MAS FUNDS
(THE "FUND")
AND
MILLER ANDERSON & SHERRERD, LLP
("MAS")
AND
MAS FUND DISTRIBUTION, INC.
("MASDI")
CODE OF ETHICS
--------------
1. Purposes
--------
This Code of Ethics has been adopted by the Fund, MAS and MASDI, the
principal underwriter of the Funds, in accordance with Rule 17j-1 under the
Investment Company Act of 1940, as amended (the "Act"). Rule 17j-1 under the Act
generally proscribes fraudulent or manipulative practices with respect to
purchases or sales of securities held or to be acquired by investment companies,
if effected by affiliated persons (as defined under the Act) of such companies.
Specifically, Rule 17j-1 provides that it is unlawful for any affiliated person
of or principal underwriter for a registered investment company, or any
affiliated person of an investment adviser of or principal underwriter for a
registered investment company, in connection with the purchase or sale, directly
or indirectly, by such person of a security held or to be acquired by such
registered investment company:
(a) To employ any device, scheme or artifice to defraud such registered
investment company;
(b) To make to such registered investment company any untrue statement of
a material fact or omit to state to such registered investment company
a material fact necessary in order to make the statements made, in
light of the circumstances under which they are made, not misleading;
(c) To engage in any act, practice, or course of business which operates
or would operate as a fraud or deceit upon any such registered
investment company; or
(d) To engage in any manipulative practice with respect to such registered
investment company.
While Rule 17j-1 is designed to protect only the interests of the Fund and
its stockholders, MAS applies the policies and procedures described in this Code
of Ethics to all employees of MAS to protect the interests of its non-Fund
clients as well (hereinafter, where appropriate, non-Fund clients of MAS are
referred to as "Advisory Clients" and any reference to an Advisory Client(s)
relates only to the activities of employees of MAS).
The purpose of this Code of Ethics is to (i) ensure that Access Persons
conduct their personal securities transactions in a manner which does not (a)
create an actual or potential conflict of interest with the Fund's or an
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Advisory Client's portfolio transactions, (b) place their personal interests
before the interests of the Fund and its stockholders or an Advisory Client or
(c) take unfair advantage of their relationship to the Fund or an Advisory
Client and (ii) provide policies and procedures consistent with the Act and Rule
17j-1 designed to give effect to the general prohibitions set forth in Rule
17j-l.
Among other things, the procedures set forth in this Code of Ethics require
that all (i) Access Persons review this Code of Ethics at least annually, (ii)
Access Persons, unless excepted by Sections 8(d) or (e) of this Code of Ethics,
report transactions in Covered Securities, (iii) Access Persons refrain from
engaging in certain transactions, and (iv) employees of MAS pre-clear with the
appropriate trading desk any transactions in Covered Securities.
2. Definitions
-----------
(a) "Access Person" means any director, officer or Advisory Person of the
Fund or of MAS, and any director or officer of MASDI, who, in the
ordinary course of business, makes, participates in or obtains
information regarding the purchase or sale of Covered Securities by
the Fund.
(b) "Advisory Person" means any employee of the Fund, or of MAS (or of any
company in a control relationship to the Fund or MAS), 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 the Fund or an Advisory Client, or whose
functions relate to the making of any recommendations with respect to
such purchases or sales.
(c) "Beneficial ownership" shall be interpreted in the same manner as it
would be in determining whether a person is subject to the provisions
of Section 16 of the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder, except that the determination of
direct or indirect beneficial ownership shall apply to all securities
which an Access Person has or acquires.
(d) "Control" shall have the same meaning as that set forth in Section
2(a)(9) of the Act.
(e) "Compliance Department" means the MAS Compliance Department.
(f) "Covered Security" means a security as defined in Section 2(a)(36) of
the Act, except that it does not include: (i) shares of registered
open-end investment companies, (ii) direct obligations of the
Government of the United States, and (iii) bankers' acceptances, bank
certificates of deposit, commercial paper, and high quality short-term
debt instruments, including repurchase agreements.
(g) "Disinterested Director" means a director of the Fund who is not an
"interested person" of the Fund within the meaning of Section 2(a)(19)
of the Act.
