CODE OF ETHICS OF THE SARATOGA ADVANTAGE TRUST AND SARATOGA CAPITAL
MANAGEMENT (Amended and Restated as of July 28, 2000)
Introduction
This Code of Ethics has been adopted by The Saratoga Advantage Trust (the
"Trust") and Saratoga Capital Management (the "Manager"), in compliance with
Rule 17j-1 (the "Rule") under the Investment Company Act of 1940 (the "Act") to
establish standards and procedures for the detection and prevention of
activities by which persons having knowledge of the investments and investment
intentions of the Trust or any other investment company managed and/or advised
by the Manager (referred to collectively herein as "Other Clients") may abuse
their fiduciary duties to the Trust or Other Clients and to deal with other
types of conflict of interest situations to which the Rule is addressed.
General Prohibitions
The specific provisions and reporting requirements of the Rule and this
Code of Ethics are concerned primarily with those investment activities of
Access Persons, defined below, who are associated with the Trust or Other
Clients and who thus may benefit from or interfere with the purchase or sale of
portfolio securities by the Trust or Other Clients. However, the Rule and this
Code of Ethics apply to all affiliated persons of the Trust or Other Clients
(including the Manager) and affiliated persons of the Manager ("Covered
Persons").
The Rule makes it "unlawful" for Covered Persons to engage in conduct which
is deceitful, fraudulent, or manipulative, or which involves false or misleading
statements, in connection with the purchase or sale of securities by an
investment company. Accordingly, under the Rule and this Code of Ethics no
Covered Person shall use any information concerning the investments or
investment intentions of the Trust or Other Clients, or his or her ability to
influence such investment intentions, for personal gain or in a manner
detrimental to the interests of the Trust or Other Clients.
In addition, no Covered Person shall, directly or indirectly in connection
with the purchase or sale of a "security held or to be acquired" by the Trust or
Other Clients:
employ any device, scheme or artifice to defraud the Trust or Other
Clients; or
make to the Trust or any Other Client, the Manager any untrue statement of
a material fact or omit to state to any of the foregoing a material fact
necessary in order to make the statements made, in light of the circumstances
under which they are made, not misleading; or
engage in any act, practice, or course of business which operates or would
operate as a fraud or deceit upon the Trust or Other Clients; or
engage in any manipulative practice with respect to the Trust or Other
Clients.
This Code of Ethics acknowledges the general principles that Covered
Persons: (A) owe a fiduciary obligation to the Trust and Other Clients; (B) have
the duty at all times to place the interests of shareholders first; (C) must
conduct all personal securities transactions in such a manner as to avoid any
actual or potential conflict of interest or abuse of an individual's position of
trust and responsibility; and (D) should not take inappropriate advantage of
their positions in relation to the Trust or Other Clients.
Definitions (as used herein)
"Access Person" means: (1) any officer, trustee, director or employee of
the Manager or of the Trust or Other Clients; (2) any employee of any company in
a control relationship to the Manager or the Trust or Other Clients who, in
connection with his or her regular functions or duties, makes, participates in
or obtains information regarding the purchase or sale of securities by the Trust
or Other Clients, or whose functions or duties relate to the making of any
recommendations with respect to such purchases or sales; and (3) any natural
person in a control relationship to the Manager or the Trust or Other Clients
who obtains information concerning recommendations made for the purchase or sale
of securities by the Trust or Other Clients.
"Affiliated Person" of another person means: (1) any person directly or
indirectly owning, controlling or holding with power to vote, 5% or more of the
outstanding voting securities of such other person; (2) any person 5% or more of
whose outstanding voting securities are directly or indirectly owned, controlled
or held with power to vote, by such other person; (3) any person directly or
indirectly controlling, controlled by, or under common control with, such other
person; (4) any officer, trustee, director, partner, copartner, or employee of
such other person; and (5) any investment adviser of the Trust or Other Clients.
"Beneficial Interest" means: any interest by which an Access Person or any
member of his or her immediate family (relative by blood or marriage living in
the same household), can directly or indirectly derive a monetary benefit from
the purchase, sale (or other acquisition or disposition) or ownership of a
security, except such interests as the Administrator of this Code of Ethics
shall determine to be too remote for the purpose of this Code of Ethics. (A
transaction in which an Access Person acquires or disposes of a Security in
which he or she has or thereby acquires a direct or indirect Beneficial Interest
will be referred to in this Code of Ethics as a "personal securities"
transaction or as a transaction for the person's "own account").
"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,
directly or through one or more controlled companies, more than 25% of the
voting securities of a company shall be presumed to control such company.
