<PAGE>
EXHIBIT P.(2).
CODE OF ETHICS
TOUCHSTONE SECURITIES, INC.
Touchstone Securities, Inc. (the "Distributor") has adopted this
Code of Ethics effective as of July 1, 2000, in accordance with the
provisions of Rule 17j-1 under the Investment Company Act of 1940, as amended
(the "1940 Act").
Rule 17j-1 under the 1940 Act generally prohibits deceitful,
fraudulent or manipulative practices with respect to purchases or sales of
securities held or to be acquired by investment companies. While this Code is
designed to prevent violations of Rule 17j-1, it is possible to comply with
the terms of this Code and nevertheless violate the general prohibitions set
forth in Rule 17j-1. Those persons subject to this Code should, therefore,
bear these general prohibitions in mind at all times.
A. GENERAL STANDARDS OF ETHICAL CONDUCT
Directors, officers and other Access Persons (as defined in this
Code) have a duty at all times to place the interests of the investment
companies ("Funds") for which the Distributor acts as the principal
underwriter ahead of their own interests.
All personal securities transactions of these individuals must be
conducted in compliance with this Code and in a manner that avoids any actual
or potential conflict of interest or any abuse of the individual's position
of trust and responsibility to the Distributor and the Funds.
All activities of these individuals also must be conducted in
accordance with the fundamental standard that they may not take any
inappropriate advantage of their positions with the Distributor.
B. STANDARDS OF CONDUCT FOR ACCESS PERSONS
1. PROHIBITED PURCHASES AND SALES WHEN A FUND TRADE IS PENDING
a. PROHIBITION
If an Access Person knows that an investment advisor, on
behalf of any Fund, has placed a "buy" or "sell" order in a
Covered Security on a particular day, the Access Person may not
purchase or sell, directly or indirectly, the Covered Security or
a Related Security on the same day if:
- the Access Person has any direct or indirect
beneficial ownership in the Covered Security or a
Related Security or
- the Access Person will acquire any direct or
indirect beneficial ownership in the Covered Security
or a Related Security by reason of the purchase.
<PAGE>
b. EXCEPTIONS
This prohibition does not apply to:
- purchases or sales involving 500 or fewer shares of
a Covered Security that is included in the Standard &
Poor's 500
- purchases or sales effected in any account over
which the Access Person has no direct or indirect
influence or control
- purchases or sales that are non-volitional on the
part of the Access Person
- purchases that are part of an automatic dividend
reinvestment plan
- sales that are part of an automatic withdrawal plan
- 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 the rights were
acquired from the issuer
- sales of rights issued by an issuer pro rata to all
holders of a class of its securities to the extent the
rights were acquired from the issuer or
- purchases or sales that the Compliance Officer
approves in writing before the purchase or sale
c. APPROVAL BY THE COMPLIANCE OFFICER
To obtain approval for a specific transaction, an Access
Person should contact the Compliance Officer. The Access Person
must disclose to the Compliance Officer all factors potentially
relevant to a conflict of interest analysis that the Access Person
is aware of, including the existence of any substantial economic
relationship between his or her transaction and the Fund's
transaction.
Generally the Compliance Officer will approve a transaction
only if:
- the transaction is only remotely potentially harmful
to the Fund because it would be very unlikely to affect
a highly institutional market
- the transaction is clearly not economically related
to the securities to be purchased or sold by an
investment advisor on behalf of the Fund or
- the transaction is unlikely to result in any of the
abuses described in Rule 17j-1.
2. CONFIDENTIALITY
An Access Person may not reveal to any other person (except in the
normal course of his or her duties on behalf of the Distributor) any
information about securities transactions of a Fund or securities under
consideration for purchase or sale by a Fund.
C. REPORTING
1. DUPLICATE CONFIRMATIONS AND STATEMENTS
Each Access Person must arrange for duplicate copies of broker
trade confirmations and periodic statements of his or her
brokerage accounts to be sent to the Compliance Officer.
<PAGE>
2. HOLDINGS REPORTS
a. WHAT INFORMATION MUST BE INCLUDED IN A HOLDINGS REPORTS?
Each Access Person must submit written and signed reports
containing information about each Covered Security in which the
Access Person had any direct or indirect beneficial ownership
("Holdings Reports").
Each Holdings Report must include the following information:
- title of each Covered Security in which the Access
Person had any direct or indirect beneficial ownership
- number of shares and/or principal amount of each
Covered Security in which the Access Person had any
direct or indirect beneficial ownership
- name of any broker, dealer or bank with whom the
Access Person maintained an account in which any
securities were held for the direct or indirect benefit
of the Access Person and
- date the Holdings Report is submitted by the Access
Person
If an Access Person is not required to report any information
on a Holdings Report, the Access Person must submit a written and
signed statement to that effect to the Compliance Officer by the
date on which the Holdings Report is due.
b. WHEN MUST AN ACCESS PERSON SUBMIT AN INITIAL HOLDINGS REPORT?
Each Access Person must submit to the Compliance Officer an
Initial Holdings Report no later than 10 days after he or she
becomes an Access Person. The information included in the Initial
Holdings Report must reflect the Access Person's holdings as of
the date he or she became an Access Person.
c. WHEN MUST AN ACCESS PERSON SUBMIT ANNUAL HOLDINGS REPORTS?
Each Access Person must submit to the Compliance Officer an
Annual Holdings Report no later than January 30 of each year. The
information included in the Annual Holdings Report must reflect
the Access Person's holdings as of the immediately preceding
December 31.
d. ARE THERE ANY EXCEPTIONS TO THESE REPORTING REQUIREMENTS?
