CODE OF ETHICS
for
The Narragansett Insured Tax-Free Income Fund
January 1, 2000
Effective: January 1, 2000
(as amended June, 2000)
THE CODE OF ETHICS
OF THE NARRAGANSETT INSURED TAX-FREE INCOME FUND
INTRODUCTION
It is the policy of the Narragansett Insured Tax-Free Income Fund
(the "Fund") to avoid any conflict of interest or even the
appearance of such a conflict in connection with the performance
of general management, investment advisory, distribution and
portfolio management services for the Fund and its shareholders.
This code of ethics (the "Code of Ethics" or the "Code") has been
adopted by the Fund's Trustees to implement this policy. The
Code applies to the Fund and each of its officers and Trustees.
In the Code, "Aquila Entity" or "Aquila Entities" shall mean (1)
all members of the Aquila Group of Companies, including Aquila
Management Corporation, Aquila Distributors, Inc. and STCM
Management Company, Inc; (2) all funds for which a member of the
Aquila Group of Companies provides administrative, distribution
or investment advisory services (the "Funds"); and (3) any other
advisory clients of the Aquila Group of Companies. A code of
ethics substantially the same as this code has been adopted by
each of the Aquila Group of Companies, and covers every officer,
director and employee of that Company who is involved in
providing services to the Fund whether by way of security
analysis or recommendation, placement of trading orders,
portfolio management, distribution or otherwise. In this Code,
provisions applicable to the Aquila Group of Companies are
present solely for convenience of administration and apply only
to those companies under their own code of ethics.
One of the practices that raises a potential conflict of interest
is that of trading in the same securities (or related securities)
that are being purchased or sold, or considered for purchase or
sale, for the Fund or other Aquila Entities by persons affiliated
with the Fund or other Aquila Entities for accounts in which the
affiliated persons have a beneficial ownership interest or which
they control. The Investment Advisers Act of 1940 ("Advisers
Act"), the Investment Company Act of 1940 ("1940 Act"), and other
federal and state securities laws and rules generally prohibit
fraudulent, deceptive or manipulative trading by persons
affiliated with investment advisers with respect to securities
held, to be acquired or under consideration for purchase or sale
by advisory clients. This prohibition extends to trading in
furtherance of personal interests to the detriment of the Fund or
other Aquila Entities as well as any attempt to benefit from the
market impact of their anticipated or actual transactions. The
Securities and Exchange Commission ("SEC") regulations require
the adoption of procedures designed to prevent such fraudulent
conduct.
Please read the specifics of this Code of Ethics carefully. If
you have any questions, discuss them with the Fund Counsel, that
is, regular independent counsel to the fund, if you are an
Independent Trustee, or with Robert Anderson, the Compliance
Officer ("C.O.") for the Aquila Group of Companies or his
successor. Be sure that you understand the Code. Then sign and
date the attached certification and return it to the C.O., who
will maintain it as part of the Fund's records. Keep a copy of
the Code for your reference. The C.O. is responsible for
enforcing and interpreting this Code, and is always available to
answer any questions you may have. As an officer, trustee,
director, employee, or control person of the Fund or any other
Aquila Entity, you are subject to all applicable provisions of
this Code.
ADOPTION OF THIS CODE
This Code has been adopted in compliance with Section 17(j) of
the 1940 Act and Rule 17j-1 (the "Rule"), Sections 204 and 204A
of the Advisers Act and the rules thereunder, and Section 15(f)
of the Securities and Exchange Act of 1934.
PURPOSE OF THIS CODE
This Code seeks to maintain the highest standards of ethical
conduct for the Fund, other Aquila Entities and their personnel.
In so doing, this Code addresses three areas of concern:
1. Observance of the general anti-fraud provisions of the
Federal securities laws.
2. Avoidance of conflicts with the interests of the Fund
and other Aquila Entities or the appearance of such
conflicts.
3. Avoidance of trading securities on the basis of
material non-public information or
information about securities transactions made or
being considered for the Fund or other clients of the
Aquila Entities.
1. GENERAL DEFINITIONS
Listed below are definitions for some of the terms used in this
Code, many of which are defined by law.
"Access Person" shall mean any director, trustee, officer or
Advisory Person of any Aquila Entity.
