As Filed with the Commission on April 28, 2000
1940 Act File No. 811-6698
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No.
...10......................................... X
EQUITY 500 INDEX PORTFOLIO
(Exact Name of Registrant as Specified in Charter)
One South Street, Baltimore, Maryland 21202
(Address of Principal Executive Offices)
(410) 895-5000
(Registrant's Telephone Number)
Daniel O. Hirsch, Esq. Copies to: Burton M. Leibert, Esq.
One South Street Willkie Farr & Gallagher
Baltimore, Maryland 21202 One Citicorp Center
(Name and Address of Agent for Service) 153 East 53rd Street
New York, New York 10022
Explanatory Note
This Amendment to the Registrant's Registration Statement on Form N-1A (the
"Registration Statement") has been filed by the Registrant to Section 8(b) of
the Investment Company Act of 1940. However, beneficial interests in the series
of the Registrant are not being registered under the Securities Act of 1933 (the
"1933 Act"), because such interests will be issued solely in private placement
transactions that do not involve any "public offering" within the meaning of
Section 4(2) of the 1933 Act. Investments in the Registrant's series may only be
made by investment companies, insurance company separate accounts, common or
commingled trust funds or similar organizations or
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entities that are "accredited investors" within the meaning of Regulation D
under the 1933 Act. The registration Statement does not constitute an offer to
sell, or the solicitation of an offer to buy, any beneficial interests in any
series of the Registrant.
Equity 500 Index Portfolio
PART A
Responses to Items 1,2,3,5 and 9 have been omitted pursuant to paragraph 2(b) of
Instruction B of the General Instructions to Form N-1A.
ITEM 4. INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT STRATEGIES, AND RELATED
RISKS
The investment objective of Equity 500 Index Portfolio (the "Portfolio") may be
changed without shareholder approval. The investment objective of the Portfolio
is to seek to match, as closely as possible, before expenses, the performance of
the Standard & Poor's 500 Composite Stock Price Index (the "S&P 500 Index"),
which emphasizes stocks of large U.S. companies.
There can be no assurance that the investment objective of the Portfolio will be
achieved. Additional information about the investment policies of the Portfolio
appears in Part B of this Registration Statement. The Registrant incorporates by
reference information concerning the Portfolio's investment objective and
policies and risk factors associated with investments in the Portfolio from the
sections entitled "Objective," "Strategy," "Principal Investments," "Investment
Process," "Risks," and "Organizational Structure," in the prospectus of BT
Pyramid Mutual Funds -- Equity 500 Index Investment (the "Feeder Fund") (the
"Feeder Fund Prospectus").
ITEM 6. MANAGEMENT, ORGANIZATION AND CAPITAL STRUCTURE
Capitalized terms used in this Part A have the same meaning as in the Feeder
Fund's prospectus. Registrant incorporates by reference information concerning
the management of the Portfolio from the sections entitled "Annual Fund
Operating Expenses" and "Management of the Fund" in the Feeder Fund's
Prospectus.
The Portfolio is organized as a trust under the laws of the State of New York.
The Portfolio's Declaration of Trust provides
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that investors in the Portfolio (e.g., investment companies, insurance company
separate accounts and common and commingled trust funds) will each be liable for
all obligations of the Portfolio. However, the risk of an investor in the
Portfolio incurring financial loss on account of such liability is limited to
circumstances in which both inadequate insurance existed and the Portfolio
itself was unable to meet its obligations.
Investments in the Portfolio have no preemptive or conversion rights and are
fully paid and non-assessable, except as set forth below. The Portfolio is not
required and has no current intention to hold annual meetings of investors, but
the Portfolio will hold special meetings of investors when in the judgment of
the Trustees it is necessary or desirable to submit matters for an investor
vote. Changes in fundamental policies will be submitted to investors for
approval. Investors have under certain circumstances (e.g., upon application and
submission of certain specified documents to the Trustees by a specified number
of investors) the right to communicate with other investors in connection with
requesting a meeting of investors for the purpose of removing one or more
Trustees. Investors also have the right to remove one or more Trustees without a
meeting by a declaration in writing by a specified number of investors. Upon
liquidation of the Portfolio, investors would be entitled to share pro rata in
the net assets of the Portfolio available for distribution to investors.
Registrant incorporates by reference additional information concerning the
Portfolio's capital stock from the sections entitled "Calculating the Fund's
Share Price," "Buying and Selling Fund Shares," and "Dividends and
Distributions," and "Tax Considerations" in the Feeder Fund Prospectus.
Each investor in the Portfolio may add to or reduce its investment in the
Portfolio on each Portfolio Business Day. At the Valuation Time, on each such
business day, the value of each investor's beneficial interest in the Portfolio
will be determined by multiplying the net asset value of the Portfolio by the
percentage, effective for that day, that represents that investor's share of the
aggregate beneficial interests in the Portfolio. Any additions or withdrawals,
which are to be effected on that day, will then be effected. The investor's
percentage of the aggregate beneficial interests in the Portfolio will then be
re-computed as the percentage equal to the fraction (i) the numerator of which
is the value of such investor's investment in the Portfolio as of the Valuation
Time, on such day plus or minus, as the case may be, the amount of any
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additions to or withdrawals from the investor's investment in the Portfolio
effected on such day, and (ii) the denominator of which is the aggregate net
asset value of the Portfolio as of the Valuation Time on such day plus or minus,
as the case may be, the amount of the net additions to or withdrawals from the
aggregate investments in the Portfolio by all investors in the Portfolio. The
percentage so determined will then be applied to determine the value of the
investor's interest in the Portfolio as of the Valuation Time, on the following
business day of the Portfolio.
The net income of the Portfolio shall consist of (i) all income accrued, less
the amortization of any premium, on the assets of the Portfolio, less (ii) all
actual and accrued expenses of the Portfolio determined in accordance with
generally accepted accounting principles. Interest income includes discount
earned (including both original issue and market discount) on discount paper
accrued ratably to the date of maturity and any net realized gains or losses on
the assets of the Portfolio. All the net income of the Portfolio is allocated
pro rata among the investors in the Portfolio. The net income is accrued daily
and distributed monthly to the investors in the Portfolio.
Under the anticipated method of operation of the Portfolio, the Portfolio will
not be subject to any income tax. However, each investor in the Portfolio will
be taxed on its share (as determined in accordance with the governing
instruments of the Portfolio) of the Portfolio's ordinary income and capital
gain in determining its income tax liability. The determination of such share
will be made in accordance with the Internal Revenue Code of 1986, as amended
(the "Code"), and regulations promulgated thereunder.
It is intended that the Portfolio's assets, income and distributions will be
managed in such a way that an investor in the Portfolio will be able to satisfy
the requirements of Subchapter M of the Code, assuming that the investor
invested all of its assets in the Portfolio.
ITEM 7. SHAREHOLDER INFORMATION
Registrant incorporates by reference information concerning computation of net
asset value and valuation of the Portfolio's assets from sections entitled
"Calculating the Fund's Share Price" and "Buying and Selling Fund Shares" in the
Feeder Fund's Prospectus.
<PAGE>
Beneficial interests in the Portfolio are issued solely in private placement
transactions that do not involve any "public offering" within the meaning of
Section 4(2) of the 1933 Act. Investments in the Trust may only be made by
investment companies, insurance company separate accounts, common or commingled
trust funds or similar organizations or entities that are "accredited investors"
within the meaning of Regulation D under the 1933 Act. This Registration
Statement does not constitute an offer to sell, or the solicitation of an offer
to buy, any "security" within the meaning of the 1933 Act.
An investment in the Portfolio may be made without a sales load. All investments
are made at net asset value next determined if an order is received by the
Portfolio by the designated cutoff time for each accredited investor. The net
asset value of the Portfolio is determined on each Portfolio Business Day. The
Portfolio's portfolio securities are valued primarily on the basis of market
quotations or, if quotations are not readily available, by a method which the
Board of Trustees believes accurately reflects fair value.
There is no minimum initial or subsequent investment in the Portfolio. However,
because the Portfolio intends to be as fully invested at all times as is
reasonably practicable in order to enhance the yield on its assets, investments
must be made in Federal funds (i.e., monies credited to the account of the
Portfolio's custodian bank by a Federal Reserve Bank).
An investor in the Portfolio may withdraw all or any portion of its investment
at the net asset value next determined if a withdrawal request in proper form is
furnished by the investor to the Portfolio by the designated cutoff time for
each accredited investor. The proceeds of a withdrawal will be paid by the
Portfolio in Federal funds normally on the Portfolio Business Day the withdrawal
is effected, but in any event within seven days. The Portfolio reserves the
right to pay redemptions in kind. Investments in the Portfolio may not be
transferred.
The right of any investor to receive payment with respect to any withdrawal may
be suspended or the payment of the withdrawal proceeds postponed during any
period in which the NYSE is closed (other than weekends or holidays) or trading
on such Exchange is restricted, or, to the extent otherwise permitted by the
1940 Act, if an emergency exists.
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The Portfolio and ICC Distributors, Inc. ("ICC"), reserve the right to cease
accepting investments at any time or to reject any investment order.
The placement agent for the Portfolio is ICC. The principal business address of
ICC is Two Portland Square, Portland, Maine 04101. ICC receives no additional
compensation for serving as the placement agent for the Portfolio.
Registrant incorporates by reference information concerning the dividends and
distributions and tax consequences from the sections entitled "Dividends and
Distributions" and "Tax Considerations" in each Feeder Fund's Prospectus.
ITEM 8. DISTRIBUTION ARRANGEMENTS
The Registrant incorporates by reference information concerning its
Master-Feeder structure from the sections entitled "Organizational Structure" in
each Feeder Fund's Prospectus.
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Equity 500 Index Portfolio
PART B
ITEM 10. COVER PAGE AND TABLE OF CONTENTS.
The Prospectus of the Equity 500 Index Portfolio (the "Portfolio") dated April
30, 2000, which may be amended from time to time provides the basic information
investors should know before investing. This SAI, which is not a Prospectus, is
intended to provide additional information regarding the activities and
operations of the Portfolio and should be read in conjunction with the
Prospectus. You may request a copy of a prospectus or a paper copy of this SAI,
if you have received it electronically, free of charge by calling the Portfolio
at 1-800-730-1313
TABLE OF CONTENTS
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FUND HISTORY
DESCRIPTION OF THE FUND AND ITS INVESTMENT RISKS
MANAGEMENT OF THE FUND
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
INVESTMENT ADVISORY AND OTHER SERVICES
BROKERAGE ALLOCATION AND OTHER PRACTICES
CAPITAL STOCK AND OTHER SECURITIES
PURCHASE, REDEMPTION AND PRICING OF SECURITIES BEING OFFERED
TAXATION OF THE FUND
UNDERWRITERS
CALCULATION OF PERFORMANCE DATA
FINANCIAL STATEMENTS
ITEM 11. FUND HISTORY
The Equity 500 Index Portfolio (the "Portfolio") was organized as a trust under
the laws of the State of New York on December 11, 1991.
ITEM 12. DESCRIPTION OF THE FUND AND ITS INVESTMENT RISKS
The Portfolio is a no-load, open-end management investment company. Registrant
incorporates by reference information concerning the investment policies and
limitations of the Portfolio from the sections entitled "Investment Objectives,
Policies and Restrictions" in the Statement of Additional Information of BT
Investment Funds -- Equity 500 Index Investment (the "Feeder Fund") (the "Feeder
Fund's SAI").
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Capitalized terms used in this Part B have the same meaning as in
the Feeder Fund's SAI.
ITEM 13. MANAGEMENT OF THE FUND
Registrant incorporates by reference information concerning the management of
the Portfolio from the section entitled "Management of the Trusts" in the Feeder
Fund's SAI.
ITEM 14. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of April 24, 2000, Equity 500 Index Investment, a series of BT Pyramid Mutual
Funds, Equity 500 Index Premier, a series of BT Institutional Funds, Scudder S&P
500 Index Fund, Homestead Stock Index Fund and USAA S&P 500 Index Fund (each a
"Fund") owned approximately 13%, 36%, 4%, 0.3% and 46%, respectively, of the
value of the outstanding interests in the corresponding Portfolio. Because each
Fund controls the corresponding Portfolio, it may take actions without the
approval of any other investor in the Portfolio.
ITEM 15. INVESTMENT ADVISORY AND OTHER SERVICES
Registrant incorporates by reference information concerning the investment
advisory and other services provided for or on behalf of the Portfolio from the
section entitled "Management of the Trusts" in the Feeder Fund's SAI.
ITEM 16. BROKERAGE ALLOCATION AND OTHER PRACTICES
Registrant incorporates by reference information concerning the brokerage
allocation and other practices of the Portfolios from the section entitled
"Investment Objectives, Policies and Restrictions--Brokerage Commissions" in the
Feeder Fund's SAI.
ITEM 17. CAPITAL STOCK AND OTHER SECURITIES
Under the Declaration of Trust, the Trustees are authorized to issue beneficial
interests in the Portfolio. Investors are entitled to participate pro rata in
distributions of taxable income, loss, gain and credit of the Portfolio. Upon
liquidation or dissolution of the Portfolio, investors are entitled to share pro
rata in the Portfolio's net assets available for distribution to its investors.
Investments in the Portfolio have no preference, preemptive, conversion or
similar rights and are fully paid and non-assessable, except as set forth below.
Investments in the Portfolio may not be transferred.
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Each investor is entitled to a vote in proportion to the amount of its
investment in the Portfolio. Investors in the Portfolio do not have cumulative
voting rights, and investors holding more than 50% of the aggregate beneficial
interest in the Portfolio may elect all of the Trustees if they choose to do so
and in such event the other investors in the Portfolio would not be able to
elect any Trustee. The Portfolio is not required and has no current intention to
hold annual meetings of investors but the Portfolio will hold special meetings
of investors when in the judgment of the Portfolio's Trustees it is necessary or
desirable to submit matters for an investor vote. No material amendment may be
made to the Portfolio's Declaration of Trust without the affirmative majority
vote of investors (with the vote of each being in proportion to the amount of
its investment).
The Portfolio may enter into a merger or consolidation, or sell all or
substantially all of its assets, if approved by the vote of two thirds of its
investors (with the vote of each being in proportion to its percentage of the
beneficial interests in the Portfolio), except that if the Trustees recommend
such sale of assets, the approval by vote of a majority of the investors (with
the vote of each being in proportion to its percentage of the beneficial
interests of the Portfolio) will be sufficient. The Portfolio may also be
terminated (i) upon liquidation and distribution of its assets if approved by
the vote of two thirds of its investors (with the vote of each being in
proportion to the amount of its investment) or (ii) by the Trustees by written
notice to its investors.
Investors in the Portfolio will be held personally liable for its obligations
and liabilities, subject, however, to indemnification by the Portfolio in the
event that there is imposed upon an investor a greater portion of the
liabilities and obligations of the Portfolio than its proportionate beneficial
interest in the Portfolio. The Declaration of Trust also provides that the
Portfolio shall maintain appropriate insurance (for example, fidelity bonding
and errors and omissions insurance) for the protection of the Portfolio, its
investors, Trustees, officers, employees and agents covering possible tort and
other liabilities. Thus, the risk of an investor incurring financial loss on
account of investor liability is limited to circumstances in which both
inadequate insurance existed and the Portfolio itself was unable to meet its
obligations.
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The Declaration of Trust further provides that obligations of the Portfolio are
not binding upon the Trustees individually but only upon the property of the
Portfolio and that the Trustees will not be liable for any action or failure to
act, but nothing in the Declaration of Trust protects a Trustee against any
liability to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of his office.
ITEM 18. PURCHASE, REDEMPTION AND PRICING OF SECURITIES BEING OFFERED
Beneficial interests in the Portfolio are issued solely in private placement
transactions that do not involve any "public offering" within the meaning of
Section 4(2) of the 1933 Act. See Item 7 "Shareholder Information" in Part A of
this Registration Statement.
Registrant incorporates by reference information concerning the method followed
by the Portfolio in determining its net asset value and the timing of such
determinations from the section entitled "Valuation of Securities; Redemptions
and Purchases in Kind" in the Feeder Fund SAI.
ITEM 19. TAXATION OF THE FUND
Registrant incorporates by reference information concerning the taxation of the
Portfolio from the section entitled "Taxation" in the Feeder Fund SAI.
It is intended that the Portfolio's assets, income and distributions will be
managed in such a way that an investor in the Portfolio will be able to satisfy
the requirements of Subchapter M of the Code, assuming that the investor
invested all of its assets in the Portfolio.
There are certain tax issues that will be relevant to only certain of the
investors in the Portfolio. All investors are advised to consult their own tax
advisors as to the tax consequences of an investment in the Portfolio.
ITEM 20. UNDERWRITERS
The placement agent for the Portfolio is ICC Distributors, Inc., which receives
no additional compensation for serving in this capacity. Investment companies,
insurance company separate accounts, common and commingled trust funds and
similar
<PAGE>
organizations and entities may continuously invest in the Portfolio.
ITEM 21. CALCULATION OF PERFORMANCE DATA
Not applicable.
ITEM 22. FINANCIAL STATEMENTS
The financial statements for the Portfolio for the period ended December 31,
1999 are incorporated herein by reference from the BT Pyramid Mutual
Funds--Equity 500 Index Investment's Annual Report dated December 31, 1999 (File
Nos. 33-34079 and 811-6071) and have been included in reliance upon the report
of PricewaterhouseCoopers L.L.P., independent certified public accountants, as
experts in accounting and auditing. A copy of the Annual Report may be obtained
without charge by contacting the Trust.
PART C OTHER INFORMATION
Responses to Items 23(e) and (i)-(k) have been omitted pursuant to paragraph
2(b) of Instruction B of the General Instructions to Form N-1A.
ITEM 23. EXHIBITS
(a) Conformed copy of Declaration of Trust of the Registrant; 2.
(i) Amendment No. 1 to Declaration of Trust; 2
(b) By-Laws of the Registrant; 2
(c) Not applicable.
(d) Advisory Agreement dated June 4, 1999, between the Registrant and
Bankers Trust Company ("Bankers Trust"); filed herewith
(f) Not applicable.
(g) Conformed copy of Custodian Agreement between the Registrant and
Bankers Trust; 4.
(h) Administration and Services Agreement between the Registrant and
Bankers Trust; 1
(i) Conformed copy of Exclusive Placement Agent Agreement; filed
herewith.
(ii) Copy of Exhibit A to Exclusive Placement Agent Agreement; +.
(iii) Expense Limitation Agreement dated December 31, 1999, among BT
Institutional Funds, Cash Management Portfolio, Treasury Money
Portfolio, Equity 500 Index
<PAGE>
Portfolio, BT Investment Portfolios and Bankers Trust Company;
filed herewith
(iv) Expense Limitation Agreement dated December 31, 1999, among
BT Pyramid Mutual Funds, Cash Management Portfolio, and
Bankers Trust Company; filed herewith
(l) Investment representation letters of initial investors; 1.
(m) Not applicable.
(n) Not applicable.
(o) Not applicable.
(p) Portfolio, Adviser and Exclusive Placement Agent Codes of Ethics;
filed herewith
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+ All exhibits have been filed electronically.
1 Incorporated by reference to Registrant's registration statement on Form
N-1A("Registration Statement") as filed with the Securities and Exchange
Commission("Commission") on June 9, 1992.
2 Incorporated by reference to Amendment No. 4 to Registrant's Registration
Statement as filed with the Commission on April 26, 1996.
3 Incorporated by reference to Amendment No. 5 to Registrant's Registration
Statement as filed with the Commission on March 19, 1997.
4 Incorporated by reference to Amendment No. 6 to Registrant's Registration
Statement as filed with the Commission on June 2, 1997.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT:
None
ITEM 25. INDEMNIFICATION:
Incorporated by reference to Amendment No. 4 to Registrant's Registration
Statement as filed with the Commission on April 26, 1996.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER:
Bankers Trust Company ("Bankers Trust") serves as investment adviser to the
Portfolio. Bankers Trust, a New York banking corporation, is a wholly owned
subsidiary of Deutsche Bank A.G.
<PAGE>
Bankers Trust conducts a variety of commercial banking and trust activities and
is a major wholesale supplier of financial services to the international
institutional market.
To the knowledge of the Trust, none of the directors or officers of Bankers
Trust, except those set forth below, is engaged in any other business,
profession, vocation or employment of a substantial nature, except that certain
directors and officers also hold various positions with and engage in business
for Deutsche Bank A.G. and its affiliates or subsidiaries. Set forth below are
the names and principal businesses of the directors and officers of Bankers
Trust who, to our knowledge as of April 25, 2000, are engaged in any other
business, profession, vocation or employment of a substantial nature.
Josef Ackermann
Member, Board of Managing Directors, Deutsche Bank AG; Chairman of the Board and
Chief Executive Officer, Bankers Trust Corporation; Chairman of the Board and
Chief Executive Officer, Bankers Trust Company; Chairman of the Supervisory
Board, Deutsche Bank Luxembourg, S.A.; Supervisory Board Memberships in: EUREX
Frankfurt AG; EUREX Zurich AG; Linde AG, Stora Enso Oyj and Mannesmann AG;
Director, Deutsche Bank Americas Holding Corp. Address: Deutsche Bank AG,
Taunusanlage 12, 60325 Frankfurt am Main, Germany.
Hans Angermueller
"Of Counsel", Shearman & Sterling; Director, Bankers Trust Corporation;
Director, Bankers Trust Company. Address: Shearman & Sterling, 599 Lexington
Avenue, Suite 1414, New York, New York 10022-6069.
