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ENCLOSURE 3
WALL STREET ASSOCIATES
CODE OF ETHICS AND STATEMENT OF
POLICY AND PROCEDURES REGARDING PERSONAL
SECURITIES TRANSACTIONS
April 26, 2000
1) DEFINITIONS
The following definitions apply for purposes of the Code and Statement in
addition to the definitions contained elsewhere herein.
a) "Access Person" means any director, officer or employee of
Wall Street Associates ("WSA") and any Advisory Person.
b) "Advisory Person" means any Employee, 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 a Client,
or whose functions relate to the making of any recommendations with
respect to such purchases or sales.
c) "Client" means any person or entity, including an investment company,
for which WSA serves as investment manager, adviser or sub-adviser.
d) "Compliance Officer" refers to Jeff Jeffery, or the current appointed
Officer or his successor Compliance Officer.
e) "Employee" refers to a person who is an employee of WSA.
f) "Investment Personnel" refers to any Employee who is a Portfolio
Manager, or Access Persons, such as Securities Analysts and order
placement personnel, or those who assist in executing the Portfolio
Manager's decisions.
g) "Personal Account" refers to a brokerage account in which an individual
subject to this Code and Statement has any beneficial ownership and a
brokerage account maintained by or for:
i) such an individual's spouse (other than a legally separated or
divorced spouse),
ii) any person who resides with an Employee, or
iii) any other account (except a Client Account) with respect to which
the individual has investment discretion.
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h) "Security" has the meaning as set forth in Section 2 (a) (36) of the
Company Act and any derivative thereof, commodities, options or forward
contracts, except that it shall not include shares of open-end and
closed-end investment companies registered under the Company Act,
securities issued by the Government of the United States, short-term
debt securities that are government Securities within the meaning of
Section 2(a)16 of the Company Act, bankers' acceptances, bank
certificates of deposit, commercial paper, and such other money market
instruments as are designated by the Compliance Officer.
i) "Insider Trading" refers to a person's reliance upon material
information regarding a publicly traded company in making the
determination to purchase or sell shares in that company that is not
otherwise made known to the investing public and which is received from
an officer, director or employee for the company or individual who owns
a controlling interest in the company.
2) PURPOSE
a) As a registered investment adviser and a fiduciary, WSA, hereinafter
sometimes "WSA," owes an undivided duty of loyalty to its clients for
which it serves as investment manager, adviser or sub-adviser. WSA must
avoid even the appearance of a conflict that may compromise the trust
clients have placed in WSA and must insist on strict adherence to
fiduciary standards and compliance with all applicable federal and
state Securities laws. Adherence to this Code of Ethics and Statement
of Policy and Procedures Regarding Personal Securities Transactions
(the "Code and Statement") is a fundamental condition of service with
WSA.
b) The Code and Statement is intended to comply with Rule 17j-1 under the
Investment Company Act of 1940, as amended, which requires WSA to
adopt a code of ethics containing provisions reasonably necessary to
prevent specified individuals from engaging in certain conduct. Under
Rule 17j-1(a), certain conduct by "access persons" (as defined in the
Rule) of WSA, itself as adviser or sub-adviser of these companies with
respect to purchases or sales of securities held or to be acquired by
the client(s), is prohibited. As set forth in Section 3 below, this
Code and Statement applies to all Employees and all other individuals
who are Access Persons. The Code and Statement is also intended to
comply with the provisions of Rule 204-2 under the Investment Advisers
Act of 1940, as amended (the "Advisers Act"), which requires WSA to
maintain records of securities transactions in which its personnel
have any beneficial ownership.
c) This Code and Statement is intended to ensure that Personal Account
transactions are conducted in accordance with the following principles:
i) a duty at all times to place first the interests of Clients;
ii) the requirement that all Personal Account transactions be
conducted consistent with this Code and Statement and in a manner
that avoids any actual or potential conflict of interest or any
abuse of an individual's responsibility and position of trust; and
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iii) the fundamental standard that WSA personnel not take inappropriate
advantage of their positions.
d) In addition to the specific prohibitions on certain Personal Account
transactions as set forth below, all Access Persons are prohibited, in
connection with the purchase or sale, directly or indirectly, by such
persons of a security held or to be acquired by a Client, from:
i) employing any device, scheme or artifice to defraud any Client;
making to a Client any untrue statement of a material fact or
omitting to state to such Client a material fact necessary in
order to make the statements made, in light of the circumstances
under which they are made, not misleading;
ii) engaging in any act, practice or course of business which operates
or would operate as a fraud or deceit upon any Client;
iii) engaging in any manipulative practice with respect to any Client;
or
iv) revealing to any other person (except in the normal course of his
or her duties on behalf of a Client) any information regarding
securities transactions by any Client or the consideration by any
Client or of WSA of any such securities transactions; or
v) serving on any board of directors, as trustees, or in any other
management capacity of any private or public company without prior
written authorization from the Compliance Officer based upon a
determination that such service would not be inconsistent with the
interests of any Client; or
vi) receiving any gift or other thing of more than de minimis value
from any person or entity that does business with WSA on behalf of
a Client, provided, however, that receipt of the following shall
not be prohibited:
- an occasional meal, reception, event or entertainment that
is not so frequent, so costly, or so extensive as to raise
any question of impropriety;
- a meal, reception or event in conjunction with a bona fide
business meeting.
