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EXHIBIT 99.p(7)
CODE OF ETHICS FOR DEPRINCE, RACE & ZOLLO, INC.
I. INTRODUCTION
The policies in this Code of Ethics reflect DePrince, Race & Zollo, Inc. ("DRZ")
assumption and expectation of unqualified loyalty to the interests of DRZ and
its clients on the part of each access person. In the course of their service to
DRZ, access persons must be under no influence which may cause them to serve
their own or someone else's interests rather than those of DRZ or its clients.
DRZ's policies reflect its desire to detect and prevent not only situations
involving actual or potential conflict of interests, but also those situations
involving only an appearance of conflict or of unethical conduct. DRZ's business
is one dependent upon public confidence. The mere appearance of possibility of
doubtful loyalty is as important to avoid as actual disloyalty itself. The
appearance of impropriety could besmirch DRZ's name and damage its reputation to
the detriment of all those with whom we do business.
II. STATEMENT OF GENERAL PRINCIPLES
It is the policy of DRZ that no access person shall engage in any act, practice
or course of conduct that would violate the provisions of the Investment
Advisors Act or, with respect to those clients that are Investment Companies,
Section 17(j) of the Investment Company Act of 1940, as amended (the "1940
Act"), and Rule 17j-1 thereunder. The fundamental position of DRZ is, and has
been, that each access person shall place at all times the interests of DRZ's
clients first. Accordingly, private financial transactions by access persons of
DRZ must 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
access person's position of trust and responsibility. Further, access persons
should not take inappropriate advantage of their positions with or on behalf of
any client of DRZ.
Without limiting in any manner the fiduciary duty owed by access persons to the
clients of DRZ or the provisions of this Code of Ethics, it should be noted that
DRZ considers it proper that purchases and sales be made by its access persons
in the marketplace of securities owned by the clients of DRZ; provided, however,
that such securities transactions comply with the spirit of, and the specific
restrictions and limitations set forth in, this Code of Ethics. Such personal
securities transactions should also be made in amounts consistent with the
normal investment practice of the person involved. Not only does this policy
encourage investment freedom and result in investment experience, but it also
fosters a continuing personal interest in such investments by those responsible
for the continuous supervision of the clients' portfolios. It is also evidence
of confidence in the investments made.
In making personal investment decisions with respect to any security, however,
extreme care must be exercised by access persons to insure that the prohibitions
of this Code of
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Ethics are not violated. Further, personal investing by an access person should
be conducted in such a manner so as to eliminate the possibility that the access
person's time and attention is being devoted to his or her personal investments
at the expense of time and attention that should be devoted to management of a
client's portfolio.
It bears emphasis that technical compliance with procedures, prohibitions and
limitations of this Code of Ethics will not automatically insulate from scrutiny
personal securities transactions which show a pattern of abuse by an access
person of his or her fiduciary duty to any client of DRZ.
III. LEGAL REQUIREMENTS
Section 17(j) of the 1940 Act, provides, among other things, that it is unlawful
for any affiliated person of DRZ to engage in any act, practice or course of
business in connection with the purchase or sale, directly or indirectly, by
such affiliated person of any security held or to be acquired by a client, which
is an investment company, in contravention of such rules and regulations as the
Securities and Exchange Commission (the "Commission") may adopt to define and
prescribe means reasonably necessary to prevent such acts, practices or courses
of business as are fraudulent, deceptive or manipulative. Pursuant to Section
17(j), the Commission has adopted Rule 17j-1 which states that it is unlawful
for any affiliated person of DRZ in connection with the purchase or sale of a
security held or to be acquired (as defined in the Rule) by a client:
(i) to employ any device, scheme or artifice to defraud a client, which is
an investment company;
(ii) to make to a client, which is an investment company, any untrue
statement of a material fact or omit to state to a client a material fact
necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading;
(iii) to engage in any act, practice or course of business which operates
or would operate as a fraud or deceit upon a client, which is an investment
company; or
(iv) to engage in any manipulative practice with respect to a client, which
is an investment company.