George B. Beitzel
Private Investor; Director, Bankers Trust Corporation; Director, Bankers Trust
Company; Directorships in: Bitstream, Inc.; Computer Task Group, Inc.; and Staff
Leasing Inc. Address: 29 King Street, Chappaqua, New York 10514-3432.
Yves de Balman
Co-Chairman and Co-Chief Executive Officer, DB Alex. Brown LLC; Vice Chairman,
Bankers Trust Corporation; Director, Bankers Trust International, plc; Director,
Aerospatiale Matra; Co-Chairman and Co-Chief Executive Officer, Deutsche Bank
Securities Inc. Address: 130 Liberty Street, New York, New York 10006.
William R. Howell
Chairman Emeritus, J.C. Penney Company, Inc.; Director, Bankers Trust
Corporation; Director, Bankers Trust Company; Director, Exxon Mobil Corporation;
Warner-Lambert Company; Halliburton Company; Williams, Inc.;
<PAGE>
Central and South West Corporation. Adddress: 6501 Legacy Drive, Plano, Texas
75054-3698.
Hermann-Josef Lamberti
Executive Vice President, Deutsche Bank AG; Director and Vice Chairman, Bankers
Trust Corporation; Director, Bankers Trust Company; Board memberships: Euroclear
plc (London); Euroclear sc. (Brussels); and The Clearinghouse Interbank Payments
Co. L.L.C. Supervisory Board Memberships in: GZS (Frankfurt) and the European
Transaction Bank (e.t.b.). Director, Deutsche Bank Americas Holding Corp.
Address: Deutsche Bank AG, Taunusanlage 12, 60325 Frankfurt am Main, Germany.
Troland S. Link
General Counsel of Deutsche Bank North America; General Counsel, Bankers Trust
Corporation; Managing Director and General Counsel, Bankers Trust Company.
Address: 1301 Sixth Avenue - Fl.8, New York, NY 10019.
Rodney A. McLauchlan
Executive Vice President, Bankers Trust Company; Executive Vice President,
Bankers Trust Corporation. Address: 31 West 52nd Street, Fl.28, New York, NY
10019.
John A. Ross
Chief Executive Officer of the Americas, Deutsche Bank AG; President and
Director, Bankers Trust Corporation; President and Director, Bankers Trust
Company; President, Director and Chief Executive Officer, Taunus Corporation and
DB U.S. Financial Markets Holding Corporation; President and Chief Executive
Officer, Deutsche Bank Americas Holding Corp.; Director, Deutsche Bank
Securities Inc.and DB Alex. Brown LLC. Address: Deutsche Bank, 31 West 52nd
Street, FL. 28, New York, New York 10019.
Ronaldo H. Schmitz
Member of the Group Board, Deutsche Bank AG, Director, Bankers Trust
Corporation; Director, Bankers Trust Company; Non-executive Director,
Bertelsmann AG, Glaxo Wellcome plc, Rohm & Haas Co. and INSEAD - Paris, France;
Director, Deutsche Bank Americas Holding Corp. Address: Deutsche Bank AG,
Taunusanlage 12, 60325 Frankfurt am Main, Germany.
Mayo A. Shattuck III
Co-Chairman and Co-Chief Executive Officer, DB Alex. Brown LLC; Vice Chairman,
Bankers Trust Corporation; Director, Bankers Trust International, plc, Alex.
Brown & Sons Holdings Limited, Alex. Brown & Sons Limited, Alex. Brown Asset
Management, Inc., Alex. Brown Capital Advisory, Incorporated and Investment
Company Capital Corporation; Co-
<PAGE>
Chairman and Co-Chief Executive Officer, Deutsche Bank Securities Inc.; Director
and President - AB Administrative Partner, Inc., ABFS I Incorporated, ABS
Leasing Services Company, ABS MB Ltd., Alex. Brown Financial Corporation, Alex.
Brown Financial Services Incorporated, Alex. Brown Investments Incorporated,
Alex. Brown Management Services Inc. and Alex. Brown Mortgage Capital
Corporation; and Director and Vice President, Alex. Brown & Sons Holdings
Limited; Director, Constellation Holdings; President, South Street Aviation;
Co-Chairman and Co-Chief Executive Officer, Deutsche Bank Securities Inc.
Address: One South Street, Fl.30 Baltimore, MD 21202.
Item 27. PRINCIPAL UNDERWRITERS:
(a) ICC Distributors, Inc., the Distributor for shares of the Registrant, also
acts as principal underwriter for the following open-end investment companies:
BT Investment Funds, BT Advisor Funds, BT Institutional Funds, BT Pyramid Mutual
Funds, Cash Management Portfolio, Intermediate Tax Free Portfolio, NY Tax Free
Money Portfolio, Treasury Money Portfolio, International Equity Portfolio,
Equity 500 Index Portfolio, Capital Appreciation Portfolio, Asset Management
Portfolio, Deutsche Banc Alex. Brown Cash Reserve Fund, Inc., Flag Investors
Communications Fund, Inc., Flag Investors Emerging Growth Fund, Inc., the Flag
Investors Total Return U.S. Treasury Fund Shares of Total Return U.S. Treasury
Fund, Inc., the Flag Investors Managed Municipal Fund Shares of Managed
Municipal Fund, Inc., Flag Investors Short-Intermediate Income Fund, Inc., Flag
Investors Value Builder Fund, Inc., Flag Investors Real Estate Securities Fund,
Inc., Flag Investors Equity Partners Fund, Inc., Flag Investors Funds, Inc.
(formerly known as Deutsche Funds, Inc.), Flag Investors Portfolio Trust
(formerly known as Deutsche Portfolio), Morgan Grenfell Investment Trust, The
Glenmede Funds, Inc. and The Glenmede Portfolio.
(b) Unless otherwise stated, the principal business address for the
following persons is Two Portland Square, Portland, Maine 04101.
Name and Positions and Positions and
Principal Business Offices with Offices with
Address Distributor Registrant
John A. Keffer President None
Ronald H. Hirsch Treasurer None
Nanette K. Chern Chief Compliance Officer None
<PAGE>
David I. Goldstein Secretary None
Benjamin L. Niles Vice President None
Frederick Skillin Assistant Treasurer None
Marc D. Keffer Assistant Secretary None
(c) None
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS:
Registrant: One South Street, Baltimore, MD 21202.
Adviser, Custodian and Administrator: Bankers Trust Company, 130 Liberty Street,
New York, NY 10006.
Transfer Agent and Dividend Disbursing Agent: Investors Fiduciary Trust Company,
127 West 10th Street, Kansas City, MO 64105.
Placement Agent: ICC Distributors, Inc., Two Portland Square, Portland, ME
04101.
ITEM 29. MANAGEMENT SERVICES.
Not Applicable
ITEM 32. UNDERTAKINGS.
Not Applicable
<PAGE>
SIGNATURES
Pursuant to the requirements of the Investment Company Act of 1940, the
Registrant, EQUITY 500 INDEX PORTFOLIO, has duly caused this Amendment No. 10 to
its Registration Statement to be signed on its behalf by the undersigned,
thereto duly authorized, in the City of Baltimore and State of Maryland on the
28th day of April, 2000.
EQUITY 500 INDEX PORTFOLIO
By /s/Daniel O. Hirsch
Daniel O. Hirsch, Secretary
April 28, 2000
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of June 4, 1999 by and between EQUITY 500 INDEX
PORTFOLIO, a New York trust (herein called the "Trust") and BANKERS TRUST
COMPANY (herein called the "Investment Adviser").
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940;
WHEREAS, the Trust desires to retain the Investment Adviser to render
investment advisory and other services to the Trust with respect to certain of
its series of shares of beneficial interests as may currently exist or be
created in the future (each, a "Fund") as listed on Exhibit A hereto, and the
Investment Adviser is willing to so render such services on the terms
hereinafter set forth;
NOW, THEREFORE, this Agreement
W I T N E S S E T H:
In consideration of the promises and mutual covenants herein contained,
it is agreed between the parties hereto as follows:
1. Appointment. The Trust hereby appoints the Investment Adviser to act
as investment adviser to each Fund for the period and on the terms set forth in
this Agreement. The Investment Adviser accepts such appointment and agrees to
render the services herein set forth for the compensation herein provided.
2. Management. Subject to the supervision of the Board of Trustees of
the Trust, the Investment Adviser will provide a continuous investment program
for the Fund, including investment research and management with respect to all
securities, investments, cash and cash equivalents in the Fund. The Investment
Adviser will determine from time to time what securities and other investments
will be purchased, retained or sold by each Fund. The Investment Adviser will
provide the services rendered by it hereunder in accordance with the investment
objective(s) and policies of each Fund as stated in the Fund's then-current
prospectus and statement of additional information (or the Fund's then current
registration statement on Form N-1A as filed with the Securities and Exchange
Commission (the "SEC") and the then-current offering memorandum if the Fund is
not registered under the Securities Act of 1933, as amended ("1933 Act"). The
Investment Adviser further agrees that it:
(a) will conform with all applicable rules and regulations of
the SEC (herein called the "Rules") and with all applicable provisions of the
1933 Act; as amended, the Securities Exchange Act of 1934, as amended (the "1934
Act"), the Investment Company Act of 1940, as amended (the "1940 Act"); and the
Investment Advisers Act of 1940, as amended (the "Advisers Act"), and will, in
addition, conduct
<PAGE>
its activities under this Agreement in accordance with regulations of the Board
of Governors of the Federal Reserve System pertaining to the investment advisory
activities of bank holding companies and their subsidiaries;
(b) will place orders pursuant to its investment
determinations for each Fund either directly with the issuer or with any broker
or dealer selected by it. In placing orders with brokers and dealers, the
Investment Adviser will use its reasonable best efforts to obtain the best net
price and the most favorable execution of its orders, after taking into account
all factors it deems relevant, including the breadth of the market in the
security, the price of the security, the financial condition and execution
capability of the broker or dealer, and the reasonableness of the commission, if
any, both for the specific transaction and on a continuing basis. Consistent
with this obligation, the Investment Adviser may, to the extent permitted by
law, purchase and sell portfolio securities to and from brokers and dealers who
provide brokerage and research services (within the meaning of Section 28(e) of
the 1934 Act) to or for the benefit of any fund and/or other accounts over which
the Investment Adviser or any of its affiliates exercises investment discretion.
Subject to the review of the Trust's Board of Trustees from time to time with
respect to the extent and continuation of the policy, the Investment Adviser is
authorized to pay to a broker or dealer who provides such brokerage and research
services a commission for effecting a securities transaction which is in excess
of the amount of commission another broker or dealer would have charged for
effecting that transaction if the Investment Adviser determines in good faith
that such commission was reasonable in relation to the value of the brokerage
and research services provided by such broker or dealer, viewed in terms of
either that particular transaction or the overall responsibilities of the
Investment Adviser with respect to the accounts as to which it exercises
investment discretion; and
(c) will maintain books and records with respect to the
securities transactions of each Fund and will render to the Trust's Board of
Trustees such periodic and special reports as the Board may request.
3. Services Not Exclusive. The investment advisory services rendered by
the Investment Adviser hereunder are not to be deemed exclusive, and the
Investment Adviser shall be free to render similar services to others so long as
its services under this Agreement are not impaired thereby.
4. Books and Records. In compliance with the requirements of Rule 31a-3
of the Rules under the 1940 Act, the Investment Adviser hereby agrees that all
records which it maintains for the Trust are the property of the Trust and
further agrees to surrender promptly to the Trust any of such records upon
request of the Trust. The Investment Adviser further agrees to preserve for the
periods prescribed by Rule 31 a-2 under the 1940 Act the records required to be
maintained by Rule 31 a-1 under the 1940 Act and to comply in full with the
requirements of Rule 204-2 under the Advisers Act pertaining to
2
<PAGE>
the maintenance of books and records.
5. Expenses. During the term of this Agreement, the Investment Adviser
will pay all expenses incurred by it in connection with its activities under
this Agreement other than the cost of purchasing securities (including brokerage
commissions, if any) for the Fund.
6. Compensation. For the services provided and the expenses assumed
pursuant to this Agreement, the Trust will pay the Investment Adviser, and the
Investment Adviser will accept as full compensation therefor, fees, computed
daily and payable monthly, an amount equal to the rate of 0.075% of the
Portfolio's average daily net assets.
7. Limitation of Liability of the Investment Adviser: Indemnification.
(a) The Investment Adviser shall not be liable for any error
of judgment or mistake of law or for any loss suffered by a Fund in connection
with the matters to which this Agreement relates, except a loss resulting from a
breach of fiduciary duty with respect to the receipt of compensation for
services or a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Investment Adviser in the performance of its
duties or from reckless disregard by it of its obligations and duties under this
Agreement;
(b) Subject to the exceptions and limitations contained in
Section 7(c) below:
(i) the Investment Adviser (hereinafter referred to
as a "Covered Person") shall be indemnified by the respective Fund to the
fullest extent permitted by law, against liability and against all expenses
reasonably incurred or paid by him in connection with any claim, action, suit or
proceeding in which he becomes involved, as a party or otherwise, by virtue of
his being or having been the Investment Adviser of the Fund, and against amounts
paid or incurred by him in the settlement thereof;
(ii) the words "claim," "action," "suit," or
"proceeding" shall apply to all claims, actions, suits or proceedings (civil,
criminal or other, including appeals), actual or threatened while in office or
thereafter, and the words "liability" and "expenses" shall include, without
limitation, attorneys' fees, costs, judgments, amounts paid in settlement,
fines, penalties and other liabilities.
(c) No indemnification shall be provided hereunder to a
Covered Person:
(i) who shall have been adjudicated by a court or
body before which
3
<PAGE>
the proceeding was brought (A) to be liable to the Trust or to one or more
Funds' investors by reason of willful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in the conduct of his office, or
(B) not to have acted in good faith in the reasonable belief that his action was
in the best interest of a Fund; or
(ii) in the event of a settlement, unless there has
been a determination that such Covered Person did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office;
(A) by the court or other body approving
the settlement; or
(B) by at least a majority of those
Trustees who are neither Interested Persons of the Trust nor are parties to the
matter based upon a review of readily available facts (as opposed to a full
trial-type inquiry); or
(C) by written opinion of independent legal
counsel based upon a review of readily available facts (as opposed to a full
trial-type inquiry); provided, however, that any investor in a Fund may, by
appropriate legal proceedings, challenge any such determination by the Trustees
or by independent counsel.
(d) The rights of indemnification herein provided may be
insured against by policies maintained by the Trust, shall be severable, shall
not be exclusive of or affect any other rights to which any Covered Person may
now or hereafter be entitled, shall continue as to a person who has ceased to be
a Covered Person and shall inure to the benefit of the successors and assigns of
such person. Nothing contained herein shall affect any rights to indemnification
to which Trust personnel and any other persons, other than a Covered Person, may
be entitled by contract or otherwise under law.
(e) Expenses in connection with the preparation and
presentation of a defense to any claim, suit or proceeding of the character
described in subsection (b) of this Section 7 may be paid by the Trust on behalf
of the respective Fund from time to time prior to final disposition thereto upon
receipt of an undertaking by or on behalf of such Covered Person that such
amount will be paid over by him to the Trust on behalf of the respective Fund if
it is ultimately determined that he is not entitled to indemnification under
this Section 7; provided, however, that either (i) such Covered Person shall
have provided appropriate security for such undertaking or (ii) the Trust shall
be insured against losses arising out of any such advance payments, or (iii)
either a majority of the Trustees who are neither Interested Persons of the
Trust nor parties to the matter, or independent legal counsel in a written
opinion, shall have determined, based upon a review of readily available facts
as opposed to a trial-type inquiry or full investigation, that there is reason
to believe that such Covered Person will be entitled to
4
<PAGE>
indemnification under this Section 7.
8. Duration and Termination. This Agreement shall be effective as to a
Fund as of the date the Fund commences investment operations after this
Agreement shall have been approved by the Board of Trustees of the Trust with
respect to that Fund and the Investor(s) in the Fund in the manner contemplated
by Section 15 of the 1940 Act and, unless sooner terminated as provided herein,
shall continue until the second anniversary of such date. Thereafter, if not
terminated, this Agreement shall continue in effect as to such Fund for
successive periods of 12 months each, provided such continuance is specifically
approved at least annually (a) by the vote of a majority of those members of the
Board of Trustees of the Trust who are not parties to this Agreement or
Interested Persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval, or (b) by Vote of a Majority of the
Outstanding Voting Securities of the Trust; provided, however, that this
Agreement may be terminated by the Trust at any time, without the payment of any
penalty, by the Board of Trustees of the Trust, by Vote of a Majority of the
Outstanding Voting Securities of the Trust on 60 days' written notice to the
Investment Adviser, or by the Investment Adviser as to the Trust at any time,
without payment of any penalty, on 90 days' written notice to the Trust. This
Agreement will immediately terminate in the event of its assignment (as used in
this Agreement, the terms "Vote of a Majority of the Outstanding Voting
Securities," "Interested Person" and "Assignment' shall have the same meanings
as such terms have in the 1940 Act and the rules and regulatory constructions
thereunder.)
9. Amendment of this Agreement. No material term of this Agreement may
be changed, waived, discharged or terminated orally, but only by an instrument
in writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought, and no amendment of a material term of this
Agreement shall be effective with respect to a Fund, until approved by Vote of a
Majority of the Outstanding Voting Securities of that Fund.
10. Representations and Warranties. The Investment Adviser hereby
represents and warrants as follows:
(a) The Investment Adviser is exempt from registration under
the 1940 Act:
(b) The Investment Adviser has all requisite authority to
enter into, execute, deliver and perform its obligations under this Agreement;
(c) This Agreement is legal, valid and binding, and
enforceable in accordance with its terms; and
5
<PAGE>
(d) The performance by the Investment Adviser of its
obligations under this Agreement does not conflict with any law to which it is
subject.
11. Covenants. The Investment Adviser hereby covenants and agrees that,
so long as this Agreement shall remain in effect:
(a) The Investment Adviser shall remain either exempt from, or
registered under, the registration provisions of the Advisers Act; and
(b) The performance by the Investment Adviser of its
obligations under this Agreement shall not conflict with any law to which it is
then subject.
12. Notices. Any notice required to be given pursuant to this Agreement
shall be deemed duly given if delivered or mailed by registered mail, postage
prepaid, (a) to the Investment Adviser, Mutual Funds Services, 130 Liberty
Street (One Bankers Trust Plaza), New York, New York 10006 or (b) to the Trust,
c/o BT Alex. Brown, Inc., One South Street, Baltimore, Maryland 21202.
13. Waiver. With full knowledge of the circumstances and the effect of
its action, the Investment Adviser hereby waives any and all rights which it may
acquire in the future against the property of any investor in a Fund, other than
shares in that Fund, which arise out of any action or inaction of the Trust
under this Agreement.
14. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby.
This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and shall be governed by the
laws of the State of New York, without reference to principles of conflicts of
law. The Trust is organized under the laws of the State of New York pursuant to
a Declaration of Trust dated December 11, 1991, as amended. No Trustee, officer
or employee of the Trust shall be personally bound by or liable hereunder, nor
shall resort be had to their private property for the satisfaction of any
obligation or claim hereunder.
6
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
EQUITY 500 INDEX PORTFOLIO
By: /s/ Daniel O. Hirsch
Name: Daniel O. Hirsch
Title: Secretary
BANKERS TRUST COMPANY
By: /s/ Ross Youngman
Name: Ross Youngman
Title: Managing Director
EXPENSE LIMITATION AGREEMENT
THIS EXPENSE LIMITATION AGREEMENT is made as of the 31st day of
December, 1999 by and between BT INSTITUTIONAL FUNDS, a Massachusetts Business
trust (the "Trust"), CASH MANAGEMENT PORTFOLIO, TREASURY MONEY PORTFOLIO, EQUITY
500 INDEX PORTFOLIO and BT INVESTMENT PORTFOLIOS, each a New York trust (each a
"Portfolio Trust"), and BANKERS TRUST COMPANY, a New York corporation (the
"Adviser"), with respect to the following:
WHEREAS, the Adviser serves as BT Institutional Funds' Investment
Adviser pursuant to an Investment Advisory Agreement dated June 4, 1999, the
Adviser serves as Investment Adviser to Cash Management Portfolio and Treasury
Money Portfolio pursuant to Investment Advisory Agreements dated June 4, 1999;
the Adviser serves as Investment Adviser to Equity 500 Index Portfolio pursuant
to an Investment Advisory Agreement dated June 4, 1999, the Adviser serves as BT
Investment Portfolio's Investment Adviser pursuant to an Investment Advisory
Agreement dated June 4, 1999, and each as re-approved thereafter, and the
Adviser serves as the Trust's Administrator pursuant to an Administration and
Services Agreement dated October 28, 1992, as amended, (collectively, the
"Agreements"); and
NOW, in consideration of the mutual covenants herein contained and other
good and valuable consideration, the receipt whereof is hereby acknowledged, the
parties hereto agree as follows:
1. The Adviser agrees to waive its fees and reimburse expenses for a period
from December 31, 1999 to April 30, 2001 to the extent necessary so that
each Fund's total annual operating expenses do not exceed the percentage
of average daily net assets set forth on Exhibit A.
2. Upon the termination of the Investment Advisory Agreement or the
Administration Agreement, this Agreement shall automatically terminate.
