CODE OF ETHICS
for
STERLING CAPITAL MANAGEMENT COMPANY
AND
STERLING CAPITAL DISTRIBUTORS, INC.
Revised August 1, 2000
PREAMBLE
This Code of Ethics is being adopted in compliance with the requirements of
Rule 17j-1 (the "Rule") adopted by the United States Securities and Exchange
Commission under the Investment Company Act of 1940 (the "Act"), and Sections
204A and 206 of the Investment Advisers Act of 1940 (the 'Advisers Act'),
specifically Rule 204-2 thereunder, to effectuate the purposes and objectives of
those provisions. Section 204A of the Advisers Act requires the establishment
and enforcement of policies and procedures reasonably designed to prevent the
misuse of material, nonpublic information by investment advisers. Rule 204-2
imposes recordkeeping requirements with respect to personal securities
transactions of advisory representatives (defined below). Rule 17j-1 of the
Investment Company Act and Section 206 of the Advisers Act make the following
activities unlawful for certain persons, including any employee of Sterling
Capital Management Company or Sterling Capital Distributors, Inc. (collectively
referred to as the 'Firm') in connection with the purchase or sale by such
person of a security held or to be acquired by any Portfolio or any Fund managed
by the Firm:
1. To employ a device, scheme or artifice to defraud a Portfolio, a Fund,
any client or prospective client;
2. To make to a Portfolio, a Fund, any client or prospective client, any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements made, in light of the circumstances in 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 a Portfolio, a Fund, any client or
prospective client; or
4. Acting as principal for his/her own account, knowingly to sell any
security to or purchase any security from a client, or acting as a broker for a
person other than such client, knowingly to effect any sale or purchase of any
security for the account of such client, without disclosing to such client in
writing before the completion of such transaction the capacity in which he/she
is acting and obtaining the consent of the client to such transaction. The
prohibitions of this paragraph (4) shall not apply to any transaction with a
customer of a bank broker or dealer if such broker or dealer is not acting as an
investment adviser in relation to such transaction; or
5. To engage in any act, practice, or course of business which is
fraudulent, deceptive or manipulative.
This Code contains provisions reasonably necessary to prevent persons from
engaging in acts in violation of the above standard and procedures reasonably
necessary to prevent violations of the Code.
The Board of Directors of the Firm adopts this Code of Ethics. This Code is
based upon the principle that the directors and officers of the Firm, and
certain affiliated persons of the Firm, owe a fiduciary duty to, among others,
the clients of the Firm to conduct their affairs, including their personal
securities transactions, in such a manner as to avoid (i) serving their own
personal interests ahead of clients; (ii) taking inappropriate advantage of
their position with the Firm; and (iii) any actual or potential conflicts of
interest or any abuse of their position of trust and responsibility. This
fiduciary duty includes the duty of the Compliance Officer of the Firm to report
violations of this Code of Ethics to the Firm's Board of Directors and to the
Board of Directors of any Fund of advised or subadvised by the Firm.
POLICY STATEMENT ON INSIDER TRADING
The Firm forbids any officer, director or employee from trading, either
personally or on behalf of others, including accounts managed by the Firm, on
material nonpublic information or communicating material nonpublic information
to others in violation of the law. This conduct is frequently referred to as
"insider trading." The Firm's policy applies to every officer, director and
employee and extends to activities within and outside their duties at the Firm.
Any questions regarding the Firm's policy and procedures should be referred to
the Compliance Officer.
The term "insider trading" is not defined in the federal securities laws,
but generally is used to refer to the use of material nonpublic information to
trade in securities (whether or not one is an "insider") or to communications of
material nonpublic information to others.
While the law concerning insider trading is not static, it is generally
understood that the law prohibits:
1) trading by an insider, while in possession of material nonpublic
information, or
2) trading by a non-insider, while in possession of material nonpublic
information, where the information either was disclosed to the non-insider in
violation of an insider's duty to keep it confidential or was misappropriated,
or
3) communicating material nonpublic information to others.
The concept of "insider" is broad. It includes officers, directors and
employees of a company. In addition, a person can be a "temporary insider" if he
or she enters into a special confidential relationship in the conduct of a
company's affairs and as a result is given access to information solely for the
company's purposes. A temporary insider can include, among others, a company's
attorneys, accountants, consultants, bank lending officers, and the employees of
such organizations. In addition, the Firm may become a temporary insider of a
company it advises or for which it performs other services. For that to occur
the company must expect the Firm to keep the disclosed nonpublic information
confidential and the relationship must at least imply such a duty before the
Firm will be considered an insider.
