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EXHIBIT (p)(12)
PACIFIC LIFE INSURANCE COMPANY SECURITIES DIVISION
CODE OF ETHICS
The following Code of Ethics ("Code") is adopted by the Pacific Life Insurance
Company Securities Division ("Securities Division") , pursuant to Rule 17j-1 of
the Investment Company Act of 1940 (the "Act") and Section 206 and Rule 204.2
under the Investment Advisers Act of 1940 ("Advisers Act"). This Code is
intended to ensure that all acts, practices and courses of business engaged in
by Access Persons (as defined below) of the Fund reflect high standards and
comply with the requirements of Section 17(j) of the Act and Rule 17j-1
thereunder as well as Section 206 and Rule 204.2 under the Advisers Act.
I. DEFINITIONS
(a) "Access Person" means any employee in the Securities Division of
Pacific Life Insurance Company ("Pacific Life"), or any employee of
Pacific Life who has access to current trading information of the
Securities Division, as designated by the Securities Division
Compliance Officer ("Compliance Officer"), from time to time.
(b) "Client Account" means any account managed by the Securities Division,
including Pacific Life proprietary accounts, and only those portfolios
of Pacific Select Fund which the Securities Division actually manages
(currently, Money Market and High Yield Bond Portfolios).
(c) A security is "being considered for purchase or sale" when a
recommendation to purchase or sell a security has been made and
communicated or, with respect to the person making the recommendation,
when such person seriously considers making such a recommendation.
(d) A security is "being purchased or sold" by the Securities Division
from the time when a purchase or sale program has been communicated to
the person who places the buy and sell orders for the Securities
Division until the time when such program has been fully completed or
terminated.
(e) "Beneficial Ownership" shall be interpreted in the same manner as it
would be in determining whether a person is subject to the provisions
of Section 16 of the Securities Exchange Act of 1934 and the rules and
regulations thereunder, except
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that the determination of direct or indirect beneficial ownership
shall apply to all securities which an Access Person has or
acquires./1/
(f) "Control" shall have the same meaning as that set forth in Section
2(a)(9) of the Act. Section 2(a)(9) provides that "control" generally
means the power to exercise a controlling influence over the
management or policies of a company, unless such power is solely the
result of an official position with such company.
(g) "Security" shall have the meaning set forth in Section 2(a)(36) of the
Act, except that it shall not include "Exempt Securities".
(h) "Exempt Securities" include securities issued by the Government of the
United States, and money market instruments/2/ as defined under Rule
17j-1 of the Act (as amended from time to time), and shares of
registered open-end investment companies, or such other securities as
may be excepted under the provisions of Rule 17j-1.
(i) "Portfolio Employee" is any person who is authorized to make
investment decisions on behalf of a Client Account, as well as
investment personnel such as securities
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/1/ You are considered to have Beneficial Ownership of Securities if you
have or share a direct or indirect Pecuniary Interest in the
Securities. You have a Pecuniary Interest in Securities if you have
the opportunity, directly or indirectly, to profit or share in any
profit derived from a transaction in the Securities. The following are
examples of an indirect Pecuniary Interest in Securities:
(a) Securities held by members of your immediate family sharing the
same household; however, this presumption may be rebutted by
convincing evidence that profits derived from transactions in
these Securities will not provide you with any economic benefit.
Immediate family means any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, sibling, mother-in-law, father-
in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law, and includes any adoptive relationship.
(b) Your interest as a general partner in Securities held by a
general or limited partnership.
(c) Your interest as a manager-member in the Securities held by a
limited liability company.
You do not have an indirect Pecuniary Interest in Securities held by
a corporation, partnership, limited liability company or other entity
in which you hold an equity interest, unless you are a controlling
equityholder or you have or share investment control over the
Securities held by the entity.
The following circumstances constitute Beneficial Ownership by you
of Securities held by a trust:
(a) Your ownership of Securities as a trustee where either you or
members of your immediate family have a vested interest in the
principal or income of the trust.
(b) Your ownership of a vested beneficial interest in a trust.
(c) Your status as a settlor of a trust, unless the consent of all of
the beneficiaries is required in order for you to revoke the
trust.
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/2/ Currently, the following are exempted: bankers' acceptances, bank
certificates of deposit, commercial paper, and high quality short-
term debt instruments, including repurchase agreements and any
instrument that has 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 Organization.
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analysts and traders who advise or execute the decisions of portfolio
managers of a Client Account.
II. STATEMENT OF GENERAL PRINCIPLES
The following are general principles governing personal securities
transactions by Access Persons of the Securities Division :
(1) Access Persons have a duty to place the interests of Client
Accounts first;
(2) Access Persons must comply with this Code of Ethics and avoid any
actual or potential conflicts of interest in personal securities
transactions; and
(3) Access Persons cannot take inappropriate advantage of their
positions, including in particular, front-running purchases or
sales by Client Accounts.