"Advisory Person" shall mean any employee of an Aquila Entity (or
of any company in a "Control" relationship to an Aquila Entity)
who, in connection with his or her regular functions or duties,
makes, participates in, or obtains any information regarding the
purchase or sale of securities by the Fund or other advisory
clients, including other Funds, or whose functions relate to the
making of any recommendations with respect to such purchases or
sales of securities. Also included within the definition of
"Advisory Person" is any natural person in a "Control"
relationship to the Fund or any other Aquila Entity that is a
registered investment company or an investment adviser who
obtains information concerning recommendations made to advisory
clients, including the Fund and other Funds, with respect to the
purchase or sale of securities.
"Beneficial Ownership/Beneficial Owner" shall mean any person who
has or shares, directly or indirectly, through any contract,
arrangement, understanding, relationship, or otherwise, a direct
or indirect pecuniary interest in a security, within the meaning
of the Securities Exchange Act Rule 16a-1(a)(2). "Pecuniary
interest" means the opportunity, directly or indirectly, to
profit or share in any profit derived from a transaction in the
security. "Indirect pecuniary interest" includes, but is not
limited to, securities held by members of your immediate family
who share your household, including your spouse, children and
stepchildren, parents, grandparents, brothers and sisters, and
any of your in-laws.
If you need help in determining whether you have beneficial
ownership of any security for purposes of this Code, you should
consult the C.O., or the Fund Counsel if you are an Independent
Trustee.
"Chairman" shall mean the current Chairman of the Fund.
"Control" shall mean the power to exercise a controlling interest
over the management or policies of a company, unless such power
is solely the result of an official position. Any person is
presumed to "Control" a company if that person owns, directly or
indirectly through one or more controlled companies, more than
25% of the voting securities of a company. Despite this
presumption, a person may not be a Control Person if facts, other
than security ownership, demonstrate that such person does not
have a controlling interest. Similarly, persons owning less than
25% of the voting securities of a company may be deemed to have
"Control" depending upon the facts and circumstances.
"Independent Trustee" shall mean, with respect to the Fund or any
other Fund, a trustee who is not an interested person of such
fund.
"Personal Trading" shall mean the purchase or sale of securities
by an individual for his or her own account, any other account in
which he or she has a "Beneficial Ownership" interest, or any
account (other than an account of an advisory client of an Aquila
Entity) for which the Aquila employee decides what securities
transactions will be effected for the account, either by making
recommendations to the account owner or by entering orders
directly with the broker handling the account.
"President" shall mean the current President of Aquila Management
Corporation.
"Purchase or Sale of a Security" includes, among other things,
the writing of an option to purchase or sell a security.
"Security" shall mean any note, stock, treasury stock, bond,
debenture, evidence of indebtedness, certificate of interest or
participation in any profit-sharing agreement, collateral-trust
certificate, preorganization certificate or subscription,
transferable share, investment contract, voting-trust
certificate, certificate of deposit for a security, fractional
undivided interest in oil, gas, or other mineral rights, any put,
call, straddle, option, or privilege on any security or on any
group or index of securities (including any interest therein
based on the value thereof), or any put, call, straddle, option,
or privilege entered into on a national securities exchange
relating to foreign currency, or generally any interest or
instrument commonly known as a "security" or any certificate of
interest or participation in, temporary or interim certificate
for, receipt for guarantee of, or warrant or right to subscribe
to or purchase any of the foregoing.
For purposes of the provisions of this Code governing personal
securities trading and pre-clearance, and reporting of
transactions and holdings, "Security" does not include direct
obligations of the U.S. Government, shares of registered open-end
investment companies (mutual funds), bankers' acceptances, bank
certificates of deposit, commercial paper and high quality short-
term debt instruments, including repurchase agreements (i.e., any
instrument that has a maturity at issuance of less than 366 days
and that is rated in one of the two highest rating categories by
a NRSRO).