Trading on inside information is not a basis for liability unless the
information is material. "Material information" generally is defined as
information for which there is a substantial likelihood that a reasonable
investor would consider it important in making his or her investment decisions,
or information that is reasonably certain to have a substantial effect on the
price of a company's securities. Information that officers, directors and
employees should consider material includes, but is not limited to: dividend
changes, earnings estimates, changes in previously released earnings estimates,
significant merger or acquisition proposals or agreements, major litigation,
liquidation problems, and extraordinary management developments.
Information is nonpublic until it has been effectively communicated to the
market place. One must be able to point to some fact to show that the
information is generally public. For example, information found in a report
filed with the SEC, or appearing in Dow Jones, Reuters Economic Services, The
Wall Street Journal or other publications of general circulation would be
considered public.
Before trading for yourself or others in the securities of a company about
which you may have potential inside information, ask yourself the following
questions:
i. Is the information material? Is this information that an investor would
consider important in making his or her investment decisions? Is this
information that would substantially effect the market price of the securities
if generally disclosed?
ii. Is the information nonpublic? To whom has this information been
provided? Has the information been effectively communicated to the marketplace?
If, after consideration of the above, you believe that the information is
material and nonpublic, or if you have questions as to whether the information
is material and nonpublic, you should take the following steps.
i. Report the matter immediately to the Firm's Compliance Officer.
ii. Do not purchase or sell the securities on behalf of yourself or others.
iii. Do not communicate the information inside or outside the Firm, other
than to the Firm's Compliance Officer.
iv. After the Firm's Compliance Officer has reviewed the issue, you will be
instructed to continue the prohibitions against trading and communication, or
you will be allowed to trade and communicate the information.
Information in your possession that you identify as material and nonpublic
may not be communicated to anyone, including persons within the Firm, except as
provided above. In addition, care should be taken so that such information is
secure. For example, files containing material nonpublic information should be
sealed; access to computer files containing material nonpublic information
should be restricted.
The role of the Firm's Compliance Officer is critical to the implementation
and maintenance of the Firm's policy and procedures against insider trading. The
Firm's Supervisory Procedures can be divided into two classifications -
prevention of insider trading and detection of insider trading.
To prevent insider trading, the Firm will:
i. provide, on a regular basis, an educational program to familiarize
officers, directors and employees with the Firm's policy and procedures, and
ii. when it has been determined that an officer, director or employee of
the Firm has material nonpublic information,
1. implement measures to prevent dissemination of such information, and
2. if necessary, restrict officers, directors and employees from trading
the securities.
To detect insider trading, the Compliance Officer will:
i. review the trading activity reports filed by each officer, director and
employee, and
ii. review the trading activity of accounts managed by the Firm.
A. DEFINITIONS
1. "Access person" means any director, officer, general partner or advisory
representative of the Firm.
2. "Advisory representative means any employee, who in connection with his
or her regular functions or duties, normally makes, participates in, or
otherwise obtains current information regarding the purchase or sale of a
security by the Firm, or whose functions relate to the making of any
recommendations with respect to such purchases or sales; and any natural person
in a control relationship to the Firm who obtains information concerning
recommendations made concerning a purchase or sale of a Security. This
definition includes but is not limited to the following: partner, officer,
director, 'Investment Person', 'Portfolio Manager' and any other employee of the
Adviser designated as an 'Advisory Representative' from time to time by the
Compliance Officer.
3. 'Non-Advisory Representative' means any individual who has no contact
with information regarding the purchases or sales of Securities made by the Firm
in his or her regular functions or duties. However, such individuals are subject
to the Preamble and Policy Statement on Insider Trading contained in this Code.
4. "Affiliated company" means a company which is an affiliated person, as
defined in the 1940 Act.
5. "Affiliated person" of another person means (a) any person directly or
indirectly owning, controlling, or holding with power to vote, five (5%) percent
or more of the outstanding voting securities of such other person; (b) any
person five (5%) percent or more of whose outstanding voting securities are
directly or indirectly owned, controlled, or held with power to vote, by such
other person; (c) any person directly or indirectly controlling, controlled by,
or under common control with, such other person; (d) any officer, director,
partner, copartner, or employee of such other person; (e) if such other person
is an investment company, any investment adviser thereof or any member of an
advisory board thereof; and (f) if such other person is an unincorporated
investment company not having a board of directors, the depositor thereof.
