EX-99.p.2 CODE ETH
[EXHIBIT (p)(2)]
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PROCEDURE NAME: FAAM CODE OF ETHICS
PROCESS REF. #: FAAM 101
AUTHOR: CHRIS GRIFFIN
CONTACT: FAAM COMPLIANCE REVIEW OFFICER
APPROVAL DATE: 8-28-98
REVISION DATE: 6-21-00
RELATED POLICIES: USBC 101, 102, FAAM 102, 103, 104, 106, 301, U.S. BANCORP CODE
OF ETHICS
REGULATORY RULE: SEC 17j-1 PERSONAL INVESTMENT ACTIVITIES OF INVESTMENT COMPANY
PERSONNEL
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PURPOSE
This Code of Ethics is adopted by and on behalf of First American Asset
Management, a division of U.S. Bank National Association, in an effort to
prevent violations of the 1940 Act and the rules and regulations thereunder and
to codify the written policies and procedures designed to prevent the misuse of
Material Non-Public Information. Rule 17j-1 of the 1940 Act requires registered
investment companies and each investment adviser and principal underwriter of
any such investment company to adopt a written code of ethics containing
provisions reasonably necessary to prevent access persons from engaging in
certain activities prohibited by Rule 17j-1, and to use reasonable diligence and
institute procedures reasonably necessary to prevent violations of such code.
The purpose of this Code is to establish policies consistent with Rule 17j-1 of
the 1940 Act and with the following general principles:
* Access Persons have the duty at all times to place the interests of clients
and shareholders ahead of their own personal interests in any decision
relating to their personal investments.
* All Personal Securities Transactions shall be conducted consistent with
this Code and in such manner as to avoid any actual, potential or
appearance of a conflict of interest, or any abuse of an individual's
position of trust and responsibility.
* Access Persons shall not take inappropriate advantage of their position and
must avoid any situation that might compromise, or call into question,
their exercise of fully independent judgment in the interest of
shareholders.
The Adviser may from time to time adopt such interpretations of this Code as
necessary.
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SCOPE
The prohibitions and the preclearance and reporting requirements set forth in
this Code apply to all transactions in a Security which an Access Person has, or
by reason of such transaction acquires, any Beneficial Ownership unless that
Security or transaction has been specifically exempted by this Code.
1. DEFINITIONS
A. "Access Person" means a General Access Person or a Restricted
Access Person.
(1) "General Access Person" means an employee of the
Adviser who, in connection with his or her regular
functions or duties obtains information regarding
purchases or sales of Securities by the Funds, or who
obtains any information concerning which Securities
are being recommended prior to the effective
dissemination of such recommendations. Additionally,
a person is deemed a "General Access Person" if such
person enters into a special confidential
relationship in the conduct of the affairs of the
Adviser, and is given access to Material Non-Public
Information. Examples of such include temporary or
contracted employees, consultants, advisers, or
attorneys.
(2) "Restricted Access Person" means an employee of the
Adviser who, with respect to any Fund, makes any
investment recommendation, participates in the
determination of which investment recommendations
will be made, has the power to influence management
of the Funds, or executes trades for any Fund.
Restricted Access Persons include, without
limitation, Fund Managers, research analysts,
traders, and other such persons as determined by the
Adviser.
B. "Adviser" means First American Asset Management, a division of
U.S. Bank National Association.
C. "Beneficial Ownership" of a Security is to be determined in
the same manner as it is for purposes of Section 16a-1(a)(2)
of the 1934 Act. This means that a person should generally
consider themselves the "Beneficial Owner" of any Security in
which they have a direct or indirect financial interest. In
addition, persons should consider themselves the "Beneficial
Owner" of any Security held by their spouse, minor children,
relatives who share their home, or other persons by reason of
any contract, arrangement, understanding, or relationship that
provides them with sole or shared voting or investment power
with respect to such Security.