"Security Held or to be Acquired" means (A) any Security that
within the most recent 15 days is being or has been: (i) held by
the Fund or other Aquila Entity or (ii) "considered for purchase
or sale" by or on behalf of the Fund or other Aquila Entity and
(B) any option to purchase or sell, and any security convertible
into or exchangeable for, a Security described in (A) above. A
Security is "being considered" for purchase or sale if:
(a) there is an outstanding order (this includes orders
that are in the process of being
executed) to purchase or sell that Security for the Fund or
another Aquila Entity's account or portfolio;
(b) there is an outstanding oral or written recommendation
with respect to that Security that has not been acted upon
or rejected; or
(c) the person responsible for a portfolio intends to
purchase or sell (e.g., has decided to but has not yet
purchased or sold) that Security for an Aquila Entity's
account or portfolio.
2. PROHIBITED TRANSACTIONS AND ACTIVITIES
As a general matter, it is a violation of the policies of the
Fund and all other Aquila Entities for any of their personnel to
engage in any act, practice, or course of business in connection
with the purchase or sale of any security in violation of any
provision of the Federal securities laws or the SEC's rules
designed to prevent fraudulent, deceptive, or manipulative acts,
practices or business conduct.
A. General Prohibition Against "Front-Running"
The practice of trading on the basis of the anticipated market
effect of trades for the Fund or another Aquila Entity, which is
known as "front-running" or "scalping," constitutes a violation
of the Federal securities laws.
Therefore, it is absolutely prohibited for any Access Person to
engage in Personal Trading in a Security that the Access Person
knows or should know is a "Security Held or to be Acquired" by
the Fund or other advisory client of an Aquila Entity.
B. Prohibited Personal Trading by Advisory Persons
In addition to the above general prohibitions, Advisory Persons
are prohibited from engaging in Personal Trading in any Security,
except as specifically permitted in Section 3 of this Code. In
no event are Advisory Persons permitted to
1) acquire Beneficial Ownership in any securities in an
initial public offering, unless there is prior approval
in writing by the President or C.O.;
2) acquire Beneficial Ownership in securities in a private
placement, unless there is prior approval in writing by
the President or C.O.; or
3) effect short sales or acquire short positions in any
"Security Held" by the Fund or other advisory client of an
Aquila Entity.
A record of all written approvals of, and rationale supporting,
any direct or indirect acquisition by Advisory Persons of an
investment in an initial public offering or private placement
will be made and retained by the C.O. in accordance with Section
14 herein.
Advisory Persons who have acquired private placement securities
pursuant to prior written approval from the President or the C.O.
must immediately disclose that investment to the C.O. before they
participate at any level in any subsequent consideration of an
investment in the issuer for the Fund or any other Aquila Entity.
In such circumstance, the decision to purchase securities of the
issuer for the Fund or other Aquila Entity will be subject to
independent review by other Aquila investment personnel with no
personal interest in the issuer.
Access Persons who are not Advisory Persons are not subject to
the above restrictions on personal trading or the pre-clearance
requirements of this Code provided that, in the ordinary course
of performing their duties or otherwise, they do not have access
to or have information concerning the Securities trades that are
being executed, under consideration, or recommended for the Fund
or other Aquila Entities.
C. Dealings with Persons Who Do Business With the Fund or Other
Aquila Entities
No Advisory Person may seek or accept from any person that does
business with the Fund or any other Aquila Entity any item of
material value or preferential treatment that is or appears to be
connected with the Fund or another Aquila Entity directing
business to that person.
For purposes of this prohibition, "items of material value"
include but are not limited to:
(a) gifts amounting in value to more than $100 per person
per year; and
(b) payment or reimbursement of travel expenses, including
overnight lodging, in excess of $100 per person per year.
"Items of material value" do not include:
(a) an occasional meal, a ticket to a sporting event or the
theater or comparable entertainment, which is not
conditioned on directing business to the firm that provided
such meal or entertainment and is neither so frequent nor so
extensive as to raise any question of propriety; or
(b) an unconditional gift of a typical item of reminder
advertising such as a ball-point pen with the name of the
advertiser inscribed, a calendar pad, or other gifts amounting in
value to not more than $100 per person per year.
Any invitations involving travel for more than one day must have
advance approval from the C.O.
