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EXHIBIT (p)
CODE OF ETHICS
OF FORTIS ADVISERS, INC.
AND AFFILIATES
ADOPTED ON SEPTEMBER 30, 1999
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CODE OF ETHICS
OF FORTIS ADVISERS, INC. AND AFFILIATES
TABLE OF CONTENTS
How does the Code of Ethics prevent insider trading?.........................3
Why do we have a Code of Ethics that places limitations on our employees"
and directors' abilities to buy and sell securities for their own accounts?..5
Who has to comply with the Code?.............................................5
What securities are subject to the Code?.....................................6
What securities/transactions are exempt from the Code?.......................6
Who are Access Persons and Investment Persons under the Code?................8
How do I determine whether I'm an Access Person or an Investment Person?.....9
What are Independent Directors required to do under the Code? ...............9
What are Access Persons required to do under the Code?......................10
What are Investment Persons required to do under the Code? .................15
What additional requirements are there if I'm a registered representative
with Fortis Investors, Inc.?................................................21
What are my quarterly reporting requirements under the Code?................22
How do we use the information we collect?...................................23
How do we handle violations of the Code?....................................24
EXHIBITS
Exhibit A Pre-clearance Request Forms
Exhibit B Request for Duplicate Confirmations & Periodic Statements
Exhibit C Annual Certification of Compliance
Exhibit D Personal Securities Holdings Report
Exhibit E Quarterly Report of Securities Trades
Exhibit F Authorization Request to Open New Account
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HOW DOES THE CODE OF ETHICS PREVENT INSIDER TRADING?
1. Insider Trading Prohibition. You may not:
o trade in a security for your own account, the account of others,
Fortis Funds, or other managed accounts of Fortis Advisers, Inc.
("Advisers") while in possession of material, non-public information
regarding the security. Other managed accounts of Advisers include
annuity, pension and general accounts;
o reveal to any person contemplated or completed securities trades of a
Fortis Fund or other managed account of Advisers, except in the
performance of your duties, unless such information is already a
matter of public knowledge;
o provide material, non-public information regarding a security to
others, except in the performance of your duties;
o recommend the purchase or sale of a security while in possession of
material, non-public information regarding the security; or
o assist someone in any of the above activities.
To prevent insider trading you should protect all material, non-public
information in your possession. For example, you should lock up files and
restrict access to computer files containing material, nonpublic information.
2. Definition of Material, Nonpublic Information.
o Material. Generally, material information is (1) information on which
reasonable investors rely in making purchase or sale decisions or (2)
information that is reasonably certain to have a substantial effect on
the price of a company's securities. Material information often
includes dividend changes, earnings estimates, changes in previously
released earnings estimates, significant merger or acquisition
proposals or agreements, major litigation, liquidation and
extraordinary management developments.
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o Nonpublic. Information is nonpublic until it has been effectively
communicated to the marketplace. You should be able to point to some
fact to show that the information is public. For example, you should
be able to show that the information was in a report filed with the
SEC or a publication such as the Wall Street Journal.
If you have further questions regarding what is material, non-public
information, you should contact the legal department.
3. Detection of Insider Trading. To detect insider trading, the legal
department of Advisers will:
o review the trading activity reports filed by each Access Person and
Investment Person; and
o review the trading activity of Advisers, Fortis Investors, Inc., and
Fortis Funds.
4. Prevention of Insider Trading. To prevent insider trading, the legal
department will:
o take appropriate measures to familiarize all employees with the Code;
o answer questions regarding the Code;
o resolve issues of whether information is material and/or nonpublic;
and
o review and update the Code as necessary.
5. Penalties for Insider Trading. If you violate insider trading laws, you may
be subject to some or all of the following penalties, even if you do not
personally benefit from the violation: injunctions; monetary damages;
surrender of profits; criminal fines; and jail. We may impose additional
penalties. Please see "How do we handle violations of the Code?" for
further information.
6. Code of Conduct. Please see Fortis, Inc. and Affiliates Policy Statement on
Employee Conduct and Supplemental Policy Statement on Management Conduct
("Code of Conduct") for further restrictions on insider trading. If you
would like a copy of the Code of Conduct, please contact the legal
department.
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WHY DO WE HAVE A CODE OF ETHICS THAT PLACES LIMITATIONS ON OUR EMPLOYEES' AND
DIRECTORS' ABILITIES TO BUY AND SELL SECURITIES FOR THEIR OWN ACCOUNTS?
Advisers, Fortis Investors, Inc. and Fortis Funds are required by federal
law(1) to adopt a Code of Ethics (the "Code") designed to prevent:
o investment activities by persons with access to certain information
that might be harmful to Fortis Funds or other managed accounts of
Advisers;
o persons from illegally profiting from their relationship with Fortis
Funds or other managed accounts of Advisers; and
o insider trading.
To meet the requirements of these laws, a majority of the independent directors
of Fortis Funds approved the Code.
Fortis employees and directors should at all times place the interests of
the shareholders of Fortis Funds first. All personal securities trades should be
conducted in compliance with the Code and in such a manner as to avoid an actual
or potential conflict of interest or any abuse of an individual's position of
trust and responsibility. In summary, employees and directors should not take
inappropriate advantage of their positions.
You should read the Code and keep a copy of it in your files. After
reading the Code, you should execute the acknowledgment attached to the back of
the Code and return it to the legal department.
WHO HAS TO COMPLY WITH THE CODE?
If you are an Access Person, an Investment Person or an Independent Director of
Fortis Funds, you must comply with the Code. In addition, persons or entities
over which you could be expected to exercise influence or control are subject to
the Code. Examples of these persons or entities include(2):
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o your spouse;
o your minor children;
o other persons sharing your household continuously for a period of at
least 1 year; and/or
o any entity or person (including partnership, corporation or trust) for
whom you provide investment advice or make investment decisions.
