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EXHIBIT 16(a)
BLACKROCK FUNDS/SM/
Code of Ethics
I. Introduction.
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The purpose of this Code of Ethics is to prevent Access Persons (as
defined below) of BlackRock Funds/SM/ (the "Fund") from engaging in any act,
practice or course of business prohibited by paragraph (b) of Rule 17j-1 (the
"Rule") under the Investment Company Act of 1940, as amended (the "Act"). This
Code of Ethics is required by paragraph (c) of the Rule. A copy of the Rule is
attached to this Code of Ethics as Appendix 1.
Access Persons of the Fund, in conducting their personal securities
transactions, owe a fiduciary duty to the shareholders of the Fund. The
fundamental standard to be followed in personal securities transactions is that
Access Persons may not take inappropriate advantage of their positions. All
personal securities transactions by Access Persons must be conducted in such a
manner as to avoid any actual or potential conflict of interest between the
Access Person's interest and the interests of the Fund, or any abuse of an
Access Person's position of trust and responsibility. Potential conflicts
arising from personal investment activities could include buying or selling
securities based on knowledge of the Fund's trading position or plans (sometimes
referred to as front-running), and acceptance of personal favors that could
influence trading judgments on behalf of the Fund. While this Code of Ethics is
designed to address identified conflicts and potential conflicts, it cannot
possibly be written broadly enough to cover all potential situations and, in
this regard, Access Persons are expected to adhere not only to the letter, but
also the spirit, of the policies contained herein.
II. Definitions.
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In order to understand how this Code of Ethics applies to particular
persons and transactions, familiarity with the key terms and concepts used in
this Code of Ethics is necessary. Those key terms and concepts are:
1. "Access Person" means any trustee, officer or "advisory person"
of the Fund. A list of the Fund's Access Persons is attached as Appendix 2 to
this Code of Ethics and will be updated from time to time.
2. "Advisory person" means (a) any employee of the Fund or of any
company in a control relationship to the Fund, who, in connection with his
regular functions or duties, makes, participates in, or obtains information
regarding the purchase or sale of a "Covered Security" by the Fund, or whose
functions relate to the making of any recommendations with respect to such
purchases or sales; and (b) any natural person in a control
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relationship to the Fund who obtains information concerning recommendations made
to the Fund with regard to the purchase or sale of "Covered Securities".
3. "Beneficial ownership" has the meaning set forth in Rule 16a-
1(a)(2) of the Securities Exchange Act of 1934, as amended, a copy of which is
included as Appendix 3. The determination of direct or indirect beneficial
ownership shall apply to all securities which an Access Person has or acquires.
4. "BDI" means BlackRock Distributors, Inc., the Fund's principal
underwriter.
5. "BDI Code" means the Code of Ethics adopted by BDI and approved
by the Board.
6. "BlackRock" means BlackRock, Inc. and certain of its affiliates
that act as investment adviser and sub-adviser to the Fund.
7. "BlackRock Code" means the Employee Investment Transaction Policy
adopted by BlackRock and approved by the Board.
8. "Control" has the meaning set forth in Section 2(a)(9) of the
Act.
9. "Covered Security" has the meaning set forth in Section 2(a)(36)
of the Act, except that it shall not include: direct obligations of the
Government of the United States; bankers' acceptances, bank certificates of
deposit, commercial paper, and high-quality short-term debt instruments,
including repurchase agreements; and shares issued by registered open-end
investment companies. A high-quality short-term debt instrument is one with 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 rating
organization.
10. "Independent trustee" means a trustee of the Fund who is not an
"interested person" of the Fund within the meaning of Section 2(a)(19) of the
Act.
11. "Investment Personnel" of the Fund means (a) any employee of the
Fund (or of any company in a control relationship to the Fund) who, in
connection with his or her regular functions or duties, makes or participates in
making recommendations regarding the purchase or sale of securities by the Fund
and (b) any natural person who controls the Fund and who obtains information
concerning recommendations made to the Fund regarding the purchase or sale of
securities by the Fund.
12. "IPO" means an offering of securities registered under the
Securities Act of 1933, the issuer or which, immediately before the
registration, was not subject to the reporting requirements of Sections 13 or
15(d) of the Securities Exchange Act.
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13. "Limited Offering" means an offering exempt from registration
under the Securities Act of 1933 pursuant to Section 4(2), 4(6) or Rule 504, 505
or 506 under the Securities Act of 1933.
14. "Purchase or sale of a Covered Security" includes, among other
things, the writing of an option to purchase or sell a Covered Security.
III. Restrictions Applicable to Directors, Officers and Employees of BlackRock
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and BDI.
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1. All Directors, officers and employees of BlackRock's investment
advisory companies and BDI shall be subject to the restrictions, limitations and
reporting responsibilities set forth in the BlackRock Code and BDI Code,
respectively, as if fully set forth herein.
2. Persons subject to this Section III shall not be subject to the
restrictions, limitations and reporting responsibilities set forth in Sections
IV. and V. below.
IV. Prohibitions; Exemptions.
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1. Prohibited Purchases and Sales.