3. EXEMPTED TRANSACTIONS
The following types of Personal Trading are exempted from the
restrictions in Section 2.B above:
(a) trading in Securities in an account over which a person
does not have direct or indirect Control or influence (e.g., a
blind trust);
(b) purchases of Securities pursuant to an automatic
dividend reinvestment plan;
(c) purchases of Securities 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;
(d) transactions which have been pre-cleared in writing by
the President or the C.O., by use of the Personal Trading
Authorization Form based on the information and
representations set forth in the Form and such other information
as the President or the C.O. determines is appropriate to
consider. In the case of requests for pre-clearance of
Personal Trading in a Security Held or to be Acquired for the
Fund or another Aquila Entity which is advised by an investment
adviser that is not subject to this Code ("external
investment adviser"), the President or the C.O. generally shall
grant authorization to trade if the person seeking pre-
clearance does not have access to or knowledge of current
investment decisions or recommendations of such external
investment adviser; and
(e) transactions in circumstances where the President or
the C.O. finds that permitting the transaction is
necessary or appropriate to alleviate hardship or to deal with
unforeseen circumstances, and is otherwise appropriate, is
consistent with the purposes and policies of this Code, is not
in conflict with the interests of the Aquila Entities, and is in
compliance with applicable law. Any such finding will be
documented in writing and maintained in accordance with
Section 13 herein.
4. CONFIDENTIALITY OF SECURITIES RECOMMENDATIONS AND INVESTMENT
DECISIONS
From the time that an Advisory Person anticipates making a
recommendation to purchase or sell a Security or the time that he
or she decides to purchase or sell a Security for the Fund or
another Aquila Entity or learns of such recommendation or
decision, through the time that all trades based on that
recommendation or decision have been consummated, the subject and
content of that recommendation or investment decision are
considered to be proprietary information that may only be used
for the benefit of the Fund or other applicable Aquila Entity.
Such information also may be considered to constitute "material
non-public information" by the SEC and other regulatory
authorities. Accordingly, Advisory Persons must maintain the
utmost confidentiality with respect to their recommendations and
investment decisions during this period and may not discuss a
contemplated recommendation with anyone -- inside or outside of
the Fund or other Aquila Entities -- other than the President,
the Chairman of Aquila Management Corporation, the C.O., the
portfolio manager for the Fund or other applicable Aquila Entity,
or the broker-dealer or issuer executing the order. In addition,
this confidentiality obligation extends to all Access Persons and
other Fund or Aquila Entities personnel who may obtain access to
such information.
This prohibition is not intended to inhibit exchanges of
information among Advisory Persons concerning the Securities in
their respective areas of coverage. Rather, this policy is a
recognition of general fiduciary principles, including but not
limited to the duty to place the interest of the Fund and other
Aquila Entities, including their shareholders, first at all
times. Any questions concerning the distinction between an
appropriate informational exchange and a prohibited communication
should be discussed with the C.O.
5. APPROVALS OF TRANSACTIONS OR REQUESTS FOR WAIVERS OF
RESTRICTIONS BY THE C.O., THE CHAIRMAN OR THE PRESIDENT
In the event that the C.O., the Chairman or the President seeks
to engage in a transaction for which approval is required under
this Code or seeks a waiver pursuant to Section 3 of this Code,
the approval or waiver shall, in the case of the C.O., be granted
or denied by the Chairman or the President and, in the case of
the Chairman or the President, the approval or waiver shall be
granted or denied by Fund Counsel. A written record of the
action taken and the reasons for it shall be made by the person
making the determination and the original record retained in
accordance with Section 13 hereof.
6. REPORTING OF PERSONAL SECURITIES HOLDINGS AND TRADING
ACCOUNTS
A. Initial Reports
All Access Persons of the Fund and other Aquila Entities (other
than Independent Trustees) must, upon commencement of employment
(but in any case no later than 10 days after the person becomes
an Access Person), disclose all personal securities holdings in
writing to the C.O. This report must include the title, number
of shares and principal amount of each Security in which the
Access Person had any Beneficial Ownership when the person became
an Access Person.
Each Access Person (other than Independent Trustees) also must,
upon commencement of employment but in any case no later than 10
days after the person becomes an Access Person, notify the C.O.
in writing of any securities or commodities account in which he
or she has a Beneficial Ownership interest or over which he or
she exercises Control as of the date the person became an Access
Person. Such notification must identify the brokerage firm or
other financial institution at which the account is maintained,
the account executive, the title of the account, the account
number, and the names and addresses of all individuals with a
Beneficial Ownership interest in the account. Subsequent to
employment, each such Access Person shall notify the C.O.
immediately and in writing of any new securities or commodities
accounts.