III. PROHIBITED PURCHASES AND SALES
A. No Access Person shall, in connection with the purchase or sale,
directly or indirectly, by such person of a security held or to be
acquired by any Client Accounts:
(1) employ and devise, scheme or artifice to defraud a Client
Account;
(2) make to the Securities Division or a Client Account any untrue
statement of a material fact or omit to state to the Securities
Division or a Client Account a material fact necessary in order
to make the statements made, in light of the circumstances under
which they are made, not misleading;
(3) engage in any act, practice or course of business which would
operate as a fraud or deceit upon a Client Account ;
(4) engage in any manipulative practice with respect to a Client
Account.
B. In this connection it shall be impermissible for any Access Person to
purchase or sell, directly or indirectly, any security (or any option
to purchase or sell such security) in which (s)he has, or by reason of
such transaction acquires, any direct or indirect beneficial ownership
and which (s)he has actual knowledge at the time of such purchase or
sale that such security:
(1) is being considered for purchase or sale by the Securities
Division for a Client Account; or
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(2) is being purchased or sold for a Client Account.
Apart from preclearance procedures required by Section VI, this does
not impose any duty or requirement on Access Persons to inquire of
Portfolio Employees if a security is being considered or is being
purchased or sold for a Client Account.
C. Any Access Person who questions whether a contemplated transaction is
prohibited by this Code should discuss the transaction with the
Securities Division's Compliance Officer (or his/her designee) or the
Pacific Life Law Department, prior to proceeding with the transaction.
D. An Access Person may not accept any investment opportunity, gift,
gratuity or other thing of more than nominal value, from any person or
entity that does business or desires to do business with the
Securities Division, including trading with any Client Account. It is
not prohibited to (i) accept gifts from a single giver, so long as the
annual aggregate value does not exceed $100; or (ii) attend business
meals, sporting events and other entertainment events at the expense
of the giver, so long as the expense is reasonable and the giver is
present with the Access Person.
IV. EXEMPT TRANSACTIONS FOR ACCESS PERSONS
These transactions are exempt from quarterly reporting
The prohibitions of Section III of this Code shall not apply to the
following transactions by an Access Person:
(1) Purchases or sales over which the Access Person has no direct or
indirect influence or control. There is a presumption that you
can exert some measure of influence or control over accounts held
by members of your immediate family sharing the same household,
but this presumption may be rebutted by convincing evidence;
(2) Purchases or sales of securities which are not eligible for
purchase or sale by any Client Account;
(3) Purchases or sales which are nonvolitional on the part of either
the Access Person or a Client Account;
(4) Purchases which are part of an automatic dividend reinvestment
plan;
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(5) Purchases effected upon the exercise of rights issued by an
issuer pro rata to all holders of a class of its securities, to
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the extent such rights were acquired with respect to securities
of which you have beneficial ownership.
(6) Acquisitions or dispositions of Securities as the result of a
stock dividend, stock split, reverse stock split, merger,
consolidation, spin-off or other similar corporate distribution
or reorganization applicable to all holders of a class of
Securities of which you have Beneficial Ownership.
(7) Subject to the restrictions on participation in private
placements set forth below under Private Placements, acquisitions
or dispositions of Securities of a private issuer. A private
issuer is a corporation, partnership, limited liability company
or other entity which has no outstanding publicly-traded
Securities, and no outstanding Securities which are convertible
into or exchangeable for, or represent the right to purchase or
otherwise acquire, publicly-traded Securities. However, you will
have Beneficial Ownership of Securities held by a private issuer
whose equity Securities you hold, unless you are not a
controlling equityholder and do not have or share investment
control over the Securities held by the entity.
(8) Transactions which appear to the Compliance Officer or his/her
designee to present no reasonable likelihood of harm to any
Client Account and which have been authorized in advance by the
Compliance Officer.
V. TRANSACTIONS WHICH DO NOT REQUIRE PRECLEARANCE
(These transactions are subject to reporting requirements)
The following Transactions do not require preclearance:
(1) Purchases or sales of securities which are not eligible for
purchase or sale by any Client Account managed by the Securities
Division.
(2) Purchases or sales of up to $100,000 per calendar month per
issuer of fixed-income Securities other than municipal
securities.
(3) Any purchase or sale of fixed-income Securities issued by
agencies or instrumentalities of, or unconditionally guaranteed
by, the Government of the United States.
(4) Purchases or sale of up to $1,000,000 per calendar month per
issuer of fixed-income Securities issued by qualified foreign
governments.
