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CENTURA FUNDS
Code of Ethics
(Rule 17j-l Policy)
Governing Purchase and Sale of Securities by Each
Officer, Director, Trustee and Employee
Effective February 23, 2000
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I. Definitions
1. Access Person -
A. as to the Company: (1) each director or officer of
the Company and(2) any Advisory Person;
B. with respect to the Distributor, 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 whose
functions or duties in the ordinary course of
business relate to the making of any recommendation
to a Fund regarding the purchase or sale of Covered
Securities; provided that, each Access Person who is
affiliated with the Distributor will be governed by
the provisions of the Code of Ethics of the
Distributor and will not be subject to the provisions
of this Code; and
C. with respect to the Adviser (which is primarily
engaged in a business or businesses other than
advising registered investment companies or other
advisory clients), any director, officer, general
partner, or Advisory Person of the Adviser who, with
respect to any Fund, makes any recommendation,
participates in the determination of which
recommendation will be made, or whose principal
function or duties relate to the determination of
which recommendation shall be made, or who, in
connection with his or her duties, obtains any
information concerning recommendations on Covered
Securities being made by the Adviser to any Fund.
2. Act - Investment Company Act of 1940.
3. Adviser - Centura Bank
4. Advisory Person - includes (a) any natural person in a control
relationship (25% ownership) to the Company or Adviser who
obtains information concerning recommendations made to a Fund
with regard to the purchase or sale of Covered
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Securities by a Fund, and (b) each employee of the Company or
Adviser (or of any company in a control relationship to the
Company or Adviser) who, in connection with his or her regular
functions or duties, makes, participates in, or obtains
information regarding the purchase or sale of Covered
Securities by a Fund or whose functions relate to the making
of any recommendations with respect to the purchases or sales.
5. Beneficial Ownership - generally means having a direct or
indirect pecuniary interest in a security and is legally
defined to be beneficial ownership as used in Rule 16a-1(a)(2)
under Section 15 of the Securities Act of 1934. Among other
things, beneficial ownership is presumed regarding securities
and accounts held in the name of a spouse or any other family
member living in the same household. Beneficial ownership also
extends to transactions by entities over which a person has
ownership, voting or investment control, including
corporations (and similar entities), trusts and foundations.
6. Code - this Code of Ethics.
7. Company - Centura Funds, Inc.
8. Compliance Officer - person designated by the Company's Board
of Directors to fulfill the responsibilities assigned to the
Compliance Officer hereunder.
9. Covered Security - any security as defined in Section 2(a)(16)
of the Act (a broad definition that includes any interest or
instrument commonly known as a security), but excluding (a)
direct obligations of the U.S. Government, (b) bankers'
acceptances, bank certificates of deposit, commercial paper
and high quality short-term debt instruments, including
repurchase agreements, and (c) shares of open-end investment
companies.
10. Distributor - Bisys Fund Services.
11. Fund - a series of the Company.
12. Initial Public Offering - an offering of securities registered
under the Securities Act of 1933, the issuer of which,
immediately before the registration, was not subject to the
reporting requirements of Sections 13 or 15(d) of the
Securities Exchange Act of 1934.
13. Investment Personnel or Investment Person (a) any employee of
the Company or the Adviser (or of any company in a control
relationship to the Company or Adviser) 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; or (b) any natural person who
controls the Company or the Adviser and who obtains
information concerning recommendations made to a
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Fund regarding the purchase or sale of securities by the Fund.
Investment Personnel are Advisory Persons.
14. Limited Offering - an offering that is exempt from
registration under the Securities Act of 1933 pursuant to
Section 4(2) or Section 4(6) or pursuant to Rule 504, Rule
505, or Rule 506 under that Act.
15. Portfolio Manager - those employees of the Company or Adviser
authorized to make investment decisions on behalf of the Fund.
16. Security held or to be acquired - any Covered Security that,
within the most recent 15 days (i) is or has been held by a
Fund, (ii) is being considered by a Fund or by the Adviser for
purchase by the Fund, or (iii) any option to purchase or sell,
and any security convertible into or exchangeable for, one of
the foregoing.
17. Sub-Adviser - Sovereign Advisers or any other sub-investment
adviser to a Fund.
II. Legal Requirement
Rule 17j-l under the Investment Company Act of 1940 makes it unlawful
for the Adviser, Distributor, any director, officer or employee or other
affiliated person of the Company or of the Adviser or Distributor, in connection
with the purchase and sale by such person of a "security held or to be acquired"
by a Fund:
1. To employ any device, scheme or artifice to defraud the
Company or a Fund;
2. To make to the Company or a Fund any untrue statement of a
material fact or omit to state to the Company or 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;
3. To engage in any act, practice, or course of business which
operates or would operate as a fraud or deceit upon the
Company or a Fund; or
4. To engage in any manipulative practice with respect to the
Company or a Fund.