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(h) "Purchase or sale (or sell)" with respect to a Covered Security means
any acquisition or disposition of a direct or indirect beneficial
interest in a Covered Security, including, inter alia, the writing or
buying of an option to purchase or sell a Covered Security.
(i) "Security held or to be acquired" means (i) any Covered Security
which, within the most recent 15 days, is or has been held by the Fund
or an Advisory Client, or is being or has been considered by the Fund
or an Advisory Client or MAS for purchase by the Fund or an Advisory
Client; and (ii) any option to purchase or sell, and any security
convertible into or exchangeable for, a Covered Security described in
this paragraph.
3. Prohibited Transactions
-----------------------
(a) No Access Person or employee of MAS shall purchase or sell any Covered
Security which to his or her actual knowledge at the time of such
purchase or sale:
(i) is being considered for purchase or sale by the Fund or an
Advisory Client; or
(ii) is being purchased or sold by the Fund or an Advisory Client.
(b) No employee of MAS shall purchase or sell a Covered Security while
there is a pending "buy" or "sell" order in the same or a related
security for a Fund or an Advisory Client until that order is executed
or withdrawn.
(c) No Advisory Person shall purchase or sell a Covered Security within
seven calendar days before or after any portfolio(s) of the Fund over
which such Advisory Person exercises investment discretion or an
Advisory Client over which the Advisory Person exercises investment
discretion purchases or sells the same or a related Covered Security.
Any profits realized or unrealized by the Advisory Person on a
prohibited purchase or sale within the proscribed period shall be
disgorged to a charity.
(d) No employee of MAS shall profit from the purchase and sale or sale and
purchase of the same (or equivalent) Covered Security within 60
calendar days. Any profits realized on such purchase or sale shall be
disgorged to a charity.
(e) No Access Person or employee of MAS shall purchase any securities in
an initial public offering.
(f) No employee of MAS shall purchase privately-placed securities unless
such purchase is pre-approved by the Compliance Department. Any such
person who has previously purchased privately-placed securities must
disclose such purchases to the Compliance Department before such
person participates in a Fund's or an Advisory Client's subsequent
consideration of an investment in the securities of the same or a
related issuer. Upon such disclosure, the Compliance Department
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shall appoint another person with no personal interest in the issuer,
to conduct an independent review of such Fund's or such Advisory
Client's decision to purchase securities of the same or a related
issuer.
(g) No Access Person or employee of MAS shall recommend the purchase or
sale of any Covered Securities to a Fund or to an Advisory Client
without having disclosed to the Compliance Department his or her
interest, if any, in such Covered Securities or the issuer thereof,
including without limitation (i) his or her direct or indirect
beneficial ownership of any securities of such issuer, (ii) any
contemplated purchase or sale by such person of such securities, (iii)
any position with such issuer or its affiliates, and (iv) any present
or proposed business relationship between such issuer or its
affiliates, on the one hand, and such person or any party in which
such person has a significant interest, on the other; provided,
however, that in the event the interest of such person in such
securities or the issuer thereof is not material to his or her
personal net worth and any contemplated purchase or sale by such
person in such securities cannot reasonably be expected to have a
material adverse effect on any such purchase or sale by a Fund or an
Advisory Client or on the market for the securities generally, such
person shall not be required to disclose his or her interest in the
securities or the issuer thereof in connection with any such
recommendation.
(h) No Access Person or employee of MAS shall reveal to any other person
(except in the normal course of his or her duties on behalf of a Fund
or an Advisory Client) any information regarding the purchase or sale
of any Covered Security by a Fund or an Advisory Client or
consideration of the purchase or sale by a Fund or an Advisory Client
of any such Covered Security.
4. Pre-Clearance of Covered Securities Transactions and Permitted Brokerage
---------------------------------------------------------------------------
Accounts
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No employee of MAS shall purchase or sell Covered Securities without prior
written authorization from the appropriate trading desk. Pre-clearance of a
purchase or sale shall be valid and in effect only for the business day in which
such pre-clearance is given; provided, however, that the approval of an
unexecuted purchase or sale is deemed to be revoked when the employee becomes
aware of facts or circumstances that would have resulted in the denial of
approval of the approved purchase or sale were such facts or circumstances made
known to the MAS trading desk at the time the proposed purchase or sale was
originally presented for approval. MAS requires all of its employees to maintain
their personal brokerage accounts at a broker/dealer affiliated with Morgan
Stanley Dean Witter (hereinafter, a "Morgan Stanley Account"). Outside personal
brokerage accounts are permitted only under very limited circumstances and only
with express written approval by the Compliance Department. The Compliance
Department has implemented procedures reasonably designed to monitor purchases
and sales effected pursuant to the aforementioned pre-clearance procedures.
