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Dwight Asset Management Company
Code of Ethics
Section 17(j) of the Investment Company Act of 1940 (the "1940 Act") authorizes
the SEC to adopt rules and regulations to prevent fraudulent, deceptive or
manipulative acts, practices or courses of business in the operation of
investment companies and their affiliates, including the power to require the
adoption of codes of ethics to prevent such fraudulent acts.
Rule 17j-1 establishes minimum standards of conduct for persons having access to
information regarding the purchase and sale of portfolio securities by
investment companies. The Rule also requires every investment company registered
under the 1940 Act, and each investment adviser or principal underwriter for
such investment company, to adopt a written code containing provisions
reasonably necessary to prevent its access persons from engaging in any act or
practice prohibited by the anti-fraud provisions of Rule 17j-1 and to institute
procedures reasonably necessary to prevent violations of such code.
Additionally, under Section 204A of the Investment Advisers Act of 1940, every
investment adviser must create and enforce written policies and procedures in
order to prevent the misuse of material, nonpublic information by such
investment adviser or any person associated with such investment adviser.
Because of the nature of the business of this firm (hereinafter referred to as
the "Firm"), its employees may be exposed to information which constitutes
inside information, which the use of, for the financial benefit of the
employees, their "tippees" or clients, is proscribed by federal law. In addition
to the responsibilities imposed by these specific securities laws, the Firm has
a fiduciary duty to investment advisory clients which requires each employee to
act solely for the benefit of the clients. Employees also have a duty to act in
the best interests of the Firm. Finally, it is in the best interests of the Firm
as a professional advisory organization to avoid potential conflicts of
interest, or even the appearance of such conflicts, in the conduct of our
officers and employees
As a result of these aspects of the Firm's business, this Code of Ethics has
been adopted. Our goal is to protect you, the Firm, and our clients from the
damage that could result from a violation of securities or other laws or from
situations involving real or apparent conflicts of interest. While it is
impossible to define all situations which might pose a risk of securities laws
violations or create conflicts, this Code of Ethics is designed to address those
circumstances where such concerns are most likely to arise. By complying with
the guidelines below, the Firm's employees can minimize their and the Firm's
potential exposure from violations of laws governing securities transactions and
fiduciary relationships.
Failure to comply with the provisions of this Code of Ethics is a ground for
disciplinary action, including discharge, by the Firm. Adherence to the Code of
Ethics is considered a basic condition of employment by the Firm. If you have
any doubt as to the propriety of any activity, questions regarding
interpretation of this Code of Ethics, or questions about its application to
particular situations, you should consult with the person charged with the
administration of this Code of Ethics, who is identified in Attachment B to this
Code (and is referred to hereinafter as the "Compliance Officer").
Please acknowledge that you have read the Code of Ethics by signing the
acknowledgment attached to the Code as Attachment D and returning it to the
Compliance Officer.
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I. Code of Ethics of the UAM Funds
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The Firm has adopted the Code of Ethics of the UAM Funds which is attached as
Attachment A hereto and incorporated by reference herein, in total including all
Exhibits. The Code of Ethics of the UAM Funds is intended to establish personal
trading policies, restrictions, and reporting requirements for the Firm's
employees in order to effectuate the purposes and objectives of Rule 17j-1 under
the Investment Company Act of 1940 and set forth in the Code of Ethics of the
UAM Funds.
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II. Use of Inside Information.
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Under Section 204A of the Investment Advisers Act of 1940, every investment
adviser must create and enforce written policies and procedures in order to
prevent the misuse of material, nonpublic information by such investment adviser
or any person associated with such investment adviser.
A. Policy Statement on Use of Inside Information
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No officer, director or employee of the Firm shall make use of material
nonpublic ("inside") information/1/ concerning any publicly-held company, nor
shall any employee of the Firm disclose any such inside information to other
persons, including clients of the Firm or any mutual funds managed by the Firm,
if such use or disclosure would violate the Securities Act of 1934, as amended,
or the rules or regulations promulgated thereunder (together, the ",'34 Act").
Every employee of the Firm shall keep confidential any information communicated
to such employee with the understanding that it shall be kept confidential,
including all information related to security recommendations and investment
decisions being made by the Firm. No employee of the Firm shall in violation of
the '34 Act direct trades in securities for accounts of investment advisory
clients as to which the firm has discretionary authority while the Firm is in
possession of inside information. Such use, disclosure or trades may subject
both the employee and the Firm to substantial legal penalties under the '34 Act.