To assure compliance with these restrictions, the Company agrees to be
governed by the provisions contained in this Code, and the Adviser, Sub-Adviser
and Distributor agree to be governed by a Code of Ethics that complies with the
provisions of Rule 17j-1 and has been approved by the Company's board of
directors. Each person affiliated with the Adviser, Sub-Adviser or Distributor
who would otherwise be subject to the provisions of this Code will instead be
governed by the provisions of the Code of Ethics of the Adviser, Sub-Adviser or
Distributor, as applicable, provided that the Adviser, Sub-Adviser and
Distributor shall each provide to the Compliance Officer, in advance of each
meeting of the Board of Directors of the Company, information regarding any
violations of the Code of Ethics of the Adviser, Sub-Adviser or
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Distributor, as applicable, involving persons who would otherwise be Access
Persons hereunder whose violations were relevant to the Fund.
III. General Principles
The Company shall be governed by the following principles and shall
apply them to its Access Persons.
1. No Access Person shall engage in any act, practice or course
of conduct that would violate the provisions of Rule 17j-l set
forth above.
2. The interests of the Funds and their shareholders are
paramount and come before the interests of any Access Person
or employee.
3. Personal investing activities of all Access Persons and
employees shall be conducted in a manner that shall avoid
actual or potential conflicts of interest with the Funds and
their shareholders.
4. Access Persons shall not use such positions, or any investment
opportunities presented by virtue of such positions, to the
detriment of the Funds and their shareholders.
IV. Substantive Restrictions
1. The price paid or received by a Fund for any security should
not be affected by a buying or selling interest on the part of
an Access Person, or otherwise result in an inappropriate
advantage to the Access Person. To that end:
A. no Access Person shall enter an order for the
purchase or sale of a security which a Fund is, or is
considering, purchasing or selling until the day
after the Fund's transactions in that security have
been completed, provided that the provisions of this
paragraph IV.1 shall not apply to any director of the
Company who is not an "interested person" of the
Company (as defined in Section 2(a)(19) of the
Investment Company Act of 1940) except with respect
to securities transactions where such director knew
or, in the ordinary course of fulfilling his or her
official duties as a director of the Company, should
have known that such security was being purchased or
sold by a Fund or that a purchase or sale of such
security was being considered by or with respect to a
Fund; and
B. a Portfolio Manager of a Fund may not buy or sell a
security within seven days before or after that Fund
trades in the security.
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C. The foregoing restrictions shall not apply to the
following transactions unless the Compliance Officer
determines that such transactions violate the General
Principles of this Code:
(a) reinvestments of dividends pursuant to a
plan;
(b) transactions in: short-term securities
issued or guaranteed by an agency or
instrumentality of the U.S. Government;
bankers' acceptances; U.S. bank certificates
of deposit; and commercial paper;
(c) transactions in which direct or indirect
beneficial ownership is not acquired or
disposed of;
(d) transactions in accounts as to which an
Access Person has no investment control,
(e) transactions in accounts of an Access Person
for which investment discretion is not
retained by the Access Person but is granted
to any of the following that are
unaffiliated with the Adviser, Sub-Adviser
or Distributor: a registered broker-dealer,
registered investment adviser or other
investment manager acting in a similar
fiduciary capacity, provided the following
conditions are satisfied:
1 The terms of the account agreement
("Agreement") must be in writing
and filed with the Compliance
Officer prior to any transactions;
2 Any amendment to the Agreement must
be filed with the Compliance
Officer prior to its effective
date; and
3 The Agreement must require the
account manager to comply with the
reporting provisions of Section V.6
of this Code.
(f) transactions in securities in connection
with an employer sponsored or other tax
qualified plan, such as a 401(k) plan, an
IRA, or ESOP, in an amount not exceeding
$1,000 in any calendar month.
2. No Investment Person may, without first obtaining approval
from the Compliance Officer, directly or indirectly acquire
beneficial ownership of any securities issued as part of an
Initial Public Offering or a Limited Offering. Any such
approval shall take into account, among other factors, whether
the investment opportunity should be reserved for a Fund and
whether the opportunity is being offered to such Investment
Person because of his or her position with the Company or a
Fund. Any such Investment Person who has been authorized to
acquire securities
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in a Limited Offering must disclose his or her interest if he
or she is involved in a Fund's consideration of an investment
in such issuer. Any decision to acquire such issuer's
securities on behalf of a Fund shall be subject to review by
Investment Persons with no personal interest in the issuer.