Please see "Who are Access Persons and Investment Persons under the Code?" for
more information.
WHAT SECURITIES ARE SUBJECT TO THE CODE? All securities which may be purchased
by Fortis Funds are subject to the Code.
WHAT SECURITIES/TRANSACTIONS ARE EXEMPT FROM THE CODE?
1. Exemption from Pre-clearance and Reporting Requirements. You do not have to
pre-clear or report the following securities or transactions:
o securities issued or guaranteed by the U.S. government or its agencies
or instrumentalities;
o bankers' acceptances;
o bank certificates of deposit and time deposits;
o commercial paper;
o repurchase agreements;
o stock splits or stock dividends;
o shares of registered open-end investment companies other than Fortis
Funds; and
o shares of money market funds including Fortis Money Fund.
2. Exemption from Pre-clearance Requirements. The following transactions do
not need pre-clearance but must be reported:
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o purchases of securities through automatic dividend reinvestment. You
do not need to report these purchases if we receive duplicate
confirmations showing your purchases through automatic dividend
reinvestment;
o purchases of securities through automatic payroll deduction, such as
contributions to your 401(k). You do not need to report these
purchases if we receive duplicate confirmations from your broker
showing your purchases through automatic payroll deduction;
o gifts of securities;
o any securities trade, or series of related trades, involving 500
shares or less in the aggregate, if the issuer has a market
capitalization (outstanding shares multiplied by the current price per
share) greater than US $1 billion;
o securities purchased or sold for your account when you have
demonstrated that you have given discretionary authority to a third
party who is not an Access Person or Investment Person or otherwise
affiliated with Fortis Funds or the Fortis organization. You cannot
give discretionary authority to a broker who participates in Fortis
Fund transactions;
o securities trades in Fortis Funds. You do not need to report
securities trades in the Fortis Money Fund.
3. Exemption from Reporting Requirements. If you are an Access Person or
Investment Person, you are not required to file a report for any trades in
an account over which you do not have any direct or indirect influence or
control.
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WHO ARE ACCESS PERSONS AND INVESTMENT PERSONS UNDER THE CODE?
1. Access Persons include:
o Any officer or director of Fortis Funds or Advisers (except
Independent Directors of Fortis Funds);
o Any officer or director of Fortis Investors, Inc. who:
>> makes, participates in or obtains information regarding the
purchase or sale of securities by Fortis Funds; or
>> makes any recommendation to Fortis Funds regarding the purchase
or sale of securities;
o Any employee of Fortis Funds or Advisers (or any company in a control
relationship with Fortis Funds or Advisers):
>> who makes, participates in, or obtains information regarding the
purchase or sale of securities by Fortis Funds; or
>> whose job responsibilities relate to the making of any
recommendations with respect to the purchase or sales of
securities by Fortis Funds.
Examples of departments of persons typically classified as Access Persons:
Mutual Fund Accounting, Legal, Mortgages, and Equity Real Estate of Advisers and
Investment Accounting of Fortis, Inc.
2. Investment Persons include:
o any employee of Fortis Funds or Advisers (or of any company in a
control relationship with Fortis Funds or Advisers i.e. Fortis, Inc.)
who makes or participates in making recommendations regarding the
purchase or sale of securities by Fortis Funds (i.e. portfolio
managers and employees who provide information and advice to a
portfolio manager or who help execute a portfolio manager's decisions,
such as securities analysts and traders); and
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o any person in a control relationship with Fortis Funds or Advisers who
obtains information concerning recommendations regarding the purchase
or sale of securities by Fortis Funds.
Examples of departments of persons typically classified as Investment Persons
include: Fixed Income, Equity, Administration, and Quantitative Analysis
Departments (including Administrative Assistants) of Advisers.
HOW DO I DETERMINE WHETHER I'M AN ACCESS PERSON OR AN INVESTMENT PERSON?
The legal department of Advisers in consultation with the head of your
department determines whether you are an Access Person or an Investment Person
based upon your job responsibilities. When the legal department sends you a copy
of the Code, the cover letter will indicate whether you are an Access Person or
an Investment Person. In addition, each quarter the legal department will send
you a quarterly report of securities trades indicating whether you are an Access
Person or Investment Person. If you have any questions regarding your
classification, you should contact the legal department. Please see "Who are
Access Persons and Investment Persons under the Code?" for additional
information.
WHAT ARE INDEPENDENT DIRECTORS REQUIRED TO DO UNDER THE CODE?
1. Annual Certification of Compliance. You must sign an annual certification
of compliance provided by the legal department at the end of each calendar
year. It certifies that you:
o read and understand the Code;
o acknowledge that you are subject to the terms of the Code as an
Independent Director;
o disclosed or reported all personal securities trades required to be
disclosed or reported pursuant to the Code; and
o to the best of your knowledge you complied with the Code.
Please see Exhibit C for a blank annual certificate of compliance.
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2. Reporting Requirements. If you are an Independent Director of a Fortis
Fund, you must report a trade if you, at the time of the trade, knew or, in
the ordinary course of fulfilling your duties as a director of a Fortis
Fund, should have known that, during the 15 day period immediately
preceding the date of the trade, the security was purchased or sold by the
Fortis Fund or was being considered for purchase or sale by the Fortis
Fund.
To report a trade, you must submit a quarterly report to the legal
department no later than ten (10) calendar days after the end of each calendar
quarter. Please see Exhibit E for a blank quarterly report of securities trades.
Your report must contain all information required by the form including:
o The date of the transaction, the title, interest rate and maturity
date (if applicable), the number of shares, and the principal amount
of each security involved;
o The nature of the transactions (i.e., purchase, sale, or any other
type of acquisition or disposition);
o The price at which the transaction was effected; and
o The name of the broker, dealer, or bank with or through whom the
transaction was effected.