Natural persons shall be presumed not to be controlled persons.
"Covered Person" shall have the meaning set forth in paragraph II of this
Code of Ethics.
"Investment Person" means an Access Person described in paragraphs-IV.A-(2)
or (3) above and includes a trader in portfolio securities.
"Portfolio Manager" means an Access Person who is responsible for making
decisions as to securities to be bought or sold for the Trust's Portfolios or
for Other Clients.
"Trader" means an Access Person who is responsible for effecting Portfolio
security transactions on behalf of the Trust or Other Clients.
"Security" includes all stock, debt obligations and other instruments
comprising the investments of the Trust or Other Clients, including any warrant
or option to acquire or sell a security and financial futures contracts, but
excludes securities issued by the U.S. government or its agencies, bankers'
acceptances, bank certificates of deposit, commercial paper and shares of a
mutual fund. References to a "Security" in this Code of Ethics shall include any
warrant for, option in, or security immediately convertible into that
"Security."
A "security held or to be acquired" by the Trust or Other Clients means any
security (as defined above) which, within the most recent 7 days: (i) is or has
been held by the Trust or Other Clients; or (ii) is being or has been considered
for purchase by the Trust or Other Clients.
A security is "being considered for purchase or sale" from the time an
order is given by or on behalf of the Trust or Other Clients until all orders
with respect to that security are completed or withdrawn.
Prohibited Transactions
Subject to any more limiting requirement set forth below, an Access Person
may not effect a personal securities transaction if he or she knows or, in the
ordinary course of business, should know at the time of entering into the
transaction that: (i) the Trust or Other Clients have engaged in a transaction
in the same security within the last 7 days, or is engaging in a transaction or
is going to engage in a transaction in the same security in the next 7 days; or
(ii) within the last 7 days a transaction in the same security for the Trust or
Other Clients was considered or is being considered or within the next 7 days is
going to be considered, unless such Access Person (1) obtains advance clearance
of such transaction and (2) reports to the Trust or Other Clients, as
applicable, the information described in paragraph VIII of this Code of Ethics.
Initial Public Offerings and Private Placements
Advance clearance and approval for any acquisition of securities by an
Investment Person in an initial public offering or private placement must be
obtained , and any such acquisitions will be promptly reported to the Trustees.
Blackout Periods
(1) An Investment Person may not effect a personal securities transaction
on a day during which the Trust or Other Clients have a pending "buy" or "sell"
order in that same security until that order is executed or withdrawn. (2) In
addition, a portfolio manager may not buy or sell a security for his or her own
account within at least seven calendar days before and after a fund or account
that he or she manages trades in that security. (3) Any profits realized on
trades within the proscribed periods will have to be disgorged.
Gifts
An Investment Person may not accept any gift or other thing of more than de
minimis value from any person or entity that does business with or on behalf of
the Trust or Other Clients.
Service as a Director
An Investment Person may not serve on the board of directors of any
publicly traded company, without prior authorization of the Chief Executive
Officer of Saratoga Capital Management which is based upon a determination that
the board service would not be inconsistent with the interests of the Trust and
its shareholders and Other Clients and their shareholders, as applicable. If and
when such board service is authorized, the Investment Person serving as a
director will be isolated from other Investment Persons who make investment
decisions involving that company through "Chinese Wall" or other procedures.
Advance Clearance Requirement
Procedures
From Whom Obtained
Advance clearance of a personal securities transaction required to be
approved under this Code of Ethics must be obtained from the Administrator of
this Code of Ethics.
Time of Clearance
Transaction clearances must be obtained no more than three (3) days prior
to the transaction. If the trade is not made within three (3) days of the date
of clearance, a new clearance must be obtained.
Form
Clearance must be obtained in writing by completing and signing a form
provided for that purpose by the Trust or Other Clients, which form shall set
forth the details of the proposed transaction, and obtaining the signature of
the Administrator. An example of such Form is annexed hereto as Schedule A.
Filing
A copy of all completed clearance forms, with all required signatures,
shall be retained by the Administrator of this Code of Ethics.
Factors Considered in Clearance of Personal Transactions
The Administrator may refuse to grant clearance of a personal transaction
in his sole discretion without being required to specify any reason for the
refusal. Generally, the Administrator of this Code of Ethics will consider the
following factors in determining whether or not to clear a proposed transaction:
Whether the amount or nature of the transaction or person making it is
likely to affect the price or market for the Security;
Whether the individual making the proposed purchase or sale is likely to
benefit from purchases or sales being made or being considered by the Trust or
Other Clients;
Whether the Security proposed to be purchased or sold is one that would
qualify for purchase or sale by the Trust or Other Clients;
Whether the transaction is nonvolitional on the part of the individual,
such as receipt of a stock dividend or a sinking fund call.