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A qualified foreign government is a national government of a
developed foreign country with outstanding fixed-income
securities in excess of fifty billion dollars.
(5) Purchases or sales of up to the greater of 1,000 shares per day
or $150,000, but not more than 2,000 shares per calendar week,
per issuer, of large-cap issuers.
A large-cap issuer is an issuer with a total market
capitalization in excess of one billion dollars and an average
daily trading volume during the preceding calendar month, on the
principal securities exchange (including NASDAQ) on which its
shares are traded, in excess of 50,000 shares.
(6) Purchases or sales of up to the greater of 500 shares or $50,000
per calendar week, per issuer, of stock of issuers other than
large-cap issuers.
(7) Purchases or sales of up to $1,000,000 in total notional open
interest per calendar month, per index, of exchange-traded
options on broadly-based indices.
A broadly-based index is an index with an average notional open
interest during the preceding calendar quarter in excess of one
billion dollars.
(8) Any purchase or sale of shares of registered closed-end
investment companies.
Access Persons should keep the following in mind:
(1) Paragraph V Transactions must be reported to the Securities
Division Compliance Officer on quarterly and annual reports (see
below).
(2) The securities of qualified foreign governments, large-cap
issuers and broadly-based indices which qualify under Paragraph V
may change from time to time. Accordingly, you may purchase
Securities in a Paragraph V Transaction, only to find that you
cannot sell them later without preclearance. In that case, you
will be able to sell them only if you preclear the sale in
compliance with the procedures set forth in the Code.
In addition, Portfolio Employees should keep the following in mind:
(1) Paragraph V Transactions are subject to the prohibition against
short-swing trading profits set forth in the Code.
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VI. PRECLEARANCE PROCEDURES
The purchase or sale of any Security by any Access Person which is not
exempt, requires preclearance by the Compliance Officer.
(1) The Securities may not be purchased or sold on any day during
which there is a pending buy or sell order in the same Security
on behalf of any Client Account until that order is executed or
withdrawn.
(2) The Securities may be purchased or sold only if you have asked
the Compliance Officer to preclear the purchase or sale, the
Compliance Officer has given you preclearance in writing, and the
purchase or sale is executed by the close of business on the day
after preclearance is given. Preclearance will not be given
unless a determination is made that the purchase or sale complies
with this Code and the foregoing restrictions. The form for
requesting preclearance is attached hereto as Appendix I.
(3) The Securities may not be purchased or sold by any Access Person
on the same day on which a Client Account trades in the same
Security, except as provided in 2 above. After the Compliance
Officer has given preclearance to an Access Person for the
purchase or sale of Securities, in the event a Client Account
should purchase or sell such Securities before the close of
business on the day after preclearance is given, the Access
Person may nonetheless purchase or sell such Securities provided
that (1) the preclearance is not withdrawn prior to the purchase
or sale of Securities by the Access Person, and (2) the Access
Person had no actual knowledge that the Securities were being
purchased or sold for a Client Account.
(4) Any transaction which violates these procedures must be unwound,
or if that is not practical or not possible, profits received by
the Access Person must be contributed to a charitable
organization.
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VII. PRIVATE PLACEMENTS
If you are a Portfolio Employee, you may not acquire Beneficial Ownership
of any Securities in a private placement, unless you have received the
prior written approval of the Compliance Officer. Approval may not be
given unless a determination is made that the investment opportunity
should not be reserved for a Client Account.
If you have acquired Beneficial Ownership of Securities in a private
placement, you must disclose your investment to the Compliance Officer
when you play a part in any consideration of an investment by a Client
Account in the issuer of the Securities, and any decision to make such an
investment must be independently reviewed by a portfolio manager who does
not have Beneficial Ownership of any Securities of the issuer.
VIII. INITIAL PUBLIC OFFERINGS ("IPOs")
If you are a Portfolio Employee, you may not acquire Beneficial Ownership
of any Securities in an IPO unless you receive prior written approval
from the Compliance Officer.
IX. SHORT-TERM TRADING PROFITS
If you are a Portfolio Employee, you may not profit from the purchase and
sale, or sale and purchase, within 60 calendar days of the same (or
equivalent) Securities of which you have Beneficial Ownership. Any such
short-term trade must be unwound, or if that is not practical, the
profits must be contributed to a charitable organization. Nothing in this
paragraph shall be deemed to permit avoidance of loss through short-term
trading.
You are considered to profit from a short-term trade if Securities of
which you have Beneficial Ownership are sold for more than their purchase
price, even though the Securities purchased and the Securities sold are
held of record or beneficially by different persons or entities.