3. Any question of interpretation of any term or provision of this Agreement
having a counterpart in or otherwise derived from a term or provision of
the Investment Company Act of 1940 (the "1940 Act") shall be resolved by
reference to such term or provision of the 1940 Act and to
interpretations thereof, if any, by the United States Courts or in the
absence of any controlling decision of any such court, by rules,
regulations or orders of the Securities and Exchange Commission ("SEC")
issued pursuant to said Act. In addition, where the effect of a
requirement of the 1940 Act reflected in any provision of this Agreement
is revised by rule, regulation or order of the SEC, such provision shall
be deemed to incorporate the effect of such rule, regulation or order.
Otherwise the provisions of this Agreement shall be interpreted in
accordance with the laws of Massachusetts.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officers as of the day and year first
above written.
ON BEHALF OF THE TRUST AND
PORTFOLIO TRUSTS LISTED BELOW:
BT INSTITUTIONAL FUNDS
CASH MANAGEMENT PORTFOLIO
TREASURY MONEY PORTFOLIO
EQUITY 500 INDEX PORTFOLIO
BT INVESTMENT PORTFOLIOS
Attest: /s/ Amy M. Olmert By: /s/ Daniel O. Hirsch
Name: Amy M. Olmert Name: Daniel O. Hirsch
Title: Secretary
BANKERS TRUST COMPANY
Attest: /s/ Amy M. Olmert By: /s/ Ross Youngman
Name: Amy M. Olmert Name: Ross Youngman
Title: Managing Director
<PAGE>
EXHIBIT A
<TABLE>
<CAPTION>
Total Fund Operating Expenses
Fund (as a percentage of average daily net assets)
- ---- ---------------------------------------------
<S> <C>
Institutional Cash Management Fund 0.23%
Institutional Cash Reserves Fund 0.18%
Institutional Treasury Money Fund 0.75%
Institutional Liquid Assets Fund 0.16%
Institutional Treasury Assets Fund 0.25%
Institutional Equity 500 Index Fund 0.10%
</TABLE>
EXPENSE LIMITATION AGREEMENT
THIS EXPENSE LIMITATION AGREEMENT is made as of the 31st day of
December, 1999 by and between BT PYRAMID MUTUAL FUNDS, a Massachusetts Business
trust (the "Trust"), CASH MANAGEMENT PORTFOLIO and EQUITY 500 INDEX PORTFOLIO,
each a New York trust (a "Portfolio Trust"), and BANKERS TRUST COMPANY, a New
York corporation (the "Adviser"), with respect to the following:
WHEREAS, the Adviser serves as BT Pyramid Mutual Funds' Investment
Adviser pursuant to an Investment Advisory Agreement dated June 4, 1999; the
Adviser serves as the Investment Adviser to Cash Management Portfolio and Equity
500 Index Portfolio pursuant to Investment Advisory Agreements dated June 4,
1999 and the Adviser serves as the Trust's Administrator pursuant to an
Administration and Services Agreement dated October 28, 1992, as amended,
(collectively, the "Agreements"); and
NOW, in consideration of the mutual covenants herein contained and other
good and valuable consideration, the receipt whereof is hereby acknowledged, the
parties hereto agree as follows:
1. The Adviser agrees to waive its fees and reimburse expenses for period
from December 31, 1999 to April 30, 2001 to the extent necessary so that
each Fund's total annual operating expenses do not exceed the percentage
of average daily net assets set forth on Exhibit A.
2. Upon the termination of the Investment Advisory Agreement or the
Administration Agreement, this Agreement shall automatically terminate.
3. Any question of interpretation of any term or provision of this Agreement
having a counterpart in or otherwise derived from a term or provision of
the Investment Company Act of 1940 (the "1940 Act") shall be resolved by
reference to such term or provision of the 1940 Act and to
interpretations thereof, if any, by the United States Courts or in the
absence of any controlling decision of any such court, by rules,
regulations or orders of the Securities and Exchange Commission ("SEC")
issued pursuant to said Act. In addition, where the effect of a
requirement of the 1940 Act reflected in any provision of this Agreement
is revised by rule, regulation or order of the SEC, such provision shall
be deemed to incorporate the effect of such rule, regulation or order.
Otherwise the provisions of this Agreement shall be interpreted in
accordance with the laws of Massachusetts.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officers as of the day and year first
above written.
ON BEHALF OF THE TRUST AND
PORTFOLIO TRUSTS LISTED BELOW:
BT PYRAMID MUTUAL FUNDS
CASH MANAGEMENT PORTFOLIO
EQUITY 500 INDEX PORTFOLIO
Attest: /s/ Amy M. Olmert By: /s/ Daniel O. Hirsch
-------------------- --------------------------
Name: Amy M. Olmert Name: Daniel O. Hirsch
Title: Secretary
BANKERS TRUST COMPANY
Attest: /s/ Amy M. Olmert By: /s/ Ross Youngman
-------------------- --------------------------
Name: Amy M. Olmert Name: Ross Youngman
Title: Managing Director
<PAGE>
EXHIBIT A
Total Fund Operating Expenses
Fund (as a percentage of average daily net assets)
- ---- ---------------------------------------------
BT Investment Money Market Fund 0.35%
Equity 500 Index Fund 0.25%
CODE OF ETHICS AND PROCEDURES
PURSUANT TO RULE 17J-1 UNDER THE
INVESTMENT COMPANY ACT OF 1940
This Code of Ethics (the "Code") has been adopted by each Investment Company
listed on Exhibit A, attached hereto (each, a "Trust") to specify and prohibit
certain types of personal securities transactions deemed to create a conflict of
interest and to establish reporting requirements and preventive procedures
pursuant to the provisions of Rule 17j-1(b)(1) under the Investment Company Act
of 1940 (the "1940 Act").
I. DEFINITIONS
A. An "Access Person" means (i) any Trustee, Director, officer, or
Advisory Person (as defined below) of the Investment Company or any
investment advisor thereof, or (ii) any director or officer of a
principal underwriter of the Investment Company, who, in the ordinary
course of his or her business, makes, participates in or obtains
information regarding the purchase or sale of securities for the
Investment Company for which the principal underwriter so acts or whose
functions or duties as part of the ordinary course of his or her
business relate to the making of any recommendation to the Investment
company regarding the purchase or sale of securities or (iii)
notwithstanding the provisions of clause (i) above, where the
investment adviser is primarily engaged in a business or businesses
other than advising registered investment companies or other advisory
clients, any trustee, director, officer or Advisory Person of the
investment adviser who, with respect to the Investment Company, makes
any recommendation or participates in the determination of which
recommendations shall be made, or whose principal function of duties
relate to the determination of which recommendations shall be made to
the Investment Company or who in connection with his or her duties,
obtains any information concerning securities recommendations being
made by such investment adviser to the Investment Company.
B. An "Advisory Person" means any employee of the Investment Company or
any investment advisor thereof (or of any company in a control
relationship to the Investment Company or such investment adviser),
who, in connection with his or her regular functions or duties, makes,
participates in or obtains information regarding the purchase or sale
of securities by the Investment Company or whose functions relate to
any recommendations with respect to such purchases or sales and any
natural person in a control relationship with the Investment Company or
adviser who obtains information regarding the purchase or sale of
securities.
C. A "Portfolio Manager" means any person or persons with the direct
responsibility and authority to make investment decisions affecting the
Investment Company.
D. "Access Persons", "Advisory Persons" and "Portfolio Managers" shall
not, unless otherwise provided in the code of ethics of the Investment
Company's investment adviser any subadviser, administrator or principal
underwriter, include any individual who is required to file quarterly
reports with the Investment Company's investment adviser, any
subadviser, administrator or principal underwriter pursuant to a code
of ethics substantially in conformity with Rule 17j-1 of the 1940 Act
or Rule 204-2 of the Investment Advisers Act of 1940 which has been
approved by the Investment Company's Board of Trustees.
E. "Beneficial Ownership" shall be interpreted subject to the provisions
of Rule 16a-1(a) (exclusive of Section (a)(1) of such Rule) of the
Securities Exchange Act of 1934.
F. "Control" shall have the same meaning as set forth in Section 2(a)(9)
of the 1940 Act.
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<PAGE>
G. "Disinterested Trustee" means a Trustee who is not an "interested
person" of the Investment Company within the meaning of Section
2(a)(19) of the 1940 Act. An "interested person" includes any person
who is a trustee, director, officer or employee of any investment
adviser of the Investment Company, or owner of 5% or more of the
outstanding stock of any investment adviser of the Investment Company.
Affiliates of brokers or dealers are also "interested persons", except
as provided in Rule 2(a)(19)(1) under the 1940 Act.
H. "Review Officer" is the person designated by the Investment Company's
Board of Trustees to monitor the overall compliance with this Code. In
the absence of any such designation, the Review Officer shall be the
Treasurer or any Assistant Treasurer of the Investment Company.
I. "Preclearance Officer" is the person designated by the Investment
Company's Board of Trustees to provide preclearance of any personal
security transaction as required by this Code.
J. "Purchase or sale of a security" includes, among other things, the
writing of an option to purchase or sell a security or the purchase or
sale of a future or index on a security or option thereon.
K. "Security" shall have the meaning set forth in Section 2(a)(36) of the
1940 Act (in effect, all securities) except that is shall not include
securities issued by the U.S. Government (or any other "government
security" as that term is defined in the 1940 Act), bankers'
acceptances, bank certificates of deposit, commercial paper and such
other money market instruments as may be designated by the Trustees of
the Investment Company, and shares of registered open-end investment
companies.
L. A security is "being considered for purchase or sale" when a
recommendation to purchase or sell the security has been made and
communicated and, with respect to the person making the recommendation,
when such person seriously considers making such a recommendation.
II. STATEMENT OF GENERAL PRINCIPLES
The following general fiduciary principles shall govern the personal investment
activities of all Access Persons.
Each Access Person shall:
A. At all times, place the interests of the Investment Company before his
or her personal interests;
B. Conduct all personal securities transactions in a manner consistent
with this Code, so as to avoid any actual or potential conflicts of
interest, or an abuse of position of trust and responsibility; and
C. Not take an inappropriate advantage of his or her position with or on
behalf of the Investment Company.
III. UNLAWFUL ACTIONS
It is unlawful for any affiliated person of or principal underwriter for a Fund,
or any affiliated person of an investment adviser of or principal underwriter
for a Fund, in connection with the purchase or sale, directly or indirectly, by
the person of a security held or to be acquired by the Fund:
A. To employ any device, scheme or artifice to defraud the Fund;
B. To make any untrue statement of a material fact to the Fund or to omit
to state a material fact necessary in order to make statements made to
the Fund, in light of the circumstances in which they are made, not
misleading;
2
<PAGE>
C. To engage in any act, practice or course of business that operates or
would operate as a fraud or deceit on the Fund; or
D. To engage in any manipulative practice with respect to the Fund.
IV. RESTRICTIONS OF PERSONAL INVESTING ACTIVITIES
A. Blackout Periods
1. No Access Person (other than a Disinterested Trustee) shall
purchase or sell, directly or indirectly, any security in
which he or she has, or by reason of such transaction
acquires, any direct or indirect beneficial ownership on a day
during which he or she knows or should have known the
Investment Company has a pending "buy" and "sell" order in
that same security until that order is executed or withdrawn.
2. No Advisory Person or Portfolio Manager shall purchase or
sell, directly or indirectly, any security in which he or she
has, or by reason of such transaction acquires, any direct or
indirect beneficial ownership within at least seven calendar
days before and after the Investment Company trades (or has
traded) in that security.
B. Initial Public Offerings
No Advisory Person shall acquire any security in an initial public
offering for his or her personal account.
C. Private Placements
With regard to private placements, each Advisory Person shall:
1. Obtain express prior written approval from the Preclearance
Officer for any acquisition of securities in a private
placement (the Preclearance Officer, in making such
determination, shall consider, among other factors, whether
the investment opportunity should be reserved for the
Investment Company, and whether such opportunity is being
offered to such Advisory Person by virtue of his or her
position with the Investment Company); and
2. After authorization to acquire securities in a private
placement has been obtained, disclose such personal investment
with respect to any subsequent consideration by the Investment
Company (or any other investment company for which he or she
acts in a capacity as an Advisory Person) for investment in
that issuer.
If the Investment Company decides to purchase securities of an
issuer the shares of which have been previously obtained for
personal investment by an Advisory Person, that decision shall
be subject to an independent review by Advisory Persons with
no personal interest in the issuer.
D. Short-Term Trading Profits
No Advisory Person shall profit from the purchase and sale, or sale and
purchase, of the same (or equivalent) securities of which such Advisory
Person has beneficial ownership within 60 calendar days. any profit so
realized shall, unless the Investment Company" Board of Trustees
approves otherwise, be disgorged as directed by the Investment
Company's Board of Trustees.
E. Gifts
No Advisory Person shall receive any gift or other things of more than
de minimis value from any person or entity that does business with or
on behalf of the Investment Company.
3
<PAGE>
F. Service as a Director or Trustee
1. No Advisory Person shall serve on the board of directors or
trustees of a publicly traded company without prior
authorization from the Board of Trustees of the Investment
Company, based upon a determination that such board service
would be consistent with the interests of the Investment
Company and its investors.
2. If board service by an Advisory Person is authorized by the
Board of Trustees of the Investment Company such Advisory
Person shall be isolated from the investment making decisions
of the Investment Company with respect to the companies of
which he or she is a director or trustee.
G. Exempted Transactions
The prohibitions of Section IV shall not apply to:
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 that are non-volitional on the part of the
Access Person or the Investment Company, including mergers,
recapitalizations or similar transactions;
3. Purchases which are part of an automatic dividend reinvestment
plan;
4. Purchases effected upon the exercise of rights issued by an
issuer pro rata to all holders of a class of securities, to
the extent such rights were acquired from such issuer, and
sales of such rights so acquired; and
5. Purchases or sales that receive prior approval in writing by
the Preclearance Officer as (a) only remotely potentially
harmful to the Investment Company because they would be very
unlikely to affect a highly institutional market, (b) clearly
not economically related to the securities to be purchased or
sold or held by the Investment company or client, and (c) not
representing any danger of the abuses proscribed by Rule
17j-1, but only if in each case the prospective purchaser has
identified to the Review Officer all factors of which he or
she is aware which are potentially relevant to a conflict of
interest analysis, including the existence of any substantial
economic relationship between his or her transaction and
securities held or to be held by the Investment Company.
V. COMPLIANCE PROCEDURES
A. Preclearance
1. An Access Person (other than a Disinterested Trustee) may not,
directly or indirectly, acquire or dispose of beneficial
ownership of a security except as provided below unless:
a. Such purchase or sale has been approved by the
Preclearance Officer;
b. The approved transaction is completed on the same day
approval is received; and
c. The Preclearance Officer has not rescinded such
approval prior to execution of the transaction.
2. Each Access person may effect total purchase and sales of up
to $25,000 of securities listed on a national securities
exchange or on NASDAQ within any six month period without
preclearance from the Board of Trustees or the Preclearance
Officer provided that:
a. The six month period is a "rolling" period, i.e., the
limit is applicable between any two dates which are
six months apart;
b. Transactions in options and futures, other than
options or futures on commodities, will be included
for purposes of calculating whether the $25,000 limit
has been exceeded. such transactions will be measured
by the value of the securities underlying options and
futures; and
4
<PAGE>
c. although preclearance is not required for personal
transactions in securities which fall into this "de
minimis" exception, these trades must still be
reported on a quarterly basis pursuant to Section
V.B.2. hereunder, if such transactions are
reportable.
B. Reporting
1. Coverage: Each Access Person (other than Disinterested
Trustees) shall file with the Review Officer confidential
quarterly reports containing the information required in
Section V.B.2 hereunder with respect to all transactions
during the preceding quarter in any securities in which such
person has, or by reason of such transaction acquires, any
direct or indirect beneficial ownership, provided that no
Access Person shall be required to report transactions
effected for any account over which such Access Person has no
direct or indirect influence or control (except that such an
Access Person must file a written certification stating that
he or she has no direct or indirect influence or control over
the account in question).
2. Filings: Every report shall be made no later than ten days
after the end of the calendar quarter in which the transaction
to which the report relates was effected, and shall contain
the following information:
a. The date of the transaction, the title and the number
of shares and the principal amount of each security
involved;
b. The nature of the transaction (i.e. purchase, sale,
or any other type of acquisition or disposition);
c. The price at which the transaction was effected; and
d. The name of the broker, dealer or bank with or
through whom the transaction was effected.
3. Any report may contain a statement that it shall not be
construed as an admission by the person making the report that
he or she has any direct or indirect beneficial ownership in
the security to which the report relates.
4. Confirmations: All Access Persons (other than Disinterested
Trustees) shall direct their brokers to supply the Investment
Company's Review Officer on a timely basis, duplicate copies
of all personal securities transactions.
C. Review
In reviewing transactions and holding reports, the Review Officer shall
take into account the exemptions allowed under Section IV.G. hereunder.
Before making a determination that a violation has been committed by an
Access Person, the Review Officer shall give such person an opportunity
to supply additional information regarding the transaction in question.
Each Fund, investment adviser or principal underwriter shall maintain a
list of names of appropriate management and compliance personnel
responsible for reviewing securities transactions and holdings reports.
D. Disclosure of Personal Holdings
All Advisory Persons shall disclose personal securities holdings upon
commencement of employment and thereafter on an annual basis.
E. Certification of Compliance
Each Access Person is required to certify annually that he or she has
read and understood this Code and recognizes that he or she is subject
to the Code. Further, each Access Person is required to certify
annually that he or she has complied with all the requirements of this
Code and that he or she has disclosed or reported all personal
securities transactions pursuant to the requirements of the Code.
5
<PAGE>
VI. REQUIREMENTS FOR DISINTERESTED TRUSTEES
A. No report is required if such person is a Disinterested Trustee, and such
person would be required to make such report solely by reason of being a
Trustee, except where such Trustee knew, or in the ordinary course of
fulfilling his official duties as a Trustee of the Funds, should have known
that during the fifteen day period immediately preceding or after the date
of the transaction in a security by the Trustee, such security is or was
purchased or sold, or considered for purchase or sale by the Funds.
B. Notwithstanding the preceding section, any Disinterested Trustee may, at
his or her option, report the information described in Section V.B.2. above
with respect to any one or more transactions and may include a statement
that the report shall not be construed as an admission that the person knew
or should have known of portfolio transactions by the Investment Company in
such securities.
VII. REVIEW BY THE BOARD OF TRUSTEES
The Board of Trustees, including a majority of Trustees who are not interested
persons, must approve the Code of Ethics of the Fund, the Code of Ethics of each
investment adviser and principal underwriter of the Fund, and any material
changes to these Codes. The board must base its approval of a Code and any
material changes to the Code based on a determination that the Code contains
provisions reasonably necessary to to prevent Access Persons from engaging in
any conduct prohibited by paragraph III. of these policies and procedures.
Before approving a Code of a Fund, investment adviser or principal underwriter
or any amendment to the Code, the Board of Trustees must receive a certification
from the Fund, investment adviser or principal underwriter that it has adopted
procedures reasonably necessary to prevent Access Persons from violating the
investment adviser's or principal underwriter's Code of Ethics. The Fund's board
must approve the Code of an investment adviser or principal underwriter before
initially retaining the services of the investment adviser or principal
underwriter. The Fund's board must approve a material change to a Code no later
than six months after adoption of the material change.
At least annually, the Review Officer shall provide to the Board of Trustees:
A. A review of all existing procedures concerning Access Persons' personal
trading activities and any procedural changes made during the past
year;
B. Any recommended changes to the Investment Company's Code or procedures;
and
C. A written report describing any issues or violations that occurred
during the past year, including, but not limited to, information about
material Code or procedural violations and sanctions imposed in
response to those violations.
D. Certification that the Fund, investment adviser or principal
underwriter has adopted procedures reasonably necessary to prevent its
access persons from violating its Code of Ethics.
VIII. SANCTIONS
A. Sanctions for Violations By Access Persons (Except Disinterested
Trustees)
If the Review Officer determines that a violation of this Code has
occurred, he or she shall so advise the Board of Trustees and the Board
may impose such sanctions as it deems appropriate, including inter
alia, disgorgement of profits, censure, suspension or termination of
the employment of the violator. All material violations of the code and
any sanctions imposed as a result thereto shall be reported
periodically to the Board of Trustees.
6
<PAGE>
B. Sanctions for Violations by Disinterested Trustees
If the Review Officer determines that any Disinterested Trustee has
violated this code, he or she shall so advise the President of the
Investment Company and also a committee consisting of the Disinterested
Trustees (other than the person whose transaction is at issue) and
shall provide the committee with a report, including the record of
pertinent actual or contemplated portfolio transactions of the
Investment Company and any additional information supplied by the
person whose transaction is at issue. The committee, at its option,
shall either impose such sanctions as it deems appropriate or refer the
matter to the full Board of Trustees of each Trust, which shall impose
such sanctions as it deems appropriate.
IX. MISCELLANEOUS
A. Access Persons
The Review Officer of the Investment Company will identify all Access
Persons who are under a duty to make reports to the Investment Company
and will inform such person so of such duty. Any failure by the Review
Officer to notify any person of his or her duties shall not relieve
such person of his or her obligations hereunder.