Exempt Transactions
Neither the prohibitions nor the reporting requirements of this Code of
Ethics apply to:
Purchase, sales or other acquisitions or dispositions of Securities for an
account over which the Covered Person or Access Person has no direct influence
or control and does not exercise indirect influence or control;
Purchases, sales or other acquisitions or dispositions of Securities which
are not eligible for purchase or sale by the Trust or Other Clients;
Involuntary purchases or sales made by a Covered Person or an Access
Person;
Purchases which are part of an automatic dividend reinvestment plan;
Purchases or other reacquisitions or dispositions resulting from the
exercise of rights acquired from an issuer as part of a pro rata distribution to
all holders of a class of Securities of such issuer and the sale of such rights;
Purchases, sales or other acquisitions or dispositions which receive the
prior approval of the Administrator upon consideration of the factors stated in
paragraph VI(B) above and/or because:
their potential harm to the Trust or Other Clients is remote;
they would be unlikely to affect a highly institutional market; or
they are clearly not related economically to Securities being considered
for purchase or sale by the Trust or Other Clients.
A. Reporting Requirements - Quarterly Transactions
Within ten (10) days after the end of each calendar quarter, each Access
Person shall make a written report to the Administrator of this Code of Ethics
of all non-exempt transactions occurring in the quarter by which they acquired
or disposed of a Beneficial Interest in any security.
Such report must be dated and contain the following information with
respect to each reportable transaction and/or brokerage account established by
the Access Person in which he or she held any securities during the quarter:
Date and nature of the transaction (purchase, sale or any other type of
acquisition or disposition);
Title, interest rate and maturity date (if applicable), number of share or
principal amount of each Security and the price at which the transaction was
effected;
Name of the broker, dealer or bank with or through whom the transaction was
effected; and
The name of the broker, dealer or bank with whom the Access Person
established the account, and the date the account was established.
Such report may contain a statement that the report is not to be construed
as an admission that the person making it has or had any direct or indirect
Beneficial Interest in any Security to which the report relates.
Notwithstanding the quarterly reporting requirement set forth in
paragraph-VIII.A.(1) above, a Trustee of the Trust or a director of an
investment company managed or advised by the Manager who is not an "interested
person" of the Trust or the investment company, respectively, as such term is
defined in Section 2(a)(19) of the Act, shall not be subject to such reporting
requirement except where such Trustee knew or, in the ordinary course of
fulfilling his or her official duties as a Trustee of the Trust, should have
known that during the seven day period immediately preceding or after the date
of the transaction in a security by the Trustee, such security is or was
purchased or sold by the Trust or such purchase or sale by the Trust is or was
considered by the Trust or the Trust's Manager or Advisers.
Reporting Requirements - Initial and Annual Holdings
Each Access Person must disclose all personal holdings in securities
(including any privately-placed securities) to the Administrator of this Code of
Ethics for review no later than 10 days after becoming an Access Person and
annually thereafter. Each initial and annual holdings report must contain the
following information: (i) the title, number of securities and principal amount
of each security in which the Access Person has any direct or indirect
beneficial ownership; (ii) the name of the broker, dealer or financial
institution with or through whom the Access Person maintains an account in which
any securities were held for the direct or indirect benefit of the Access
Person; and (iii) the date the report is submitted by the Access Person. Each
report must be current as of a date no more than 30 days before the report is
submitted.
Form of Reports
The reports may be on the form provided by the Trust or Other Clients or
may consist of trade confirmations and/or broker account statements received by
the Administrator of the Code in the prescribed time periods, which provide at
least the same information. A copy of each of the Trust's reporting forms is
attached hereto as Schedule B.
Responsibility to Report
The responsibility for taking the initiative to report is imposed on each
individual required to make a report. Any effort by the Trust or Other Clients
to facilitate the reporting process does not change or alter that
responsibility.
Where to File Report
All reports must be filed with the Administrator of this Code of Ethics.
Confidentiality of Transactions
Until disclosed in a public report to shareholders or to the SEC in the
normal course, all information concerning Securities "being considered for
purchase or sale" by the Trust or Other Clients shall be kept confidential by
all Access Persons and disclosed by them only on a "need to know" basis. It
shall be the responsibility of the Administrator of this Code of Ethics to
report any inadequacy found by him to the Board of Trustees of the Trust or the
relevant parties with respect to Other Clients.