B. Quarterly Reports
Each Access Person (other than Independent Trustees) must report
to the C.O. the information described below with respect to
transactions in any Securities in which such Access Person had,
or by reason of such transaction acquires, any direct or indirect
Beneficial Ownership in a Security. Such reports must be made no
later than ten days after the end of the calendar quarter in
which the transaction(s) were effected.
C. Annual Reports
Annually, each Access Person (other than Independent Trustees)
must submit a report that includes the following information:
title, number of shares and principal amount of each Security in
which the Access Person had any Beneficial Ownership; the name of
any broker, dealer or bank with whom the Access Person maintains
an account in which any securities are held for the direct or
indirect benefit of the Access Person; and the date that the
report is submitted by the Access Person. The report must be
current as of a date no more than 30 days before the report is
submitted.
D. General Reporting Information.
Access Persons are not required to report Securities trades in
accounts over which they do not have influence or Control over
investment decisions (e.g., a blind trust). No report required
by this Section shall be construed as an admission by the Access
Person that he or she has any Beneficial Ownership of any
Security on the report, nor shall the making of a report be
construed as an admission of a violation of this Code by the
Access Person.
The C.O. will identify all Access Persons who are required to
submit these reports and will inform those Access Persons of
these reporting requirements. In addition to the reports
required under this section, each Advisory Person is responsible
for "pre-clearing" before a securities transaction is executed,
through the Personal Trading Authorization Form (Exhibit A).
7. INFORMATION REQUIRED IN PERSONAL TRADING REPORTS
Quarterly reports required under Section 6.B must include the
following information:
(a) the date of the transaction, the title, the interest
rate and maturity (if applicable), and number of shares, and
the principal amount of each Security involved;
(b) the nature of the transaction (e.g., purchase, sale, or
any other type of acquisition or disposition);
(c) the price at which the transaction was effected;
(d) the name of the broker, dealer, or bank with or through
which the transaction was effected; and
(e) the date that the report is submitted by the Access
Person.
These quarterly reports also must include the following
information with respect to any account established by an Access
Person in which he or she has a Beneficial Ownership interest or
over which he or she exercises control:
(a) the name of the broker, dealer or bank with whom the
Access Person established the account;
(b) the date the account was established; and
(c) the date that the report is submitted by the Access
Person.
One way to achieve this is for you to instruct the brokerage firm
or bank, at which you maintain accounts in which you have a
Beneficial Ownership interest or over which you have Control, to
automatically send copies of broker trade confirmations or
monthly or quarterly account statements to the C.O. no later than
ten days after the end of each calendar quarter. To use
confirmations or account statements to satisfy the quarterly
reporting requirement, the confirmations and statements must
include all of the information listed above. The C.O. will be
responsible for reviewing such records.
Such reports must be made with respect to all Personal Trading,
including transactions exempted by Section 3. However, Access
Persons are not required to report Securities trades in accounts
over which they do not have influence or Control over investment
decisions (e.g., a blind trust).
8. REPORTING OF PERSONAL TRADING BY INDEPENDENT TRUSTEES OF THE
AQUILA FUNDS
If your only relationship to the Aquila Entities is that of an
Independent Trustee of the Fund, you are not required to submit
reports of your Personal Trading, unless you knew or, in the
ordinary course of fulfilling your duties as an Independent
Trustee, should have known, that during the 15-day period before
or after your transaction in a Security, the Security was
purchased or sold, or considered for purchase or sale, by or on
behalf of one of the Funds. If you are required to submit a
report under this section, your report must be submitted no later
than ten days after the end of the calendar quarter in which the
transaction(s) were effected. Your report must include the
information described under Section 7 above.
Independent Trustees are not required to report Securities trades
in accounts for which they do not have influence or Control over
investment decisions (e.g., a blind trust). No report required
by this Section shall be construed as an admission by an
Independent Trustee that he or she has any Beneficial Ownership
of any Security on the report, nor shall the making of a report
be construed as an admission of a violation of this Code by the
Independent Trustee. The C.O. will inform the Independent
Trustees of these reporting requirements. Copies of all such
reports to the C.O. shall be referred to Fund Counsel and the
originals shall be maintained by the C.O. as part of the Fund's
records.