IX. REPORTING
A. Every Access Person shall (i) file with the Compliance Officer an
initial holdings report within 10 days of becoming an access person
and (ii) file with the Compliance Officer a holdings report annually
within 30 days of year-end. Holdings reports must be current as of a
date no more than 30 days before the report is submitted. (Sample
Report of Initial/Annual Securities Holdings is attached hereto as
Appendix IV).
B. Every Access Person shall file with the Compliance Officer a
quarterly report of any transaction in Securities with respect to
transactions in any Security in which such Access Person has, or by
reason of such transaction acquires, any direct or indirect
beneficial ownership in the security; provided however, that such
Access
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Person shall not be required to make a report with respect to exempt
transactions as set forth in paragraph IV. (Sample Personal
Transaction Reporting Form is attached hereto as Appendix II).
C. Every quarterly report shall be made no later than ten days after
the end of the calendar quarter in which the transaction to which
the report relates was effected, and shall contain the following
information:
(1) The date of the transaction, the title and the number of
shares, and the principal amount of each security involved;
(2) The nature of the transaction (i.e., purchase, sale or any
other type of acquisition or disposition), including
information sufficient to establish any exemption listed in
Paragraph IV which is relied upon;
(3) The price at which the transaction was effected;
(4) The name of the broker, dealer or bank with or through whom the
transaction was effected; and
(5) For accounts opened during the quarter:
(a) The opening date of the account;
(b) Account title;
(c) Account number; and
(d) Name of Broker Dealer or Bank;
D. Any such report may contain a statement that the report shall not be
construed as an admission by the person making such report that he
has any direct or indirect beneficial ownership in the security to
which the report relates, and the existence of any report shall not
be construed as an admission that any event reported on constitutes
a violation of this Code.
XI. CERTIFICATE OF COMPLIANCE
As an Access Person, you are required to certify annually that you have
read and understand this Code and recognize that you are subject to this
Code. Each annual certificate will also state that, to the best of your
knowledge, you have complied with the requirements of this Code during
the prior year, and that you have disclosed, reported, or caused to be
reported
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all transactions during the prior year in Securities of which you had or
acquired Beneficial Ownership. The Compliance Officer shall obtain
certificates of compliance from each Access Person (a copy of a form of
which is attached hereto as Appendix III) and certify on behalf of the
Securities Division , that as a firm, it has complied with this Code.
XII. REVIEW AND ENFORCEMENT
A. Review
(1) The Compliance Officer (or his/her designees) shall from time to
time review the reported personal securities transactions of
Access Persons to determine whether any violation of this Code
may have occurred, taking into account all the exemptions
provided under Paragraph IV. The Compliance Officer or his/her
designees shall review holdings reports at least annually and
transaction reports at least quarterly. Before making any
determination that a violation has been committed by an
individual, the Compliance Officer (or his/her designee) shall
give such person an opportunity to supply additional information
regarding the transaction in question.
(2) The Compliance Officer shall be responsible to maintain a
current list of all Securities Division Access Persons, updated
at least quarterly.
(3) The Compliance Officer or his/her designees shall report at
least annually to the Board of Pacific Select Fund (and any
other client so requests) regarding compliance with this Code,
including violations if any and recommendations for change if
necessary.
B. Enforcement
(1) If the Compliance Officer (or his/her designees) determines that
a violation of this Code may have occurred, they shall promptly
report the possible violation to the compliance officer of
Pacific Select Fund or such other appropriate parties.
(2) No person shall participate in a determination of whether he has
committed a violation of this Code or in the imposition of any
sanction against himself.
XIII. RECORDS
The Compliance Officer shall maintain records in the manner and to the
extent set forth in the Act and shall make the same available for
appropriate examination by representatives of Pacific Select Fund or the
Securities and Exchange Commission:
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(1) A copy of this Code and any other code of ethics which is, or at
any time within the past five years has been in effect, shall be
preserved in an easily accessible place;
(2) A record of any violation of this Code and of any action taken
as a result of such violation shall be preserved in an easily
accessible place for a period of not less than five years
following the end of the fiscal year in which the violation
occurs;
(3) A copy of each report made pursuant to this Code by an Access
Person shall be preserved by the Securities Division for a
period of not less than five years from the end of the fiscal
year in which it is made, the first two years in an easily
accessible place;
(4) A list of all persons who are, or within the past five years
have been, required to make reports pursuant to this Code shall
be maintained by the Compliance Officer in an easily accessible
place.
XIV. CONFIDENTIALITY
All reports of securities transactions and any other information filed
with the Securities Division pursuant to this Code shall be treated as
confidential, except as regards appropriate examinations by
representatives of the Pacific Select Fund or the Securities and Exchange
Commission.
XV. AMENDMENT AND INTERPRETATION OF PROVISIONS
The Compliance Officer may from time to time amend this Code or adopt
such interpretations of this Code as he/she deems appropriate.