6. "Beneficial ownership" shall be interpreted in the same manner as it
would be under Rule 16a-1(a)(2) of the Securities Exchange Act of 1934, as
amended (the "1934 Act") in determining whether a person is the beneficial owner
of a security for purposes of Section 16 of the 1934 Act and the rules and
regulations thereunder, that, generally speaking, encompasses those situations
where the beneficial owner has the right to enjoy a direct or indirect economic
benefit from the ownership of the security. A person is normally regarded as the
beneficial owner of securities held in (i) the name of his or her spouse,
domestic partner, minor children, or other relatives living in his or her
household; (ii) a trust, estate or other account in which he/she has a present
or future interest in the income, principal or right to obtain title to the
securities; or (iii) the name of another person or entity by reason of any
contract, understanding, relationship, agreement or other arrangement whereby he
or she obtains benefits substantially equivalent to those of ownership.
7. "Control" means the power to exercise a controlling influence over the
management or policies of a company, unless such power is solely the result of
an official position with such company. Any person who owns beneficially, either
directly or through one or more controlled companies, more than twenty-five
(25%) percent of the voting securities of a company shall be presumed to control
such company. Any person who does not so own more than twenty-five (25%) percent
of the voting securities of any company shall be presumed not to control such
company. A natural person shall be presumed not to be a controlled person.
8. "Disclosable transaction" means any transaction in a security pursuant
to which an access person would have a beneficial ownership.
9. 'Firm' means the investment adviser registered with the Securities and
Exchange Commission under the Investment Advisers Act of 1940, subject to this
Code of Ethics.
10. 'Fund' means any investment vehicle registered under the Investment
Company Act of 1940 for which the Firm acts as manager, adviser or subadviser.
11. "Non-interested" Director means a director or trustee who is not an
interested person.
12. "Interested Person" of another person, when used with respect to a
Fund, means (i) any affiliated person of the Fund; (ii) any member of the
immediate family of any natural person who is an affiliated person of the Fund;
(iii) any interested person of any investment adviser of or principal
underwriter for the Fund; (iv) any person or partner or employee of any person
who at any time since the beginning of the last two completed fiscal years of
the Fund has acted as legal counsel for the Fund; (v) any broker or dealer
registered under the Securities Exchange Act of 1934 or any affiliated person of
such a broker or dealer; or (vi) any natural person whom the Commission by order
shall have determined to be an interested person by reason of having had, at any
time since the beginning of the last two completed fiscal years of the Fund, a
material business or professional relationship with the Fund or with the
principal executive officer of such company or with any other investment company
having the same investment adviser or principal underwriter or with the
principal executive officer of such other investment company, provided, that no
person shall be deemed to be an interested person of an investment company
solely by reason of (aa) his being a member of its Board of Directors or
advisory board or an owner of its securities, or (bb) his membership in the
immediate family of any person specified in clause (aa) of this proviso.
13. "Initial Public Offering" means 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 1934 Act.
14. "Investment Personnel" means (a) any Portfolio Manager of the Firm; (b)
any employee of the Firm (or of any company in a control relationship to a Fund
or the Firm) who, in connection with his regular functions or duties, makes or
participates in making recommendations regarding the purchase or sale of
securities by the Firm, including securities analysts and traders; or (c) any
person who controls a Fund or the Firm and who obtains information concerning
recommendations made to any Fund or Portfolio regarding the purchase or sale of
securities by the Fund or Portfolio.
15. "Limited Offering" means an offering that is exempt from registration
under the Securities Act of 1933, as amended (the "Securities Act") pursuant to
Section 4(2) or Section 4(6) or Rules 504, 505 or 506 under the Securities Act.
Limited offerings are commonly referred to as private placements.
16. "Person" means a natural person or a company.
17. 'Portfolio' means any account, trust or other investment vehicle
(except 'Fund') over which the Firm has investment management discretion.
18. "Portfolio Manager" means an employee of the Firm entrusted with the
direct responsibility and authority to make investment decisions affecting the
Portfolios or Funds managed by the Firm.
19. "Purchase or sale of a security" includes, among other things, the
writing of an option to purchase or sell a Security.