Although the following list is not exhaustive, under the 1934
Act and this Code, a person generally would be regarded to be
the "Beneficial Owner" of the following Securities:
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(1) Securities held in the person's own name;
(2) Securities held with another in joint tenancy,
community property, or other joint ownership;
(3) Securities held by a bank or broker as nominee or
custodian on such person's behalf or pledged as
collateral for a loan;
(4) Securities held by members of the person's immediate
family sharing the same household ("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,
including adoptive relationships);
(5) Securities held by a relative not residing in the
person's home if the person is a custodian, guardian
or otherwise has or shares control over the purchase,
sale, or voting of such Securities;
(6) Securities held by a trust in which the person is a
beneficiary and has or shares the power to make
purchase or sale decisions;
(7) Securities held by a trust for which the person
serves as a trustee and in which the person has a
pecuniary interest (including pecuniary interests by
virtue of performance fees and by virtue of holdings
by the person's immediate family);
(8) Securities held by a general partnership or limited
partnership in which the person is a general partner;
(9) Securities owned by a corporation in which the person
has a control position or in which the person has or
shares investment control over the portfolio
Securities (other than a registered investment
company);
(10) Securities in a portfolio giving the person certain
performance-related fees; and
(11) Securities held by another person or entity pursuant
to any agreement, understanding, relationship or
other arrangement giving the person any direct or
indirect pecuniary interest.
D. "Code" means this Code of Ethics, as amended from time to
time.
E. "Control" shall have the meaning as set forth in Section
2(a)(9) of the 1940 Act. For example, "control" means the
power to exercise a controlling influence over the management
or policies of a company.
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Beneficial Ownership of more than 25% of the voting securities
of a company is presumed to be "control" of such company.
F. "FAAM Compliance" means the department within the Adviser
responsible for compliance with the requirements of the Code.
G. "Fund" means each of the registered investment companies for
which the Adviser serves as investment adviser.
H. "Fund Manager" means any employee of the Adviser who has
direct responsibility and authority to make investment
decisions for any Fund.
I. "Initial Public Offering" means an offering of Securities
registered under the 1933 Act, the issuer of which, immediately
before the registration, was not subject to the reporting
requirements of Section 13 or 15(d) of the 1934 Act.
J. "Insider Trading" means the use of Material Non-Public
Information to trade in a Security (whether or not one is an
Access Person) or the communication of Material Non-Public
Information to others. While the meaning of the term is not
static, "Insider Trading" generally includes:
(1) trading in a Security by an Access Person, while in
possession of Material Non-Public Information;
(2) trading in a Security by a person who is not an
Access Person, while in possession of Material
Non-Public Information, where the information either
was disclosed to such person in violation of an
Access Person's duty to keep it confidential or was
misappropriated; and
(3) communicating Material Non-Public Information to any
person, who then trades in a Security while in
possession of such information.
K. "Material Non-Public Information" means information that has
not been effectively communicated to the marketplace, and for
which there is a substantial likelihood that a reasonable
investor would consider it important in making investment
decisions, or information that is reasonably certain to have a
substantial effect on the price of a company's Securities.
Examples of Material Non-Public Information include
information regarding dividend changes, earnings estimates,
changes in previously released earnings estimates, significant
merger or acquisition proposals or agreements, major
litigation, liquidation problems, and extraordinary management
developments.
L. "Personal Transaction" means a transaction in a Security in
which an individual has or thereby acquired Beneficial
Ownership. A person shall
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be considered to be "engaging in" or "effecting" a Personal
Transaction if such a Security is involved, regardless of
whether the transaction is effected by that person or by some
other person (such as an immediate family member).
M. "Private Placement" means an offering that is exempt from
registration under the 1933 Act pursuant to Section 4(2) or
Section 4(6), or pursuant to rule 504, rule 505 or rule 506
under the 1933 Act.
N. "Review Officer" means the person within FAAM Compliance
designated by the Adviser as having authority to review
preclearance requests and information reported under the Code.
O. "Security" shall have the same meaning as that set forth in
Section 2(a)(36) of the 1940 Act, i.e., any note, stock,
treasury stock, bond, debenture, evidence of indebtedness,
certificate of interest or participation in any profit-sharing
agreement, collateral-trust certificate, reorganization
certificate or subscription, transferable share, investment
contract, voting-trust certificate, certificate of deposit for
a security, fractional undivided interest in oil, gas, or
other mineral rights, any put, call, straddle, option, or
privilege on any security (including a certificate of deposit)
or on any group or index of securities (including any interest
therein or based on the value thereof), or any put, call,
straddle, option, or privilege entered into on a national
securities exchange relating to foreign currency, or, in
general, any interest or instrument commonly known as a
`Security', or any certificate of interest or participation
in, temporary or interim certificate for, receipt for,
guarantee of, or warrant or right to subscribe to or purchase,
any of the foregoing.