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A. No Access Person may purchase or sell, directly or indirectly,
any Covered Security in which that Access Person has, or by reason of the
transaction would acquire, any direct or indirect beneficial ownership and which
to the actual knowledge of that Access Person at the time of such purchase or
sale:
(1) is being considered for purchase or sale by the Fund; or
(2) is being purchased or sold by the Fund.
2. Exemptions From Certain Prohibitions.
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A. The prohibited purchase and sale transactions described in
paragraph IV.1 above do not apply to the following personal securities
transactions:
(1) purchases or sales effected in any account over which the Access
Person has no direct or indirect influence or control;
(2) purchases or sales which are non-volitional on the part of either
the Access Person or the Fund;
(3) purchases which are part of an automatic dividend reinvestment
plan (other than pursuant to a cash purchase plan option);
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(4) 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
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the rights were acquired from that issuer, and sales of the rights so
acquired;
(5) any purchase or sale, or series of related transactions,
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 $1 billion;
(6) any purchase or sale which the Compliance Officer of BlackRock
(as defined in the BlackRock Code) approves on the grounds that its
potential harm to the Fund is remote.
3. Prohibited Recommendations.
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An Access Person may not recommend the purchase or sale of any Covered
Security to or for the Fund without having disclosed his or her interest, if
any, in such security or the issuer thereof, including without limitation:
A. any direct or indirect beneficial ownership of any Covered
Security of such issuer, including any Covered Security received in a private
securities transaction;
B. any contemplated purchase or sale by such person of a Covered
Security;
C. any position with such issuer or its affiliates; or
D. any present or proposed business relationship between such issuer
or its affiliates and such person or any party in which such person has a
significant interest.
4. Pre-approval of Investments in Initial
Public Offerings or Limited Offerings.
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A. No Investment Personnel shall purchase any security (including,
but not limited to, any Covered Security) issued in an initial public offering
("IPO") or a Limited Offering unless an officer of the Fund approves the
transaction in advance. The Secretary shall maintain a written record of any
decisions to permit these transactions, along with the reasons supporting the
decision.
V. Reporting.
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1. Initial Holdings Reports.
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No later than ten (10) days after a person becomes an Access Person,
he or she must report to the Fund the following information:
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(i) the title, number of shares and principal amount of each
Covered Security in which the Access Person had any direct or indirect
beneficial ownership when the person became an Access Person;
(ii) the name of any broker, dealer or bank with whom the Access
Person maintained an account in which any securities were held for the
direct or indirect benefit of the Access Person as of the date the person
became an Access Person; and
(iii) the date that the report is submitted by the Access Person.
2. Quarterly Reporting.
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A. Every Access Person shall either report to the Fund the
information described in paragraphs B and C below with respect to transactions
in any Covered Security in which the Access Person has, or by reason of the
transaction acquires, any direct or indirect beneficial ownership in the
security or, in the alternative, make the representation in paragraph D below.
B. Every report shall be made not later than 10 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, the interest rate and
maturity date (if applicable), the number of shares and the principal
amount of each Covered Security involved;
(2) the nature of the transaction (i.e., purchase, sale or any other
type of acquisition or disposition);
(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;
(5) the date that the report is submitted by the Access Person; and
(6) a description of any factors potentially relevant to an analysis
of whether the Access Person may have a conflict of interest with respect
to the transaction, including the existence of any substantial economic
relationship between the transaction and securities held or to be acquired
by the Fund.
C. With respect to any account established by the Access Person in
which any securities were held during the quarter for the direct or indirect
benefit of the Access Person, no
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later than 10 days afer the end of a calendar quarter, an Access Person shall
provide a report to the Fund containing the following information:
(1) the name of the broker, dealer or bank with whom the Access
Person established the account;
(2) the date the account was established; and
(3) the date that the report is submitted by the Access Person.
D. If no transactions were conducted by an Access Person during a
calendar quarter that are subject to the reporting requirements described above,
such Access Person shall, not later than 10 days after the end of that calendar
quarter, provide a written representation to that effect to the Fund.
3. Annual Reporting.
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A. Every Access Person shall report to the Fund the information
described in paragraph B below with respect to transactions in any Covered
Security in which the Access Person has, or by reason of the transaction
acquires, any direct or indirect beneficial ownership in the security.
B. Annually, within 30 days of the end of each calendar year, the
following information (which information must be current as of a date no more
than 30 days before the report is submitted):
(1) The title, number of shares and principal amount of each Covered
Security in which the Access Person had any direct or indirect 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 that the report is submitted by the Access Person.
4. Exceptions to Reporting Requirements.
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A. An Access Person is not required to make a report otherwise
required under paragraphs 1, 2 or 3 above with respect to any transaction
effected for any account over which the Access Person does not have any direct
or indirect influence or control; provided, however, that if the Access Person
is relying upon the provisions of this paragraph 4(A) to avoid making such a
report, the Access Person shall, not later than 10 days after the end of each
calendar quarter, identify any such account in writing and certify in writing
that he or she had no direct or indirect influence over any such account.