IV. DEFINITIONS
For purposes of this Code of Ethics, the following definitions shall apply:
The term "access person" shall mean any director, officer or advisory person (as
defined below) of DRZ.
1. The term "advisory person" shall mean (i) every employee of DRZ (or of any
company in a control relationship to DRZ who, in connection with his or her
regular functions or duties, makes, participates in, or obtains information
regarding the
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purchase or sale of a security (as defined below) by a client, or whose
functions relate to the making of any recommendations with respect to such
purchases or sales and (ii) every natural person in a control relationship
to DRZ who obtains information concerning recommendations made to a client
with regard to the purchase or sale of a security.
2. The term "beneficial ownership" shall mean a direct or indirect "pecuniary
interest" (as defined in subparagraph (a) (2) of Rule 16a-1 under the
Securities Exchange Act of 1934, as amended) that is held or shared by a
person directly or indirectly (through any contract, arrangement,
understanding, relationship or otherwise) in a security. While the
definition of "pecuniary interest" in subparagraph (a) (2) of Rule 16a-1 is
complex, the term generally means the opportunity directly or indirectly to
provide or share in any profit derived from a transaction in a security. An
indirect pecuniary interest in securities by a person would be deemed to
exist as a result of: (i) ownership of securities by any of such person's
immediate family members sharing the same household (including child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling,
mother- or father-in-law, sister- or brother-in-law, and son- or
daughter-in-law; (ii) the person's partnership interest in the portfolio
securities held by a general or limited partnership; (iii) the existence of
a performance-related fee (not simply an asset-based fee) received by such
person as broker, dealer, investment adviser or manager to a securities
account; (iv) the person's right to receive dividends from a security
provided such right is separate or separable from the underlying
securities; (v) the person's interest in securities held by a trust under
certain circumstances; and (vi) the person's right to acquire securities
through the exercise or conversion of a "derivative security" (which term
excludes (a) a broad-based index option or future, (b) a right with an
exercise or conversion privilege at a price that is not fixed, and (c) a
security giving rise to the right to receive such other security only pro
rata and by virtue of a merger, consolidation or exchange offer involving
the issuer of the first security).
3. The term "control" shall mean the power to exercise a controlling influence
over the management or policies of DRZ, unless such power is solely the
result of an official position with DRZ, all as determined in accordance
with Section 2 (a) (9) of the 1940 Act.
4. The term "client" shall mean an entity (natural person, corporation,
investment company or other legal structure having the power to enter into
legal contracts), which has entered into a contract with DRZ to receive
investment management services.
5. The term "investment company" shall mean a management investment company
registered as such under the 1940 Act and for which DRZ is the investment
adviser or sub-adviser regardless of whether the investment company has
entered into a contract for investment management services with DRZ.
6. The term "investment personnel" shall mean all portfolio managers of DRZ
and other advisory persons who assist the portfolio managers in making
investment decisions for a client, including, but not limited to, analysts
and traders of DRZ.
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7. The term "material non-public information" with respect to an issuer shall
mean information, not yet released to the public, that would have a
substantial likelihood of affecting a reasonable investor's decision to buy
or sell any securities of such issuer.
8. The term "purchase" shall include the writing of an option to purchase.
9. The term "Performance Accounts" shall mean all clients of for which DRZ
receives a performance-related fee and in which DRZ is deemed to have an
indirect pecuniary interest because of the application of Rule
16a-1(a)(2)(ii)(C) under the Securities and Exchange Act of 1934, as
amended, as required by Rule 17j-1 under the 1940 Act.
10. The term "Review Officer" shall mean the officer or employee designated
from time to time by DRZ to receive and review reports of purchases and
sales by access persons. The term "Alternate Review Officer" shall mean the
officer of DRZ designated from time to time to receive and review reports
of purchases and sales by the Review Officer, and who shall act in all
respects in the manner prescribed herein for the Review Officer.