9. ADVISING NON-AQUILA ENTITIES
Advisory Persons may not render investment advice to persons
other than Aquila Entities, unless the advisory relationship,
including the identity of those involved and any fee
arrangements, has been disclosed to and approved by the
President. Once cleared with the President, all transactions for
such outside advisory clients are subject to the reporting
requirements of Section 6 above. This prohibition precludes
Advisory Persons from providing investment advice to members of
such person's immediate family without the prior approval of the
President.
10. EXTERNAL INVESTMENT ADVISERS
This Code does not extend to investment advisers to the Fund that
are not members of the Aquila Group of Companies, except as
provided in Section 15 below.
11. TRADING WITH MATERIAL NON-PUBLIC INFORMATION
THIS PROVISION OF THE CODE APPLIES TO ALL PERSONNEL
No officer, trustee, director, employee, or control person of the
Fund or any other Aquila Entity may purchase or sell any
security, or be involved in any way in the purchase or sale of a
security, while in possession of material non-public information
about the security or its issuer, regardless of the manner in
which such information was obtained. Furthermore, no person
possessing material non-public information may disclose such
information to any person other than the C.O. or Fund Counsel,
except to the extent authorized by the C.O. or, in the case of
Independent Trustees, Fund Counsel. This prohibition covers
transactions for the Fund and all other Aquila Entities made in
the course of your employment with an Aquila Entity, as well as
transactions for your personal accounts and accounts of persons
in privity with you.
Material non-public information includes corporate information,
such as undisclosed financial information about a corporation,
and market information, such as a soon-to-be-published article
about a corporation. Material information is defined as
information which an investor would consider important in making
an investment decision, or which would substantially affect the
market price of a security if generally disclosed. Non-public
information is defined as information which has not been
effectively made available to the marketplace. Any questions as
to whether certain information is material non-public information
should be directed to the C.O. or, in the case of Independent
Trustees, Fund Counsel.
12. ADVISORY PERSONS SERVING AS DIRECTORS OF PUBLICLY-TRADED
COMPANIES
Advisory Persons who serve as directors of publicly-traded
companies may be seen as having an inherent conflict of interest
between the fiduciary duty owed to the Aquila Entities and that
owed to the shareholders of such publicly-traded companies. To
avoid such potential conflicts of interest, all Advisory Persons
must receive the prior written approval of the President before
serving as director of any publicly-traded company, which
approval may be withheld in the President's sole discretion. If
you are an Advisory Person and currently serve as a director of a
publicly-traded company, you should notify the C.O. immediately.
Prior to commencement of employment with any Aquila Entity and
annually thereafter, each Advisory Person shall provide the C.O.
with a written list of all positions held by the Advisory Person
with any publicly-traded company.
Advisory Persons who receive permission to serve as directors of
publicly-traded companies will be isolated through "Chinese
Walls" or other procedures from making decisions regarding the
securities of those companies for which they serve as directors.
An especially sensitive situation involves representation on a
creditors' committee. Particular care will be taken to create a
"Chinese Wall" between portfolio management and creditors'
committee representation.
13. RECORD KEEPING
The C.O. shall maintain the following records in the manner and
for the time periods described under the Advisers Act and Rule
17j-1(f) under the 1940 Act.
(a) a copy of this Code and any other Code which is, or at
any time within the past five years has been in effect;
(b) records of any violations of this Code and any actions
taken as a result of such violations;
(c) each report, record or finding made under this Code
(i.e., those required by Sections 2, 3, 5, 6, 8, and 9),
including any information provided in lieu of these reports
(e.g., confirmations, account statements);
(d) a list of all persons who currently are or within the
past 5 years have been required to make reports pursuant to
the Code;
(e) a list of all persons who currently are or within the
past 5 years have been responsible for reviewing reports
submitted pursuant to the Code; and
(f) a copy of each report submitted to the Fund Board
of Trustees in connection
with the Board's approval of a code of ethics or
material changes to such a Code.