WHAT ARE ACCESS PERSONS REQUIRED TO DO UNDER THE CODE? If you are an Access
Person, you must comply with the following requirements.
1. Exercise Your Best Judgment. You should not engage in any personal
securities transaction that you know will be detrimental to the best
interests of any Fortis Fund. You should also not consider your personal
financial situation in connection with decisions regarding Fortis Fund
portfolio transactions.
2. Personal Securities Trades. Margin and naked option trading are relatively
risky methods of
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investing that can create particular problems for financial service
employees. For this reason, we urge you to avoid margin and naked option
trading. Before engaging in options and futures transactions, you should
understand the impact that the 60 day rule may have on your ability to
close out a position with a profit. Please see "Short Term Profits" in this
section for further information. When you buy or sell securities, you
should:
o not trade a security subject to the Code for your own account within a
7 calendar day period before or after a Fortis Fund trades that same
security. Please see "What securities are subject to the Code?" and
"What securities/transactions are exempt from the Code?"; and
o disclose your ownership of a security to the legal department if you
are recommending that a Fortis Fund trade the security.
3. Pre-clearance of Personal Securities Trades.
o Exemption from Pre-clearance Requirements. You must obtain
pre-clearance for securities subject to the Code (i.e. the securities
that can be purchased by Fortis Funds). Please see "What
securities/transactions are exempt from the Code?" to determine
whether your transactions are exempt from the pre-clearance
requirements of the Code.
o Pre-clearance Request. Prior to buying or selling securities for your
own account, you must complete a pre-clearance request form for the
trade. The form may include more than one proposed trade. Please see
Exhibit A for blank pre-clearance request forms for equity and fixed
income trades. The pre-clearance request must include your name, the
date, the name of the security, the CUSIP number of the security,
whether you are buying or selling securities, and whether the trade is
an IPO or private placement. If you do not know to whom you should
submit your request, you should contact the legal department.
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o Where to Submit Request. For equity trades, the form may be delivered
or faxed to the equity traders. For fixed income trades, the form may
be delivered or faxed to the designated fixed income portfolio manager
or fixed income trading supervisor. You may also request pre-clearance
via e-mail to the individuals listed above. If you do not know to whom
you should submit your request, you should contact the legal
department.
o Deadline for Pre-clearance Request. The pre-clearance request must be
received by 12:00 noon eastern time for same day approval. If received
after noon, you will receive a response to your pre-clearance request
on the following business day. It is highly recommended that you
submit your pre-clearance request before 9:00 a.m. eastern time so
that the trade may be reviewed at regular daily morning meetings of
the investment staffs. Early submission will expedite the approval
process for your trade.
o Approval of Trade. The person reviewing your request will verify with
mutual fund accounting that there have been no buy or sell orders by
Fortis Funds for the security you are proposing to trade within the
past 7 calendar days. We will not consider or review the trading
activity of any of the sub-advised funds of Adviser's when determining
whether to approve your request.
Each portfolio manager will be contacted to determine whether or
not they intend to trade in that security within the next 7 calendar
days. If a portfolio manager is traveling, the person reviewing the
request must make a reasonable attempt to contact the portfolio
manager by phone, voice mail or e-mail. If the portfolio manager
cannot be contacted, the person reviewing the request must make a
decision based upon his/her knowledge of the portfolio and its trading
activity. If a portfolio
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manager expects to trade the security in the next 7 calendar days,
your request will be denied.
The person reviewing your request will determine and inform you
by phone or e-mail whether your requested trade was approved or
denied. If your request is approved and Fortis Funds trade in the
security within the next 7 calendar days following the approval, the
reason for the trade must be noted on the pre-clearance request form
and the trade ticket.
o Expiration of Approval. The approval of your personal securities trade
will be effective for 7 calendar days from and including the date of
the approval. For example, if your request is approved on Tuesday, the
approval would expire at the close of business on the following
Monday. If you do not execute the trade within 7 calendar days, you
must submit a new pre-clearance request form to receive approval. If
your request is denied, you must submit a new pre-clearance request
form to receive approval.
o Recordkeeping. Once a request is approved or denied, the pre-clearance
request form must be signed by the person reviewing the request on the
appropriate approval or denial line. If the request is denied, the
person reviewing the request must note the reason for the denial on
the pre-clearance request form. The person reviewing the request will
log the request into a pre-clearance control log. The equity and fixed
income departments will maintain separate pre-clearance control logs
for equity and fixed income trades. At the end of each calendar
quarter, the equity and fixed income departments will forward the
pre-clearance control logs to the legal department. All pre-clearance
request forms will be maintained by the fixed income and equity
departments for 5 years. All pre-clearance control logs will be
maintained by the legal department for 5 years.
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4. Short Term Profits. You may not profit from the purchase and sale, or sale
and purchase, of the same (or equivalent) security subject to the Code
within 60 calendar days if the security was held by Fortis Funds during the
60-day period. An "equivalent" security means any option, warrant,
convertible security, stock appreciation right, or similar right with an
exercise or conversion privilege at a price related to the subject
security, or similar securities with a value derived from the value of the
subject security. If you obtain a short term profit from the securities
trade, you must surrender the profits on a prorata basis to the appropriate
Fortis Funds.
5. Reporting Requirements. Please see "What are my reporting requirements if
I'm an Access Person or an Investment Person?" for further information.
6. Annual Certification of Compliance. You must sign an annual certification
of compliance provided by the legal department at the end of each calendar
year. It certifies that you:
o read and understand the Code;
o acknowledge that you are subject to the terms of the Code as an Access
Person;
o disclosed or reported all personal securities trades required to be
disclosed or reported pursuant to the Code; and
o to the best of your knowledge, you complied with the Code.
Please see Exhibit C for a blank annual certificate of compliance.