3. An Investment Person must not accept gifts that would be
deemed of "material value under Section 2830(l) of the Conduct
Rules of The National Association of Securities Dealers from
any entity doing business with or on behalf of the Company, a
Fund, the Adviser, Sub-Adviser or the Distributor.
4. An Investment Person shall not serve on the boards of
directors of publicly traded companies, or in any similar
capacity, absent the prior approval of such service by the
Compliance Officer following the receipt of a written request
for such approval. In the event such a request is approved,
procedures shall be developed to avoid potential conflicts of
interest.
5. Any profits derived from securities transactions in violation
of paragraphs 1, 2 or 3 of this Section IV, shall be forfeited
and paid to the appropriate Fund or Funds for the benefit of
its or their shareholders. Gifts accepted in violation of
paragraph 4 of this Section IV shall be forfeited, if
practicable, and/or dealt with in any manner determined
appropriate and in the best interests of any affected Fund and
its shareholders.
V. Access Person Reports
1. Initial Holdings Report. Within 10 days of commencement of
employment by the Company, Adviser, Sub-Adviser or Distributor
or otherwise assuming the status of "Access Person," and
annually thereafter, each Access Person shall disclose in
writing, in a form acceptable to the Compliance Officer, all
direct or indirect Beneficial Ownership interests of such
Access Person in Covered Securities. Information to be
reported includes:
A. title, number of shares and principal amount of each
Covered Security in which the Access Person had any
direct or indirect Beneficial Ownership interest when
the person became an Access Person;
B. name of any broker, dealer or bank with whom the
Access Person maintained an account in which any
securities were held for the direct or indirect
benefit of the Access Person as of the date the
person became an Access Person;
C. the date the report is submitted by the Access
Person.
2. Quarterly Transaction Report. Unless the following information
would duplicate information provided pursuant to paragraph
V.6, below, each Access Person shall
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report to the Compliance Officer within 10 days of the end of
each calendar quarter:
A. with respect to any transaction during the quarter in
a Covered Security in which the Access person had any
direct or indirect beneficial ownership:
(a) 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;
(b) the nature of the transaction (i.e.,
purchase, sale or any other type of
acquisition or disposition);
(c) the price of the Covered Security 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.
B. with respect to any account established by the Access
Person in which any securities were held during the
quarter for the direct or indirect benefit of the
Access Person:
(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.
3. Annual Holdings Report. Each Access Person shall report
annually, within 10 days of the close of each calendar year,
the following information, which must be current as of a date
no more than 30 days before the report is submitted:
A. the title, number of shares and principal amount of
each Covered Security in which the Access Person had
any direct or indirect beneficial ownership;
B. 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
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C. the date the report is submitted.
4. Any report required to be submitted pursuant to this Section V
may contain a statement that the report will not be construed
as an admission that the person making the report has any
direct or indirect beneficial ownership in the Covered
Security to which the report relates.
5. Each Access Person shall obtain the prior approval of the
Compliance Officer of all personal securities transactions in
Covered Securities.
6. Each Access Person, with respect to each brokerage account in
which such Access Person has any beneficial interest shall
arrange that the broker shall mail directly to the Compliance
Officer at the same time they are mailed or furnished to such
Access Person (a) duplicate copies of brokers' advice covering
each transaction in Covered Securities in such account and (b)
copies of periodic statements with respect to the account.
7. Exceptions from Reporting Requirements.
A. A person need not submit reports pursuant to this
Section V with respect to transactions effected for,
and Covered Securities held in, any account over
which the person has no direct or indirect influence
or control;
B. A director of the Company who is not an "interested
person" of the Company (as defined in Section
2(a)(19) of the Investment Company Act of 1940), and
who would be required to make a report solely by
reason of being a director of the Company, need not
make:
(a) an Initial Holdings Report or an Annual
Holdings Report;
(b) a Quarterly Transaction Report unless the
director knew or, in the ordinary course of
fulfilling his or her official duties as a
director of the Company, should have known
that, during the 15-day period immediately
preceding or after the director's
transaction in a Covered Security, a Fund
purchased or sold such Covered Security or a
Fund or the Adviser or Sub-Adviser
considered purchasing or selling the Covered
Security.
8. Promptly after the adoption of this Code, and promptly after a
person becomes an Access Person, the Compliance Officer shall
notify each Access Person that he or she is subject to the
reporting requirements of this Code, and shall deliver a copy
of this Code to each Access Person. The Compliance Officer
shall annually obtain written assurances from each Access
Person that he or she is aware of his or her obligations under
this Code and has complied with the Code and with its
reporting requirements.