An Access Person does not have to include in his or her
Holdings Reports information about the following securities or
accounts:
- direct obligations of the government of the United
States
- bankers' acceptances
- bank certificates of deposit
- commercial paper
- high quality short-term debt instruments including
repurchase agreements
- shares issued by open-end Funds
- securities held in any account over which the Access
Person has no direct or indirect influence or control
and
- transactions effected for any account over which the
Access Person has no direct or indirect influence or
control
<PAGE>
2. QUARTERLY TRANSACTION REPORTS
a. WHAT INFORMATION MUST BE INCLUDED IN A QUARTERLY
TRANSACTION REPORT?
Each Access Person must submit a report ("Quarterly
Transaction Report") containing information about:
- every transaction in a Covered Security during the
quarter and in which the Access Person had any direct
or indirect beneficial ownership and
- every account established by the Access Person in
which any securities were held during the quarter for
the direct or indirect benefit of the Access Person.
A Quarterly Transaction Report must include the following
information:
- date of each transaction in a Covered Security
- title of the Covered Security
- interest rate and maturity date of the Covered
Security, if applicable
- number of shares and/or principal amount of the
Covered Security
- nature of the transaction
- price of the Covered Security at which the
transaction was effected
- name of the broker, dealer or bank with or through
which the transaction was effected
- name of the broker, dealer or bank with whom the
Access Person established any new account
- date the account was established and
- date the Quarterly Transaction Report is submitted
by the Access Person
If an Access Person is not required to report any information
on a Quarterly Transaction Report, the Access Person must submit a
written and signed statement to that effect to the Compliance
Officer no later than 10 days after the end of the calendar
quarter.
b. WHEN MUST AN ACCESS PERSON SUBMIT A QUARTERLY TRANSACTION
REPORT?
A Quarterly Transaction Report must be submitted to the
Compliance Officer no later than 10 days after the end of each
calendar quarter.
c. ARE THERE ANY EXCEPTIONS TO THESE REQUIREMENTS?
- EXCEPTIONS FOR CERTAIN SECURITIES AND ACCOUNTS
<PAGE>
An Access Person does not have to report transactions
involving the following securities or accounts:
- direct obligations of the government of the
United States
- bankers' acceptances
- bank certificates of deposit
- commercial paper
- high quality short-term debt instruments
including repurchase agreements
- shares issued by open-end Funds
- securities held in any account over which the
Access Person has no direct or indirect influence
or control and
- transactions effected for any account over
which the Access Person has no direct or indirect
influence or control
If an Access Person does not make a Quarterly Transaction
Report because of this exception, the Access Person must
submit a written and signed statement to that effect to
the Compliance Officer no later than 10 days after the end
of the calendar quarter.
- EXCEPTIONS BASED ON DUPLICATE CONFIRMATIONS
In addition, an Access Person does not have to make a
Quarterly Transaction Report for a calendar quarter if:
- the report would duplicate information contained
in broker trade confirmations or account statements
received by the Compliance Officer no later than 10
days after the end of the calendar quarter and
- all of the required information is contained in
the broker trade confirmations or account statements.
If broker trade confirmations do not contain all of the
required information, the Access Person must include the
missing information in a Quarterly Transaction Report.
If an Access Person does not make a Quarterly Transaction
Report because of this exception, the Access Person must
submit a written and signed statement to that effect to
the Compliance Officer no later than 10 days after the end
of the calendar quarter.
D. COMPLIANCE OFFICER REVIEWS
In reviewing transactions, the Compliance Officer will take into
account the various exceptions included in this Code. Before making a
determination that an Access Person has violated this Code, the Compliance
Officer will give the Access Person an opportunity to supply additional
information about the transaction in question.
<PAGE>
E. SANCTIONS
The Board of Directors of the Distributor may impose sanctions on an
Access Person for violations of this Code as it deems appropriate. Sanctions
could include disgorgement of any profits realized by the Access Person as a
result of the violation, a letter of censure or suspension in the Access
Person's personnel file, or termination of the employment of the Access Person.
F. MISCELLANEOUS
All reports of securities transactions and any other information
reported pursuant to this Code will be treated as confidential.
The Board of Directors of the Distributor may from time to time adopt
interpretations of this Code as it deems appropriate.
G. DEFINITIONS
"Access Person" means
- any director, officer or general partner of the Distributor
who, in the ordinary course of business, makes, participates in
or obtains information regarding the purchase or sale of Covered
Securities by a Fund or
- any director, officer or general partner of the Distributor
whose functions or duties in the ordinary course of business
relate to the making of any recommendations to a Fund regarding
the purchase or sale of Covered Securities
"Beneficial Ownership" is interpreted in the same manner as it would be
under Rule 16a-1(a)(2) promulgated under the Securities Exchange Act of
1934.
"Control" has the same meaning as in Section 2(a)(9) of the 1940 Act.
"Covered Security" means a security as defined in Section 2(a)(36) of
the 1940 Act (in effect, all securities), except that it does not
include:
- direct obligations of the government of the United States
- bankers' acceptances
- bank certificates of deposit
- commercial paper
- high quality short-term debt instruments, including
repurchase agreements and
- shares issued by open-end Funds
"Fund" means any investment company registered under the 1940 Act for
which the Distributor serves as the principal underwriter.
"Purchase or sale of Covered Securities" includes, among other things,
the writing of an option to purchase or sell Covered Securities.
<PAGE>
"Related Security" means:
- a security issued by the same issuer that issued the Covered
Security
- a security issued by an issuer under common control with the
issuer that issued the Covered Security or o a security that
gives the holder any contractual right with respect to the
Covered Security, including options, warrants or other
convertible securities
"Compliance Officer" means any person designated by the Distributor to
administer this Code or to review reports required by this Code.