20. 'Security Held or to be Acquired' means (i) any security which, within
the most recent 15 days, is or has been held by a Fund or Portfolio, or is being
or has been considered for purchase by a Fund or Portfolio, or (ii) any option
to purchase or sell and any security convertible into or exchangeable for a
Security.
21. "Security" shall have the meaning set forth in Section 202(a)(18) of
the Advisers Act and Section 2(a)(36) of the 1940 Investment Company Act.
Further, for purposes of this Code, 'Security' shall include any commodities
contracts as defined in Section 2(a)(1)(A) of the Commodity Exchange Act. This
definition includes but is not limited to futures contracts on equity indices.
'Security' shall not include direct obligations of the Government of the
United States, , bankers' acceptances, bank certificates of deposit, high
quality short-term debt instruments (maturity of less than 366 days at issuance
and rated in one of the two highest rating categories by a Nationally Recognized
Statistical Rating Organization), including repurchase agreements, commercial
paper and shares of money market funds that limit their investments to the
exempted securities enumerated above. Also excluded from the definition are any
registered open-end investment companies (e.g. open-end mutual funds). Any
question as to whether a particular investment constitutes a 'Security' should
be referred to the Compliance Officer of the Firm.
B. PROHIBITED TRANSACTIONS
No access person or advisory representative shall engage in any act,
practice or course of conduct, which would violate the provisions of Rule 17j-1
of the Investment Company Act or Section 206 of the Investment Advisers Act as
set forth above.
Note: Portfolios of the UAM Funds, Inc., UAM Funds, Inc. II and UAM Trust,
Inc. (collectively, the 'UAM Portfolios') are managed by investment advisers
that are subsidiaries of or organizations otherwise affiliated with United Asset
Management Corporation (the "Management Companies"). Under the organizational
structure of the Management Companies, the entities maintain separate offices,
independent operations and autonomy when making investment decisions. In view of
these circumstances, advisory personnel of the Management Companies who are
defined as "access persons" under the 1940 Act, under normal circumstances would
have no knowledge of proposed securities transactions, pending "buy" or "sell"
orders in a security, or the execution or withdrawal of an order for any other
UAM Portfolio for which a different Management Company serves as investment
adviser. To restrict the flow of investment information related to the UAM
Portfolios, the access persons at a Management Company are prohibited from
disclosing pending "buy" or "sell" orders for a UAM Portfolio to any employees
of any other Management Company until the order is executed or withdrawn. The
Management Companies shall implement procedures designed to achieve employee
awareness of this prohibition.
1. Access Persons
Except as provided in Section C below, no access person shall:
(a) purchase or sell, directly or indirectly, any security in which he/she
has or by reason of such transaction acquires, any direct or indirect beneficial
ownership and which to his/her actual knowledge at the time of such purchase or
sale:
(1) is being considered for purchase or sale by any Portfolio or Fund
managed by the Firm, or
(2) is being purchased or sold by any Portfolio or Fund managed by the
Firm; or
(b) disclose to other persons the securities activities engaged in or
contemplated for the various Portfolios or Funds managed by the Firm.
2. Investment Personnel
In addition to the prohibitions listed in Section B(1) above, no investment
personnel shall engage in any of the following:
(a) accept any gift or other thing of more than de minimus value from any
person or entity that does business with or on behalf of the Firm. For purposes
of this Code, 'de minimus' shall be considered to be the annual receipt of gifts
from the same source valued at $500 or less per individual recipient, when the
gifts are in relation to the Firm's business.
(b) acquire a beneficial interest in any securities in an initial public
offering ("IPO") or other limited offerings commonly referred to as private
placements, without prior written approval of the compliance officer of the
Firm. The compliance officer must maintain a record of any decision, and the
reasons supporting the decision, to approve the investment personnel's
acquisition of an IPO or private placement for at least five years after the end
of the fiscal year in which the approval was granted.
Before granting such approval the compliance officer (or other designee)
should carefully evaluate such investment to determine that the investment could
create no material conflict between the investment personnel and a Fund or
Portfolio. The compliance officer may make such determination by looking at,
among other things, the nature of the offering and the particular facts
surrounding the purchase. For example, the compliance officer may consider
approving the transaction if the compliance officer (or designee) can determine
that: (i) the investment did not result from directing Fund, Portfolio or Firm
business to the underwriter or issuer of the security; (ii) the Investment
Personnel is not misappropriating an opportunity that should have been offered
to the Fund or Portfolio; and (iii) an Investment Person's investment decisions
for the Fund or Portfolio will not be unduly influenced by his or her personal
holdings and investment decisions are based solely on the best interests of Fund
or Portfolio. Any person authorized to purchase securities in an IPO or private
placement shall disclose that investment when they play a part in a Fund's or
Portfolio's subsequent consideration of an investment in that issuer. In such
circumstances, a Fund's or Portfolio's decision to purchase securities of the
issuer shall be subject to independent review by investment personnel with no
personal interest in the issuer.