14. VIOLATIONS OF THIS CODE
Violations of this Code may result in the imposition of
criminal penalties or sanctions by the SEC, other regulatory
authorities, or the Aquila Entities, including forfeiture of any
profit from a transaction, and forfeiture of future discretionary
salary increases or bonuses and suspension or termination of
employment. Determinations as to whether a violation has
occurred, and the appropriate sanctions, if any, shall be made by
the directors or trustees or the President; provided however,
that no person believed to have violated this Code shall
participate in such determinations made with respect to his or
her own conduct.
15. BOARD APPROVAL AND REPORTS TO BOARD
A. Initial Approval of Codes of Ethics
The Board of the Fund, including a majority of Independent
Trustees, shall approve any code of ethics required by the Rule
of any new investment adviser or principal underwriter for the
Fund that is not subject to this Code of Ethics before retaining
the services of that entity. Before the Board meeting at which a
code is scheduled for approval, the affected adviser or principal
underwriter shall provide the Board with a copy of the code, a
written certification that the adviser has adopted procedures
reasonably necessary to prevent its Access Persons from violating
the code and any other information requested by the Board.
B. Material Changes to Codes of Ethics
The Board of the Fund, including a majority of Independent
Trustees, will approve any material changes to this Code, as well
as to the code of ethics adopted pursuant to Rule 17j-1 of any
member of the Aquila Group of Companies that provides services to
the Fund and of any external investment adviser to the Fund,
within six months following the adoption of the change. The
appropriate Fund officers or personnel of the Aquila Group of
Companies or external investment adviser will, on a timely basis,
provide notice to the Board of the changes and provide the Board
with the following information regarding the changes for which
Board approval is sought: (a) a written description of the
change and the reasons therefor; (b) a copy of the revised code
of ethics, marked to show the changes; (c) a written
certification that the adviser has adopted procedures reasonably
necessary to prevent the adviser's Access Persons from violating
the code; and (d) any other information requested by the Board.
C. Annual Reports to Board
At least annually, the appropriate officers of the Fund, other
Aquila Entities and each external investment adviser shall
provide the Board with (i) a written certification that the Fund
or such other entity has adopted procedures reasonably necessary
to prevent its Access Persons from violating its code of ethics;
a written report that describes any issues arising under its code
of ethics or related procedures since the last report to the
Board; and (ii) any other information requested by the Board. The
report shall include, but not be limited to, information about:
material violations of the code or related procedures;
immaterial, individual violations (such as late filings of
quarterly transactions reports) if such violations are material
in the aggregate; and sanctions imposed in response to such
violations; significant conflicts of interest that arose
involving personal trading, even if the conflicts did not result
in a code violation (e.g., where an Advisory Person is a director
of a company whose securities are held by the Fund. See Section
12 herein.). Further, the Board will be provided with more
frequent reports when there have been significant violations of a
code or related procedures, or significant conflicts of interest
arising under the code or procedures.
Certification
I have read the Code of Ethics of the Narragansett Insured Tax-
Free Income Fund in its entirety, and I understand it. I agree to
comply fully with all of its provisions. Further, I agree to
certify, in writing and each year, that I have complied with the
terms of this Code, as amended from time to time.
Dated: Signed:
EXHIBIT A
AQUILA ENTITIES
PERSONAL TRADING AUTHORIZATION FORM
In connection with the contemplated
(purchase or sale)*
by of
(name of employee) (number of shares)
of on
:
(name of security) (date)
I confirm that to my knowledge (a) there presently is no outstanding
order to purchase or sell the above-listed security for an Aquila
Entity's account or portfolio; (b) there is no outstanding oral
or written communication with respect to that security that has
not been acted upon or rejected; (c) I have no present intention
to purchase or sell that security for an Aquila Entity and am not
aware that such security is "being considered" by anyone with
discretionary authority over trading of behalf of an Aquila
Entity and (d) I am not in possession of material non-public
information with respect to the security described above nor am I
making the transaction described above on the basis of material
non-public information. I further confirm that the above
conditions have existed during this entire business day.
Finally, I confirm that I have no access to or knowledge of
current recommendations or investment decisions relating to this
security that may be being made or considered for any Aquila
Entity by an investment adviser not subject to the Aquila Code of
Ethics.
Dated: Signed:
Approved: Dated:
Compliance Officer
* If other than market order, described proposed limits.