11. The term "sale" shall include the writing of an option to sell.
12. The term "security" shall have the meaning set forth in Section 2 (a) (36)
of the 1940 Act, except that it shall not include shares of registered
open-end investment companies, securities issued by the United States
government, short-term securities which are "government securities" within
the meaning of Section 2 (a) (16) of the 1940 Act, bankers' acceptances,
bank certificates of deposit, commercial paper and such other money market
instruments as may designated from time to time by DRZ.
13. A security is "being considered for purchase or sale" when a recommendation
to purchase or sell a security has been made and communicated and, with
respect to the person making the recommendation, when such person seriously
considers making such a recommendation.
14. The term "significant remedial action" shall mean any action that has a
material financial effect upon an access person, such as firing, suspending
or demoting the access person, imposing a substantial fine or requiring the
disgorging of profits.
V. SUBSTANTIVE RESTRICTIONS ON PERSONAL TRADING ACTIVITIES
A. Prohibited Activities
While the scope of actions which may violate the Statement of General Principles
set forth above cannot be defined exactly, such actions would always include at
least the following prohibited activities.
1. No ACCESS PERSON shall, directly or indirectly, purchase or sell securities
in any way, that such securities transactions compete in the market with actual
or considered
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securities transactions for any client of DRZ, or otherwise personally act to
injure any client's securities transactions; i.e. you may not execute an order
for your own account before executing a client's order. In addition, you may not
execute a buy trade for your own account when DRZ is executing a sell for a
client, or execute a sell trade for your own account when DRZ is executing a buy
for a client;
2. No ACCESS PERSON shall use the knowledge of securities purchased or sold by
any client of DRZ or securities being considered for purchase or sale by any
client of DRZ to profit personally, directly or indirectly, by the market effect
of such transactions;
3. No ACCESS PERSON shall, directly or indirectly, communicate to any person who
is not an access person any material non-public information relating to any
client of DRZ or any issuer of any security owned by any client of DRZ,
including, without limitation, the purchase or sale or considered purchase or
sale of a security on behalf or any client of DRZ, except to the extent
necessary to effectuate securities transactions on behalf of the client of DRZ;
4. No ACCESS PERSON shall, directly or indirectly, execute a personal securities
transaction on a day during which a client of DRZ has a pending "buy" or "sell"
order in that same or equivalent security until that order is executed or
withdrawn;
5. No ACCESS PERSON shall accept any gift or other thing of more than de minimis
value from any person or entity that does business with or on behalf of client;
6. No ACCESS PERSONS shall serve on the board of directors of any publicly
traded company, absent prior written authorization and determination by the
President of DRZ that the board service would be consistent with the interests
of clients. All ACCESS PERSONS are prohibited from accepting any service,
employment, engagement, connection, association or affiliation in or with any
enterprise, business of otherwise which is likely to materially interfere with
the effective discharge of responsibilities to DRZ and its clients;
7. INVESTMENT PERSONNEL shall not, directly or indirectly, purchase any security
sold in an initial public offering of an issuer without obtaining prior written
approval from the Review Officer;
8. INVESTMENT PERSONNEL shall not, directly or indirectly, purchase any security
issued pursuant to a private placement without obtaining prior written approval
from the Review Officer. Investment personnel who have been authorized to
acquire securities in a private placement must disclose such investment when
they are involved in a client's subsequent consideration of an investment in the
issuer. In such circumstances, the client's decision to purchase securities of
the issuer must be independently reviewed by investment personnel with no
personal interest in the issuer;
9. INVESTMENT PERSONNEL shall not recommend any securities transaction on behalf
of a client without having previously disclosed any beneficial ownership
interest in such securities or the issuer thereof to the Review Officer
including without limitation:
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a. his or her beneficial ownership of any securities of such issuer;
b. any contemplated transaction by such person in such securities;
c. any position with such issuer or its affiliates; and
d. any present or proposed business relationship between such issuer or its
affiliates and such person or any party in which such person has a
significant interest.
Such interested investment personnel may not participate in the decision for the
client to purchase and sell securities of such issuer.