(c) profit in the purchase and sale, or sale and purchase, of the same (or
equivalent) securities within sixty (60) calendar days. Trades made in violation
of this prohibition should be unwound, if possible. Otherwise, any profits
realized on such short-term trades shall be subject to disgorgement to the
appropriate Portfolio(s) or Fund(s) of the Firm.
Exception: The compliance officer of the Firm may allow exceptions to this
policy on a case-by-case basis when the abusive practices that the policy is
designed to prevent, such as front running or conflicts of interest, are not
present and the equity of the situation strongly supports an exemption. An
example is the involuntary sale of securities due to unforeseen corporate
activity such as a merger. [See Pre-Clearance Procedures below]. The ban on
short-term trading profits is specifically designed to deter potential conflicts
of interest and front running transactions, which typically involve a quick
trading pattern to capitalize on a short-lived market impact of a trade by one
of the Funds or Portfolios. The respective compliance officer shall consider the
policy reasons for the ban on short-term trades, as stated herein, in
determining when an exception to the prohibition is permissible. The compliance
officer may consider granting an exception to this prohibition if the securities
involved in the transaction are not (i) being considered for purchase or sale by
a Fund or Portfolio that serves as the basis of the individual's "investment
personnel" status or (ii) being purchased or sold by a Fund or Portfolio that
serves as the basis of the individual's "investment personnel" status and, are
not economically related to such securities. In order for a proposed transaction
to be considered for exemption from the short-term trading prohibitions, the
investment personnel must complete, sign and submit to the compliance officer a
completed Securities Transactions Report Relating to Short-Term Trading (Exhibit
D), certifying that the proposed transaction is in compliance with this Code of
Ethics. The compliance officer shall retain a record of exceptions granted and
the reasons supporting the decision.
(d) serve on the Board of Directors of any publicly traded company without
prior authorization of the compliance officer of the Firm. Any such
authorization shall be based upon a determination that the board service would
be consistent with the interests of the Firm, any Portfolios or Funds.
Authorization of board service shall be subject to the implementation by the
Firm of "Chinese Wall" or other procedures to isolate such investment personnel
from making decisions about trading in that company's securitiesNotification of
such directorships shall be made to the compliance officer of the Funds.
3. Portfolio Managers
In addition to the prohibitions listed in Sections B(1) and (2) above, no
portfolio manager shall:
(a) buy or sell a security within seven (7) calendar days before or two (2)
calendar days after any portfolio of the Firm trades in that security. Any
trades made within the proscribed period shall be unwound, if possible.
Otherwise, any profits realized on trades within the proscribed period shall be
disgorged to the appropriate client portfolio.
C. EXEMPTED TRANSACTIONS
Transactions described in Sections B(1), B(2)(c) and B(3) above, which
appear upon reasonable inquiry and investigation to present no reasonable
likelihood of harm to a Fund or Portfolio and which are otherwise transacted in
accordance with Investment Company Act Rule 17j-1 and Section 206 of the
Investment Company Act may be permitted within the discretion of the compliance
officer of the Firm on a case-by-case basis. Such exempted transactions may
include:
1. purchases or sales of securities which are not eligible for purchase by
a Fund or Portfolio and which are not related economically to securities
purchased, sold or held by the Fund or a Portfolio.
2. securities of companies with a market capitalization in excess of $1
billion.
3. purchases or sales of a de minimus amount of securities. A de minimus
amount of securities shall be defined in this section of the Code of Ethics as:
(a) up to an aggregate $25,000 principal amount of a fixed income security
within any three-consecutive month period;
(b) up to an aggregate 100 shares of an equity security within any
three-consecutive month period; or
(c) any amount of securities if the proposed acquisition or disposition by
a Fund or Portfolio is in the amount of 1,000 shares or less and the security is
listed on a national securities exchange or the National Association of
Securities Dealers Automated Quotation System.