P. "Watchlist" shall be the daily list of Securities being
recommended and intended for recommendation for trading,
pending Securities to be traded, and those Securities traded
within a defined timeframe by the Funds.
Q. "1933 Act" means the Securities Act of 1933, as amended.
R. "1934 Act" means the Securities Exchange Act of 1934, as
amended.
S. "1940 Act" means the Investment Company Act of 1940, as
amended.
2. EXEMPTED SECURITIES
A. This Code shall not apply to purchases or sales of:
(1) direct obligations of the Government of the United
States;
(2) bankers' acceptances, bank certificates of deposit,
commercial paper and high quality short-term debt
instruments including repurchase agreements; and
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(3) shares issued by registered open-end investment
companies.
3. EXEMPTED TRANSACTIONS
A. This Code shall not apply to:
(1) purchases which are part of an automatic dividend
reinvestment plan; or
(2) purchases of an employer's stock under an
employer-sponsored plan (including the employer of a
spouse or partner).
B. Although the reporting obligations set forth in Section 6
remain, the preclearance and prohibited purchase and sales
requirements of this Code, as set forth in Sections 4 and 5,
shall not apply to the following:
(1) purchases effected 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;
(2) purchases or sales of Securities that are traded by
the Equity Index Fund, but not other Funds;
(3) purchases or sales which are non-volitional on the
part of the Access Person (as determined by the
Review Officer) including purchases or sales upon
exercise of puts or calls written by the person, and
sales from a margin account pursuant to a bona fide
margin call;
(4) purchases or sales effected in any account over which
the Access Person has no direct or indirect influence
or control (the determination regarding such an
account must be on file with FAAM Compliance prior to
effecting trades in such account); or
(5) purchases or sales of U.S. Bancorp stock.
4. PRECLEARANCE
Except as set forth in Sections 2 (Exempted Securities) and 3 (Exempted
Transactions) of this Code, Access Persons must preclear all personal
transactions in a Security. No transaction may be effected without the
prior written approval of the Review Officer. The preclearance
requirements of this Section 4 are in addition to, and not in
limitation of, the prohibitions of Section 5 (Prohibited Purchases and
Sales) and the reporting requirements of Section 6 (Reporting) of this
Code. Access Persons are also responsible for knowing if other trading
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restrictions apply to them (such as NASD registration restrictions),
and obtaining appropriate approval.
A. PUBLICLY TRADED SECURITIES. PRECLEARANCE APPROVAL IS REQUIRED
FOR ANY PURCHASE OR SALE OF A PUBLICLY TRADED SECURITY. SUCH
TRANSACTIONS MUST BE PRECLEARED PURSUANT TO SUCH PROCEDURES AS
ADOPTED BY THE ADVISERS FROM TIME TO TIME. A TRANSACTION MUST
BE EXECUTED BY THE CLOSE OF THE NYSE THE SAME DAY CLEARANCE IS
APPROVED.
B. Private Placements. Preclearance is required for any purchase
of a non-publicly traded Security. Such approval will take
into account, among other factors, whether the investment
opportunity should be reserved for a Fund and whether the
opportunity is being offered to the Access Person by virtue of
his or her relationship to the Funds. A transaction must be
executed within the timeframe set forth in the written
approval.
C. Standard & Poors 100 Composite Stock Index Equities.
Transactions in equity securities included in the S&P100
Composite Stock Index require preclearance; however, clearance
of such purchase and sales will not be subject to the
prohibitions set forth in Section 5 (Prohibited Purchases and
Sales) unless the Adviser or Review Officer determines that
granting clearance would be inconsistent with the expressed
purposes of this Code.
D. Inadvertent Violations. A transaction by an Access Person
effected in violation of the prohibitions set forth in Section
5.C. (Blackout Periods) will not be considered a violation of
this Code and disgorgement (or liquidation) will not be
required so long as the transaction was effected in accordance
with the preclearance procedures described in this Section 4.
5. PROHIBITED PURCHASES AND SALES
A. Initial Public Offerings. No Restricted Access Person may
acquire any equity Security in an Initial Public Offering.