No employee of the Firm shall make unlawful use of inside information
concerning the Firm's parent company, United Asset Management Corporation
("UAM"), which is a publicly-held company.
B. Procedures for Avoiding Insider Trading.
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An employee who comes to possess or believes that he or she may have come
to possess inside information concerning any publicly-held company the
securities of which the employee or the Firm is considering trading shall confer
about such information with the Compliance Officer, who shall determine whether
use of such information would violate the '34 Act. While the Compliance Officer
is deliberating, the employee shall not trade the securities in question on
behalf of the employee or anyone else, including clients of the Firm, nor shall
the employee communicate the information to others. If the Compliance Officer
determines that use of the information would be unlawful, such Officer shall
notify all employees of the Firm that they are prohibited from disclosing to
other persons ("tippees") inside information about the issuer in question and
from trading in the securities in question in "personal securities transactions"
or for the accounts of clients (notwithstanding the inclusion of such securities
on any "recommended to buy" or "recommended to sell" lists compiled by the Firm)
until further notice, and shall take appropriate measures to maintain the
confidentiality of the information, for example by placing any written materials
containing the inside information in a confidential file under the Compliance
Officer's control.
Following receipt of the notice prohibiting certain trades and until
receipt of further notice from the Compliance Officer, every employee shall
refrain from disclosing such information to tippees and from trading the
securities in question in "personal securities transactions" or for the accounts
of clients.
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/1/ That is, information which has not been disclosed generally to the
marketplace, the disclosure of which is likely to affect the market value
of the securities in question or is likely to be considered important by
reasonable investors.
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C. Violations
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Whether a violation of this Section II has occurred shall be determined by
the Firm in the reasonable exercise of its judgment, whether or not any civil or
criminal procedure has been instituted by any person.
Federal laws do not explicitly define what constitutes unlawful use of
inside information. Many cases have been decided under these laws, however, and
a summary of their rulings is attached to this code as Attachment C. Employees
should review the attachment whenever they receive what may be inside
information, and they should confer with the Compliance Officer before trading
securities while in the possession of such information.
III. Other Conflicts of Interest.
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Employees should also be aware that areas in addition to personal
securities transactions or use of inside information may involve conflicts of
interest. The following should be regarded as examples of situations involving
real or potential conflicts rather than as a complete list of situations to
avoid.
. Information acquired in connection with employment by our organization
may not be used in any way which might be contrary to or in competition
with the interests of clients.
. Information regarding actual or contemplated investment decisions,
research priorities, or client interests should not be disclosed to
persons outside our organization.
. All outside relationships such as directorships, trusteeships or
memberships in investment organizations (e.g., an investment club)
other than directorships or trusteeships of non-profit organizations,
which are not clients of the Firm should be discussed with the
Compliance Officer prior to acceptance of any such position.
No advisory representative shall advise clients to purchase, hold or sell
UAM stock or other securities. No advisory representative having discretionary
authority over clients funds shall exercise such discretion to invest such funds
in UAM stock or other securities, although an advisory representative may
implement a Client's exercise of its own discretion to trade in UAM securities.
IV. Other Transactions.
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No employee of the Firm shall participate on behalf of the Firm, or any
client of the Firm, or on such employees own behalf in any of the following
transactions:
(i) Use of the Firms funds for political purposes;
(ii) Payment or receipt of bribes, kickbacks or other amounts with any
understanding that part or all of such amount will be refunded or
delivered to a third party in violation of any applicable law;
(iii) Payment to governmental officials or employees other than in the
ordinary course of business for legal purposes such as payment of
taxes;
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(iv) Use of the funds or assets of the Firm or any subsidiary of the Firm
for any other unlawful or improper purpose; and
(v) Use of any device, scheme, artifice, or practice which operates or is
intended to operate as a fraud or deceit upon the Firm or any client
of the Firm, and in particular with respect to any security which has
been held by or considered for purchase by the Firm within the last 15
days.
Whether a violation of any of these rights has occurred shall be determined
by the Firm in the reasonable exercise of its judgment, whether or not any civil
or criminal procedure has been instituted by any person.
V. Background Information
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The SEC registration form for investment advisers requires the reporting,
under oath, of past disciplinary actions taken against all "advisory
affiliates." The Investment Advisers Act requires similar disclosure to clients
of the Firm. The term "advisory affiliate" includes directors and chief officers
of an adviser; individuals who have the power to direct or cause the direction
of the management or policies of a company; and all current employees except
those performing only clerical, administrative, support or similar functions.
