) excludes other transactions not
required to be reported, and (iii) is not an admission that I have or had any
direct or indirect beneficial ownership in the securities listed above.
Signature: ______________________
Print Name: ______________________
A-1
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Exhibit B
EXCELSIOR FUNDS, INC.
Securities Transaction Report
For the Calendar Quarter Ended ________________________________
(month/day/year)
To: Chase Global Funds Service Company, as Co-Administrator of the above listed
Company
During the quarter referred to above, the following transactions were
effect in securities of which I had, or by reason of such transaction acquired,
direct or indirect beneficial ownership, and which are required to be reported
pursuant to the Code of Ethics of the Company:
<TABLE>
<CAPTION>
Interest
Number of Rate and Nature of Broker/Dealer
Shares or Maturity Dollar Transaction or Bank
Title of Date of Principal Date (if Amount of (Purchase, Through Whom
Security Transaction Amount applicable) Transaction Sale, Other) Price Effected
-------- ----------- ------ ----------- ----------- ------------ ----- --------
<S> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
For each Access Person of the Company, other than a director
who is not an "interested person" (as defined in the 1940 Act), provide the
following information with respect to any account established by you during the
quarter referred to above in which securities were held during the quarter for
your direct or indirect benefit:
1. The name of the broker, dealer or bank with whom you established
the account.
2. The date the account was established.
This report (i) excludes transactions with respect to which I had no
direct or indirect influence or control, (ii) excludes other transactions not
required to be reported, and (iii) is not an admission that I have or had any
direct or indirect beneficial ownership in the securities listed above.
Signature: _______________________
Print Name: _______________________
B-1
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Exhibit C
EXCELSIOR FUNDS, INC.
ANNUAL CERTIFICATE
Pursuant to the requirements of the Code of Ethics of Excelsior Funds,
Inc. (the "Company"), the undersigned hereby certifies as follows:
1. I have read the Company's Code of Ethics.
2. I understand the Code of Ethics and acknowledge that I am subject
to it.
3. Since the date of the last Annual Certificate (if any) given
pursuant to the Code of Ethics, I have reported all personal
securities transactions and provided any securities holding
reports required to be reported under the requirements of the
Code of Ethics.
Date: ________________________ ______________________________
Print Name
______________________________
Signature