3) PROHIBITED PURCHASES AND SALES
a) ALL ACCESS PERSONS It is the responsibility of each Access Person to
ensure that a particular securities transaction being considered for
his or her Personal Account is not subject to a restriction contained
in this Code and Statement or otherwise prohibited by any applicable
laws. Personal Account transactions for Access Persons may be effected
only in a Personal Account and in accordance with the following
provisions:
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i) No Access Person may purchase or sell a security in a Personal
Account if, at the time of the transaction, the Access Person has
actual knowledge that the security is being considered for
purchase or sale for a Client, is being purchased or sold for a
Client. This restriction is applicable to all Personal Accounts,
including one for which the Access Person has investment
discretion, but no beneficial ownership.
ii) No Access Person may purchase or sell, directly or indirectly,
any security in which the Access Person has (or after such
transaction would have) any direct or indirect beneficial
ownership unless such Access Person obtains the prior written
approval of the transaction by both a Senior Member of the
Portfolio Management Staff and the Senior Trader on the Trading
Desk. The Senior Member of the Portfolio Management Staff and the
Senior Trader (having no personal interest in the subject
transaction) may approve the transaction if they conclude that
the transaction is not likely to have any adverse economic impact
on a Client, or on the ability to purchase or sell securities of
the same or similar class of Securities of the issuer involved. A
request for pre-clearance must be made in writing in advance of
the contemplated transaction and must state:
(a) the name of the security involved,
(b) the date or dates on which such securities are to be
acquired or sold, and
(c) an explanation of the reason(s) the Employee or Access
Person is not proposing to purchase or sell the
security or securities on behalf of the Clients, as
well.
iii) No Access Person shall profit from the purchase and sale, or sale
and purchase, of the same (or an equivalent) Security in a
Personal Securities Tranaction within sixty ccalendar days.
iv) No Access Person may execute or cause the execution of a
transaction in a security in which the Access Person has (or by
reason of such transaction would have) any direct or indirect
beneficial ownership, for at least seven (7) days prior to, and
seven (7) days following the day on which any Client has a
pending "buy" or "sell" order in that same or related security
until that order is executed or withdrawn. However, if the
Client's pending "sell" order in the same or related securities
disposes of all of the Client's interest in that security, an
Access Person is allowed to sell his or her direct or beneficial
interest in that security twenty-four (24) hours after the sale
of Client's entire interest in that security has been finalized
b) INVESTMENT PERSONNEL In addition to the prohibitions set forth in
paragraph (a) of this Section, Investment Personnel shall not:
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(i) acquire any direct or indirect Beneficial Ownership
in any securities in any initial public offering.
(ii) acquire any Beneficial Ownership in any securities in
any private placement of securities unless the
Compliance Officer and Senior Portfolio Management
Team have given express prior written approval.
Investment Personnel so authorized to acquire
securities in a private placement must disclose that
investment when they play a part in any Client's
subsequent consideration for an investment in the
issuer, and in such a case, the decision to purchase
securities of that issuer for a Client will be
subject to an independent review by Investment
Personnel with no personal interest in such issuer;
The Compliance Officer, in determining whether
approval should be given, will take into account,
among other factors, whether the investment
opportunity should be reserved for a Client and
whether the opportunity is being offered to the
individual by virtue of his or her position with WSA.
c.) PORTFOLIO MANAGERS In addition to the requirements set forth in
paragraphs (a) and (b) of this Section, a Portfolio Manager of a Client
account shall not buy or sell a security for his Personal Account
within seven (7) days before and after that Client's account trades in
that security unless the Client's trade in the security disposes of all
of the Clients' interest in that security, in which event the Portfolio
Manager may sell the security twenty-four (24) hours after the sale of
Clients' entire interest in that security.
4) REPORTING
a) ALL EMPLOYEES All Employees must file with the Compliance Officer a
listing of all securities in which they have Beneficial Ownership, and
upon commencement of employment with WSA and while so employed maintain
on a current basis, a list of all of their Personal Accounts. They also
must direct their brokers to submit to the Compliance Officer a
duplicate copy of the confirmation of each securities transaction in a
Personal Account and a copy of the monthly statements for each Personal
Account. Any employee who has not engaged in any reportable transaction
during a quarter shall, within ten (10) days of the end of the quarter,
so certify to the Compliance Officer in writing.
b) The Compliance Officer shall maintain the confirmations, trade
authorization sheets and periodic statements required by paragraph (a)
above and such other records, if any, as are required by Rule 17j-1
under the Company Act and Rule 204-2 under the Advisers Act.
All reports furnished pursuant to this Section will be kept
confidential, subject to the rights of inspection by the Compliance
Officer, the Securities and Exchange Commission and by other third
parties pursuant to applicable law.
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c) Each person subject to this Code and Statement must certify upon
commencement of employment that he or she has read and understands this
Code and Statement as amended, recognizes that he or she is subject
thereto and has complied with its provisions and disclosed or reported
all Personal Account transactions required to be disclosed or reported
by this Code and Statement.
5) SANCTIONS
Upon discovery of a violation of this Code and Statement, WSA, with the
advice of the Compliance Officer and the Company's expert counsel, may
impose such sanctions as it deems appropriate, including, but not
limited to, censure, suspension or termination of service. Individuals
subject to this Code and Statement who fail to comply with this Code
and Statement may also be violating the federal Securities laws and
other federal and state laws. Any such person who is suspected of
violating this Code and Statement should be reported immediately the
Compliance Officer.