Many advisory affiliates must also provide biographical information which must
be reported to the SEC.
All advisory affiliates of the Firm are required, as a condition of their
employment, to provide full information to the Firm as to all relevant past
disciplinary actions taken against them, and, if necessary, to provide full
biographical information. If any of the information previously provided becomes
inaccurate or needs to be updated to make it accurate, it shall be your
obligation to bring this to the attention of Compliance Officer.
The Firm can provide you with questionnaires and forms covering the
disclosures required by you, if necessary, for your review.
VI. Review of Reports and Oversight of the Code of Ethics
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The Compliance Officer shall review all reports filed by employees under
this Code of Ethics, and shall compare such individual reports with reports of
transactions entered into by the Firm, and with recommendations made and
securities contemplated for purchase by the Firm, on behalf of clients. The
Compliance Officer shall report to the Board of Directors promptly following the
receipt of any report which indicates that an advisory representative entered
into a personal securities transaction which violated the prohibitions contained
in Section I of this Code of Ethics or any report which indicates that any
person violated the prohibitions contained in Section II concerning inside
information. The Compliance Officer shall also report to the Board of Directors
any apparent violations of the reporting requirement, any transaction not
required to be reported but which the Compliance Officer nevertheless believes
to be a violation of this Code of Ethics, and any other act or practice which
the Compliance Officer believes to be a violation of this Code of Ethics.
The Board shall consider reports made to it hereunder and upon discovering
that a violation of this Code has occurred, the Board may impose such sanctions
as it deems appropriate including, among other things, a letter of sanction or
suspension or termination of the employment of the violator. In addition, the
Board shall review the operation of these policies at least once a year.
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Attachment B
Compliance Officer
The Firm has designated Gloria Flinn to serve as its Compliance Officer
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until further notice.
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Attachment C
Inside Information
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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 actual "insider" with respect to
the issuer) or to communicate material nonpublic information to others. 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 elements of insider trading and the penalties for such unlawful conduct
are discussed below.
1. Who is an Insider?
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The concept of "insider" is broad. It includes officers and directors and
may include other employees of an issuer of securities. In addition, a person
can be a "temporary insider" if he or she enters into a special confidential
relationship in the conduct of an issuer's affairs and as a result is given
access to information solely for the issuer's purposes. A temporary insider
can include, among others, a company's attorneys, accountants, consultants,
bank lending officers, and the employees of such organizations. According to
the Supreme Court, the issuer must expect the outsider to keep the disclosed
nonpublic information confidential and the relationship must at least imply
such a duty before the outsider will be considered an insider.
2. What is Material Information?
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Trading while in possession of 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 about an issuer that
may be material includes, but is not limited to: dividend changes, earnings
estimates, determinations of actual earnings, changes in previously released
earnings estimates, significant merger or acquisition proposals or agreements,
major litigation, liquidity problems, and extraordinary management developments.
Material information does not have to emanate from an issuer. For example,
in what is known as the Carpenter case, decided in 1987, the Supreme Court
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considered as material certain information about the contents of a forthcoming
column in the Wall Street Journal that was expected to affect the market price
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of securities. In that case, a reporter was found criminally liable for
disclosing to others the dates that reports on various companies would appear in
the Journal and whether those reports would be favorable or not.
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3. What is Nonpublic Information?
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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
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Wall Street Journal or other publications or general circulation would be
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considers public.
4. Penalties for Insider Trading
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Penalties for trading on or communicating material nonpublic information
are severe, both for individuals involved in such unlawful conduct and their
employers. A person can be subject to some or all of the penalties below even if
he or she does not personally benefit from the violation. Penalties include:
. civil injunctions
. treble damages
. disgorgement of profits
. jail sentences
. fines for the person who committed the violation of up to three times
the profit gained or loss avoided, whether or not the person actually
benefited, and
. fines for the employer or other controlling person of up to the greater
of $1,000,000 or three times the amount of the profit gained or loss
avoided.
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Attachment D
Acknowledgement
The undersigned hereby acknowledges receipt of the Firm's Code of Ethics and
certifies that the undersigned has read the same and agrees to abide by it. The
undersigned hereby certifies that he or she has never been found civilly liable
for or criminally guilty of insider trading and that no legal proceedings
alleging that the undersigned has violated the law on insider trading are now
pending or, to the knowledge of the undersigned, threatened by any person or
authority. The undersigned undertakes to give the Firm prompt notice of any such
proceedings which may be filed or threatened in the future.
Date: _______________________________________
Signature: ____________________________________
Print Name: ___________________________________