Sanctions
Any violation of this Code of Ethics shall be subject to the imposition of
such sanctions by the Trust or Other Clients, the Manager of the Trust or Other
Clients as may be deemed appropriate under the circumstances to achieve the
purposes of the Rule and this Code of Ethics which may include suspension or
termination of employment, a letter of censure and/or restitution of an amount
equal to the difference between the price paid or received by the Trust or Other
Clients and the more advantageous price paid or received by the offending
person. Sanctions for violation of this Code of Ethics by a Trustee of the Trust
will be determined by a majority vote of its Independent Trustees. Sanctions for
violations of this Code of Ethics with respect to Other Clients will be
determined by the such parties as is determined by such Other Clients.
Administration and Construction
The administration of this Code of Ethics with respect to the Trust shall
be the responsibility of the Chief Financial Officer of the Trust who shall
serve as the "Administrator" of this Code of Ethics. The Administrator of the
Code with respect to Other Clients shall be the respective Chief Financial
Officers of such investment companies.
The duties of such Administrator shall include:
Continuous maintenance of a current list of the names of all Access Persons
with an appropriate description of their title or employment;
Providing each Access Person a copy of this Code of Ethics and informing
them of their duties and obligations thereunder, and assuring that Covered
Persons who are not access persons are familiar with applicable requirements of
this Code of Ethics;
Supervising the implementation of this Code of Ethics by the Manager or
Other Clients and the enforcement of the terms hereof by the Manager;
Maintaining or supervising the maintenance of all records and reports
required by this Code of Ethics;
Preparing listings of all transactions effected by any Access Person within
seven (7) days of the date on which the same security was held, purchased or
sold by the Trust or Other Clients;
Determining whether any particular securities transaction should be
exempted pursuant to the provisions of this Code of Ethics;
Issuing either personally or with the assistance of counsel as may be
appropriate, any interpretation of this Code of Ethics which may appear
consistent with the objectives of the Rule and this Code of Ethics;
Conducting of such inspections or investigations, including scrutiny of the
listings referred to in the preceding subparagraph, as shall reasonably be
required to detect and report, with his recommendations, any apparent violations
of this Code of Ethics to the Board of Trustees of the Trust or the appropriate
parties with respect to Other Clients;
Submitting a quarterly report to the Trustees of the Trust containing a
description of any violation and the sanction imposed; transactions which
suggest the possibility of a violation of interpretations issued by and any
exemptions or waivers found appropriate by the Administrator; and any other
significant information concerning the appropriateness of this Code of Ethics.
Required Records
The Administrator shall maintain and cause to be maintained in an easily
accessible place, the following records:
A copy of any Code of Ethics adopted pursuant to the Rule which has been in
effect during the past five (5) years;
A record of any violation of any such Code of Ethics and of any action
taken as a result of such violation;
A copy of each report made by the Administrator within two (2) years from
the end of the fiscal year of the Trust or Other Client (or, in the case of a
separate account, the opening of the account) in which such report or
interpretation is made or issued and for an additional three (3) years in a
place which need not be easily accessible;
A list of all persons who are, or within the past five (5) years have been,
required to make reports pursuant to the Rule and this Code of Ethics; and
E. The record of any decision and reasons supporting the decision to
approve any acquisitions of private placements or Initial Public Offering
securities for at least five years after the end of the fiscal year in which
such approval was granted.
Amendments and Modifications
With respect to the Trust, this Code of Ethics may not be amended or
modified except in a written form which is specifically approved by majority
vote of the Independent Trustees of the Trust.
With respect to the Trust, this Code of Ethics was adopted by the Board of
Trustees of the Trust, including a majority of its Independent Trustees, at a
meeting held on July 28, 2000.
Bruce E. Ventimiglia
Chairman and President of the Board of Trustees
of the Trust, and Chairman, President and
Chief Executive Officer of the Manager
Compliance Certification
I have read and understand the terms of the above Code of Ethics.
I recognize the responsibilities and obligations that I have incurred as a
result of my being subject to this Code of Ethics, and hereby agree to abide by
the terms of the above Code of Ethics.
_______________________________________ _______________________________
Signature Date
_______________________________________
Name
SCHEDULE A
REQUEST FOR PERMISSION
TO ENGAGE IN PERSONAL TRANSACTION
I hereby request permission to effect a transaction in securities as
indicated below for my own account or other account in which I have a beneficial
interest or legal title.
(Use approximate dates and amounts of proposed transactions.)
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No. of
Shares of
Date Principal Name of
Amount Security Unit Price Total Price Broker
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PURCHASES AND ACQUISITIONS
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SALES AND OTHER DISPOSITIONS
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Name: _________________________________
Date: Signature:_____________________________