General Access Persons may purchase Securities in an Initial
Public Offering upon receipt of preclearance approval. (An
Initial Public Offering preclearance form must be used for
such a request.)
B. Debt New Issue Offerings. No Restricted Access Person may
acquire any municipal or corporate debt instruments in any new
issue offering. General Access Persons may purchase such debt
instruments in new issue offerings upon receipt of
preclearance approval. (An Initial Public Offering
preclearance form must be used for such a request.)
C. Blackout Periods.
(1) General Access Persons: Except for Securities and
transactions
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exempted from preclearance (as provided in Section 2
[Exempted Transactions] and 3 [Exempted Transactions]
of this Code), and except as otherwise provided in
this Section 5, General Access Persons are prohibited
from executing (directly or indirectly) a Personal
Transaction in a Security at any time during which:
a. any Fund is trading the same Security the
same day;
b. such Security is under active consideration
by any Fund or is listed on the Watchlist or
other such list of recommended Securities as
may be maintained by the Adviser; or
c. the Access Person has Material Non-Public
Information with respect to the Security.
(2) Restricted Access Persons: In addition to the
prohibitions set forth in Section 5.C.(1) above,
Restricted Access Persons are prohibited from
executing a personal transaction in a Security within
7 days:
a. BEFORE any Fund for which the Restricted
Access Person has investment management,
advisory, or transactional responsibility
effects a transaction in the same Security;
and
b. AFTER any Fund effects a transaction in the
same Security.
D. Insider Trading. No Access Person shall purchase or sell,
directly or indirectly, any Security in which he or she has or
thereby acquires any Beneficial Ownership where such purchase
or sale constitutes Insider Trading, or take any other action
that constitutes or foreseeably may result in Insider Trading.
E. Short-term Trading. Except with respect to Securities and
transactions set forth in Sections 2 (Exempted Securities) and
3 (Exempted Transactions) of this Code, Restricted Access
Persons are prohibited from profiting from a purchase and
sale, or sale and purchase, of the same Security within 60
calendar days. Such prohibition may be waived by the Review
Officer in the event a Restricted Access Person presents
special circumstances and provided the Review Officer
determines the transaction would not be inconsistent with the
expressed purpose of this Code. No short-term trading
restrictions are placed on General Access Persons.
6. REPORTING
A. Trade Confirmations. Access Persons shall direct their
brokerage firm or bank to promptly send to the Review Officer
duplicate copies of confirmations of all Personal Transactions
and copies of periodic statements for all Security accounts in
which such Access Persons have a
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Beneficial Ownership. Access Persons are responsible for
providing trade documentation to the Review Officer when no
automatic trade confirmation is available. Compliance with
this requirement will be deemed to satisfy the quarterly
transaction reporting requirements imposed on Access Persons
under Rule 17j-1 and Section 6.C. of the Code.
B. Initial and Annual Securities Holdings Reports. Within 10
calendar days of becoming an Access Person, and annually
thereafter as required by the Adviser, Access Persons shall
disclose all personal Security holdings other than Securities
set forth in Section 2 (Exempted Securities) of this Code.
Compliance with this ongoing reporting requirement will be
satisfied by providing monthly statements of brokerage
accounts provided the statements are current within 30 days of
being received by FAAM Compliance. Reports for Securities not
included in such brokerage statements shall be submitted
annually and contain:
(1) the title, number of shares, and principal amount of
each Security in which the Access person has any
Beneficial Ownership;
(2) the name of any broker, dealer, or bank with whom the
Access Person maintains an account in which any
Securities are held for the direct or indirect
benefit of the Access Person; and
(3) the date the report is submitted by the Access
Person.
C. Quarterly Transaction Reports. Access Persons shall report
quarterly all transactions in Securities in which each has, or
by reason of such transactions acquires, any Beneficial
Ownership during the previous quarter. (In the event no
reportable transactions occurred during the quarter, the
report should be so noted and returned.) Quarterly reports
shall be made no later than 10 days after the end of the
calendar quarter, contain:
(1) the date of each transaction, the title, the interest
rate and maturity (if applicable), the number of
shares and the principal amount of each Security
(2) the nature of each transaction (i.e., purchase, sale,
or any type of acquisition or disposition);
(3) the name of the broker, dealer or bank with or
through which each transaction was effected;
(4) the price of the Security at which each transaction
was effected;
(5) the name of any broker, dealer, or bank with whom the
Access Person
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established an account in which any Securities are
held for the direct or indirect benefit of the Access
Person and the date on which the account was
established; and
(6) the date the report is submitted by the Access
Person.