B. Records
The Investment Company's administrator shall maintain records in the
manner and to the extent set froth below, which records may be
maintained on microfilm under the conditions described in Rule 31a-2(f)
under the 1940 Act, and shall be available for examination by
representatives of the Securities and Exchange Commission ("SEC"):
1. 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;
2. A record of any violation of this Code and of any action taken
as a result of such violation shall be preserved in an easily
accessible place for a period of not less than five years
following the end of the fiscal year in which the violation
occurs;
3. A copy of each report made pursuant to this Code shall be
preserved for a period of not less than five years from the
end of the fiscal year in which it is made, the first two
years in an easily accessible place; and
4. A list of all persons who are required, or within the past
five years have been required, to make reports pursuant to
this Code shall be maintained in an easily accessible place.
C. Confidentiality
All reports of securities transactions and any other information filed
pursuant to this Code shall be treated as confidential, except to the
extent required by Law.
D. Interpretation of Provisions
The Board of Trustees of the Investment Company may from time to time
adopt such interpretations of this Code as it deems appropriate.
7
<PAGE>
BT INVESTMENT FUNDS PRESERVATIONPLUS FUND
BT INSTITUTIONAL FUNDS PRESERVATIONPLUS INCOME FUND
THE LEADERSHIP TRUST U.S. BOND INDEX PORTFOLIO
EAFE INDEX PORTFOLIO
SMALL CAP PORTFOLIO EQUITY 500 INDEX PORTFOLIO
CASH MANAGEMENT PORTFOLIO ASSET MANAGEMENT I,II & III PORTFOLIO
TREASURY MONEY PORTFOLIO CAPITAL APPRECIATION PORTFOLIO
DAILY ASSETS FUND EQUITY APPRECIATION PORTFOLIO
INSTITUTIONAL TREASURY ASSETS FUND SMALL CAP INDEX PORTFOLIO
LIQUID ASSETS FUND QUANTITATIVE EQUITY FUND
TAX FREE MONEY PORTFOLIO INTERMEDIATE TAX FREE PORTFOLIO
NY TAX FREE MONEY PORTFOLIO BT INVESTMENT PORTFOLIOS
INTERNATIONAL EQUITY PORTFOLIO BT INSURANCE FUNDS TRUST
LATIN AMERICAN EQUITY PORTFOLIO (each, an "Investment Company")
PACIFIC BASIN EQUITY PORTFOLIO
GLOBAL EMERGING MARKETS EQUITY PORTFOLIO
TRANSACTION REPORT
To: ____________________________, Review Officer
From: ______________________________________
(Your name)
This Transaction Report (the "Report") is submitted pursuant to Section
V of the Code of Ethics, as of [ , 1999] (the Code), of the above
referenced Trust and supplies (below) information with respect to transactions
in any security in which I may be deemed to have, or by reason of such
transaction acquire, any direct or indirect beneficial ownership interest
(whether or not such security is a security held or to be acquired by the
Investment Company) for the calendar quarter ended ____________.
Unless the context otherwise requires, all terms used in this Report
shall have the same meaning as set forth in the Code.
For purposes of this Report, beneficial ownership shall be interpreted
subject to the provisions of the Code and Rule 16a-1(a) (exclusive of Section
(a)(1) of such Rule) of the Securities Exchange Act of 1934.
<TABLE>
<CAPTION>
- --------------------- ------------------ ------------------ ------------------ ------------------ ------------------ -------------
Title of Securities Date of Nature of Principal Amount Price at Which Name of the Nature of
- ------------------- ---------
Disposition of Transaction, of Securities the Transaction Broker, Dealer, Securities*
-----------
Transaction Whether Transaction was Effected or Bank with
----------- --------
Purchase, Sale Disposed Of Whom the
-----------
or Other type of Ownership Was
---
Acquired Or Effected
--------
Acquisition
- --------------------- ------------------ ------------------ ------------------ ------------------ ------------------ -------------
<S> <C> <C> <C> <C> <C> <C>
- --------------------- ------------------ ------------------ ------------------ ------------------ ------------------ -------------
</TABLE>
*If appropriate, you may disclaim beneficial ownership of any security listed in
this Report.
8
<PAGE>
I HEREBY CERTIFY THAT I (1) HAVE READ AND UNDERSTAND THE CODE OF THE
INVESTMENT COMPANY (2) RECOGNIZE THAT I AM SUBJECT TOT HE CODE, (3) HAVE
COMPLIED WITH THE REQUIREMENTS OF THE CODE OVER THE PAST YEAR*, (4) HAVE
DISCLOSED ALL PERSONAL SECURITIES TRANSACTIONS OVER THE PAST YEAR* REQUIRED TO
BE DISCLOSED BY THE CODE, (5) HAVE SOUGHT AND OBTAINED PRECLEARANCE WHENEVER
REQUIRED BY THE CODE AND (6) CERTIFY THAT TO THE BEST OF MY KNOWLEDGE THE
INFORMATION FURNISHED IN THIS REPORT IS TRUE AND CORRECT.
NAME (Print): ________________________________________________________
SIGNATURE: ___________________________________________________________
DATE: _____________________________________________________________
(*) OR PORTION THEREOF DURING WHICH THE CODE HAS BEEN IN EFFECT.
9
<PAGE>
BT INVESTMENT FUNDS INTERNATIONAL EQUITY PORTFOLIO
BT INSTITUTIONAL FUNDS LATIN AMERICAN EQUITY PORTFOLIO
BT PYRAMID MUTUAL FUNDS PACIFIC BASIN EQUITY PORTFOLIO
THE LEADERSHIP TRUST GLOBAL EMERGING MARKETS EQUITY PORTFOLIO
BT INVESTMENT PORTFOLIO QUANTITATIVE EQUITY FUND
BT INSURANCE FUNDS TRUST SMALL CAP PORTFOLIO
CASH MANAGEMENT PORTFOLIO EQUITY 500 INDEX PORTFOLIO
TREASURY MONEY PORTFOLIO EAFE INDEX PORTFOLIO
INSTITUTIONAL TREASURY ASSETS FUND U.S. BOND INDEX PORTFOLIO
DAILY ASSETS FUND SMALL CAP INDEX PORTFOLIO
LIQUID ASSETS FUND ASSET MANAGEMENT I, II & III PORTFOLIOS
TAX FREE MONEY PORTFOLIO CAPITAL APPRECIATION PORTFOLIO
NY TAX FREE MONEY PORTFOLIO EQUITY APPRECIATION PORTFOLIO
PRESERVATIONPLUS FUND INTERMEDIATE TAX FREE PORTFOLIO
PRESERVATIONPLUS INCOME FUND
PERSONAL TRADING REQUEST AND AUTHORIZATION
This Personal Trading Request and Authorization is submitted pursuant
to the Code of Ethics as of [ , 1999] (the "Code") of the above
referenced. Unless the context otherwise requires, all terms used herein shall
have the same meaning as set forth in the Code.
Personal Trading Request (to be completed by Access Person prior to any personal
trade):
Name of Access Person: ___________________________________________________
Date of proposed transaction: ________________________________________________
Name of the issuer and dollar amount or number of securities of the issuer to be
purchased or sold:
________________________________________________________________________________
Nature of the transaction (i.e. purchase, sale)(1):
________________________________________________________________________________
Are you or is a member of your immediate family an officer, trustee, or director
of the issuer of the securities or any affiliate(2) of the issuer? [ ]Yes [ ]No
If yes, please describe:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(1) If other than market order, please describe any proposed limits.
(2) For purposes of this question, "affiliate" includes (I) any entity that
directly or indirectly owns, controls or holds with power to vote 5% or more of
the outstanding voting securities of the issuer and (II) any entity under common
control with the issuer.
10
<PAGE>
Describe the nature of any direct or indirect professional or business
relationship that you may have with the issuer of the securities.(3)
________________________________________________________________________________
________________________________________________________________________________
Do you have an material nonpublic information concerning the issuer?
[ ]Yes [ ]No
Do you beneficially own more than 1/2 of 1% of the outstanding equity securities
of the issuer?
[ ]Yes [ ]No
If yes, please report the name of the issuer and the total number of
shares "beneficially owned":
________________________________________________________________________________
________________________________________________________________________________
Are you aware of any facts regarding the proposed transaction, including the
existence of any substantial economic relationship between the proposed
transaction and any securities held or to be acquired by the Investment Company,
that may be relevant to a determination as to the existence of a potential
conflict of interest?(4) [ ] Yes [ ] No
If yes, please describe:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(3) A "professional relationship" includes, for example, the provision of legal
counsel or accounting services. a "business relationship" includes, for example,
the provision of consulting services or insurance coverage.
(4)Facts that would be responsive to this question would include, for example
the receipt of "special favors" from a stock promoter, including participation
in a private placement or initial public offering as an inducement to purchase
other securities for the Investment Company. Another example would be investment
in securities of a limited partnership that in turn owned warrants of a company
formed for the purpose of effecting a leveraged buy-out in circumstances where
the Investment Company might invest in securities related to a leveraged
buy-out. The foregoing are only examples of pertinent facts and in no way limit
the types of facts that may be responsive to this question.
11
<PAGE>
To the best of my knowledge and belief, the answers I have provided above are
true and correct.
Dated: ______________________ ___________________________________
Signature of Access Person
Approval or Disapproval of Personal Trading Request (to be completed by
Preclearance Officer) prior to personal trade:
___ I confirm that the above-described proposed transaction appears to be
consistent with the policies described in the Code and that the
conditions necessary(5) for approval of the proposed transaction have
been satisfied.
___ I do not believe that the above-described proposed transaction appears to
be consistent with the policies described in the Code or that the
conditions necessary for the approval of the proposed transaction have
been satisfied.
Dated: ___________________________ ____________________________________
Signature of Preclearance Officer
________________________________________________________________________________
(5)In the case of a personal securities transaction by an Access Person of the
Investment Company (other than Disinterested Trustees), the Code requires that
the Preclearance Officer determine that the proposed personal securities
transaction (I) is not potentially harmful to the Investment Company (II) would
be unlikely to affect the market in which the Investment Company's portfolio
securities are traded, and (III) is not related economically to securities to be
purchased, sold, or held by the Investment Company. In addition, the Code
requires that the Preclearance Officer determine that the decision to purchase
or sell the security at issue is not he result of information obtained in the
course of the Access Person's relationship with the Investment Company.
12
<PAGE>
EXHIBIT A
BT INVESTMENT FUNDS
BT INSTITUTIONAL FUNDS
BT PYRAMID MUTUAL FUNDS
THE LEADERSHIP TRUST
BT INVESTMENT PORTFOLIO
BT INSURANCE FUNDS TRUST
CASH MANAGEMENT PORTFOLIO
TREASURY MONEY PORTFOLIO
INSTITUTIONAL TREASURY ASSETS FUND
DAILY ASSETS FUND
LIQUID ASSETS FUND
TAX FREE MONEY PORTFOLIO
NY TAX FREE MONEY PORTFOLIO
PRESERVATIONPLUS FUND
PRESERVATIONPLUS INCOME FUND
INTERNATIONAL EQUITY PORTFOLIO
LATIN AMERICAN EQUITY PORTFOLIO
PACIFIC BASIN EQUITY PORTFOLIO
GLOBAL EMERGING MARKETS EQUITY PORTFOLIO
QUANTITATIVE EQUITY FUND
SMALL CAP PORTFOLIO
EQUITY 500 INDEX PORTFOLIO
EAFE INDEX PORTFOLIO
U.S. BOND INDEX PORTFOLIO
SMALL CAP INDEX PORTFOLIO
ASSET MANAGEMENT I, II & III PORTFOLIOS
CAPITAL APPRECIATION PORTFOLIO
EQUITY APPRECIATION PORTFOLIO
INTERMEDIATE TAX FREE PORTFOLIO
13
<PAGE>
Confidential Information, Insider Trading
and Related Matters
Issue Date: September 1998
Contents
Letter to All Employees
Introduction
Protecting Confidential Information
The Basic Policy
Nature of Confidential Information
Safeguarding Documents and Files
Securing Communications
Temporary Staff and Outside Services
Client Confidentiality Agreements
Inquiries from Outside Parties
Customer Inquiries Regarding Investment Advice
Public Statements and Shareholder Communications
Insider Trading and Conflict of Interest
The Basic Policy
Nature of Material Nonpublic Information
Insider Trading
"Frontrunning"
Dealing with Rumors
Unintentional Receipt of Confidential Information
Personal Securities Trading by Employees
Sharing Information Within Bankers Trust - The "Chinese Wall"
The Basic Policy
The "Chinese Wall"
Crossing the Chinese Wall
Avoid Unintended "Backflow" of Information
Additional Walls
The Restricted List and the Gray List
What Are the Restricted and Gray Lists?
Updates and Distribution of the Lists
Trading Restrictions - The Restricted List
Waivers and Exceptions to Trading Restrictions
Other Matters
The Compliance Department
Waivers and Exceptions
Confirming Your Compliance with Policies
If You Have Questions
Personal Securities Transactions by Employees (Separate Booklet)
(C) 1998 Bankers Trust Corporation
1 of 10
<PAGE>
Bankers Trust
September 1998
To All Employees:
This is your personal copy of Bankers Trust's Employee Compliance Guide,
Confidential Information, Insider Trading and Related Matters. These
policies and procedures are designed to protect the Firm against
inadvertent leaks of sensitive data and possible violations of various
securities laws, as well as to protect the reputation of the Firm and its
employees. They are extremely important.
The policies and procedures described in this booklet are comprehensive
and are supported by three basic guiding principles:
1. Information that you receive as a Bankers Trust employee is
confidential and intended to be used solely for the business purposes
of the Firm or its clients. You must safeguard confidential information
at all times.
2. If you possess material nonpublic information about or affecting
securities or their issuer, you may not buy or sell such securities
regardless of the source of the information.
3. Whenever potential conflicts of interest arise, you should place our
fiduciary duty to clients ahead of Bankers Trust's immediate interests,
and you should place the interests of Bankers Trust ahead of your
personal financial interests.
Thank you for your attention to both the letter and spirit of these standards of
professional conduct. Should you ever have a question on how to apply these
policies to some event or circumstance, I encourage you to seek the guidance of
the Compliance Department.
Sincerely,
Frank Newman
Chairman and
Chief Executive Officer
Introduction
This policy statement, Confidential Information, Insider Trading and
Related Matters, applies worldwide to all employees of Bankers Trust
Corporation and its subsidiaries (referred to herein as "Bankers Trust" or
the "Firm"). For legal and business reasons, it is essential that our
clients, prospective customers and others are confident that they can rely
on our integrity and discretion to protect and properly use the
confidential information they entrust to us.
Adhering to the policies and standards of conduct described in this
booklet is a condition of your employment with Bankers Trust. Failure to
comply with them may subject you to disciplinary action, including
possible dismissal and civil or criminal penalties. Also, if you become
aware of an apparent violation of these policies and procedures by another
employee, you must report the relevant facts to the Compliance Department.
No written policy can anticipate every situation. Use common sense and
good judgment when responding to situations that may not be specifically
covered by these standards, and recognize when to seek advice regarding
their application.
2 of 10
<PAGE>
Protecting Confidential Information
1. The Basic Policy
Improper disclosure or misuse of confidential information is prohibited.
You are required to treat confidential information in a responsible and
proper manner, and in accordance with the policies and procedures of
Bankers Trust.
2. Nature of Confidential Information
Confidential information refers to business matters not generally known or
made available to the public. You should generally presume that all
business information acquired in connection with your responsibilities at
Bankers Trust regarding the Firm, its clients and business transactions is
confidential unless the contrary is clearly evident. This includes
proprietary information, products and transactions developed or used by
Bankers Trust as explained further in the Firm's Rules for Business
Conduct.
Examples of Confidential Information
o a client's planned acquisition target or restructuring plan;
o forthcoming investment research recommendations;
o information about a client's accounts or borrowings;
o proprietary or fiduciary trading positions and strategies;
o customer, supplier, creditor and investor lists; and
o unannounced information about Bankers Trust's earnings or transactions.
3. Safeguarding Documents and Files
When handling confidential information contained in written documents, computer
files or other modes of communication and storage, you have a personal
responsibility to protect it. Also, each department should develop appropriate
policies and procedures to properly protect confidential information within its
control.
Recommended Practices to Safeguard
Confidential Documents and Files
o mark confidential documents as CONFIDENTIAL;
o prevent unrestricted copying of confidential documents and keep track of
copies made;
o shred confidential documents that are no longer needed;
o protect documents and files by using locked cabinets and limiting
computer access;
o use caution when carrying confidential documents and files in public
areas;
o keep desks and conference rooms clear;
o when appropriate, use code names to protect the identities of
participants in a transaction; and
o restrict access by visitors (including Bankers Trust personnel from
other departments) in areas where they can observe or overhear
confidential information.
3 of 10
<PAGE>
4. Securing Communications
Avoid discussing confidential information in public areas such as
elevators, hallways, taxicabs, airplanes or restaurants where others may
be listening. Be careful when using speakerphones, cellular phones,
e-mail, the Internet and similar methods of communication because
conversations and messages can be overheard or intercepted. Also, don't
share information over the telephone until you have identified the caller.
When asked informally by friends or at social gatherings about
confidential matters concerning Bankers Trust, its clients or others, as a
general rule you should decline to comment.
Those "in the know" can protect the Firm, family and friends - and
themselves - by keeping workplace information at the workplace.
5. Temporary Staff and Outside Services
If consultants or temporary staff are utilized in your department,
exercise care to ensure they do not gain unauthorized access to or
mishandle confidential information. Also recognize that certain functions
or areas within Bankers Trust may be too sensitive to entrust to temporary
workers or outside service organizations. When deemed appropriate by
business line management or when required by local regulations, outside
personnel should sign a confidentiality agreement (as approved by the
Legal Department) to confirm their awareness and understanding of the
requirement to protect confidential information and not misuse it.
6. Client Confidentiality Agreements
A confidentiality agreement with a client or a prospective customer may
impose additional obligations on the Firm with respect to protecting
confidential information. Business line management should establish
appropriate internal procedures and provide instructions to employees to
ensure compliance with its terms.
When initially drafted, some confidentiality agreements can be overly
broad in scope and could impair our ability to pursue other business
opportunities during or after the term of the agreement. Therefore, the
Legal Department should review confidentiality agreements prior to being
signed by a duly authorized department manager or their designee.
7. Inquiries from Outside Parties
Unless specifically consented to by the customer, we generally do not
disclose any confidential information about our customer's dealings with
us to any outside party. An exception to this general rule occurs when
regulators and other proper legal authorities or process require that we
disclose specific information. Before releasing information or taking any
action, you should immediately report the matter to your supervisor and
seek the advice of either the Compliance Department or the Legal
Department.
Other financial institutions may ask that we respond to credit inquiries
concerning our dealings with existing or former customers. To avoid
potential liability, such responses should be limited to a very narrow
statement of objective factual matters known to us directly and should
never express an opinion as to the client's creditworthiness or integrity.
Also, no response to a credit inquiry should be made without first
obtaining the approval of a departmental credit officer or an officer in
the Credit Policy Department.
8. Customer Inquiries Regarding Investment Advice
When appropriate in responding to a customer inquiry regarding investment
advice, departments engaged in investment research, investment management
or investment advisory functions should make sure that their customers
understand that we maintain a Chinese Wall and that Bankers Trust
personnel who make investment decisions or recommendations cannot gain
access to, nor benefit from, any confidential information obtained by the
Private Functions of the Firm (see page 11).
9. Public Statements and Shareholder Communications When Bankers Trust
information is released to the public, it must be accurate and disclosed
in a proper way. Since a public statement made by a Bankers Trust employee
- - even a statement that does not release any confidential information -
could embarrass the Firm or subject it to liability, all contacts with
shareholders and security analysts should be cleared in advance with
Corporate Affairs in New York.
All requests for speeches, interviews or comments for use in broadcasts,
newspapers, magazines or other media should be referred to, or cleared by,
Corporate Affairs (in the U.S. and Australia), the designated
Communications Officer (in London), Marketing Services (in Asia) or the
head of your Bankers Trust office (for all other international locations).
When practical, these departments should be furnished with, and given an
opportunity to comment on, the text or outline of the statement or speech
and responses to any likely questions.
4 of 10
<PAGE>
Insider Trading and Conflict of Interest
1. The Basic Policy
Trading securities or other financial instruments for the accounts of
Bankers Trust, its clients or for personal interests while you are in
possession of material nonpublic information about or affecting them
(regardless of how it was obtained) is prohibited. You are also prohibited
from disclosing material nonpublic information to third parties except in
accordance with the policies and procedures described in this booklet or
where disclosure is required by law. Avoid situations that may appear to
be a conflict of interest, let alone any actual conflict, in both business
and personal securities transactions.
Under various securities laws, violations might occur if you trade
securities (or their derivatives such as options) while in possession of
material nonpublic information about them, or disclose such information to
third parties who, in turn, trade those securities or derivatives. The
securities laws of various jurisdictions provide a broad range of remedies
to protect and maintain the integrity of the securities markets. Violation
of applicable insider trading laws and regulations could subject you to
substantial civil or criminal penalties.
2. Nature of Material Nonpublic Information
Material nonpublic information (also known as price sensitive information
in some jurisdictions) refers to confidential information about or
affecting a particular issuer or its securities that is not generally
known to the investing public and a reasonable investor would likely
consider important when making an investment decision. While no single
rule can define whether a particular item is in fact material, information
that, if known to the public, would likely affect the price of a publicly
traded security (or would likely influence decisions to buy, sell or hold
a security) has a high probability of being material.