5. Exempted Transactions
---------------------
(a) The prohibitions of Section 3 and Section 4 of this Code of Ethics
shall not apply to:
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(i) Purchases or sales effected in any account over which an Access
Person or an employee of MAS has no direct or indirect influence
or control;
(ii) Purchases or sales which are non-volitional;
(iii)Purchases which are part of an automatic dividend reinvestment
plan; or
(iv) Purchases effected upon the exercise of rights issued by an
issuer pro rata to all holders of a class of its securities and
sales of such rights so acquired, but only to the extent such
rights were acquired from such issuer.
(b) Notwithstanding the prohibitions of Sections 3(a), (b) and (c) of this
Code of Ethics, the Compliance Department or MAS trading desk, as
appropriate, may approve a purchase or sale of a Covered Security by
employees of MAS which would appear to be in contravention of the
prohibitions in Sections 3(a), (b) and (c) if it is determined that
(i) the facts and circumstances applicable at the time of such
purchase or sale do not conflict with the interests of the Fund or an
Advisory Client, or (ii) such purchase or sale is only remotely
potentially harmful to the Fund or an Advisory Client because it would
be very unlikely to affect a highly institutional market, or because
it is clearly not related economically to the securities to be
purchased, sold or held by the Fund or Advisory Client, and (iii) the
spirit and intent of this Code of Ethics is met.
6. Restrictions on Receiving Gifts
-------------------------------
No employee of MAS shall receive any gift or other consideration in
merchandise, service or otherwise of more than de minimis value from any person,
firm, corporation, association or other entity that does business with or on
behalf of the Fund or an Advisory Client.
7. Service as a Director
---------------------
No employee of MAS shall serve on the board of directors of a
publicly-traded company without prior written authorization from the Compliance
Department. Approval will be based upon a determination that the board service
would not conflict with the interests of the Fund and its stockholders or an
Advisory Client.
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8. Reporting
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(a) Unless excepted by Section 8(d) or (e) of this Code of Ethics, each
Access Person must disclose all personal holdings in Covered
Securities to the Compliance Department for its review no later than
10 days after becoming an Access Person and annually thereafter. The
initial and annual holdings reports must contain the following
information:
(i) The title, number of shares and principal amount of each Covered
Security in which the Access Person has any direct or indirect
beneficial ownership;
(ii) The name of any broker, dealer or bank with or through whom the
Access Person maintained an account in which any securities were
held for the direct or indirect benefit of the Access Person; and
(iii)The date the report was submitted to the Compliance Department
by the Access Person.
(b) Unless excepted by Section 8(d) or (e) of this Code of Ethics, each
Access Person and each employee of MAS must report to the Compliance
Department for its review within 10 days of the end of a calendar
quarter the information described below with respect to transactions
in Covered Securities in which such person has, or by reason of such
transactions acquires any direct or indirect beneficial interest:
(i) 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;
(ii) The nature of the transaction (i.e., purchase, sale or any other
type of acquisition or disposition);
(iii)The price of the Covered Security at which the purchase or sale
was effected;
(iv) The name of the broker, dealer or bank with or through which the
purchase or sale was effected; and
(v) The date the report was submitted to the Compliance Department by
such person.
(c) Unless excepted by Section 8(d) or (e) of this Code of Ethics, each
Access Person and each employee of MAS must report to the Compliance
Department for its review within 10 days of the end of a calendar
quarter the information described below with respect to any account
established by such person in which any securities were held during
the quarter for the direct or indirect benefit of such person:
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(i) The name of the broker, dealer or bank with whom the account was
established;
(ii) The date the account was established; and
(iii)The date the report was submitted to the Compliance Department
by such person.