4. Securities which the access person, Fund and/or Portfolio has no
influence or control, including:
(a) purchases or sales effected in any account over which the access person
has no direct or indirect influence or control;
(b) purchases or sales which are non-volitional on the part of either the
access person or the Fund and/or Portfolio;
(c) purchases which are part of an automatic dividend reinvestment plan or
direct stock plan (pending preclearance of the original purchase); and
(d) securities acquired by the exercise of rights issued pro rata by an
issuer to all holders of a class of its securities (to the extent such rights
were acquired from such issuer), and sales of such rights so acquired.
5. Holdings in direct obligations of the U.S. government, bankers'
acceptances, bank certificates of deposit, commercial paper, high quality
short-term debt instruments and registered open-end investment companies.
6. From time to time, the Equity Department will execute investment
programs for a limited number of clients that are known as 'rebalance' programs.
One example of a rebalance is when a new portfolio is funded with cash, and it
is modeled against the model portfolio. The result is that all stocks owned in
the model would be purchased on behalf of that one client. Another example is
where a client has equity and fixed income portfolios under management, and the
overall equity allocation exceeds the proscribed target. A rebalance program may
be initiated to sell a small portion of some or all stocks in the portfolio to
reduce exposure to stocks. Rebalance programs typically do not generate high
quantities of shares being traded in particular securities and as such the firm
deems that when a rebalance program is underway, employees are considered free
to personally trade in those stocks that are part of the rebalance program. Such
personal transactions shall be considered exempt transactions as it pertains to
transactions described in Sections B(1), B(2)(c) and B(3) above.
D. COMPLIANCE PROCEDURES
With respect to the pre-clearance and reporting requirements contained
herein, access persons shall pre-clear through and report to the compliance
officer of the Firm.
1. Pre-clearance Procedures
All access persons must receive prior written approval from the Firm's
compliance officer, or other officer designated by the Board of Directors,
before purchasing or selling securities in an account that such access person
has beneficial ownership. The access person should request pre-clearance by
completing, signing and submitting Personal Securities Transactions
Pre-Clearance Form (Exhibit E) to the compliance officer.
Pre-clearance approval will expire at the close of business on the trading
date two (2) business days after the date on which authorization is received.
For example, preclearance received Friday at 9:00 a.m. would expire as of the
close of business Monday. If the trade is not completed before such
pre-clearance expires, the access person is required to again obtain
pre-clearance for the trade. In addition, if an access person becomes aware of
any additional information with respect to a transaction that was precleared,
such person is obligated to disclose such information to the appropriate
compliance officer prior to executing the precleared transaction.
Access persons are excluded from preclearing securities purchased, sold or
acquired in the following transactions:
(a) purchases or sales effected in any account over which the access person
has no direct or indirect influence or control.
(b) purchases or sales which are non-volitional on the part of either the
access person or a Fund or Portfolio.
(c) purchases which are part of an automatic dividend reinvestment plan or
direct stock plan (pending preclearance of the original purchase).
(d) securities acquired by the exercise of rights issued pro rata by an
issuer to all holders of a class of its securities, to the extent such rights
were acquired from such issuer, and sales of such rights so acquired.
(e) holdings in direct obligations of the U.S. government, bankers'
acceptances, bank certificates of deposit, commercial paper, high quality
short-term debt instruments and registered open-end investment companies are not
disclosable transactions.
2. Disclosure of Personal Holdings
All access persons shall disclose to the compliance officer:
(a) all personal securities holdings (including securities acquired before
the person became an access person) within ten (10) days upon the later of
commencement of employment or adoption of this Code of Ethics; and
(b) The name of any broker, dealer or bank with whom the access person
maintains an account in which any securities were held for the direct or
indirect benefit of the access person must also be reported.
Holdings in direct obligations of the U.S. government, bankers'
acceptances, bank certificates of deposit, commercial paper, high quality
short-term debt instruments and registered open-end investment companies are not
disclosable transactions.
The compliance officer of the Firm may, at its discretion, request access
persons to provide duplicate copies of confirmation of each disclosable
transaction in the accounts and account statements.
In addition to reporting securities holdings, every access person shall
certify in their initial report that:
(a) they have received, read and understand the Code of Ethics and
recognize that they are subject thereto; and
(b) they have no knowledge of the existence of any personal conflict of
interest relationship which may involve a Fund or Portfolio, such as any
economic relationship between their transactions and securities held or to be
acquired by a Fund or a Portfolio.