Examples of Nonpublic Information
About Issuers Likely to be Material
o knowledge of unannounced tender offers;
o plans to issue or redeem securities;
o new products or major contracts;
o liquidity problems or covenant defaults;
o significant management developments;
o estimates about revenues and earnings; and
o significant mergers, acquisitions or divestitures.
3. Insider Trading
"Insiders" are persons who owe a fiduciary duty to a company's
stockholders and typically include a company's officers, directors and
employees. Insiders also may include a company's outside advisors,
bankers, lawyers, underwriters and printers when they receive material
nonpublic information about the company for a specific purpose.
As a Bankers Trust employee, you should generally assume that any
nonpublic information coming into your possession is material and you may
not trade in or recommend any related securities while in possession of
that information. Also, you may not disclose such information to others (a
practice generally referred to as "tipping") since such conduct may be
unethical and illegal. In fact, indirect receipt of nonpublic information
may subject you to these rules if you knew, or should have known, that the
information originated from the company or from someone who had a duty not
to disclose it.
The securities laws governing insider trading are complex and evolving.
You should consult the Compliance Department if uncertain whether the
information you possess is material or nonpublic before making a purchase,
sale or recommendation to which it relates.
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4. "Frontrunning"
You are prohibited from buying or selling securities for the account of
Bankers Trust, as well as for your own account, on the basis of your
knowledge about our clients' trading positions, plans or strategies, or
our own forthcoming research recommendations.
5. Dealing With Rumors
Various securities laws prohibit the circulation of rumors where the
underlying intent is to manipulate the price of publicly traded
securities. As a general rule, you should refrain from conveying rumors to
others. If you have reason to believe that a particular rumor is being
circulated to influence the market, you should report the matter to the
Compliance Department.
Securities trading on the basis of unsubstantiated rumors may subject you
or the Firm to regulatory scrutiny and possible civil or other penalties.
Keep in mind that recommendations and other statements to clients must
have a reasonable basis in fact. Contact your supervisor if uncertain how
to handle a particular rumor.
6. Unintentional Receipt of Confidential Information
Sometimes, confidential information is inadvertently or improperly communicated
to a person who should not have access to that information. To help avoid this
situation, you should clearly describe your position at the Firm when calling on
clients, prospects and in general discussions with others.
Contact the Compliance Department immediately if you inadvertently or
improperly receive nonpublic information that may be material to determine
what action, if any, is appropriate in the circumstances.
7. Personal Securities Trading by Employees
You must always avoid any actual or potential conflicts of interest
between your Bankers Trust duties and responsibilities, and your personal
investment activities. Restrictions that pertain to personal securities
transactions by employees, including opening and maintaining Employee
Related Accounts (as defined) and the requirement to pre-clear personal
securities transactions, are described in a separate booklet that
supplements this policy statement entitled Personal Securities
Transactions by Employees.
Sharing Information Within Bankers Trust - The "Chinese Wall"
1. The Basic Policy
Absent appropriate consent, confidential and material nonpublic
information, whether relating to Bankers Trust, its clients or others,
should not be disclosed to anyone other than relevant Bankers Trust
personnel, the Firm's outside lawyers, advisors and accountants, and where
appropriate concerning a transaction, the participants in the transaction.
You are permitted to share confidential information within Bankers Trust
only when the communication observes our Chinese Wall policies and
procedures, it complies with our duty of confidentiality owed to clients
and the recipient of the information:
o has a legitimate need to know the information in connection with his or
her Bankers Trust duties;
o has no responsibilities, whether to Bankers Trust, its clients or
others, that are likely to give rise to conflict of interest or a misuse
of the information; and
o understands that the information is confidential, as well as the limitations
on further distribution of the information.
This policy is extremely important. You must exercise caution before
sharing confidential information and, when appropriate, verify the
identity of the recipient and ascertain that he or she has a legitimate
need for the information and has no conflicting duties.
2. The "Chinese Wall"
Because Bankers Trust is a multi-faceted financial institution, some areas
of the Firm may have material nonpublic information about a particular
company while other areas of the Firm may wish to buy, sell or recommend
that company's securities. The controls provided by our "Chinese Wall"
policies and procedures allow us to engage in these diverse activities
without violating the law or breaching our fiduciary responsibilities.
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The Chinese Wall separates the "Private" areas of the Firm ("Potential
Insider Functions") that are likely to come into possession of material
nonpublic information in the ordinary course of business from the "Public"
areas of the Firm ("Trading and Advising Functions") that trade securities
or other instruments for our own account or for the accounts of others, or
that render investment advice. Generally, material nonpublic information
obtained by anyone who works in the Potential Insider Functions should not
be communicated to anyone outside those functions, and particularly must
not be communicated to anyone in the Firm's Trading or Advising Functions.
Private Functions Public Functions
Examples include: Examples include:
o mergers, acquisitions and o trading, sales and funding;
corporate advisory; o brokerage;
o commercial lending and o investment management; and
credit; o investment research.
o corporate finance; and
o corporate trust.
Employees assigned to certain infrastructure and control groups, such as
Operations and Product Controllers, may obtain confidential information
while conducting their normal activities. In addition, members of senior
management and the Compliance, Legal, Audit and Credit departments are
generally considered "above the Chinese Wall" and therefore have ready
access to confidential information. If you are a member of one of these
groups or a similar function within the Firm, be careful to avoid any
improper disclosure of confidential information, particularly with respect
to personnel on the "Public" side of the Chinese Wall.
3. Crossing the Chinese Wall
In limited situations, communicating material nonpublic information to a
person involved in a Trading or Advising Function may be necessary to
achieve a legitimate business purpose. For example, an investment research
analyst's expertise in a particular industry may be necessary concerning a
proposed corporate finance transaction.
Unless the Compliance Department has expressly approved a particular
department's procedures for conducting Chinese Wall crossings, any
communication of material nonpublic information from the "Private" side of
the Chinese Wall to an employee on the "Public" side of the Chinese Wall
must be handled through the Compliance Department. Further, for
departments that do not have approved procedures, the Compliance
Department must be notified regarding the proposed communication prior to
initiating any contact with the employee.
You should contact the Compliance Department if uncertain whether a
proposed communication of material nonpublic information is permissible.
Also, the Compliance Department should be notified immediately if you
believe such information may have been improperly communicated either
within Bankers Trust or elsewhere.
4. Avoid Unintended "Backflow" of Information
In principle, the Chinese Wall need not inhibit the flow of information
from the "Public" side to the "Private" side of the Wall. Communication of
this type, however, may cause an unintended "backflow" of confidential
information. For example, a request for public information on a particular
company by a mergers and acquisitions specialist (Private Function) to an
investment research analyst (Public Function) may provide the research
analyst a hint as to a possible material development.
All unnecessary business communications (in either direction) between the
Private Functions and Public Functions should be avoided and care must be
exercised whenever an employee engaged in a Private Function deems it
necessary to obtain information from an employee in a Public Function.
Questions in this regard should be directed to the Compliance Department.
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5. Additional Walls
Beyond the Chinese Wall described above, we often establish other walls -
some temporary and some permanent - to insulate confidential information
held within certain business lines from other personnel who should not
have access to that information.
Examples of Additional Walls
o While our research functions that publish investment
recommendations for distribution to the public are generally
considered to be on the "Public" side of the Chinese Wall,
information such as an analyst's plan to significantly change an
existing recommendation regarding particular securities is
confidential and should generally not be disclosed to personnel in
the Firm's trading and sales functions (unless prior approval has
been obtained from the Compliance Department) until such research
is released to customers.
o Investment management personnel who become aware of a significant
client investment plan that will likely affect market prices
should not reveal the plan to personnel who handle Bankers Trust's
proprietary trading and investing.
o In the lending areas of the Firm, information relating to a
proposed loan to one company should be insulated from personnel
working on a proposed loan to another company if the two companies
are competing to acquire the same target company.
The Restricted List and the Gray List
1. What Are the Restricted and Gray Lists?
For legal, regulatory and business reasons, the Compliance Department
maintains a Restricted List and a Gray List of securities. Securities may
be placed on these lists when certain conditions are met, such as when a
business area within Bankers Trust:
o possesses material nonpublic information about or affecting the
securities or their issuer;
o is involved in a securities offering or significant transaction
affecting the securities or their issuer; or
o may be issuing to the public a significant change in the Firm's
investment recommendation regarding certain securities or issuers.
The Restricted List is comprised of securities in which the normal trading
or recommending activity of the Firm and its employees is prohibited or
subject to specified restrictions as described in the List. While the
Restricted List is distributed quite extensively within Bankers Trust, its
composition is generally considered confidential and should not be shared
with others outside of the Firm. In response to any inquiry, you should
reply simply that we are not able to take a position or make a
recommendation regarding the particular security at this time.
The Gray List is a highly confidential list maintained by the Compliance
Department to check the integrity of the Chinese Wall, and to prevent or
address potential conflicts of interest concerning trading decisions and
investment recommendations. Securities may be placed on the Gray List when
the Firm is involved in an unannounced material transaction, or for other
confidential monitoring purposes.
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2. Updates and Distribution of the Lists
The Compliance Department determines when securities should be added to or
removed from both the Restricted List and Gray List and distributes the
Restricted List to appropriate personnel within the Firm. Business line
management of the various Private Functions is responsible for informing
and updating the Compliance Department concerning details of the Firm's
involvement in certain confidential transactions.
Certain business units that are routinely involved in the Firm's
investment banking and advisory businesses follow specific procedures for
providing deal information to the Compliance Department. If you are
assigned to a department that does not have such procedures and you become
aware of material nonpublic information about or affecting a publicly
traded company or its securities, you should immediately notify the
Compliance Department.
3. Trading Restrictions - The Restricted List
Personnel in the Firm's Public Functions, such as trading and sales,
investment management and investment research, must refer to the
Restricted List regularly and comply with its trading restrictions.
Generally, the trading restrictions may limit or prohibit:
o transactions involving securities on the Restricted List in the accounts
of Bankers Trust, its employees and its customers; and
o solicitation and investment advising activities, such as commenting
about, recommending or soliciting orders involving securities on the
Restricted List, or issuing research regarding such securities.
Trading restrictions may apply to customer accounts where Bankers Trust
exercises investment discretion, but do not generally apply to unsolicited
customer trades executed on an "agency" basis (i.e., where the Firm is not
acting as principal). Special rules apply to customer and proprietary
accounts connected with certain defined index, passive or basket trading
strategies where a transaction involving securities on the Restricted List
is dictated by contract or predetermined formula. Additional information
about these special rules can be obtained from the Compliance Department.
The Restricted List describes the various types of trading restrictions
imposed on Bankers Trust and its employees in light of certain legal,
regulatory and business requirements.
Trading Restrictions -- The Restricted List
Full Restriction
When securities are subject to "Full Restriction," the following
activities with respect to such securities are generally prohibited:
o trading for the Firm's proprietary account;
o trading for Employee Related Accounts;
o trading for customer accounts over which Bankers Trust exercises
investment discretion;
o basket trading for an account, such as an index fund, where the transaction
is dictated by a contract or predetermined formula;
o market making activities;
o solicitation of customer orders;
o issuance or distribution of written research or rendering oral
recommendations; and
o execution of unsolicited customer orders, unless such orders are executed
on an "agency" basis only.
Note: For securities not subject to "Full Restriction," the
Restricted List identifies which of the above specific activities
are prohibited.
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4. Waivers and Exceptions to Trading Restrictions Waivers and exceptions
to any trading restrictions identified on the Restricted List require the
specific prior approval of the Compliance Department. Violation of the
trading restrictions could subject the Firm and the employee involved to
civil or criminal penalties, as well as other disciplinary actions.
Other Matters
1. The Compliance Department
As used in this policy statement, the "Compliance Department" refers to
the Bankers Trust Compliance Department and the BTAL Compliance
Department.
The Bankers Trust Compliance Department is organized generally by U.S.
business lines and regionally for Asia, Europe/Middle East/Africa and
Latin America, and is comprised of the following groups:
o Broker-Dealer Compliance (including Latin America);
o Fiduciary Compliance;
o Corporate Compliance; and
o Europe & Asia Regional Compliance.
The BTAL Compliance Department is organized generally by business lines in
Australia and New Zealand.
2. Waivers and Exceptions
Bankers Trust policies regarding confidential information, insider trading
and related matters as described in this booklet are necessarily a general
summary. In practice, some situations may arise that warrant making
exceptions to some general rules set forth herein, and you must obtain
approval from the Compliance Department before taking action regarding
such an exception.
3. Confirming Your Compliance With Policies
Annually, you are required to sign a statement as a Bankers Trust employee
acknowledging that you have received this policy statement Confidential
Information, Insider Trading and Related Matters and confirm your
adherence to Bankers Trust's standards of conduct.
4. If You Have Questions
You should refer to the Compliance Department all questions concerning the
interpretation or application of these policies, the propriety of any
particular conduct, or other compliance-related matters.
NOTE -- Refer to Personal Securities Transactions by Employees, a separate
booklet that supplements this policy statement, for additional information
regarding opening and maintaining Employee Related Accounts (as defined),
pre-clearance of trades and other rules and restrictions regarding
personal securities transactions by employees.
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Personal Securities Transactions by Employees
Issue Date: September 1998
Contents
Introduction
Summary
Opening and Maintaining Employee Related Accounts
The Basic Policy
Employee Related Accounts Defined
"Designated Broker" Rule
Waivers to the Designated Broker Rule
Monitoring Employee Related Accounts
Pre-Clearing Transactions in Employee Related Accounts
The Basic Policy
Pre-Clearance Procedures
Additional Supervisory Pre-Clearance
Private Securities Transactions
Restrictions Regarding Personal Securities Transactions
The Basic Policy
Material Nonpublic Information
Corporate and Departmental Restricted Lists
"Frontrunning"
Employee Transactions in Bankers Trust Securities
Avoiding Conflicts with Your Bankers Trust Job Responsibilities
Initial Public Offerings and New Issues
Other Matters
Waivers and Exceptions
Confirming Your Compliance with Policies
If You Have Questions
Note: The policies contained in this booklet should be read in conjunction
with the policy statement Confidential Information, Insider Trading and
Related Matters.
(C) 1998 Bankers Trust Corporation
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Introduction
This policy statement, Personal Securities Transactions by Employees,
applies worldwide to all employees of Bankers Trust Corporation and its
subsidiaries (referred to herein as "Bankers Trust" or the "Firm"). Along
with the standards provided in this booklet, you should be familiar with
the contents of the Firm's related policy statement Confidential
Information, Insider Trading and Related Matters.
As used in this Guide, "securities" transactions include those involving
equity or debt securities, derivatives of securities (such as options,
warrants and indexes), futures, commodities and similar instruments.
You should always conduct your personal trading activities lawfully,
properly and responsibly, and are encouraged to adopt long-term investment
strategies that are consistent with your financial resources and
objectives. The Firm generally discourages short-term trading strategies,
and you are cautioned that such strategies may inherently carry a higher
risk of regulatory and other scrutiny. In any event, excessive or
inappropriate trading that interferes with your job performance, or
compromises the duty that Bankers Trust owes to its clients and
shareholders, will not be tolerated.
Summary
This booklet is organized to help you comply with Bankers Trust's policies
and procedures, and to protect you and the Firm from potential liability.
In summary, the section entitled:
o Opening and Maintaining Employee Related Accounts describes the types of
accounts you must disclose to the Compliance Department upon joining the
Firm and your requirement to obtain explicit permission from the
Compliance Department prior to opening and maintaining Employee Related
Accounts (as defined);
o Pre-Clearing Transactions in Employee Related Accounts describes the
procedures you must follow to pre-clear your personal securities
transactions with the Compliance Department before you place any order
with your broker; and
o Restrictions Regarding Personal Securities Transactions describes
certain trading prohibitions and procedures you must observe to avoid
violating the Firm's policies and various securities laws and
regulations. Questions about this policy and the matters discussed
herein should be directed to your Compliance Officer or to the
Compliance Department at (212) 250-5812.
Opening and Maintaining Employee Related Accounts
1. The Basic Policy
All employees must obtain the explicit permission of the Compliance
Department prior to opening a new Employee Related Account. Upon joining
Bankers Trust, new employees are required to disclose all of their
Employee Related Accounts (as defined below) to the Compliance Department
and must carry out the instructions provided to conform such accounts, if
necessary, to the Firm's policies.
Under no circumstance are you permitted to open or maintain any Employee
Related Account that is undisclosed to the Compliance Department. Also,
the policies, procedures and rules described throughout this Guide apply
to all of your Employee Related Accounts.
2. Employee Related Accounts Defined
"Employee Related Accounts" include all accounts in which you have an
ownership or beneficial interest (or can exercise investment discretion or
control) and have the capability of holding securities, or in which
securities transactions may be executed, even if the accounts are
inactive. Employee Related Accounts include:
o your own accounts;
o your spouse's accounts and the accounts of your minor children and other
relatives (whether by marriage or otherwise) living in your home;
o accounts in which you, your spouse, your minor children or other
relatives living in your home have a beneficial interest; and
o accounts over which you or your spouse exercise investment discretion
or control.
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Although they are securities in the technical sense, money market funds
and open-ended mutual funds held directly with the fund or its transfer
agent are not considered Employee Related Accounts for the purposes of
applying the above definition.
3. "Designated Broker" Rule
Depending on your Bankers Trust location, you may be required to open and
maintain your Employee Related Accounts with a "Designated Broker," which
refers to brokerage firms specifically identified by the Compliance
Department for employee use. Employee Related Accounts with the Designated
Brokers must be opened in accordance with local Compliance Department
procedures.
Employees who wish to open and maintain an Employee Related Account in the
U.S. must do so with one of the following Designated Brokers:
o BT Alex. Brown Incorporated
o Quick & Reilly (Wall Street Office)
o Salomon Smith Barney (the Rasweiler Group, New York)
Information about opening such an account can be obtained from the Compliance
Department at (212) 250-5812.
Employees assigned to Bankers Trust offices outside the U.S. are provided
local guidelines regarding Designated Brokers (and instructions about
opening and maintaining Employee Related Accounts) by Regional Compliance
Groups for Asia, Australia/New Zealand, Europe/Middle East/Africa and
Latin America. You should contact your Regional Compliance Officer if you
have questions.
4. Waivers to the Designated Broker Rule
In very limited situations, the Compliance Department may grant you
permission to open or maintain an Employee Related Account at a brokerage
firm other than a Designated Broker. Generally, such permission is limited
to the following types of situations:
o your spouse or close relative, by reason of employment, is required by
his or her employer to maintain their brokerage accounts with a firm
other than a Designated Broker; or
o your Employee Related Account is maintained on a "discretionary" basis.
This means that full investment discretion has been granted to an
outside bank, investment manager or trustee, and neither you nor a
close relative participates in the investment decisions or is informed
in advance regarding transactions in the account.
An employee's request to the Compliance Department for an exemption to the
Designated Broker policy must be submitted in writing. If permission is
granted, duplicates of account statements and transaction confirmations
must be provided to the Compliance Department. Your continued eligibility
for an exception to the Designated Broker policy is periodically reviewed
and evaluated and can be revoked at any time.
NOTE -- Do not open an account with another brokerage firm until you
receive authorization to do so from the Compliance Department.
5. Monitoring Employee Related Accounts
To ensure adherence to Bankers Trust's policies, the Compliance Department
monitors transactions in Employee Related Accounts, whether they are
maintained with a Designated Broker or otherwise. If you violate the
Firm's policies and procedures as described herein, you may be required to
cancel, reverse or freeze any transaction or position in your Employee
Related Account at your expense, regardless of where the account is held.
Such action may be required without advance notice.
Pre-Clearing Transactions In Employee Related Accounts
1. The Basic Policy
You must contact the Compliance Department to pre-clear all transactions
involving securities or their derivatives in your Employee Related
Accounts (other than transactions involving only U.S. Treasury
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securities or open-ended mutual funds) prior to placing an order with your
broker. You are personally responsible for ensuring that your proposed
transaction does not violate the Firm's policies or applicable securities laws
and regulations by virtue of your Bankers Trust responsibilities or information
you may possess about the securities or their issuer.
2. Pre-Clearance Procedures
Proposed transactions in your Employee Related Accounts must be personally
pre-cleared with the Compliance Department. After providing the requested
information about the transaction, you will be informed whether you have
been granted permission to place the order with your broker which is valid
for the day given and the next business day. If permission is denied to
proceed with the proposed transaction, such denial is confidential and
should not be disclosed to others.
For employees assigned to Bankers Trust offices in the U.S. and Canada,
securities transactions can be pre-cleared by contacting the Compliance
Department at (212) 250-5812.
Employees assigned to Bankers Trust offices outside of the U.S. and Canada
are provided local guidelines and contacts for pre-clearing securities
transactions by Regional Compliance Groups for Asia, Australia/New
Zealand, Europe/Middle East/Africa and Latin America. You should contact
your Regional Compliance Officer if you have questions.
3. Additional Supervisory Pre-Clearance
Depending on your area of assignment, you may be subject to additional
departmental policies that require you to first pre-clear your proposed
securities transaction with your supervisor prior to requesting
pre-clearance from the Compliance Department. If you are assigned to one
of the Bankers Trust departments in which employees are subject to this
requirement, you will be informed of this fact when you contact the
Compliance Department for pre-clearance.
