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EXHIBIT p.1
THE ARMADA FUNDS
CODE OF ETHICS
I. LEGAL REQUIREMENT.
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 Armada Funds
(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.
The Company expects that its officers and Trustees 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
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securities transactions which might involve conflicts of interest or an
appearance of impropriety, and to establish reporting requirements and
enforcement procedures.
III. DEFINITIONS.
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 Code of Ethics adopted by the Company's investment
adviser or principal underwriter in compliance with Rule 17j-1 of the
1940 Act and Rule 204-2(a)(12) of the Investment Advisers Act of 1940
or Section 15(f) of the Securities Exchange Act of 1934, as
applicable.
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,
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 or its investment 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 a
fund.
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:
(i) 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
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or duties, makes or participates in making recommendations regarding
the purchase or sale of securities by the Company.
(ii) 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. "Exempt Security" means:
1. Direct obligations of the Government of the United States;
banker's 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.
2. Securities purchased or sold in any account over which the Access
Person has no direct or indirect influence or control.
3. Securities purchased or sold in a transaction which is non-
volitional on the part of either the Access Person or the
Company.
4. Securities acquired as a part of an automatic dividend
reinvestment plan.
5. Securities acquired upon the exercise of rights issued by an
issuer PRO RATA to all holders of a class of its securities, to
the extent such rights were acquired from such issuer, and sales
of such rights so acquired.
6. Securities issued by any company included in the Standard and
Poor's 500 Stock Index and in an amount less than $10,000.
7. 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 prospectus(es)
under the Securities Act of 1933 or the Company's registration
statement on Form N-1A.
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
$10,000.
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IV. POLICIES OF THE COMPANY REGARDING PERSONAL SECURITIES TRANSACTIONS.
A. GENERAL POLICY.
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.
1. RESTRICTIONS ON PERSONAL SECURITIES TRANSACTIONS BY ACCESS
PERSONS OTHER THAN RESTRICTED TRUSTEES AND RESTRICTED OFFICERS.
a. No Access Person who is not a Restricted Director or
Restricted Officer may buy or sell securities other than
Exempt Securities and De Minimis 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.
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.
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c. No clearance will be given to an Access Person other than a
Restricted Director or Restricted Officer to purchase or
sell any security (1) on a day when any portfolio of the
Company has a pending "buy" or "sell" order in that same
security until that order is executed or withdrawn or (2)
when the Compliance Officer has been advised by the
investment adviser that the same security is being
considered for purchase or sale for any portfolio of the
Company.
d. The pre-clearance requirement contained in paragraph
IV.B.1. a, above, shall apply to ALL purchases of a
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
TRUSTEES AND RESTRICTED OFFICERS.
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 or
sale by the Company to Restricted Trustees 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 Trustees 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 security
(other than an Exempt Security or a De Minimis Security) or
at the time of the transaction that the security purchased
or sold by him or her (other than an Exempt Security or a De
Minimis 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 security (1)
on a day when any portfolio of the Company has a pending
"buy" or "sell" order in
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that same security until that order is executed or withdrawn
or (2) when the Compliance Officer has been advised by the
investment adviser that the same security is being
considered for purchase or sale for any portfolio of the
Company.
V. PROCEDURES.
A. 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:
1. 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) will submit to the administrator an Initial Holdings Report
in the form attached hereto as Exhibit A that lists ALL
securities other than Exempt Securities beneficially owned(1) by
the Access Person. This report must be submitted within ten days
of becoming an Access Person (or for persons already designated
as Access Person 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.
2. 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) will also submit to the administrator an Annual Holdings
Report attached hereto as Exhibit A no later than thirty days
after the end of the calendar year. The Annual Holdings Report
must list ALL securities other than Exempt Securities
beneficially owned by the Access Person, 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.
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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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3. Each Access Person of the Company other than a Restricted
Director or 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.
4. 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 securities
other than Exempt 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
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 4 is contained in the brokerage
confirmations or account statements required to be submitted
under paragraph 3.
5. 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 4 to
the administrator, but only for a transaction in a security other
than an Exempt Security 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, should have known that during the
15-day period immediately preceding or after the date of the
transaction, such security is or was purchased or sold, or
considered for purchase or sale, by the Company.
6. The administrator of the Company 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
that such person is subject to the pre-clearance or reporting
requirements and shall deliver a copy of this Code to each such
person.
7. The administrator of the Company shall review the initial
holdings reports, annual holdings reports, and quarterly
transaction reports received, and as appropriate compare the
reports with the pre-clearance authorization received, and report
to the Company's Board of Trustees:
a. with respect to any transaction that appears to evidence a
possible violation of this Code; and
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2. See footnote 1 above
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b. apparent violations of the reporting requirement stated
herein.
8. 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 the disgorgement of any profits to the Company. The Board
shall review the operation of this Code of Ethics at least once a
year.
9. The Company's investment adviser and principal underwriter shall
adopt, maintain and enforce separate codes of ethics with respect
to their personnel in compliance with Rule 17j-1 and Rule 204-
2(a)(12) of the Investment Advisers Act of 1940 or Section 15(f)
of the Securities Exchange Act of 1934, as applicable, 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 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.
10. At each quarterly Board of Trustees' meeting the administrator,
investment adviser and principal underwriter of the Company shall
provide a written report to the Company's Board of Trustees
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 or principal underwriter; and
b. all disciplinary actions(3) taken in response to such
violations.
11. At least once a year, the Company's investment adviser and
principal underwriter shall provide to the Board 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) describes
any issues arising under the code of ethics or procedures since
the last report,
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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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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.
12. This Code, the codes of the investment adviser and principal
underwriter, a copy of each report by an Access Person, any
record of any violation of this Code and any action taken as a
result thereof, any written report hereunder by the Company's
administrator, investment adviser 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
required by Rule 17j-1.
VI. CERTIFICATION.
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 Trustees of the Armada Funds
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EXHIBIT A
ARMADA FUNDS
HOLDINGS REPORT
For the Year/Period Ended _______________________
(month/day/year)
[ ] Check Here if this is an Initial Holdings Report
To: _____________________, as Administrator of the
above listed Fund
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 Principal
Security of 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.
Date: Signature:
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Print Name:
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EXHIBIT B
ARMADA FUNDS
SECURITIES TRANSACTION REPORT
For the Calendar Quarter Ended _______________________
(month/day/year)
To: _____________________, as Administrator of the
above listed Fund
During the quarter referred to above, the following transactions were
effected in securities of which I had, or by reason of such transactions
acquired, direct or indirect beneficial ownership, and which are required to be
reported pursuant to the Code of Ethics of the Company:
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<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Nature of Broker/Dealer
Interest Rate Transaction or Bank
Security Date of Number of Principal and Maturity (Purchase, Through Whom
Transaction Shares Amount Date (if applicable) Sale, Other) Price Effected
-------- ----------- ------- ------- -------------------- ------------ ------ --------
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During the quarter referred to above, I established the following
accounts in which securities were held during the quarter for my direct or
indirect benefit:
1. The name of the broker, dealer or bank with whom I 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.
Date: Signature:
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Print Name:
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EXHIBIT C
ARMADA FUNDS
ANNUAL CERTIFICATE
Pursuant to the requirements of the Code of Ethics of the Armada Funds,
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
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Signature