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B. An independent trustee of the Fund who would be required to make
a report pursuant to paragraphs 1, 2 or 3 above solely by reason of being a
trustee of the Fund is not required to make an initial holdings report under
paragraph 1 above and an annual report under paragraph 3 above, and is only
required to make a quarterly report under paragraph 2 above if the independent
trustee, at the time of the transaction, knew or, in the ordinary course of
fulfilling the independent trustee's official duties as a trustee of the Fund,
should have known that (a) the Fund has engaged in a transaction in the same
security within the last 15 days or is engaging or going to engage in a
transaction in the same security within the next 15 days, or (b) the Fund or
BlackRock has within the last 15 days considered a transaction in the same
security or is considering a transaction in the same security or within the next
15 days is going to consider a transaction in the same security.
5. Annual Certification.
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A. All Access Persons are required to certify that they have read
and understand this Code of Ethics and recognize that they are subject to the
provisions hereof and will comply with the policy and procedures stated herein.
Further, all Access Persons are required to certify annually that they have
complied with the requirements of this Code of Ethics and that they have
reported all personal securities transactions required to be disclosed or
reported pursuant to the requirements of such policies. A copy of the
certification form to be used in complying with this paragraph A is attached to
this Code of Ethics as Appendix 4.
B. The Fund, BlackRock and BDI shall prepare an annual report to the
Board of Trustees of the Fund to be presented at the first regular meeting of
the Board after March 31 of each year and which shall:
(1) Summarize existing procedures concerning personal investing,
including preclearance policies and the monitoring of personal investment
activity after preclearance has been granted, and any changes in the procedures
during the past year;
(2) describe any issues arising under the Code of Ethics or
procedures since the last report to the Board including, but not limited to,
information about any material violations of the Code of Ethics or procedures
and the sanctions imposed during the past year;
(3) identify any recommended changes in existing restrictions or
procedures based upon experience under this Code of Ethics, evolving industry
practice or developments in applicable laws and regulations;
(4) contain such other information, observations and recommendations
as deemed relevant by the Fund, BlackRock or BDI; and
(5) certify that the Fund, BlackRock and BDI have adopted Codes of
Ethics with procedures reasonably necessary to prevent Access Persons from
violating the provisions of Rule 17j-1(b) or this Code.
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6. Notification of Reporting Obligation and Review of Reports.
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Each Access Person shall receive a copy of this Code of Ethics and be
notified of his or her reporting obligations. All reports shall be promptly
submitted upon completion to the Fund's Secretary who shall review such reports.
7. Miscellaneous.
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A. Any report under this Code of Ethics may contain a statement
that the report shall not be construed as an admission by the person making the
report that the person has any direct or indirect beneficial ownership in the
securities to which the report relates.
VI. Confidentiality.
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No Access Person shall reveal to any other person (except in the
normal course of his or her duties on behalf of the Fund) any information
regarding securities transactions by the Fund or consideration by the Fund or
BlackRock of any such securities transaction.
All information obtained from any Access Person hereunder shall be
kept in strict confidence, except that reports of securities transactions
hereunder will be made available to the Securities and Exchange Commission or
any other regulatory or self-regulatory organization to the extent required by
law or regulation.
VII. Sanctions.
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Upon discovering a violation of this Code of Ethics, the Board of
Trustees of the Fund may impose any sanctions it deems appropriate, including a
letter of censure, the suspension or termination of any trustee, officer or
employee of the Fund, or the recommendation to the employer of the violator of
the suspension or termination of the employment of the violator.
Dated: May 10, 2000
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Appendix 1
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Rule 17j-1 under the 1940 Act
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Appendix 2
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The following are "Access Persons" for purposes of the foregoing Code
of Ethics:
Name Title
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Raymond J. Clark Trustee, President and Treasurer
David R. Wilmerding, Jr. Chairman of the Board
Anthony M. Santomero Vice Chairman of the Board
William O. Albertini Trustee
Robert M. Hernandez Trustee
Brian P. Kindelan Secretary
Karen H. Sabath Assistant Secretary
Ellen L. Corson Assistant Treasurer
Portfolio Managers of the Fund
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Appendix 3
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Rule 16a-1(a)(2) under the Securities Exchange Act
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Appendix 4
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CERTIFICATION FORM
This is to certify that I have read and understand the Code of Ethics
of BlackRock Funds dated May 10, 2000, and that I recognize that I am subject to
the provisions thereof and will comply with the policy and procedures stated
therein.
This is to further certify that I have complied with the requirements
of such Code of Ethics and that I have reported all personal securities
transactions required to be disclosed or reported pursuant to the requirements
of such Code of Ethics.
Please sign your name here: ___________________________
Please print your name here: ___________________________
Please date here: ________________________________
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Please sign two copies of this Certification Form, return one copy to
Mr. Bart Battista, c/o BlackRock Funds, 345 Park Avenue, New York, New York
10154, and retain the other copy, together with a copy of the Code of Ethics,
for your records.