7. Gifts. You may not accept any gifts worth more than $100 from any business
contacts of Advisers, Fortis Investors, Inc., or Fortis Funds. Gifts
include cash, gift certificates, merchandise, use of property or facilities
for weekends, vacations, trips, etc. Gifts do not include business dinners
or entertainment, or promotional items (e.g. pens, mugs, caps, T-shirts,
etc.) which are consistent with customary business practices in the
industry. Please see Fortis, Inc. and Affiliates Policy Statement on
Employee Conduct and Supplemental Policy Statement on Management Conduct
("Code of Conduct") for further restrictions on gifts. If you would like a
copy of the Code of Conduct, please contact the legal department.
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WHAT ARE INVESTMENT PERSONS REQUIRED TO DO UNDER THE CODE? If you are an
Investment Person, you must comply with the following requirements.
1. Exercise Your Best Judgment. You should not engage in any personal
securities transaction that you know will be detrimental to the best
interest of any Fortis Fund. You should use your best judgment in
effecting, or failing to effect, any Fortis Fund trade. You should not
consider your personal financial situation in connection with decisions
regarding Fortis Fund portfolio transactions.
2. Personal Securities Trades. Margin and naked option trading are relatively
risky methods of investing that can create particular problems for
financial service employees. For this reason, we urge you to avoid margin
and naked option trading. Before engaging in options and futures
transactions, you should understand the impact that the 60 day rule may
have on your ability to close out a position with a profit. Please see
"Short Term Profits" in this section for further information. When you buy
or sell securities, you should:
o not trade a security subject to the Code for your own account within a
7 calendar day period before or after a Fortis Fund trades that same
security. Please see "What securities are subject to the Code?" and
"What securities/transactions are exempt from the Code?": and
o disclose your ownership of a security to the legal department if you
are recommending that a Fortis Fund trade the security.
3. Pre-clearance of Personal Securities Trades.
o Exemption from Pre-clearance Requirements. You must obtain
pre-clearance for securities subject to the Code (i.e., the securities
that can be purchased by Fortis Funds). Please see "What
securities/transactions are exempt from the Code?" to
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determine whether your transactions are exempt from the pre-clearance
requirements of the Code.
o Pre-clearance Request. Prior to buying or selling securities for your
own account, you must complete a pre-clearance request form for the
trade. The form may include more than one proposed trade. Please see
Exhibit A for blank pre-clearance request forms for equity and fixed
income trades. The pre-clearance request must include your name, the
date, the name of the security, the CUSIP number of the security,
whether you are buying or selling securities, and whether the trade is
an IPO or private placement.
o Where to Submit Request. For equity trades, the form may be delivered
or faxed to the equity traders. For fixed income trades, the form may
be delivered or faxed to the designated fixed income portfolio manager
or fixed income trading supervisor. You may also request pre-clearance
via e-mail to the individuals listed above.
If the designated fixed income portfolio manager requests
pre-clearance for fixed income securities, the portfolio manager may
not approve his/her own request. The request must be delivered, faxed
or e-mailed to the fixed income trading supervisor, or in his/her
absence, to the head of the fixed income department.
If the fixed income trading supervisor requests pre-clearance for
fixed income securities, the fixed income trading supervisor may not
approve his/her own request. The request must be delivered, faxed or
e-mailed to the designated fixed income portfolio manager, or in
his/her absence, to the head of the fixed income department.
If an equity trader requests pre-clearance for equity securities,
the trader may not approve his/her own request. The request must be
delivered, faxed or e-mailed to another trader, or in that trader's
absence, to the head of the equity department.
If you do not know to whom you should submit your request, you
should contact the legal department.
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o Deadline for Pre-clearance Request. The pre-clearance request must be
received by 12:00 noon eastern time for same day approval. If received
after noon, you will receive a response to your pre-clearance request
on the following business day. It is highly recommended that you
submit your pre-clearance request before 9:00 a.m. eastern time so
that the trade may be reviewed at regular daily morning meetings of
the investment staffs. Early submission will expedite the approval
process for your trade.
o Approval of Trade. The person reviewing your request will verify with
mutual fund accounting that there have been no buy or sell orders by
Fortis Funds for the security you are proposing to trade within the
past 7 calendar days. We will not consider or review the trading
activity of any of the sub-advised funds of Adviser's when determining
whether to approve your request.
Each portfolio manager will be contacted to determine whether or
not they intend to trade in that security within the next 7 calendar
days. If a portfolio manager ...is traveling, the person reviewing the
request must make a reasonable attempt to contact the portfolio
manager by phone, voice mail or e-mail. If the portfolio manager
cannot be contacted, the person reviewing the request must make a
decision based upon his/her knowledge of the portfolio and its trading
activity. If a portfolio manager expects to trade the security in the
next 7 calendar days, your request will be denied.
The person reviewing your request will determine and inform you
by phone or e-mail whether your requested trade was approved or
denied. If your request is approved and Fortis Funds trade in the
security within the next 7 calendar days following the approval, the
reason for the trade must be noted on the pre-clearance request form
and the trade ticket.
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o Expiration of Approval. The approval of your personal securities trade
will be effective for 7 calendar days from and including the date of
the approval. For example, if your request is approved on Tuesday, the
approval would expire at the close of business on the following
Monday. If you do not execute the trade within 7 calendar days, you
must submit a new pre-clearance request form to receive approval. If
your request is denied, you must submit a new pre-clearance request
form to receive approval.
o Recordkeeping. Once a request is approved or denied, the pre-clearance
request form must be signed by the person reviewing the request on the
appropriate approval or denial line. If the request is denied, the
person reviewing the request must note the reason for the denial on
the pre-clearance request form. The person reviewing the request will
log the request into a pre-clearance control log. The equity and fixed
income departments will maintain separate pre-clearance control logs
for equity and fixed income trades. At the end of each calendar
quarter, the equity and fixed income departments will forward the
pre-clearance control logs to the legal department. All pre-clearance
request forms will be maintained by the fixed income and equity
departments for 5 years. All pre-clearance control logs will be
maintained by the legal department for 5 years.