This initial report shall be made on the form attached as Initial Report of
Access Person (Exhibit A) and shall be delivered to the compliance officer of
the Firm.
3. Quarterly Reporting Requirements
All access persons shall disclose to the Firm's compliance officer all
personal securities transactions conducted during the period as of the calendar
quarter ended within ten (10) days after quarter end. Transactions in direct
obligations of the U.S. government, bankers' acceptances, bank certificates of
deposit, commercial paper, high quality short-term debt instruments and
registered open-end investment companies are not disclosable transactions.
In addition to reporting securities holdings, every access person shall
disclose quarterly the:
(a) date of the transaction, title of the security, interest rate and
maturity date (if applicable), trade date, number of shares, and 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 name of the broker, dealer or bank with or through whom the
transaction was effected; and
(d) the date the report is submitted to the compliance officer.
In addition, with respect to any account established by an access person in
which any securities were held during the quarter for the direct or indirect
benefit of the access person, the access person must provide:
(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 the report is submitted by the access person.
This quarterly report shall be made on the form attached as Securities
Transactions for the Calendar Quarter Ended (Exhibit C) and shall be delivered
to the compliance officer of the Firm. In lieu of manually filling out all of
the information required by the form, access persons may attach confirms and/or
account statements to a signed form.
4. Annual Certification of Compliance with Code of Ethics
All access persons shall disclose to the compliance officer of the Firm all
personal securities holdings as of the calendar year ended within thirty (30)
days after year end. Holdings in direct obligations of the U.S. government,
bankers' acceptances, bank certificates of deposit, commercial paper, high
quality short-term debt instruments and registered open-end investment companies
are not disclosable holdings.
In addition to reporting securities holdings, every access person shall
certify annually that:
(a) they have read and understand the Code of Ethics and recognize that
they are subject thereto;
(b) they have complied with the requirements of the Code of Ethics; and
that they have reported all personal securities transactions required to be
reported pursuant to the requirements of the Code of Ethics;
(c) they have not disclosed pending "buy" or "sell" orders for a Portfolio
or Fund to any employees of any other Management Company, except where the
disclosure occurred subsequent to the execution or withdrawal of an order; and
(d) they have no knowledge of the existence of any personal conflict of
interest relationship which may involve any Portfolio or Fund, such as any
economic relationship between their transactions and securities held or to be
acquired by a Fund or Portfolio.
This annual report shall be made on the form attached as Annual Report of
Access Person (Exhibit B) and shall be delivered to the compliance officer of
the Firm.
5. Reports to Compliance Officer
The compliance officer of the Firm shall provide, by the twelfth (12) day
after each quarter end, certification to the compliance officer of a Fund that,
as of the prior quarter end:
(a) the compliance officer of the Firm has collected all documentation
required by the Code of Ethics and Rule 17j-1 and is retaining such
documentation on behalf of the Fund;
(b) there have been no violations to the Fund's Code of Ethics and, if
there have been violations to the Fund's Code of Ethics, the violation has been
documented and reported to the Fund's compliance officer; and
(c) the Firm has appointed appropriate management or compliance personnel,
such as the compliance officer, to review transactions and reports filed by
access persons under the Code of Ethics, and adopted procedures reasonably
necessary to prevent Access Persons from violating the Firm's Code of Ethics.
Each quarter the compliance officer of the Firm shall also provide to the
compliance officer of each Fund a list of access persons who are subject to the
Fund's Code of Ethics and the name of the compliance officer of the Firm
responsible for preclearing and reviewing personal securities transactions.
The compliance officer of the Firm shall provide such information,
including, but not limited to, initial, quarterly and annual reports for all
access persons, preclearance reports and approval for short term transactions,
IPO and private placement securities, as is requested by the Fund's compliance
officer.
6. General Reporting Requirements
The compliance officer of the Firm shall notify each access person that he
or she is subject to this Code of Ethics and the reporting requirements
contained herein, and shall deliver a copy of this Code of Ethics to each such
person when they become an access person, or upon request.
Reports submitted pursuant to this Code of Ethics shall be confidential and
shall be provided only to the officers and Directors of the Firm and each Fund,
counsel and/or regulatory authorities upon appropriate request.
7. Excessive Trading
The Firm understands that it is appropriate for access persons to
participate in the public securities markets as part of their overall personal
investment programs. As in other areas, however, this should be done in a way
that creates no potential conflicts with the interests of any Fund or Portfolio.