D. Access Person Certification. Access Persons shall annually
certify they have read and understand this Code, and recognize
they are subject thereto, have complied with the requirements
of the Code, and have disclosed and reported all Personal
Transactions required to be disclosed or reported pursuant to
the requirements of this Code.
E. Annual Report. FAAM Compliance will, at least annually,
prepare a written report for the Funds' Board of Directors
which summarizes the operation of this Code, and:
(1) contains a list of material or procedure violations
which required significant remedial action since the
previous report, including details of such violations
and the action taken;
(2) recommends changes in existing restrictions or
procedures based upon experience under the Code,
evolving industry practices or developments in
applicable laws or regulation; and
(3) certifies that the Adviser has adopted procedures
reasonably necessary to prevent Access Persons from
violating the Code.
7. POST-TRADE MONITORING
The Adviser shall implement appropriate procedures to monitor personal
investment activity by Access Persons.
8. SERVICE AS A DIRECTOR
Employees of the Adviser are prohibited from serving as a member of the
board of directors of any publicly traded company absent prior
authorization by the Funds' Board of Directors based upon a
determination that such service is consistent with the interests of the
Funds and their shareholders. Other requirements for service on a board
of directors for employees of the Adviser may be found in the U.S.
Bancorp Code of Ethics.
9. SANCTIONS
A. General.
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(1) Upon discovering a violation of this Code of Ethics,
the Adviser may impose such sanctions as it deems
appropriate, including INTER ALIA, disgorgement of
profits, fines, a letter of censure, a reduction in
salary or position, suspension without pay, and/or
termination of the employment of the violator. A
violator shall be obligated to pay any sums due,
pursuant to this paragraph, due to a violation by a
member of the immediate family of such violator. Any
profits realized on trades in violation of
preclearance and prohibited purchase and sales (as
set forth in Sections 4 [Preclearance] and 5
[Prohibited Purchase and Sales]) may require
immediate disgorgement.
(2) No person shall participate in a determination of
whether he or she has committed a violation of the
Code or of the imposition of any sanction against
himself or herself. Violations of the Code by the
Review Officer, Director of Compliance or IFS Legal
Counsel shall be reviewed by such person's immediate
superior.
(3) Access Persons who discover a violation or apparent
violation of this Code by any other person shall
immediately bring the matter to the attention of the
Review Officer.
B. Non-Exclusivity of Sanctions. The imposition of sanctions
hereunder shall not preclude the imposition of additional
sanctions by the Funds' Board of Directors and shall not be
deemed a waiver of any rights by any Fund. In addition to
sanctions which may be imposed hereunder, persons who violate
this Code may be subject to various penalties and sanctions
including, for example, injunctions, treble damages,
disgorgement of profits, fines of up to three times the profit
gained or loss avoided (whether or not the violator actually
benefited), and jail sentences.
10. RECORDKEEPING
A. A copy of this Code, and any other code which is, or at any
time within the past five years has been in effect, shall be
preserved in an easily accessible place.
B. FAAM Compliance shall inform all Access Persons of their
reporting obligation under this Code.
C. A record of any violation of this Code and 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.
D. A copy of each report made by each Access Person pursuant to
this Code, shall be preserved for a period of not less than
five years from the end of
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the fiscal year in which it is made, the first two years in an
easily accessible place.
E. A list of all Access Persons who are, or within the past five
years have been, required to make reports pursuant to this
Code shall be maintained in an easily accessible place.
F. A record of any decision, and reasons supporting the decision,
to approve the acquisition of Securities in an Initial Public
Offering for General Access persons or a Private Placement by
all Access Persons shall be maintained for at least five years
after the end of the calendar year in which the approval is
granted.
G. The Funds' Board of Directors, including a majority of
Directors who are not interested persons, shall approve this
Code. If the Adviser makes a material change to this Code, the
Funds' Board of Directors shall have six months in which to
approve the material change.
H. The Adviser shall maintain a list of appropriate management or
compliance personnel to review required reports.
I. This Code of Ethics shall be filed with the Securities and
Exchange Commission as required under Rule 17j-1.