4. Prohibition Against Trading For Managed Portfolios. If a portfolio manager
makes a personal securities trade, he/she may not trade in that security
for any of his/her managed portfolios for 7 calendar days without obtaining
a waiver. If the portfolio manager demonstrates that this restriction will
have a negative impact on the portfolio, the head of the equity department
for equity trades or the head of the fixed income department for fixed
income trades, and in their absence, the legal department or the investment
compliance department, may waive this restriction. The reason
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for the waiver must be clearly documented on the trade ticket and portfolio
manager's pre-clearance request form.
5. Short Term Profits. You may not profit from the purchase and sale, or sale
and purchase, of the same (or equivalent) security subject to the Code
within 60 calendar days if the security was held by Fortis Funds during the
60-day period. An "equivalent" security means any option, warrant,
convertible security, stock appreciation right, or similar right with an
exercise or conversion privilege at a price related to the subject
security, or similar securities with a value derived from the value of the
subject security. If you obtain a short term profit from the securities
trade, you must surrender the profits on a prorata basis to the appropriate
Fortis Funds.
6. Initial Public Offering Prohibition. You may not buy equity or fixed income
securities subject to the Code which are part of an initial public
offering.
7. Private Placements Limitations.
o Approval. You may not purchase or sell securities subject to the Code
offered through a private placement without the express prior approval
of the legal department. In reviewing your request, the legal
department will consider, among other factors, whether the investment
opportunity should be reserved for a Fortis Fund and its shareholders,
and whether the opportunity is being offered to you because of your
position with Advisers, Fortis Investors, Inc., or Fortis Funds. If
the same company offers you another opportunity to invest in a private
placement in the future, you will need to seek the approval of the
legal department.
o Disclosure. If you receive approval, you must disclose your investment
through the private placement to the legal department.
o Review of Fortis Fund Purchase. If you buy shares of a company through
a private placement and recommend that a Fortis Fund invest in the
same company's securities, then another Investment Person with no
personal interest in the company must review the Fortis Fund's
proposed purchase.
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8. Reporting Requirements. Please see "What are my reporting requirements if
I'm an Access Person or an Investment Person?" for further information.
9. Annual Certification of Compliance. You must sign an annual certification
of compliance for Advisers provided by the legal department at the end of
each calendar year. It certifies that you:
o read and understand the Code;
o acknowledge that you are subject to the terms of the Code as an
Investment Person;
o disclosed or reported all personal securities trades required to be
disclosed or reported pursuant to the Code; and
o to the best of your knowledge, you complied with the Code.
Please see Exhibit C for a blank annual certificate of compliance.
10. Gifts. You may not accept any gifts worth more than $100 from any business
contacts of Advisers, Fortis Investors, Inc., or Fortis Funds. Gifts
include cash, gift certificates, merchandise, use of property or facilities
for weekends, vacations, trips, etc. Gifts do not include business dinners
or entertainment, or promotional items (e.g. pens, mugs, caps, T-shirts,
etc.) which are consistent with customary business practices in the
industry. Please see Fortis, Inc. and Affiliates Policy Statement on
Employee Conduct and Supplemental Policy Statement on Management Conduct
("Code of Conduct") for further restrictions on gifts. If you would like a
copy of the Code of Conduct, please contact the legal department.
11. Service as Director. Investment Persons may not serve as a director of a
publicly traded company without the prior consent of the Chief Executive
Officer of Advisers. The Chief Executive Officer will not provide such
authorization unless he or she, in consultation with the legal department,
finds that serving as a director would not be inconsistent with interests
of Fortis Funds
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and their shareholders. Fortis Funds may not invest in the securities of a
such publicly traded company while an Investment Person is serving as a
director unless the Chief Executive Officer and President of Advisers
approve the trade. Please see Fortis, Inc. and Affiliates Policy Statement
on Employee Conduct and Supplemental Policy Statement on Management Conduct
("Code of Conduct") for further restrictions on serving as a director. If
you would like a copy of the Code of Conduct, please contact the legal
department.
WHAT ADDITIONAL REQUIREMENTS ARE THERE IF I'M A REGISTERED REPRESENTATIVE WITH
FORTIS INVESTORS, INC.?
1. Initial Public Offerings. If you are a registered representative of Fortis
Investor's Inc., you and your immediate family are prohibited from
purchasing initial public offerings. This prohibition exists whether or not
you are an Access Person or an Investment Person. Immediate family members
include parents, mother-in-law, father-in-law, husband, wife, brother,
sister, brother-in-law, sister-in-law, son, daughter, son-in-law,
daughter-in-law, and any other person who is supported, directly or
indirectly, by the buyer of the securities.
2. Authorization to Open New Account. If you are a registered representative
of Fortis Investor's Inc., you must provide written notice disclosing your
association with Fortis Investors, Inc. to other broker/dealers or
financial institutions with whom your opening your account. You must also
submit a written authorization request to Fortis Investor's Inc. prior to
opening or trading in a securities account with another NASD member firm.
You do not need to submit an authorization request for accounts with only
mutual funds or life insurance contracts. The name and address of the other
broker/dealer or financial institution must be included on the
authorization request. Please see Exhibit F for an example of an
authorization request. Fax the completed authorization request to the
Fortis Compliance Department at (651) 738-5262. Upon receipt, we will
forward the appropriate authorization to the NASD member firm opening your
account. If you
21
<PAGE> 22
have questions regarding the authorization request, please contact the Fortis
Investors, Inc.'s Compliance Department at (800) 800-2638, extension 3180.
WHAT ARE MY REPORTING REQUIREMENTS IF I'M AN ACCESS PERSON OR AN INVESTMENT
PERSON? In addition to the following information that you must provide, we
reserve the right to request additional information regarding your personal
securities transactions.