4. Private Securities Transactions
Investment transactions in private securities, such as limited
partnerships or the securities of private companies, are likely to be made
directly with the sponsor and not executed in your Employee Related
Account. Prior to engaging in a private securities transaction, you must
first obtain the approval of your supervisor and then pre-clear the
transaction with the Compliance Department. Private securities
transactions that give rise to actual or apparent conflicts of interest
are prohibited.
Restrictions Regarding Personal Securities Transactions
1. The Basic Policy
You have a personal obligation to conduct your investing activities and
related securities transactions lawfully and in a manner that avoids
actual or potential conflicts between your own interests and the interests
of Bankers Trust and its customers. You must carefully consider the nature
of your Bankers Trust responsibilities - and the type of information you
might be deemed to possess in light of any particular securities
transaction - before you engage in that transaction.
2. Material Nonpublic Information
If you possess material nonpublic information about or affecting
securities, or their issuer, you are prohibited from buying or selling
such securities, or advising any other person to buy or sell such
securities.
3. Corporate and Departmental Restricted Lists
You are not permitted to buy or sell any securities that are included on
the Corporate Restricted List and/or other applicable departmental
restricted lists.
4. "Frontrunning"
You are prohibited from engaging in "frontrunning," which means that you
may not buy or sell securities or other instruments for your Employee
Related Accounts so as to benefit from your knowledge of the Firm's or a
client's trading positions, plans or strategies, or forthcoming research
recommendations.
5. Employee Transactions in Bankers Trust Securities Bankers Trust
recognizes the special interest many employees have in investing in the
securities of Bankers Trust Corporation. Observe, however, that your
employment relationship with the Firm gives rise to special
rules concerning such transactions to avoid potential conflicts of interest.
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a. Transactions Subject to Special Rules
Personal trading activity in Bankers Trust Corporation securities that are
subject to special rules are generally transactions that change your
beneficial ownership interest, such as:
o purchases, sales or other transactions in Employee Related Accounts;
o employee investment elections in Bankers Trust benefit plans, such as
investment elections affecting the Bankers Trust Common Stock Fund in
the PartnerShare Plan;
o exercise of Bankers Trust stock options granted as part of an
employee's compensation;
o optional cash purchases of common stock through Bankers Trust's
Dividend Reinvestment and Common Stock Purchase Plan; and
o gifts or donations of Bankers Trust Corporation stock to charitable
organizations, relatives or others.
b. Special Rules
The following special rules apply to all transactions that change your
beneficial ownership interest in the securities of Bankers Trust
Corporation:
o all employees must pre-clear transactions involving Bankers Trust
Corporation securities with Corporate Compliance in New York (212)
250-5812, even if assigned to an office outside the U.S. or Canada;
o Bankers Trust Corporation securities may not be pledged or used as
collateral for any loan except for a margin loan associated with an
Employee Related Account;
o any short sale of Bankers Trust Corporation securities is prohibited;
o any transaction that involves options or warrants referenced to Bankers
Trust Corporation securities, other than exercising stock options
granted under a Bankers Trust incentive compensation plan, is
prohibited; and
o over-the-counter derivative transactions that are referenced to the
value of Bankers Trust Corporation securities are prohibited.
c. "Blackout" Periods
During certain times of the year, you are prohibited from conducting
transactions in Bankers Trust Corporation securities which affect your
beneficial interest in the Firm. These "blackout" periods surround the end
of each fiscal quarter or year and begin on the first day of each calendar
quarter and end 48 hours after public release of the financial reports for
the quarter or year.
Additional restricted periods may be required for certain individuals and
events, and you will be informed of whether such a restricted period is in
effect when you request pre-clearance of your proposed transaction
involving Bankers Trust Corporation securities. Any questions concerning
whether you are subject to additional restrictions should be directed to
the Compliance Department.
6. Avoiding Conflicts with Your Bankers Trust Job Responsibilities You are
prohibited from buying, selling or holding positions in securities and
other instruments for your Employee Related Accounts that give rise to a
conflict of interest, or the appearance of conflict, between your personal
financial interests and your Bankers Trust job responsibilities.
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Following is a summary of the Firm's basic rules and procedures that are
designed to prevent actual or apparent conflicts of interest. If you
believe a proposed personal securities transaction may give rise to a
potential conflict of interest, or may not comply with the following rules
and procedures, you should resolve the matter with your Compliance Officer
before placing the order.
a. Securities in Companies With Which You Have Significant Dealings
You are prohibited from buying or selling, for your Employee Related Accounts,
securities of companies with which you have significant dealings on behalf of
Bankers Trust, or for which you have ongoing relationship management
responsibilities on behalf of the Firm. This rule applies to all employees who
have significant dealings with the Firm's customers, counterparties, suppliers
or vendors. Also, you are generally prohibited from acquiring an interest in any
private equity investment vehicle sponsored by such companies.
b. Securities In Which You Have Trading or Trading-Related Responsibilities
To prevent actual or apparent conflicts of interest, employees with
"trading or trading-related responsibilities" with respect to particular
types of securities or instruments may be limited or prohibited from
buying or selling the same types of securities or instruments for their
Employee Related Accounts. Employees have trading or trading-related
responsibilities with respect to particular types of securities or
instruments if their duties:
o involve the Firm's proprietary dealing or investing activities (e.g.,
where committing the Firm's capital may be involved); and
o are associated with the origination, structuring, trading, market
making, positioning, bookrunning, distribution, sales, research or
analysis of particular types of securities or instruments.
If you have trading or trading-related responsibilities for equity
securities, investment grade debt securities or U.S. Government,
Government Agency or municipal securities (including derivatives thereof),
you are permitted to buy or sell such securities for your Employee Related
Accounts subject to compliance with certain departmental guidelines that
may require supervisory approval and minimum holding periods.
If you have trading or trading-related responsibilities for non-investment
grade debt securities, commodities, futures, FX or other instruments
(including derivatives thereof), you are prohibited from buying or selling
the same type of securities or instruments for your Employee Related
Accounts.
c. Portfolio Managers, Investment Advisory Professionals and "Access
Persons"
If you are a portfolio manager, investment advisory professional or "access
person" associated with the Firm's asset or funds management businesses, you may
be subject to certain rules designed to prevent conflicts of interest. You can
obtain more information about these rules from your supervisor or the Compliance
Department.
d. Transactions Subject to Minimum Holding Periods
Securities bought or sold for your Employee Related Accounts may be subject to a
minimum holding period to address potential conflicts of interest. Examples of
the type of job functions and transactions that typically require a minimum
holding period include:
o equity securities bought or sold by an employee with proprietary equity
trading or trading-related responsibilities (60-day holding period);
o certain debt securities bought or sold by an employee with proprietary
trading or trading-related responsibilities for U.S. Government,
Government Agency, municipal or investment-grade corporate debt
securities (60-day holding period);
o securities bought or sold by an equity research analyst, falling within
the research analyst's assigned industry group (up to a six-month
holding period); and
o securities bought or sold by employees assigned to most Bankers Trust
offices outside the U.S. (holding period varies by region).
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e. Additional International Procedures
Regional Compliance Groups for Asia, Australia/New Zealand, Europe/Middle
East/Africa and Latin America may modify the procedures described in this
section to reflect local market practices and regulatory requirements. You
should contact your Regional Compliance Officer to obtain information
about local modifications, if any, to these requirements.
7. Initial Public Offerings and New Issues
For regulatory reasons, you are prohibited from purchasing or subscribing
for securities connected with an initial public offering or a new issue
where a U.S.-registered broker-dealer is involved in the distribution, or
where any part of the distribution is offered in the U.S. This prohibition
applies even if Bankers Trust has no role or involvement in the
distribution.
For initial public offerings and new issues of securities of non-U.S.
companies distributed entirely outside of the U.S., employees assigned to
international offices of Bankers Trust may be permitted to purchase or
subscribe for such securities, provided that the appropriate Regional
Compliance Group of the Compliance Department approves such proposed
transaction in advance. You should contact your Regional Compliance
Officer for local guidelines that apply.
Other Matters
1. Waivers and Exceptions
Bankers Trust policies regarding personal securities transactions by
employees as described in this booklet is necessarily a general summary.
In practice, some situations may arise to warrant making exceptions to
some general rules set forth herein, and you must obtain approval from the
Compliance Department before taking action regarding such an exception.
2. Confirming Your Compliance with Policies
Annually, you are required to sign a statement as a Bankers Trust employee
acknowledging that you have received this supplement to the policy
statement Confidential Information, Insider Trading and Related Matters
and confirm your adherence to Bankers Trust's standards of conduct.
3. If You Have Questions
You should refer all questions concerning the interpretation or
application of these policies, the propriety of any particular conduct, or
other compliance-related matters to the Compliance Department.
NOTE -- Adhering to the policies and standards of conduct discussed in
this Guide is one of the conditions of employment with Bankers Trust.
Failure to comply with them may subject you to disciplinary action,
including possible dismissal. In addition, violation of the rules
described in this Guide may also subject you to possible civil or criminal
penalties in accordance with the securities laws or regulatory rules
applicable in various jurisdictions.
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Rules for Business Conduct
Issue Date: September 1998
Contents
Letter to All Employees
Introduction
Corporate Conduct
Bankers Trust's Reputation
Ethical Conduct
Lawful Conduct
Bankers Trust Policies and Standards
Internal Reporting Obligation
Questions
Rules for Dealing with Potential Conflicts of Interest
The Basic Rule
Personal Benefit
Improper Payments or Gifts
Permissible Business Gifts
Bankers Trust Gifts to Persons Other than Government Officials
Bankers Trust Gifts to Government Officials
Business Affiliations
Borrowing Arrangements
Outside Employment
Personal Fiduciary Arrangements with Customers
Personal Investments
Rules for Dealing with Governmental Officials and Political Candidates
Corporate Payments or Political Contributions
Personal Political Contributions
Entertainment of Government Officials
Rules for Dealing with Information
Insider Trading
Confidential Information
Proprietary Information
Proprietary Products and Transactions
Information Technology
Privacy of Electronic and Other Information
Financial and Accounting Information
Regulatory and Other Reporting
Information and Accounting Controls
Governmental or Regulatory Inquiries
Responding to Media Inquiries and Requests for Speeches
Rules for Dealing with Customers, Suppliers and the Public
The Basic Rule
New Business Initiatives
New Client Approval
"Know Your Customer"
Communication with Customers and the Public
Pricing and Terms
Customer Complaints
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Improper Customer Conduct
Special Regulatory Matters Involving Customers
Anti-Competitive Conduct
Tying Arrangements
Purchases and Commitments
Rules for Dealing with Other Employees
The Basic Rule
Cooperation
Awareness
Supervision
Due Care in Delegation
Instruction and Training
Review and Monitoring
Correction and Follow-Up
Preferential Treatment
Unlawful Conduct
Human Resources Policies
Off-Premises Requirement for Employees In Sensitive Positions
Rules for Dealing with Certain Legal, Judicial or Regulatory Matters;
Reports of Violations
General Matters
Violations of Bankers Trust Policies
Fraudulent Activity
Arrests, Indictments and Convictions
Employee Involvement in Regulatory and Other Formal Proceedings
Lobbying, Public Testimony and Related Matters
Managing Officer Reporting
Other Matters
Ongoing Compliance
Resignation and Termination
Modifications to or Waivers of the Rules
Confirming Your Compliance with the Rules
If You Have Questions
(C) 1998 Bankers Trust Corporation
Bankers Trust
September 1998
To All Employees:
This is your personal copy of the Rules for Business Conduct, which sets
forth the Firm's code of business ethics. Please read this document
carefully and advise any staff members you may supervise to do so as well.
The Rules describe our commitment to conduct all business of Bankers Trust
in the spirit of fair dealings, consideration for the rights of others,
and strict principles of good corporate citizenship and practices. As
employees, we have an important responsibility to ensure that our own
conduct meets the highest standards of personal and corporate integrity.
Only through the continuing efforts of each of us to adhere to these
principles can Bankers Trust's reputation for high ethical and
professional standards be maintained.
These Rules apply to all employees of Bankers Trust and its subsidiaries,
regardless of location. The policies and standards contained in the
booklet protect and guide each of us in making our business decisions, and
in our dealings on behalf of Bankers Trust. Your commitment to comply with
the letter and the spirit of these Rules, and your common sense and good
judgment in recognizing when you may need to seek guidance as to how they
should be applied to situations you encounter, are essential.
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Should you ever have any question as to how to interpret or apply the
Rules to any event or circumstance, I encourage you to seek guidance from
the Compliance Department.
Sincerely,
Frank Newman
Chairman and
Chief Executive Officer
Introduction
The Rules for Business Conduct (the Rules) apply worldwide to all
employees of Bankers Trust Corporation and its subsidiaries (referred to
herein as "Bankers Trust" or the "Firm"). These Rules set forth the Firm's
global commitment to conduct all business of Bankers Trust lawfully and in
accordance with high standards of personal and corporate integrity.
Adhering to the Rules for Business Conduct is one of the conditions of
employment with Bankers Trust. Failure to comply may subject you to
disciplinary action, including possible dismissal.
No written rules can anticipate every situation. Common sense and good
judgment in responding to situations that may not seem to be specifically
covered by these Rules, and in recognizing when to seek advice regarding
the application of the Rules, are a must for each employee.
The Rules for Business Conduct incorporate certain requirements of U.S.
Federal and New York state laws and regulations. Where there is a conflict
between the provisions of the Rules for Business Conduct and the
requirements of local laws and regulations of other jurisdictions in which
Bankers Trust does business, those local laws will prevail.
Corporate Conduct
1. Bankers Trust's Reputation
The Firm's reputation for integrity is its most valuable asset, and the
conduct of its employees must protect this asset at all times.
Accordingly, Bankers Trust and its employees obligate themselves to
conduct their business on behalf of Bankers Trust in accordance with high
ethical standards, and to avoid personal conduct which may compromise the
Firm's reputation.
2. Ethical Conduct
The Rules for Business Conduct are based on fundamental principles of
fairness, honesty and ethical behavior. All business of Bankers Trust
should be conducted in the spirit of fair dealings, consideration for the
rights of others, and strict principles of good corporate citizenship and
practices.
3. Lawful Conduct
Bankers Trust requires compliance with the law in the conduct of its
business. Employees should consult with the Legal Department if they have
any questions regarding the laws of any country or jurisdiction where
Bankers Trust does business.
4. Bankers Trust Policies and Standards
All employees are required to maintain ongoing compliance with all
statements of policies, procedures and standards of Bankers Trust, and
with lawful and ethical business practices, whether or not they are
specifically mentioned in the Rules for Business Conduct.
5. Internal Reporting Obligation
You are required to report any known or suspected violations of the Rules
to your Managing Officer and to the Compliance Department. If for any
reason you believe that the matter cannot be raised through that
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channel, you should report it directly to the head of Corporate Compliance in
New York.
For purposes of these Rules, your "Managing Officer" is defined to be an
officer of at least the Managing Director level to whom you directly or
indirectly report, who is in charge of the unit or office to which you are
assigned. Your Managing Officer is senior to you and would generally be a
Department Head, Division Head, Function Head, Group Head, General Manager
or Company President.
For purposes of these Rules, the "Compliance Department" refers to the
Bankers Trust Compliance Department and the BTAL Compliance Department.
The Bankers Trust Compliance Department is organized generally by U.S.
business lines and regionally for Asia, Europe/Middle East/Africa and
Latin America, and is comprised of the following groups:
o Broker-Dealer Compliance (including Latin America)
o Fiduciary Compliance
o Corporate Compliance
o Europe & Asia Regional Compliance
The BTAL Compliance Department is organized generally by business lines in
Australia and New Zealand.
6. Questions
If you are in doubt as to the specific application of these Rules or about
the propriety of any particular conduct, you must bring the matter to the
attention of your Managing Officer and the Compliance Department prior to
taking action.
Rules for Dealing with Potential Conflicts of Interest
1. The Basic Rule
There must be no conflict, or appearance of conflict, between the
self-interest of any employee and the responsibility of that employee to
Bankers Trust, its shareholders or its customers.
2. Personal Benefit
You must never improperly use your position with Bankers Trust for
personal or private gain to you, your family or any other person.
3. Improper Payments or Gifts
You are prohibited from soliciting or accepting any personal payment or
gift to influence, support or reward any service, transaction or business
involving Bankers Trust, or that appears to be made or offered to you in
anticipation of any future service, transaction or business opportunity. A
payment or gift includes any fee, compensation, remuneration or thing of
value.
Under the Bank Bribery Act and other applicable laws and regulations,
severe penalties may be imposed on anyone who offers or accepts such
improper payments or gifts. If you receive or are offered an improper
payment or gift, or if you have any questions as to the application or
interpretation of Bankers Trust's rules regarding the acceptance of gifts,
you must bring the matter to the attention of the Compliance Department.
4. Permissible Business Gifts
Subject to the prerequisites of honesty, absolute fulfillment of fiduciary
duty to Bankers Trust, relevant laws and regulations, and reasonable
conduct on the part of the employee, the acceptance of some types of
reasonable business gifts received by employees may be permissible, and
the rules are as follows:
o Cash gifts of any amount are prohibited. This includes cash equivalents
such as gift certificates, bonds, securities or other items that may be
readily converted to cash.
o Acceptance of non-cash gifts, souvenirs, tickets for sporting or
entertainment events, and other items with a value less than U.S. $200
or its equivalent is generally permitted, when it is clear that they
are unsolicited, unrelated to a transaction and the donor is not
attempting to influence the employee. In accordance with regulations
and practices in various jurisdictions, as well as the rules of the New
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York Stock Exchange (the "NYSE") and the National Association of
Securities Dealers (the "NASD"), employees of certain business lines
may be subject to more stringent gift giving and receiving guidelines.
For example, employees of BT Alex. Brown Incorporated (the U.S.
Broker-Dealer) are generally not permitted to offer or accept gifts
with a value greater than U.S. $100.
o Acceptance of gifts, other than cash, given in connection with special
occasions (e.g., promotions, retirements, weddings, holidays), that are
of reasonable value in the circumstances are permissible.
o Employees may accept reasonable and conventional business courtesies,
such as joining a customer or vendor in attending sporting events, golf
outings or concerts, provided that such activities involve no more than
the customary amenities.
o The cost of working session meals or reasonable related expenses
involving the discussion or review of business matters related to
Bankers Trust may be paid by the customer, vendor or others, provided
that such costs would have otherwise been reimbursable to the employee
by Bankers Trust in accordance with the Firm's travel and entertainment
and expense reimbursement policies.
5. Bankers Trust Gifts to Persons Other than Government Officials
In appropriate circumstances, it may be acceptable and customary for Bankers
Trust to extend gifts to customers or others who do business with the Firm. You
should be certain that the gift will not give rise to a conflict of interest, or
appearance of conflict, and that there is no reason to believe that the gift
will violate applicable codes of conduct of the recipient. Employees with
appropriate authority to do so may make business gifts at the Firm's expense,
provided that the following requirements are met:
o Gifts in the form of cash or cash equivalents may not be given
regardless of amount.
o The gift must be of reasonable value in the circumstances, and should
not exceed a value of U.S. $200 (or U.S. $100 if the gift falls under
NYSE, NASD or similar applicable rules) unless the specific prior
approval of the appropriate Managing Officer is obtained.
o The gift must be lawful and in accordance with generally accepted
business practices of the governing jurisdictions.
o The gift must not be given with the intent to influence or reward any
person regarding any business or transaction involving Bankers Trust.
6. Bankers Trust Gifts to Government Officials
You must contact the Compliance Department prior to making any gift to a
governmental employee or official. You should be aware that various
government agencies, legislative bodies and jurisdictions may have rules
and regulations regarding the receipt of gifts by their employees or
officials. In some cases, government employees or officials may be
prohibited from accepting any gifts. (Refer to page 12 for additional
rules regarding political contributions.)
7. Business Affiliations
As a general rule, a conflict of interest, or the appearance of a
conflict, might arise if your Bankers Trust duties involve any actual or
potential business with a person, entity or organization in which you or
your Family Members have a substantial personal or financial interest.
Accordingly, the following rules apply:
a. You may not act on behalf of Bankers Trust in connection with any
business or potential business involving any person, entity or
organization in which you or your Family Members have direct or indirect
(i) managerial influence, such as serving as an executive officer,
director, general partner or similar position or (ii) substantial
ownership or beneficial interest.
b. You must promptly notify your Managing Officer and the Compliance
Department of any business affiliation that you or your Family Members
have that might give rise to a conflict of interest, or the appearance
of a conflict, by virtue of your Bankers Trust duties and position, the
nature of the activities of your business unit and the nature of your
outside business affiliation. If, in the judgment of Bankers Trust, the
situation presents a concern, steps will be taken to resolve it.
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c. You must obtain the permission of a member of the Bankers Trust
Management Committee prior to accepting any appointment to serve as an
executive officer, director, general partner or similar position of any
person, entity or organization which is an existing or prospective
customer, supplier or competitor of Bankers Trust.
d. If you are an officer of any Bankers Trust entity, you are required to
report certain information about your business affiliations annually to
the Office of the Secretary. In addition, you must report to the Office
of the Secretary, within 10 days of each occurrence, any situation
involving an existing or prospective customer, supplier or competitor of
Bankers Trust in which either you or your Family Members:
o serve or accept an appointment to serve as an executive officer,
director, general partner or similar position; or
o hold or acquire any substantial ownership or beneficial interest, or
have a 10% or greater ownership or controlling interest.