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9. The Compliance Officer shall develop and implement procedures
for the review by appropriate management or compliance
personnel of reports submitted pursuant to this Code and for
monitoring of personal investment activity by Access Persons
that would identify abusive or inappropriate trading patterns
or other practices of Access Persons. The Compliance Officer
shall report on such procedures to the Board of Directors of
the Company at the next Board meeting following its design and
thereafter in connection with the annual review of this Code
referred to in Section VI.4 below.
VI. Reports to the Board
1. The Compliance Officer of the Company, the Adviser,
Sub-Adviser and Distributor shall each report in writing to
the Board of Directors at least annually regarding the
following matters not previously reported:
A. Significant issues arising under their respective
Codes of Ethics, including material violations of the
Code of Ethics, violations that, in the aggregate,
are material, and any sanctions imposed;
B. Significant conflicts of interest involving the
personal investment policies of the Company, Adviser,
Sub-Adviser or Distributor, as applicable, even if
they do not involve a violation of the Code of
Ethics; and
C. The results of monitoring of personal investment
activities of Access Persons in accordance with the
procedures referred to in Section V.9 hereof.
Each such report shall certify that the Company, Adviser,
Sub-Adviser or Distributor, as applicable, has adopted
procedures reasonably necessary to prevent Access Persons from
violating the relevant Code of Ethics.
2. The Compliance Officer shall have discretion to determine that
a violation is not material and need not be included in a
report to the Board of Directors under Section VI.1 if he or
she finds that by reason of the size of the transaction, the
circumstances or otherwise, no fraud or deceit or manipulative
practice could reasonably be found to have been practiced on a
Fund in connection with its holding or acquisition of the
security or that no other material violation of this Code has
occurred. A written memorandum of any such finding shall be
filed with reports made pursuant to this Code.
3. The Board of Directors shall consider reports made to it
hereunder and may impose such sanctions or further sanctions,
in addition to any forfeitures imposed pursuant to Section
IV.5 hereof, as it deems appropriate, including, among other
things, a letter of sanction or suspension or termination of
the employment of the violator.
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4. In addition to the annual report required by Section VI.1, the
Compliance Officer shall report to the Board of Directors
promptly, but no later than the next board meeting, regarding
serious violations of the Code of the Company, and any serious
violations of the Codes of Ethics of the Adviser, Sub-Adviser
or Distributor that are reported to the Compliance Officer.
5. The Board of Directors shall review the Code and its operation
at least once a year.
VII. Recordkeeping
1. The Company shall maintain the following records at its
principal offices:
A. this Code and any related procedures, and any code
that has been in effect during the past five years
shall be maintained in an easily accessible place;
B. a record of any violation of the Code and of any
action taken as a result of the violation, to be
maintained in an easily accessible place for at least
five years after the end of the fiscal year in which
the violation occurs;
C. a copy of each report under this Code by (or
duplicate brokers' advice for the account of) an
Access Person, to be maintained for at least five
years after the end of the fiscal year in which the
report is made, the first two years in an easily
accessible place;
D. a record of all persons, currently or within the past
five years, who are or were required to make or to
review reports under Section V.1, 2 or 3, to be
maintained in an easily accessible place;
E. a copy of each report under Section VI.1 by the
Compliance Officer to the Board, to be maintained for
at least five years after the end of the fiscal year
in which it is made, the first two years in an easily
accessible place; and
F. a record of any decision, and the reasons supporting
the decision, to approve an acquisition by an
Investment Person of securities offered in an Initial
Public Offering or in a Limited Offering, to be
maintained for at least five years after the end of
the fiscal year in which the approval is granted.
VIII. Approval Requirements
The Codes of Ethics of the Company, the Adviser, any Sub-Adviser and
the Distributor, and any material changes to the Code of Ethics of the Company,
the Adviser, any Sub-Adviser or
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the Distributor, must be approved by the Company's board of directors. Each such
approval must be based on a determination that the Code contains provisions
reasonably necessary to prevent Access Persons from engaging in any conduct
prohibited by Rule 17j-1. Before approving a Code of Ethics of the Company, the
Adviser, any Sub-Adviser or the Distributor, or any amendment thereto, the board
of directors of the Company must receive a certification from the relevant
entity that it has adopted procedures reasonably necessary to prevent its Access
Persons from violating its Code of Ethics. Before initially retaining any
investment adviser, Sub-Adviser or principal underwriter, the Company's board of
directors must approve the Code of Ethics of the relevant entity, and must
approve any material change to that Code of Ethics within six months after the
adoption of the change.
Dated: February 23, 2000
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