1. Exemption from Reporting Requirements. Please see "What
securities/transactions are exempt from the Code?" to determine whether
your transactions are exempt from the reporting requirements of the Code.
2. Personal Securities Holdings Report. You must submit to the legal
department a report of all securities subject to the Code owned (1) in your
name and (2) in accounts over which you could be expected to exercise
influence or control within 10 calendar days after becoming an Access
Person or an Investment Person. You must continue to submit these reports
within 10 calendar days after the end of each calendar year thereafter.
Please see "Who has to comply with the Code?" to determine the accounts
over which you could be expected to exercise influence or control and
Exhibit D for a blank personal securities holdings report.
3. Confirmations and Periodic Statements. You must instruct your broker to
send a duplicate copy of every confirmation of your personal securities
trades and securities trades for accounts over which you could be expected
to exercise influence or control. The duplicate copy should be addressed to
the legal department and mailed at the same time your confirmation is
mailed. You must also direct your broker to provide duplicate copies of any
periodic statements on any of your accounts to the legal department of
Advisers. Please see "Scope of Reports, Confirmations and Periodic
Statements" to determine the accounts over which you could be expected to
exercise influence or control and Exhibit B for a form of request for
duplicate confirmations and periodic statements.
22
<PAGE> 23
4. Quarterly Reports. You must submit quarterly reports to the legal
department no later than ten (10) calendar days after the end of each
calendar quarter. Please see Exhibit E for a blank quarterly report of
securities trades. Your report must contain all information required by the
form. If you did not buy or sell securities during the quarter, you should
indicate that information in the report. If you did buy or sell securities
during the quarter, the report should contain the following information:
o The date of the transaction, the title, the interest rate and maturity
date (if applicable), the number of shares, and the principal amount
of each security involved;
o The nature of the transactions (i.e., purchase, sale, or any other
type of acquisition or disposition);
o The price at which the transaction was effected; and
o The name of the broker, dealer, or bank with or through whom the
transaction was effected.
5. Reports of Violations. You must promptly report to the legal department any
trade which is, or might appear to be, in violation of the Code. Your
report should contain the same information required in quarterly reports.
HOW DO WE USE THE INFORMATION WE COLLECT?
1. Annual Report for Board of Directors. Prior to February 1 of each year, the
legal department will prepare an annual report regarding the Code for the
Board of Directors. The report will:
o summarize existing procedures regarding personal securities trades and
any changes in the procedures within the past year;
o describe in detail violations of the Code and remedial actions taken
for violations for the prior calendar year;
23
<PAGE> 24
o include significant conflicts of interest that arose involving
personal investment policies of the organization, even if the
conflicts did not result in a violation of the Code.
o identify any recommended changes in existing restrictions or
procedures of the Code based upon Advisers', Fortis Investors, Inc.'s
or Fortis Funds' experience with the Code, evolving industry
practices, or developments in applicable laws or regulations;
o contain a certification by an officer of Advisers, Fortis Investors,
Inc., and Fortis Funds that each organization adopted procedures
reasonably necessary to prevent Access Persons and Investment Persons
from violating the Code.
All reports will be kept confidential except as disclosure to the Boards of
Directors of Fortis Funds, Advisers, Fortis Investors, Inc., or other
appropriate persons as may be reasonably necessary to accomplish the purposes of
this Code.
2. Maintenance of Information. The equity and fixed income departments will
maintain the pre-clearance request forms for 5 years. The legal department
will maintain the following information for 5 years:
o a copy of the Code;
o a list of Access Persons and Investment Persons;
o a copy of the pre-clearance control log;
o a copy of each annual or quarterly report made by an Access Person or
an Investment Person;
o a record of each private placement approval and disclosure; and
o a record of any violation of the Code and any action taken as a result
of the violation.
HOW DO WE HANDLE VIOLATIONS OF THE CODE?
1. Violations by Employees and Officers. The legal department will investigate
any alleged
24
<PAGE> 25
violation of the Code. In addition, the legal department may request
additional information on any trading activity, including activity that
does not need to be pre-cleared under the Code or is exempt from reporting
under the Code. If the legal department determines that you materially
violated the Code, it will report the violation and recommend appropriate
sanctions to either (1) the Chief Executive Officer and President of
Advisors or (2) the President of Fortis Investors, Inc. who will determine
what sanctions to enforce in consultation with the legal department.
2. Violation by Directors, Chief Executive Officer or President. The legal
department will investigate any alleged violation of the Code. If the legal
department determines that you materially violated the Code, it will report
the violation and recommend appropriate sanctions to (1) the Board of
Directors of Advisers, (2) the Board of Directors of Fortis Investors,
Inc., and/or (3) the Board of Directors of Fortis Funds.
The Board of Directors will determine appropriate sanctions for the
violation. The Board of Directors may delegate its enforcement duties of the
Code to a special committee of the Board of Directors comprised of at least
three persons. If you are a member of the Board of Directors who is charged with
a violation of the Code, you may not serve on the committee or participate in
the deliberations of the Board of Directors.
3. Sanctions. Possible sanctions include: monetary penalties, letter of
censure, suspension of trading, suspension of employment, reduction in
salary or position, termination of employment/officership, removal from the
Board of Directors, and/or surrender of profits from the violating trade.
-----------------------
(1) It is intended that this Code of Ethics meet the requirements of Section 17
of the Investment Company Act, Rule 17j-1 thereunder; Section 15(f) of the
Securities Exchange Act of 1934, rules and regulations thereunder; Section 204A
of the Investment Advisers Act of 1940, rules and regulations thereunder.