You must determine whether any of the following definitions apply to your
business affiliation or the situation of the person, entity or
organization with which you are affiliated, and you should raise any
questions about their application to your Managing Officer and the
Compliance Department. The following definitions help you determine how
this rule applies to your particular circumstances:
"Family Members" For purposes of the Rules for Business Conduct, your
Family Members include your spouse, minor children, and any other person
who resides in your household or depends on you or your spouse for
financial support.
"Substantial Interest" Whether a particular ownership or beneficial
interest is "substantial" depends on the circumstances, such as the size
and nature of the entity's business and the nature of its relationship to
Bankers Trust; your Bankers Trust duties in relation to that entity; and
the size and nature of the interest in that entity in relation to your
compensation and net worth.
"Existing or Prospective Customer, Supplier or Competitor" An existing or
prospective customer or supplier of Bankers Trust includes any person,
entity or organization that (i) has done business with Bankers Trust
within the past year, or (ii) has been in contact with Bankers Trust
during the past year regarding potential business, regardless of whether
or not you work in the particular unit that deals with that customer or
supplier. A competitor of Bankers Trust includes any person, entity or
organization that does business in competition with any unit of Bankers
Trust.
8. Borrowing Arrangements
In general, you should borrow only from banks, thrifts, consumer finance
companies, brokerage firms, and other institutions that regularly lend
money and extend credit in the ordinary course of their business (herein
called "Financial or Consumer Lenders"). The following additional rules
apply:
o You are not permitted to solicit or accept treatment from any lender
which the lender would not in the ordinary course of business extend to
any unrelated third party.
o You are not permitted to borrow from an existing or prospective
customer, supplier or competitor of Bankers Trust unless it is a
Financial or Consumer Lender, and the credit is extended in the ordinary
course of its business and involves only the usual and customary terms.
o You are required to obtain the written permission of your Managing
Officer prior to borrowing from other than a Consumer and Financial
Lender.
o In general, you are permitted to borrow personally from your parents,
grandparents or other close relatives. However, you must still ensure
that such borrowing will not give rise to a conflict of interest
regarding Bankers Trust or your Bankers Trust duties.
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If you are a Bankers Trust officer, borrowing arrangements from other than
a Financial or Consumer Lender must be reported to the Office of the
Secretary within 10 days of being incurred.
9. Outside Employment
You may not engage in any employment or activity outside of Bankers Trust
that could reasonably be expected to conflict with the interests of
Bankers Trust or interfere with your Bankers Trust responsibilities. You
must obtain the written permission of your Managing Officer prior to
accepting any outside employment, consultancy or position for which you
will receive compensation.
You are permitted to engage on a voluntary basis in lawful charitable,
civic, religious or political organizations, and to receive reimbursement
of reasonable and normal expenses from such an organization. No Managing
Officer approval is required if your volunteer activities do not interfere
with your ability to perform your Bankers Trust duties, and there is no
conflict of interest, or appearance of a conflict, resulting from any
relationship between the organization and Bankers Trust.
10. Personal Fiduciary Arrangements with Customers
You may not directly or indirectly accept any bequest or legacy from a customer,
or accept personal appointment to serve as a customer's executor, administrator,
trustee or guardian, unless that customer is your Family Member (as previously
defined), or is closely related to you (such as your parents or grandparents).
Additionally, you may not personally accept power of attorney or sole signing
authority on behalf of any customer account. Any exception to the foregoing
requires the written approval of a member of the Bankers Trust Management
Committee.
11. Personal Investments
You must always act to avoid any actual or potential conflict of interest
between your Bankers Trust duties and responsibilities, and your personal
investment activities. To avoid potential conflicts, you should not
personally invest in securities issued by companies with which you have
significant dealings on behalf of Bankers Trust, or in investment vehicles
sponsored by them. Additional rules that apply to securities transactions
by employees, including the requirement for employees to pre-clear
personal securities transactions and rules regarding how Employee Related
Accounts must be maintained, are described in the booklet entitled
Personal Securities Transactions by Employees, a supplement to the Firm's
policy statement Confidential Information, Insider Trading and Related
Matters. Copies of these policies can be obtained from the Compliance
Department.
Rules for Dealing with Governmental Officials and Political Candidates
1. Corporate Payments or Political Contributions
No corporate payments or gifts of value may be made to any outside party,
including any government official or political candidate or official, for
the purpose of securing or retaining business for the Firm, or influencing
any decision on its behalf.
o Bankers Trust maintains a Political Action Committee, supported by
voluntary contributions from its officers, through which contributions
are made to political parties or candidates. The Political Action
Committee is the only means by which Bankers Trust may lawfully
participate in U.S. Federal elections.
o Corporate contributions to political parties or candidates in
jurisdictions not involving U.S. Federal elections are permitted only
when such contributions are made in accordance with applicable local
laws and regulations, and the prior approval of a member of the Bankers
Trust Management Committee has been obtained.
Under the Foreign Corrupt Practices Act, Bank Bribery Law, Elections Law
and other applicable regulations, severe penalties may be imposed on
Bankers Trust and on individuals who violate these laws and regulations.
Similar laws and regulations may also apply in various countries and legal
jurisdictions where Bankers Trust does business.
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2. Personal Political Contributions
No personal payments or gifts of value may be made to any outside party,
including any government official or political candidate or official, for
the purpose of securing business for Bankers Trust or influencing any
decision on its behalf. You should always exercise care and good judgment
to avoid making any political contribution that may give rise to a
conflict of interest, or the appearance of conflict. For example, if your
business unit engages in business with a particular governmental entity or
official, you should avoid making personal political contributions to
officials or candidates who may appear to be in a position to influence
the award of business to Bankers Trust.
Certain employees, such as those who are engaged in Bankers Trust's
municipal finance and municipal securities activities, are subject to the
requirements set forth in Bankers Trust's policy "Complying with MSRB
G-37." In addition, employees assigned to certain areas of BT Alex. Brown
Incorporated are required to obtain approval of the Compliance Department
prior to making or soliciting political contributions. Contact your
supervisor or the Compliance Department to obtain a copy of this policy or
if you have any questions regarding political contributions.
3. Entertainment of Government Officials
Entertainment and other acts of hospitality toward government or political
officials should never compromise or appear to compromise the integrity or
reputation of the official or Bankers Trust. When hospitality is extended,
it should be with the expectation that it will become a matter of public
knowledge.
Rules for Dealing with Information
1. Insider Trading
Purchasing or selling securities, futures, loans or other financial
instruments while in possession of material nonpublic information about or
affecting them, or improperly disclosing such nonpublic information
directly or indirectly to others, is prohibited. This prohibition applies
to personal transactions as well as transactions effected in the course of
your employment, and to all material nonpublic information, regardless of
whether you obtained it as a result of your employment with Bankers Trust.
If you are uncertain whether information in your possession is material or
nonpublic, you must consult the Compliance Department before making a
purchase or sale to which it is relevant. Violation of applicable insider
trading laws and regulations could subject you to substantial personal
civil or criminal penalties.
2. Confidential Information
Improper disclosure or misuse of confidential information, such as
information related to specific transactions, Bankers Trust, its customers
or others, is prohibited. You are required to treat confidential
information in a responsible and proper manner, and in accordance with the
policies and procedures of Bankers Trust.
You must read and comply with Bankers Trust's policies and procedures
regarding the protection and use of confidential information, as set forth
in the policy statement "Confidential Information, Insider Trading and
Related Matters." You should contact the Compliance Department if you need
a copy of this policy.
3. Proprietary Information
Bankers Trust's trade secrets and know-how, financial information
concerning Bankers Trust, its customers, and its employees, and
specifications, programs, materials and documentation relating to all
financial models and products, computer and telecommunications systems,
software, hardware and applications developed or used by Bankers Trust are
confidential and proprietary to Bankers Trust. You are prohibited from
using or divulging such information except as permitted or required in
connection with your work on behalf of Bankers Trust, and you may not use
it for your personal or private benefit, or for the benefit of any other
person or entity, during or after your employment with Bankers Trust.
4. Proprietary Products and Transactions
Transactions and business opportunities developed by other employees or by
you in connection with your work activities on behalf of Bankers Trust
belong to Bankers Trust, and may not be used for your personal or private
benefit, or for the benefit of any other person or entity, during or after
your employment with Bankers Trust.
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5. Information Technology
The unauthorized duplication of software developed internally or obtained
from outside suppliers is prohibited, regardless of whether such
unauthorized duplication is for business or personal use. Additionally,
you must adhere to the Firm's standards and policies regarding the use of
its technology and computer equipment. Copies of Bankers Trust's "End-User
Technology Policy" can be obtained from the Technology Strategic Planning
Department or from your local or regional Human Resources Officer.
6. Privacy of Electronic and Other Information
If you use Bankers Trust equipment, systems or electronic mail to prepare,
store or transmit information of a personal or private nature, you waive
your right to privacy regarding such information. Under certain
circumstances, Bankers Trust audit, compliance, security and other
investigatory personnel may be permitted to access all information on such
equipment.
7. Financial and Accounting Information
Accounting and other records must accurately, completely and properly
describe the transactions they record. All transactions, contracts,
assets, liabilities, revenues and expenses of Bankers Trust must be
recorded in its regular books of account and records, and all commitments,
assets held in custody for clients and other "off-balance sheet" items
must be completely, accurately and properly reported. No secret or
unrecorded transaction, contract, fund or asset may be created or
maintained for any purpose. False, fictitious or misleading entries
regarding any transaction or account are prohibited.
8. Regulatory and Other Reporting
Bankers Trust will disclose, on a timely basis, information required to
evaluate the fairness of its financial presentation, soundness of its
financial condition and the propriety of its operations. All such reports,
whether they are required in connection with specific regulations or
otherwise, must be fair, complete and accurate. Concealment, alteration or
withholding of information from authorized auditors or regulatory agencies
is prohibited.
9. Information and Accounting Controls
Employees having control or input regarding Bankers Trust assets or
transactions are required to handle them with the strictest integrity, and
ensure that such transactions and the acquisition or disposal of assets
are in accordance with management's general or specific authorization.
Adherence to prescribed accounting and control policies and procedures is
required at all times.
10. Governmental or Regulatory Inquiries
Governmental agencies and regulatory organizations may from time to time
conduct surveys or make inquiries that request information about Bankers
Trust, its customers or others that would generally be considered to be
confidential or proprietary. If you receive such a request that is outside
the normal course of your business unit's activities, you should notify
your Managing Officer and the Compliance Department before you respond.
11. Responding to Media Inquiries and Requests for Speeches
All requests for speeches, interviews or comments for use in broadcasts,
newspapers, magazines or other media should be referred to, or cleared by,
Corporate Affairs (in the U.S. and Australia), the designated Communications
Officer (in London), Marketing Services (in Asia) or the head of your Bankers
Trust office (for all other international locations). When practical, these
departments should be furnished with, given an opportunity to comment on, the
text or outline of the statement or speech and responses to any likely
questions.
Rules for Dealing with Customers, Suppliers and the Public
1. The Basic Rule
Bankers Trust will compete for business only on the basis of quality,
price of product and service to its customers. All dealings with existing
and prospective customers of Bankers Trust, and with others, must be
handled with honesty, integrity and high ethical standards, and must
adhere to the letter and the spirit of applicable laws and regulations.
2. New Business Activities
The types of products and services offered and sold to customers must be
permissible under applicable regulations, and must meet the Firm's
standards regarding product disclosure, approval and other matters. New
products and business initiatives require special approval before they can
initially be sold to customers as described in Bankers Trust's New
Business Activity Policy, copies of which can be obtain from the
Compliance Department.
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3. New Client Approval
Certain information must be reviewed and approved by management prior to
establishing a business relationship with a new customer. Bankers Trust's
policy, New Client Approval, can be obtained from the Compliance
Department.
4. "Know Your Customer"
If you have responsibilities for managing customer relationships, you
should ensure that appropriate "know your customer" procedures are
properly applied throughout the duration of Bankers Trust's relationship
with the customer. Such procedures should be sufficient to provide
reasonable assurance that the customer is not using Bankers Trust for the
furtherance of illegal or improper activities as described further in the
Firm's policy statement Prevention and Detection of Money Laundering and
Reporting of Criminal and Suspicious Activity.
5. Communication with Customers and the Public
Communication with customers and others must be fair, balanced and honest.
Misleading, exaggerated or false claims about Bankers Trust's products,
services or their characteristics should never be made to customers or
others.
6. Pricing and Terms
Product pricing and related terms and conditions of products and services
must comply with applicable laws and regulations, and must be consistent
with Bankers Trust standards of fairness and integrity.
7. Customer Complaints
Customer complaints, disputes or dissatisfaction with the products or
services of Bankers Trust must be addressed fairly and promptly. Customer
complaints of a severe or unusual nature that may affect the overall
reputation of Bankers Trust should be immediately brought to the attention
of your Managing Officer and the Compliance Department.
8. Improper Customer Conduct
Knowingly aiding or assisting any customer or other person in the
violation of laws and regulations that apply to such customer or other
person is prohibited.
9. Special Regulatory Matters Involving Customers
Bankers Trust may, from time to time, receive notification that a customer
is under investigation by regulatory or law enforcement authorities,
describing certain information, account blockages or other actions that
may be required. You should not inform the customer of such regulatory
action, or of any response submitted by Bankers Trust, without the prior
specific permission of the Legal Department or the Compliance Department.
10. Anti-Competitive Conduct
All business of Bankers Trust must be conducted in fair and open
competition. Under no circumstances should an employee discuss or commit
the Firm to any arrangement with competitors affecting pricing or
marketing policies. Violation of anti-trust laws and regulations (referred
to in some jurisdictions as competition laws) could subject you and the
Firm to substantial civil and criminal penalties.
11. Tying Arrangements
Anti-trust and competition laws and regulations of many jurisdictions may
prohibit or restrict anti-competitive conduct, including certain forms of
tying arrangements. Bankers Trust is also subject to additional anti-tying
restrictions as set forth in the Bank Holding Company Act and Regulation
Y, as interpreted by the Federal Reserve Board (the "Federal Reserve tying
rules"). Recently, the Federal Reserve modified these rules to eliminate
certain types of tying restrictions while continuing to prohibit others.
Since the laws and regulations that apply to tying arrangements are
complex, you should seek guidance from the Compliance Department or Legal
Department if you are unsure as to whether a proposed tying arrangement is
permissible.
Bank tying arrangements are generally those in which the extension of
credit, the provision of a service or the related pricing is varied or
conditioned upon the customer obtaining additional products or services
from Bankers Trust. Tying could involve linking products and services to
be provided by the same or another Bankers Trust entity.
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As a general matter, the Federal Reserve tying rules are more restrictive
when Bankers Trust Company ("BTCo") or another affiliated bank is involved
in the proposed tying arrangement. The Federal Reserve tying rules no
longer apply if BTCo or another affiliated bank is not involved in the
tying arrangement.
Restricting Availability or Varying the Pricing of Bank Products
A bank is prohibited under the Federal Reserve tying rules from conditioning the
availability of a loan or other product or service, or vary the pricing thereof,
on the condition that a customer obtains an additional product or service
offered by the bank or another affiliate unless the additional product or
service is a "traditional" bank product, such as a loan, deposit or trust
service.
For example, it would be permissible under the Federal Reserve tying rules
for the bank to condition its loan on the requirement that the customer
must maintain a deposit account with the bank or another affiliate.
However, it would not be permissible for the bank to condition the
availability or vary the pricing of its loan on the requirement that the
customer chooses an affiliate as an underwriter of the customer's
securities.
Safe Harbors
If BTCo or another affiliated bank is not involved in providing or varying
the pricing of the product or services, or in restricting the customer's
ability to use a competitor's product or service, then the Federal Reserve
tying rules do not apply.
For example, it would be permissible under the Federal Reserve tying rules
for a nonbank affiliate to tie a merger and acquisition advisory service
to the customer's appointment of that affiliate (or another nonbank
affiliate) as the underwriter of the customer's securities.
Subject to compliance with applicable local laws and regulations, a safe
harbor under the Federal Reserve tying rules also exists for "foreign"
transactions, that is, where the customer is an entity organized and
having its principal place of business outside of the U.S. or, if the
customer is a natural person, he or she is a citizen of a foreign country
other than the U.S. In such instances, the Federal Reserve tying rules
would not apply even if the tying arrangement involves BTCo or another
affiliated bank.
As stated earlier, the requirements of the Federal Reserve tying rules and
applicable local laws and regulations can be complex. If a tying
arrangement is contemplated, you should contact the Compliance Department
or Legal Department if you have questions.
12. Purchases and Commitments
Purchases and commitments on behalf of Bankers Trust must be made, and
contracts awarded and orders given, solely on a sound commercial basis in
consideration of quality, price and service, and may only be made by
Bankers Trust personnel who have been given express authority to do so.
Rules for Dealing with Other Employees
1. The Basic Rule
All dealings with other employees should be consistent with the Firm's
commitment to honesty, integrity and ethical behavior.
2. Cooperation
Every employee should cooperate fully with Bankers Trust internal and
independent auditors, attorneys, compliance and security personnel, and
other authorized parties acting on behalf of the Firm, and you should
never withhold information from them.
3. Awareness
Employees should obtain sufficient knowledge about the laws, regulations
and policies that apply to their particular Bankers Trust duties to enable
them to avoid possible violations, or recognize when they need to seek
guidance from their supervisor or others to avoid possible violations.
4. Supervision
The Firm's business activities must be subject to appropriate supervision
by Bankers Trust supervisory personnel.
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You are a supervisor if your Bankers Trust duties involve managing or
directing the work of others. As a supervisor, you have a responsibility
to ensure that the Bankers Trust activities of the employees you supervise
are properly directed toward achieving the general and specific objectives
of Bankers Trust, in accordance with applicable policies and procedures.
The supervisor is accountable for the Bankers Trust activities performed
under his or her direction.
5. Due Care in Delegation
The supervisor should delegate responsibilities to other employees only if
satisfied that such other employees possess the necessary skills and
experience to properly fulfill the responsibilities assigned.
6. Instruction and Training
The supervisor should provide adequate training and instruction regarding
the objectives of the responsibilities delegated, and the manner in which
they are to be carried out in accordance with Bankers Trust policies.
7. Review and Monitoring
The supervisor should understand how the employees are performing the
responsibilities delegated to them. This monitoring should be sufficient
in the particular circumstances to reasonably ensure that the supervisor
will promptly identify errors or improper work-related activities.
8. Correction and Follow-Up
The supervisor should take prompt corrective action if errors or improper
conduct are identified. Depending on the severity and nature of the errors
or improper conduct, the supervisor is responsible for reporting such
matters to his or her Managing Officer and the Compliance Department.
9. Preferential Treatment
No employee should give or receive any preferred conditions of employment
because of family or personal relationships. Personnel decisions must be
based on sound management practices and not on personal concerns.
10. Unlawful Conduct
The Firm's policy prohibits employees from engaging in unlawful conduct
that may represent a threat to Bankers Trust or to the safety of any other
employee or agent of Bankers Trust. Any employee convicted of a serious
crime, including but not limited to the sale, possession or use of illegal
drugs or substances, will be subject to disciplinary action, including
possible dismissal.
11. Human Resources Policies
Additional policies setting forth the Firm's standards regarding personnel
matters, such as equal opportunity and affirmative action, performance
evaluation and counseling, compensation and benefit programs, and other
matters related to employment with Bankers Trust, are issued by the Human
Resources Department. These Human Resources policies meet legal and
regulatory requirements of various jurisdictions in which Bankers Trust
does business, and you are required to comply with the letter and the
spirit of these policies. Copies of applicable policies can be obtained
from the Human Resources Department or your local or regional Human
Resources Officer.
12. Off-Premise Requirement for Employees in Sensitive Positions
Employees in "sensitive positions" (as determined and notified by the employee's
manager) are required to be off-premises for a period of at least two
consecutive weeks each year. The off-premises period may be satisfied by using
available vacation, or through a combination of vacation, holiday, medical
leave, jury duty or other authorized absences.
Sensitive positions generally include those in which the employee has
authority and access to make entries to the books and records of the Firm,
effect wire transfers or move funds, or enter into specific transactions
such as extending credit or trading securities on behalf of the Firm.
During the required off-premises period, such employees are prohibited
from directing activity, entering transactions or changing the Firm's
records in any manner, whether through an off-site computer link, written
instruction of any kind, or by telephone or other sort of communication.
Only communications of a general business nature are permitted during the
off-premises period.
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Regional management and individual business units may also require
employees in non-sensitive positions to be off-premises for a period of at
least two consecutive weeks each year. Additional information about
Bankers Trust's "Vacation & Off-Premises Policy" can be obtained from the
Compliance Department.
Rules for Dealing with Certain Legal, Judicial or Regulatory Matters;
Reports of Violations
1. General Matters
You must promptly inform your Managing Officer of matters about which you
become aware which might adversely affect the reputation of Bankers Trust
or be a threat to its assets.
2. Violations of Bankers Trust Policies
You must promptly report to your Managing Officer and the Compliance
Department every known or suspected violation of Bankers Trust's policies,
including the Rules for Business Conduct, regardless of whether such
violation involves you or another employee.
3. Fraudulent Activity
You must promptly report to the Compliance Department or Investigative
Services every known or suspected work-related event of questionable,
fraudulent or dishonest nature of which you become aware, whether such
activity involves employees or outsiders.