Further, it is important to recognize that otherwise appropriate trading, if
excessive (measured in terms of frequency, complexity of trading programs,
numbers of trades or other measure as deemed appropriate by the Fund's
compliance officer, compliance officer of the Firm, or senior management at the
Firm), may compromise the best interests of any Funds or Portfolios if such
excessive trading is conducted during work-time or using Fund/Portfolio
resources. Accordingly, if personal trading rising to such dimension as to
create an environment that is not consistent with the Code of Ethics, such
personal transactions may not be approved or may be limited by the compliance
officer of the Firm.
8. Conflict of Interest
Every access person, shall notify the compliance officer of the Firm of any
personal conflict of interest relationship which may involve a Fund or
Portfolio, such as the existence of any economic relationship between their
transactions and securities held or to be acquired by any Portfolio or Fund. The
Firm's compliance officer shall notify the compliance officer of a Fund of any
personal conflict of interest relationship which may involve the Fund. Such
notification shall occur in the pre-clearance process.
E. REPORTING OF VIOLATIONS TO THE BOARD OF DIRECTORS
The compliance officer of the Firm shall promptly report to the compliance
officer of the Fund and the Board of Directors of the Firm all apparent
violations of this Code of Ethics and the reporting requirements thereunder.
When the compliance officer of the Firm finds that a transaction otherwise
reportable to the Board of Directors pursuant to the Code could not reasonably
be found to have resulted in a fraud, deceit or manipulative practice in
violation of Rule 17j-1(a), he/she may, in his/her discretion, lodge a written
memorandum of such finding and the reasons therefor with the reports made
pursuant to this Code of Ethics, in lieu of reporting the transaction to the
Board of Directors. Such findings shall, however, be reported to the compliance
officer of any respective Funds.
The Board of Directors of the Firm or any Fund, or a Committee of Directors
created by such Board of Directors for thatpurpose, shall consider reports made
to the Board of Directors hereunder and shall determine whether or not this Code
of Ethics has been violated and what sanctions, if any, should be imposed.
F. ANNUAL REPORTING TO THE BOARD OF DIRECTORS
The compliance officer of the Firm shall prepare an annual report relating
to this Code of Ethics to the Board of Directors of the Firm and the Funds. Such
annual report shall:
(a) summarize existing procedures concerning personal investing and any
changes in the procedures made during the past year;
(b) identify any violations requiring significant remedial action during
the past year; and
(c) identify any recommended changes in the existing restrictions or
procedures based upon the Firm's experience under its Code of Ethics, evolving
industry practices or developments in applicable laws or regulations; and
(d) state that the Firm had adopted procedures reasonably necessary to
prevent access persons from violating the Code.
G. SANCTIONS
Upon discovering a violation of this Code, the Board of Directors of the
Firm or a Fund may impose such sanctions as they deem appropriate, including,
among other things, a letter of censure or suspension or termination of the
employment of the violator.
There are now sanctions to penalize employees for non-compliance with the
personal securities transaction portion of the Code concerning adherence to
pre-clearance procedures and prohibited transactions:
1st offense $50 fine
2nd offense $250 fine
3rd offense $250 fine and 5 day ban on all personal trading in
accounts where employee has a beneficial interest 4th offense $500 fine and 30
ban on all personal trading in accounts where employee has a beneficial interest
5th offense $500 fine and revocation of all personal trading
privileges on accounts where employee has a beneficial interest
H. RETENTION OF RECORDS
The Firm shall maintain the following records as required under Rule 17j-1:
(a) a copy of any Code of Ethics in effect within the most recent five
years;
(b) a list of all persons required to make reports hereunder within the
most recent five years and a list of all persons who were responsible for
reviewing the reports, as shall be updated by the compliance officer of the
Firm;
(c) a copy of each report made by an access person hereunder and submitted
to the Firm's compliance officer for a period of five years from the end of the
fiscal year in which it was made;
(d) each memorandum made by the compliance officer of the Firm hereunder,
for a period of five years from the end of the fiscal year in which it was made;
(e) a record of any violation hereof and any action taken as a result of
such violation, for a period of five years following the end of the fiscal year
in which the violation occurred; and
(f) a copy of every report provided to the Firm's Board of Directorsor a
Fund's compliance officer which describes any issues arising under the Code of
Ethics and certifies that the Firm has adopted procedures reasonably necessary
to prevent access persons from violating the Code of Ethics.