(2) Under the Investment Company Act of 1940, requirements imposed on Access
Persons, Investment Persons, and Independent Directors shall be based upon such
person's "beneficial ownership". Rule 16a-1 of the Securities Exchange Act of
1934 defines "beneficial owner" as:
any person who, directly or indirectly, through any contract, arrangement,
understanding, relationship or otherwise, has or shares a direct or indirect
pecuniary interest in the equity securities, subject to the following:
25
<PAGE> 26
(i) The term "pecuniary interest" in any class of equity securities shall mean
the opportunity, directly or indirectly, to profit or share in any profit
derived from a transaction in the subject securities.
(ii) The term "indirect pecuniary interest" in any class of equity securities
shall include, but not be limited to:
(a) securities held by members of a person's immediate family sharing the
same household; provided, however, that the presumption of such
beneficial ownership may be rebutted;
(b) a general partner's proportionate interest in the portfolio securities
held by a general or limited partnership;
(c) a performance-related fee, other than an asset-backed fee, received by
any broker, dealer, bank, insurance company, investment company,
investment adviser, investment manager, trustee or person or entity
performing a similar function; provided, however, that no pecuniary
interest shall be present where:
(1) the performance-related fee, regardless when payable, is
calculated based upon net capital gains and/or net capital
appreciation generated from the portfolio or from the fiduciary's
overall performance over a period of one year or more; and
(2) equity securities of the issuer do not account for more than ten
percent of the market value of the portfolio. A right to a
nonperformance related fee alone shall not represent a pecuniary
interest in the securities;
(d) a person's right to dividends that is separated or separable from the
underlying securities;
(e) a person's interest in securities held by trust;
(f) a person's right to acquire equity securities through the exercise or
conversion of any derivative security whether or not presently
exercisable.
(iii) A shareholder shall not be deemed to have a pecuniary interest in the
portfolio securities held by a corporation or similar entity in which the
person owns securities if the shareholder is not a controlling shareholder
of the entity and does not have or share investment control over the
entity's portfolio.
We intend for the section "Who has to comply with the Code?" in the main text of
the Code to include every person or entity included in the definition of
beneficial owner in Rule 16a-1 of the Securities Exchange Act of 1934. In any
situation where there is inconsistency between "Who has to comply with the
Code?" and the definition of beneficial owner in Rule 16a-1, the definition in
Rule 16a-1 will govern.
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<PAGE> 27
EXHIBIT A
FORTIS ADVISERS, INC.
PRECLEARANCE REQUEST
FOR
EQUITY SECURITIES
NAME OF REQUESTER: DATE OF REQUEST:
--------------------- ---------------------
PHONE/EXTENSION:
-------------------------------------------------
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
BOUGHT OR
SOLD SAME
PRIVATE SECURITY IN
IPO PLACEMENT LAST 60 DAYS*
NAME OF SECURITY BUY SELL CUSIP (YES/NO) (YES/NO) (PROFIT/LOSS) APPROVED DENIED
<S> <C> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* If you will profit from the proposed sale or purchase, please write "Profit"
in the box on this form. If you will suffer a loss from the proposed sale or
purchase, please write "Loss" in the box on this form. If you have not bought or
sold the same security in the last 60 days, please write N/A.
ALL OTHER RELEVANT INFORMATION THAT SHOULD BE CONSIDERED IN RESPONDING TO YOUR
PRECLEARANCE REQUEST:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
APPROVED BY: SIGNATURE:
---------------------------- ----------------------------
DATE:
-----------------
DENIED BY: SIGNATURE:
------------------------------ ----------------------------
DATE:
-----------------
REASON FOR DENIAL:
--------------------------------------------------------------
--------------------------------------------------------------------------------
PLEASE FAX TO SAM TOY (212) 859-5895 BY NOON EASTERN TIME FOR SAME DAY APPROVAL.
TO ENSURE SAME DAY APPROVAL, PLEASE CALL HIM AT (212) 859-7143 TO LET HIM KNOW
YOU FAXED THE FORM.
<PAGE> 28
EXHIBIT A
FORTIS ADVISERS, INC.
PRECLEARANCE REQUEST
FOR
FIXED INCOME SECURITIES
NAME OF REQUESTER: DATE OF REQUEST:
---------------------- ---------------------
PHONE/EXTENSION:
-------------------------------------------------
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
BOUGHT OR
SOLD SAME
PRIVATE NEW SECURITY IN
PLACEMENT ISSUE LAST 60 DAYS*
CUSIP NAME OF ISSUER COUPON MATURITY BUY SELL (YES/NO) (YES/NO) (PROFIT/LOSS) APPROVED DENIED
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* If you will profit from the proposed sale or purchase, please write "Profit"
in the box on this form. If you will suffer a loss from the proposed sale or
purchase, please write "Loss" in the box on this form. If you have not bought or
sold the same security in the last 60 days, please write N/A.
ALL OTHER RELEVANT INFORMATION THAT SHOULD BE CONSIDERED IN RESPONDING TO YOUR
PRECLEARANCE REQUEST:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
APPROVED BY: SIGNATURE:
------------------------------- --------------------------
DATE:
-------------------------------
DENIED BY: SIGNATURE:
--------------------------------- --------------------------
DATE:
-------------------------------
REASON FOR DENIAL:
--------------------------------------------------------------
--------------------------------------------------------------------------------
PLEASE FAX TO MAROUN HAYEK OR MICHELLE LAVELLE AT (212) 859-7273 BY NOON EASTERN
TIME FOR SAME DAY APPROVAL.
<PAGE> 29
Exhibit B
Date
Broker ABC
Street Address
City, State Zip
Re: John Smith & Mary Smith
Account No. xxxxxxxxxxxx
In connection with my existing brokerage accounts at your firm noted above,
please be advised that the Legal Department of Fortis Advisers, Inc. should be
noted as an "Interested Party" with respect to my accounts. They should,
therefore, be sent copies of all trade confirmations and periodic statements
relating to my account.