B. Exempt Transactions and Conduct
This Code of Ethics shall not be deemed to be violated by any of the following
transactions:
1. Purchases or sales for an account over which the access person has no direct
or indirect influence or control;
2. Purchases or sales which are non-volitional on the part of the access person;
3. Purchases which are part of an automatic dividend reinvestment plan;
4. Purchases made by exercising rights distributed by an issuer pro rata to all
holders of a class of its securities, to the extent such rights were acquired by
the access person from the issuer, and sales of such rights so acquired;
5. Tenders of securities pursuant to tender offers which are expressly
conditioned on the tender offer's acquisition of all of the securities of the
same class;
6. Purchases or sales for which the access person has received prior written
approval from the Review Officer. Prior approval shall be granted only if a
purchase or sale of securities is consistent with the purposes of this Code of
Ethics and Section 17(j) of the 1940 Act and rules thereunder; and
7. Purchases or sales made in good faith on behalf of a client, it being
understood by, and disclosed to, each client that DRZ may make contemporaneous
investment decisions and cause to be effected contemporaneous executions on
behalf of one or more of the clients and that such executions may increase or
decrease the price at which securities are purchased or sold for the clients.
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VI. COMPLIANCE PROCEDURES
A. Records of Securities Transactions
Upon the written request of the Review Officer, access persons are required to
direct their brokers to supply to DRZ on a timely basis duplicate copies of
confirmations of all securities transactions and copies of periodic statements
for all securities accounts in which the access person has a beneficial
ownership interest.
B. Personal Reporting Requirements
1. Each ACCESS PERSON shall submit to the Review Officer a report in the form
annexed hereto as Form A or in similar form (such as a computer printout), which
report shall set forth at least the information described in subparagraph 2 of
this Section VI. C as to all securities transactions during each quarterly
period, in which such access person has, or by reason of such transactions
acquires of disposes of, any beneficial ownership of a security.
2. Every report on Form A shall be made not later than ten (10) days after the
end of each calendar quarter in which the transaction(s) to which the report
relates was effected and shall contain the following information:
(1) the date of each transaction, the title, class and number of shares,
and the principal amount of each security involved;
(2) the nature of each transaction (i.e., purchases, sale or other type of
acquisition or disposition);
(3) the price at which each transaction was effected; and
(4) the name of the broker, dealer or bank with or through whom each
transaction was effected;
provided, however, if no transactions in any securities required to be reported
were effected during a quarterly period by an access person such access person
shall submit to the Review Officer a report on Form A within the time-frame
specified above stating that no reportable securities transaction were effected.
3. Every report concerning a securities transaction prohibited under the
Statement of General Principles or Prohibited Activities set forth in Sections
II or V.A., respectively, with respect to which the reporting person relies upon
the exceptions provided in Section V.B shall contain a brief statement of the
exemption relied upon and the circumstances of the transactions.
C. Disclosure of Personal Holdings
1. Each ACCESS PERSON shall submit to DRZ an initial holdings report no later
than 10 days after the person becomes an ACCESS PERSON which contains the
following
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information:
(i) The title, number of shares and principal amount of each security in
which the ACCESS PERSON had any direct or indirect beneficial ownership
when the person became an ACCESS PERSON; and
(ii) The name of any broker, dealer of bank with whom the ACCESS PERSON
maintained an account in which any securities (including the securities
which are excepted from the definition of securities in Section IV.14.)
were held for the direct or indirect benefit of the ACCESS PERSON as of the
date the person became an ACCESS PERSON.
2. Each ACCESS PERSON shall submit to DRZ an annual holdings report which
contains the following information (with such information current as of a date
no more than 30 days before the report is submitted):
(i) The title, number of shares and principal amount of each security in
which the ACCESS PERSON had any direct or indirect beneficial ownership;
and
(ii) The name of any broker, dealer of bank with whom the ACCESS PERSON
maintained an account in which any securities (including the securities
which are excepted from the definition of securities in Section IV.14.)
were held for the direct or indirect benefit of the ACCESS PERSON.