4. Arrests, Indictments and Convictions
You must promptly notify your Managing Officer and the Compliance
Department if you are arrested, indicted or convicted of any crime or
violation of applicable law, other than those involving minor traffic
infractions.
5. Employee Involvement in Regulatory and Other Formal Proceedings
You are required to promptly report, to your Managing Officer and the Compliance
Department, your involvement in certain governmental proceedings (such as
judicial, legislative or administrative proceedings) or regulatory hearings.
Your involvement is reportable regardless of whether it involves your testimony
as a witness, an actual or prospective party or target, or otherwise, and such
involvement:
o calls into question in any way your character, integrity or honesty; or
o concerns Bankers Trust or another Bankers Trust employee, customer or
supplier; or
o concerns you, and has received or is likely to receive publicity.
6. Lobbying, Public Testimony and Related Matters
Regarding matters which may affect the business, reputation or standing of
Bankers Trust, you may not appear as a witness, give testimony or sign a
statement advocating a position at the request of outside parties, except as
required by law, and you may not lobby before any government, legislative,
judicial or administrative body without the specific prior approval of your
Managing Officer and the Government Relations Department.
7. Managing Officer Reporting
Each Managing Officer who receives a report or becomes aware of conduct,
behavior or other circumstance that is questionable or prohibited by the
Rules for Business Conduct must ensure that such matter is brought to the
attention of the Compliance Department.
Other Matters
1. Ongoing Compliance
Your adherence to the Rules for Business Conduct, and to all lawful
policies and procedures of Bankers Trust, is required of you. Failure to
comply with them may subject you to disciplinary action, including
possible dismissal.
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2. Resignation and Termination
None of the policies contained or referred to in these Rules constitutes
or grants a legal right of any nature to any employee of Bankers Trust,
nor do any of them confer any right or privilege upon any employee or on
any particular group of employees. The Rules do not constitute an
employment contract. Subject to relevant local law and the terms of any
applicable individual written employment contract, employment with Bankers
Trust is "at will" and you have the right to resign at any time.
Conversely, Bankers Trust has the right to terminate the employment of any
employee at any time in its sole discretion, for any lawful reason.
3. Modifications to or Waivers of the Rules
Modifications to or waivers of the Rules may be made only by a member of
the Bankers Trust Management Committee.
4. Confirming Your Compliance with the Rules
Annually, employees of Bankers Trust are required to sign a statement
acknowledging that they have received the Rules for Business Conduct and
confirming their adherence to Bankers Trust's policies.
5. If You Have Questions
All questions regarding the Rules, the propriety of an action not covered
by the Rules, or other compliance-related matters should be referred to
the Compliance Department.
NOTE: An Employee's failure to report matters required to be reported
under the Rules for Business conduct is itself a violation of these Rules
and represents an independent ground for disciplinary action, up to and
including discharge.
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FORUM INVESTMENT ADVISORS, LLC
FORUM FUND SERVICES, LLC
CODE OF ETHICS
AS AMENDED JANUARY 17, 2000
INTRODUCTION
This Code of Ethics (the "Code") has been adopted by Forum Fund
Services, LLC ("FFS") and Forum Investment Advisors, LLC ("FIA" and collectively
with FFS, "Forum"). This Code pertains to Forum's investment advisory and
distribution services to registered management investment companies or series
thereof (each a "Fund"). In addition, this Code applies to employees of Forum's
commonly controlled companies who serve as officers of a Fund. This Code
establishes standards and procedures for the detection and prevention of
activities by which persons having knowledge of the investments and investment
intentions of a Fund may abuse their fiduciary duties to the Fund and addresses
other types of conflict of interest situations. Definitions of underlined terms
are included in Appendix A.
1. POLICY STATEMENT
Forum forbids any Access Person, Investment Personnel or Fund Officer
from engaging in any conduct which is contrary to this Code. In addition, due to
their positions, Forum also forbids any Access Person or Investment Personnel
from engaging in any conduct which is contrary to Forum's Insider Trading Policy
and Related Procedures. In addition, many persons subject to the Code are also
subject to the other restrictions or requirements which affect their ability to
open securities accounts, effect securities transactions, report securities
transactions, maintain information and documents in a confidential manner and
other matters relating to the proper discharge of your obligations to Forum.
These include contractual arrangements with Forum, policies adopted by Forum
concerning confidential information and documents and FFS' Compliance and
Supervisory Procedures Manual.
Forum has always held itself and its employees to the highest ethical
standards. While this Code is only one manifestation of those standards,
compliance with its provisions is essential. Failure to comply with this Code is
a very serious matter and may result in disciplinary action being taken. Such
action can include among other things, monetary fines, disgorgement of profits,
suspension or even termination of employment.
2. WHO IS COVERED BY THIS CODE
(a) All Access Persons and Investment Personnel, in each case only
with respect to those Funds as listed on Appendix B.
(b) Fund Officers, but only with respect to those Funds for which
they serve as Fund Officers as listed in Appendix B.
<PAGE>
3. PROHIBITED TRANSACTIONS
(A) PROHIBITION AGAINST FRAUDULENT CONDUCT. It is unlawful for Access
Persons, Investment Personnel and Fund Officers to use any information
concerning a security held or to be acquired by a Fund, or their ability to
influence any investment decisions, for personal gain or in a manner detrimental
to the interests of a Fund. In addition, they shall not, directly or indirectly:
(i) employ any device, scheme or artifice to defraud a Fund or
engage in any manipulative practice with respect to a Fund;
(ii) make to a Fund, any untrue statement of a material fact or
omit to state to a Fund a material fact necessary in order to
make the statements made, in light of the circumstances under
which they are made, not misleading; or
(iii) engage in any act, practice, or course of business which
operates or would operate as a fraud or deceit upon a Fund.
(B) BLACKOUT PERIOD. Access Persons and Investment Personnel shall not
purchase or sell a Covered Security in an account over which they have direct or
indirect influence or control on a day during which they know or should have
known a Fund has a pending "buy" or "sell" order in that same security until
that order is executed or withdrawn.
(C) ADDITIONAL INVESTMENT PERSONNEL BLACKOUT PERIOD. No Investment
Personnel shall purchase or sell a Covered Security within five calendar days
before or two calendar days after a Fund for which the Investment Personnel
makes or participates in making a recommendation trades in that security. Any
profits realized on trades within this proscribed period shall be disgorged.
This blackout period does not apply to money market mutual funds which are
advised by FIA.
(D) FUND OFFICER PROHIBITION. No Fund Officer shall directly or
indirectly seek to obtain information (other than that necessary to accomplish
the functions of the office) from any Fund portfolio manager regarding (i) the
status of any pending securities transaction for a Fund or (ii) the merits of
any securities transaction contemplated by the Fund Officer.
(E) BLACKOUT PERIOD EXCLUSIONS AND DEFINITIONS. The following
transactions shall not be prohibited by this Code and are not subject to the
limitations of Sections 3(b) and (c):
(i) purchases or sales over which you have no direct or indirect
influence or control (for this purpose, you are deemed to have
direct or indirect influence or control over the accounts of a
spouse, minor children and relatives residing in your home);
(ii) purchases which are part of an automatic dividend reinvestment
plan;
(iii) purchases or sales which are non-volitional on your part; and
(iv) 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.
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Your trading shall be exempt from the limitations of Sections 3(b) and
(c) provided that (i) the market capitalization of a particular security exceeds
$1 billion and (ii) pending orders of FIA do not exceed two percent of the daily
average trading volume of the security for the prior 15 days.
For purposes of Sections 3(b) and (c), and subject to Section 3(g)
below, the (i) common stock and any fixed income security of an issuer shall not
be deemed to be the same security and (ii) non-convertible preferred stock of an
issuer shall be deemed to be the same security as the fixed income securities of
that issuer; and (iii) convertible preferred stock shall be deemed to be the
same security as both the common stock and fixed income securities of that
issuer.
(F) REQUIREMENT FOR PRECLEARANCE. Investment Personnel must obtain
prior written approval from the designated Review Officer before:
(i) directly or indirectly acquiring securities in an initial
public offering for which no public market in the same or
similar securities of the issue has previously existed; and
(ii) directly or indirectly acquiring securities in a private
placement. In determining whether to preclear the transaction,
the Review Officer designated under Section 5 shall consider,
among other factors, whether the investment opportunity should
be reserved for a Fund, and whether such opportunity is being
offered to the Investment Personnel by virtue of their
position with the Fund.
Any Investment Personnel of a Fund who has taken a personal position
through a private placement will be under an affirmative obligation to disclose
that position in writing to the Review Officer if they play a material role in
the Fund's subsequent investment decision regarding the same issuer; this
separate disclosure must be made even though the Investment Personnel has
previously disclosed the ownership of the privately placed security in
compliance with the preclearance requirements of this section. Once disclosure
is given, an independent review of the Fund's investment decision will be made.
(G) OTHER PROHIBITED TRANSACTIONS. Access Persons, Investment Personnel
and Fund Officers shall not:
(i) induce or cause a Fund to take action or to fail to take
action, for personal benefit rather than for the benefit of
the Fund;
(ii) accept anything other than of DE MINIMIS value or any other
preferential treatment from any broker-dealer or other entity
with which a Fund does business;
(iii) establish or maintain an account at a broker-dealer, bank or
other entity through which securities transactions may be
effected without written notice to the designated Review
Officer prior to establishing such an account;
(iv) use knowledge of portfolio transactions of a Fund for your
personal benefit or the personal benefit of others;
(v) violate the anti-fraud provisions of the federal or state
securities laws;
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(vi) serve on the boards of directors of publicly traded companies,
absent prior authorization based upon a determination by the
Review Officer that the board service would be consistent with
the interests of the Fund and its shareholders.
(H) UNDUE INFLUENCE. Access Persons, Investment Personnel and Fund
Officers shall not cause or attempt to cause any Fund to purchase, sell or hold
any security in a manner calculated to create any personal benefit to you. You
shall not recommend any securities transactions for a Fund without having
disclosed (through reports in accordance with Section 4, preclearance in
accordance with Section 3(f), or otherwise) your interest, if any, in such
securities or the issuer thereof, including, without limitation, (i) your
beneficial ownership of any securities of such issuer, (ii) any position with
such issuer or its affiliates and (iii) any present or proposed business
relationship between you (or any party in which you have a significant interest)
and such issuer or its affiliates.
(I) CORPORATE OPPORTUNITIES. Access Persons, Investment Personnel and
Fund Officers shall not take personal advantage of any opportunity properly
belonging to a Fund.
(J) CONFIDENTIALITY. Except as required in the normal course of
carrying out their business responsibilities, Access Persons, Investment
Personnel and Fund Officers shall not reveal information relating to the
investment intentions or activities of any Fund, or securities that are being
considered for purchase or sale on behalf of any Fund.
4. REPORTING REQUIREMENTS
(A) REPORTING. Access Persons, Investment Personnel and Fund Officers
must report the information described in this Section with respect to
transactions in any Covered Security in which they have, or by reason of such
transaction acquire, any direct or indirect beneficial ownership. They must
report to the designated Review Officer unless they are otherwise required by a
Fund, pursuant to a Code of Ethics adopted by the Fund, to report to the Fund or
another person.
(B) EXCLUSIONS FROM REPORTING. Purchases or sales in Covered Securities
in an account in which you have no direct or indirect influence or control are
not subject to the reporting requirements of this Section.
(C) INITIAL HOLDING REPORTS. No later than ten (10) days after you
become subject to this Code as set forth in Section 2, you must report the
following information:
(i) the title, number of shares and principal amount of each
Covered Security (whether or not publicly traded) in which you
have any direct or indirect beneficial ownership as of the
date you became subject to this Code;
(ii) the name of any broker, dealer or bank with whom you
maintained an account in which any securities were held for
your direct or indirect benefit as of the date you became
subject to this Code; and
(iii) the date that the report is submitted.
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(D) QUARTERLY TRANSACTION REPORTS. No later than ten (10) days after
the end of a calendar quarter, you must report the following information:
(i) with respect to any transaction during the quarter in a
Covered Security (whether or not publicly traded) in which you
have, or by reason of such transaction acquired, any direct or
indirect beneficial ownership:
(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 of the Covered Security at which the
transaction was effected;
(4) the name of the broker, dealer or bank with or
through which the transaction was effected; and
(5) the date that the report is submitted.
(ii) with respect to any account established by you in which any
Covered Securities (whether or not publicly traded) were held
during the quarter for your direct or indirect benefit:
(1) the name of the broker, dealer or bank with whom you
established the account;
(2) the date the account was established; and
(3) the date that the report is submitted.
(E) ANNUAL HOLDINGS REPORTS. Annually, you must report the following
information (which information must be current as of a date no more than thirty
(30) days before the report is submitted):
(i) the title, number of shares and principal amount of each
Covered Security (whether or not publicly traded) in which you
had any direct or indirect beneficial ownership;
(ii) the name of any broker, dealer or bank with whom you maintain
an account in which any securities are held for your direct or
indirect benefit; and
(iii) the date that the report is submitted.
(F) CERTIFICATION OF COMPLIANCE. You are required to certify annually
(in the form of Attachment A) that you have read and understood the Code and
recognize that you are subject to the Code. Further, you are required to certify
annually that you have complied with all the requirements of the Code and you
have disclosed or reported all personal securities transactions pursuant to the
requirements of the Code.
(G) ALTERNATIVE REPORTING. The submission to the Review Officer of
duplicate broker trade confirmations and statements on all securities
transactions shall satisfy the reporting requirements of Section 4. The annual
holdings report may be satisfied by confirming annually,
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in writing, the accuracy of the records maintained by the Review Officer and
recording the date of the confirmation.
(H) REPORT QUALIFICATION. Any report may contain a statement that the
report shall not be construed as an admission by the person making the report
that he or she has any direct or indirect beneficial ownership in the Covered
Securities to which the report relates.
(I) ACCOUNT OPENING PROCEDURES. You shall provide written notice to the
Review Officer prior to opening any account with any entity through which a
Covered Securities transaction may be effected. In addition, you will promptly:
(i) provide full access to a Fund, its agents and attorneys to any
and all records and documents which a Fund considers relevant
to any securities transactions or other matters subject to the
Code;
(ii) cooperate with a Fund, or its agents and attorneys, in
investigating any securities transactions or other matter
subject to the Code;
(iii) provide a Fund, its agents and attorneys with an explanation
(in writing if requested) of the facts and circumstances
surrounding any securities transaction or other matter subject
to the Code; and
(iv) promptly notify the Review Officer or such other individual as
a Fund may direct, in writing, from time to time, of any
incident of noncompliance with the Code by anyone subject to
this Code.
5. REVIEW OFFICER
(A) DUTIES OF REVIEW OFFICER. The Chief Compliance Officer of Forum has
been appointed by the Director of FIA and FFS as the Review Officer to:
(i) review all securities transaction and holdings reports and
shall maintain the names of persons responsible for reviewing
these reports;
(ii) identify all persons subject to this Code who are required to
make these reports and promptly inform each person of the
requirements of this Code;
(iii) compare, on a quarterly basis, all Covered Securities
transactions with each Fund's completed portfolio transactions
to determine whether a Code violation may have occurred;
(iv) maintain a signed acknowledgment by each person who is then
subject to this Code, in the form of Attachment A; and
(v) identify persons who are Investment Personnel of the Fund and
inform those persons of their requirements to obtain prior
written approval from the Review Officer prior to directly or
indirectly acquiring ownership of a security in any private
placement or initial public offering.
(vi) exempt any Fund Officer from provisions of this Code if the
person is subject to similar requirements of a Fund's Code of
Ethics.
(B) POTENTIAL TRADE CONFLICT. When there appears to be a transaction
that conflicts with the Code, the Review Officer shall request a written
explanation of the person's transaction.
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If after post-trade review, it is determined that there has been a violation of
the Code, a report will be made by the designated Review Officer with a
recommendation of appropriate action to the Director of FIA and FFS and a Fund's
Board of Trustees (or Directors).
(C) REQUIRED RECORDS. The Review Officer shall maintain and cause to be
maintained:
(i) a copy of any code of ethics adopted by Forum which has been
in effect during the previous five (5) years in an easily
accessible place;
(ii) a record of any violation of any code of ethics, and of any
action taken as a result of such violation, in an easily
accessible place for at least five (5) years after the end of
the fiscal year in which the violation occurs;
(iii) a copy of each report made by anyone subject to this Code as
required by Section 4 for at least five (5) years after the
end of the fiscal year in which the report is made, the first
two (2) years in an easily accessible place;
(iv) a list of all persons who are, or within the past five years
have been, required to make reports or who were responsible
for reviewing these reports pursuant to any code of ethics
adopted by Forum, in an easily accessible place;
(v) a copy of each written report and certification required
pursuant to Section 5(e) of this Code for at least five (5)
years after the end of the fiscal year in which it is made,
the first two (2) years in an easily accessible place; and
(vi) a record of any decision, and the reasons supporting the
decision, approving the acquisition by Investment Personnel of
securities under Section 3(f) of this Code, for at least five
(5) years after the end of the fiscal year in which the
approval is granted.
(D) POST-TRADE REVIEW PROCESS. Following receipt of trade confirms and
statements, transactions will be screened for the following:
(i) SAME DAY TRADES: transactions by Access Persons and Investment
Personnel occurring on the same day as the purchase or sale of
the same security by a Fund for which they are an Access
Person or Investment Personnel.
(ii) PORTFOLIO MANAGER TRADES: transactions by Investment Personnel
within five calendar days before and two calendar days after a
Fund, for which the Investment Personnel makes or participates
in making a recommendation, trades in that security.
(iii) FRAUDULENT CONDUCT: transaction by Access Persons, Investment
Personnel and Fund Officers which, within the most recent 15
days, is or has been held by a Fund or is being or has been
considered by a Fund or FIA for purchase by a Fund.
(iv) OTHER ACTIVITIES: transactions which may give the appearance
that an Access Person, Investment Personnel or Fund Officer
has executed transactions not in accordance with this Code.
(E) SUBMISSION TO FUND BOARD. The Review Officer shall annually prepare
a written report to the Board of Trustees (or Directors) of a Fund listed in
Appendix B that
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(i) describes any issues under this Code or its procedures since
the last report to the Trustees, including, but not limited
to, information about material violations of the code or
procedures and sanctions imposed in response to the material
violations; and
(ii) certifies that the Fund has adopted procedures reasonably
necessary to prevent Access Persons, Investment Personnel and
Fund Officers from violating this code.
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FORUM CODE OF ETHICS
APPENDIX A
DEFINITIONS
(a) Access Person:
(i)(1) of FIA means each director or officer of FIA, any employee or
agent of FIA, or any company in a control relationship to FIA
who, in connection with the person's regular functions or
duties, makes, participates in or obtains information
regarding the purchase or sale of Covered Securities by a Fund
advised by FIA, or whose functions relate to the making of any
recommendations with respect to such purchases or sales; and
(i)(2) any natural person in a control relationship to FIA who
obtains information concerning recommendations made to a Fund
by FIA with regard to the purchase or sale of Covered
Securities by the Fund;
(ii) of FFS means each director or officer of FFS who in the
ordinary course of business makes, participates in or obtains
information regarding the purchase or sale of Covered
Securities for a Fund or whose functions or duties as part of
the ordinary course of business relate to the making of any
recommendation to a Fund regarding the purchase or sale of
Covered Securities.
(b) Act means the Investment Company Act of 1940, as amended.
(c) Beneficial Owner shall have the meaning as that set forth in Rule
16a-1(a)(2) under the Securities Exchange Act of 1934, as amended, except that
the determination of direct or indirect beneficial ownership shall apply to all
Covered Securities which an Access Person owns or acquires. A beneficial owner
of a security is any person who, directly or indirectly, through any contract,
arrangement, understanding, relationship or otherwise, has or shares a direct or
indirect pecuniary interest (the opportunity, directly or indirectly, to profit
or share in any profit derived from a transaction in the subject securities) in
a security.
Indirect pecuniary interest in a security includes securities held by a
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).
(d) Control means the power to exercise a controlling influence over the
management or policies of a company, unless this power is solely the result of
an official position with the company. Ownership of 25% or more of a company's
outstanding voting securities is presumed to give the holder thereof control
over the company. This presumption may be rebutted by the Review Officer based
upon the facts and circumstances of a given situation.
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(e) Covered Security means any security except:
(i) direct obligations of the Government of the United States;
(ii) bankers' acceptances and bank certificates of deposits;
(iii) commercial paper and debt instruments with a maturity at
issuance of less than 366 days and that are rated in one of
the two highest rating categories by a nationally recognized
statistical rating organization;
(iv) repurchase agreements covering any of the foregoing; and
(v) shares of registered open-end investment companies.
(f) Fund Officer means any employee of Forum or of a company commonly controlled
with Forum who is an officer or director/trustee of a Fund.
(h) Investment Personnel means
(i) any employee of FIA 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 a Fund managed by FIA; and
(ii) any individual who controls FIA or a Fund for which FIA is an
investment adviser and who obtains information concerning
recommendations made to the Fund regarding the purchase or
sale of securities by the Fund.
(i) Purchase or sale includes, among other things, the writing of an option
to purchase or sell.
(j) Security held or to be acquired by the Fund means
(i) any Covered Security which, within the most recent 15 days (x)
is or has been held by the applicable Fund or (y) is being or
has been considered by the applicable Fund or its investment
adviser for purchase by the applicable Fund; and
(ii) and any option to purchase or sell, and any security
convertible into or exchangeable for, a Covered Security.
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