Please send the requested documentation ensuring the account holder's name
appears on all correspondence to:
Sandra Schreur Jones
Investment Advisory Attorney
Fortis Advisers, Inc.
500 Bielenberg Drive, 50-1
Woodbury, MN 55125
Thank you for your cooperation in this request.
Sincerely yours,
John Smith & Mary Smith
cc: Sandra Schreur Jones (651) 739-6771
<PAGE> 30
EXHIBIT C
CODE OF ETHICS
ANNUAL CERTIFICATION OF COMPLIANCE
I hereby certify that: (1) I read and understand the Code of Ethics of Fortis
Advisers, Inc. and its Affiliates; and (2) I acknowledge that I am subject to
the Code's terms and conditions as an __________________________ [Access Person,
Investment Person, or Independent Director].
Except as listed below, I hereby certify that: (1) I reported all of my personal
securities transactions for the year ______ that are required to be disclosed or
reported by the Code; and (2) To the best of my knowledge, I complied with all
of the provisions of the Code for the year _____.
------------------------------ ------------------------------
Date Signature
------------------------------
Printed name
Please list any exceptions to this certification here:
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Please return this certification to Sandra Schreur Jones, Investment Advisory
Attorney, Fortis Advisers, Inc., 500 Bielenberg Drive, 5O-1, Woodbury, MN 55125.
<PAGE> 31
EXHIBIT D
PERSONAL SECURITIES HOLDING REPORT
Name (Please print): ____________________________________
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
Name of Security (including interest # Units, Shares Market Value Trading CUSIP* Name of Broker
rate and maturity date if applicable) or Contracts/Par Symbol
<S> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*The CUSIP number does not need to be listed for Fortis Funds.
Signature: ____________________________________ Date:____________________
INSTRUCTIONS:
1. Report all non-exempt securities owned by you, your spouse, your minor
children, other persons sharing your household for a period of at least one
year, or any entity or person for whom you provide investment advice or make
investment decisions. If you do not own any securities reportable under the
Code of Ethics, please write "None"
2. Exempted securities from reporting: (a) securities issued or guaranteed by
the US government or its agencies or instrumentalities; (b) bankers'
acceptances; (c) bank certificate of deposits or time deposits; (d)
commercial paper; (e) repurchase agreements; (f) shares of registered
open-end investment companies except Fortis Funds; and (g) shares of money
market funds. You must report holdings of Fortis Funds except for Fortis
Money Fund. If you would like trades in Fortis Funds to be automatically
reported for anyone listed under Instruction #1, please provide the
appropriate social security numbers or tax identification numbers.
3. Please return this report to Sandra Schreur Jones, Investment Advisory
Attorney, Fortis Advisers, Inc., 500 Bielenberg Drive, 5O-1, Woodbury, MN
55125.
<PAGE> 32
EXHIBIT E
QUARTERLY REPORT OF SECURITY TRADES FOR QUARTER ENDED ______________________
NAME (PLEASE PRINT):
----------------------------------------------
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
Name of Security Date of Buy, # Units, Market Trading CUSIP (required Executing IPO? Private
(including interest rate Transaction Sell, Shares or Value Symbol except for Broker/Dealer Y/N Placement?
and maturity date if Etc. Contracts/Par open-end mutual Y/N
applicable) funds)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Signature: ____________________________________ Date:____________________
INSTRUCTIONS:
1. Report all non-exempt transactions by you, your spouse, your minor children,
other persons sharing your household for a period of at least one year, or
any entity or person for whom you provide investment advice or make
investment decisions for the quarter ended _______________. If no reportable
transactions under the Code of Ethics, please write "None"
2. Exempted securities or transactions from reporting: (a) securities issued or
guaranteed by the US government or its agencies or instrumentalities; (b)
bankers' acceptances; (c) bank certificate of deposits or time deposits; (d)
commercial paper; (e) repurchase agreements; (f) stock splits or dividends;
(g) shares of registered open-end investment companies (mutual funds) except
Fortis Funds; and (h) shares of money market funds.
3. Reportable transactions include gifts of securities and trades in Fortis
Funds, except Fortis Money Fund. If you would like trades in Fortis Funds to
be automatically reported for anyone listed under Instruction #1, please
provide the appropriate social security numbers or tax identification
numbers. For changes in percentage allocation to Fortis Funds in your 401(k),
use the form "Change in Percentage Allocation to Fortis Funds in 401(k)."
4. Please return this report to Sandra Schreur Jones, Investment Advisory
Attorney, Fortis Advisers, Inc., 500 Bielenberg Drive, 5O-1, Woodbury, MN
55125.
<PAGE> 33
EXHIBIT F
Authorization Request to Open New Account
Date:
------------------------
VIA FAX: (651) 738-5262
To: FORTIS INVESTORS, COMPLIANCE DEPARTMENT
I am a Registered Representative with Fortis Investors, Inc. requesting
authorization to open a securities account with another broker/dealer or
financial institution. I have already notified the other broker/dealer or
financial institution that I am a Registered Representative of Fortis Investors,
Inc. I understand that Fortis Investors, Inc. is required to approve and
supervise the activities of its Registered Representatives and their individual
securities accounts. Please provide me with authorization to open an outside
securities account.
Below is informaiton regarding my new account. I UNDERSTAND THAT I DO NOT NEED
TO SUBMIT AN AUTHORIZATION REQUEST FOR ACCOUNTS WITH ONLY MUTUAL FUNDS OR LIFE
INSURANCE CONTRACTS.
Name and Address of Broker/Dealer or Financial Institution:
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
Account Number if known:
-------------------------------------------------------
Name and Phone Number of Contact person if known:
------------------------------
If you have any questions regarding my authorization request, please call me at:
-------------------------------------------.
Sincerely,
Name:
---------------------------------------
Fortis Company/Department:
---------------------------------------