E. Review of Reports
1. At the end of each calendar quarter, the Review Officer shall prepare a
summary of all transactions by access persons in securities which were
purchased, sold, held or considered for purchase or sale by each client during
the prior quarter.
2. Both the Review Officer and the Alternate Review Officer shall compare all
reported personal securities transaction with completed and contemplated
portfolio transactions of the client to determine whether a violation of this
Code of Ethics may have occurred. The Review Officer and Alternative Review
Officer shall also compare an ACCESS PERSON'S reported personal securities
transactions with the holdings disclosed on the ACCESS PERSON'S annual holdings
report. Before making any determination that a violation has been committed by
any person, the Review Officer shall give such person an opportunity to supply
additional explanatory material.
3. If the Review Officer determines that a violation of this Code of Ethics has
or may have occurred, he shall submit a written determination, together with the
related report by the ACCESS PERSON and any additional explanatory material
provided by the access person to DRZ's counsel. If the President of DRZ, after
consultation with counsel, determines a violation has occurred, he shall
immediately inform the client affected and report the sanctions.
F. Annual Certification of Compliance
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All ACCESS PERSONS shall certify annually that they (i) have read and understand
this Code of Ethics and recognize that they are subject hereto, (ii) have
complied with the requirements of this Code of Ethics and (iii) have disclosed
or reported all personal securities transactions, holdings and accounts which
are required to be disclosed or reported pursuant to the requirements of this
Code of Ethics.
G. Joint Participation
ACCESS PERSONS should be aware that a specific provision of the 1940 Act
prohibits such persons, in the absence of an order of the Commission, from
effecting a transaction in which an Investment Company is a "joint or a joint
and several participant" with such person. Any transaction which suggests the
possibility of a question in this area should be presented to legal counsel for
review.
VII. SANCTIONS
Any violation of this Code of Ethics shall result in the imposition of such
sanctions as DRZ may deem appropriate under the circumstances, which may
include, but is not limited to, removal, suspension of demotion from office,
imposition of a fine, a letter of censure and/or restitution to the affected
client of an amount equal to the advantage the offending person shall have
gained by reason of such violation.
The sanction of disgorgement of any profits realized may be imposed for
violation of the prohibition against access persons, directly or indirectly,
executing a personal securities transaction on a day during which a client in
his or her complex has a pending "buy" or "sell" order.
VIII. RECORDKEEPING REQUIREMENTS
DRZ shall maintain and preserve in an easily accessible place:
a. A copy of the Code of Ethics (and any prior code of ethics that was in
effect at any time during the past five years) for a period of five years;
b. A record of any violation of this Code of Ethics and of any action taken
as a result of such violation for a period of five years following the end
of the fiscal year in which the violation occurs;
c. A copy of each report (or computer printout) submitted under this Code
of Ethics for a period of five years, only those reports submitted during
the previous two years must be maintained and preserved in an easily
accessible place; and
d. A list of all persons who are, or within the past five years were,
required to make reports pursuant to this Code of Ethics.
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e. The names of each person who is serving or who has served as Review
Officer or Alternative Review Officer within the past five years.
IX. MISCELLANEOUS
A. Confidentiality
All information obtained from any access person hereunder shall be kept in
strict confidence by DRZ, except that reports of securities transaction
hereunder will be made available to the Commission or any other regulatory or
self-regulatory organization to the extent required by law or regulation.
B. Notice to Access Persons
DRZ shall identify all persons who are considered to be "access persons,"
"investment personnel" and "portfolio managers," inform such persons of their
respective duties and provide such persons with copies of this Code of Ethics.
Effective: August 1, 2000
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DEPRINCE, RACE & ZOLLO, INC.
ANNUAL CERTIFICATION OF COMPLIANCE
I , have read and understand this Code of Ethics and have
complied with the requirements and have disclosed or reported all personal
securities transactions, holdings and accounts which are required to be
disclosed or reported pursuant to the requirements of this Code of Ethics.
Date:
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