(d) An Access Person will not be required to make any reports described in
Sections 8(a), (b) or (c) above for any account over which the Access
Person has no direct or indirect influence or control. An Access
Person or an employee of MAS will not be required to make the annual
holdings report under Section 8(a) and the quarterly transactions
report under Section 8(b) with respect to purchases or sales effected
for, and Covered Securities held in: (i) a Morgan Stanley Account,
(ii) an account in which the Covered Securities were purchased
pursuant to a dividend reinvestment plan (up to an amount equal to the
cash value of a regularly declared dividend, but not in excess of this
amount), or (iii) an account for which the Compliance Department
receives duplicate trade confirmations and quarterly statements.
(e) A Disinterested Director of the Fund, who would be required to make a
report solely by reason of being a Fund director, is not required to
make initial and annual holdings reports. Additionally, such
Disinterested Director need only make a quarterly transactions report
for a purchase or sale of Covered Securities if he or she, at the time
of that transaction, knew or, in the ordinary course of fulfilling his
or her official duties as a Disinterested Director of the Fund, should
have known that, during the 15-day period immediately preceding or
following the date of the Covered Securities transaction by him or
her, such Covered Security is or was purchased or sold by the Fund or
was being considered for purchase or sale by the Fund.
(f) The reports described in Sections 8(a), (b) and (c) above may contain
a statement that the reports shall not be construed as an admission by
the person making such reports that he or she has any direct or
indirect beneficial ownership in the Covered Securities to which the
reports relate.
9. Annual Certifications
---------------------
All Access Persons and employees of MAS must certify annually that they
have read, understood and complied with the requirements of this Code of Ethics
and recognize that they are subject to this Code of Ethics by signing the
certification attached hereto as Exhibit A.
10. Board Review
------------
The management of the Fund and representatives or officers of MAS and, with
respect to the Fund, MASDI, shall each provide the Fund's Board of Directors, at
least annually, with the following:
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(a) a summary of existing procedures concerning personal investing and any
changes in the procedures made during the past year;
(b) a description of any issues arising under this Code of Ethics or
procedures since the last such report, including, but not limited to,
information about material violations of this Code of Ethics or
procedures and sanctions imposed in response to material violations;
(c) any recommended changes in the existing restrictions or procedures
based upon the Fund's or MAS's experience under this Code of Ethics,
evolving industry practices or developments in applicable laws and
regulations; and
(d) a certification (attached hereto as Exhibits B and C, as appropriate)
that each has adopted procedures reasonably necessary to prevent its
Access Persons from violating this Code of Ethics.
11. Sanctions
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Upon discovering a violation of this Code of Ethics, the Board of Directors
of the Fund or the Executive Committee of MAS, as the case may be, may impose
such sanctions as it deems appropriate.
12. Recordkeeping Requirements
--------------------------
The management of the Fund and representatives or officers of MAS and, with
respect to the Funds, MASDI, each shall maintain, as appropriate, the following
records for a period of five years, the first two years in an easily accessible
place, and shall make these records available to the Securities and Exchange
Commission or any representative of such during an examination of the Fund or of
MAS:
(a) a copy of this Code of Ethics or any other Code of Ethics which was in
effect at any time within the previous five years;
(b) a record of any violation of this Code of Ethics during the previous
five years, and of any action taken as a result of the violation;
(c) a copy of each report required by Section 8 of this Code of Ethics,
including any information provided in lieu of each such report;
(d) a record of all persons, currently or within the past five years, who
are or were subject to this Code of Ethics and who are or were
required to make reports under Section 8 of this Code of Ethics;
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(e) a record of all persons, currently or within the past five years, who
are or were responsible for reviewing the reports required under
Section 8 of this Code of Ethics; and
(f) a record of any decision, and the reasons supporting the decision, to
approve the acquisition of securities described in Sections 3(e) and
(f) of this Code of Ethics.
The effective date of this Code of Ethics is February 24, 2000.
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EXHIBIT A
MAS FUNDS
(THE "FUND")
AND
MILLER ANDERSON & SHERRERD, LLP
("MAS")
AND
MAS FUND DISTRIBUTION, INC.
("MASDI")
CODE OF ETHICS
--------------
ANNUAL CERTIFICATION
--------------------
I hereby certify that I have read and understand the Code of Ethics (the
"Code") which has been adopted by the Fund, MAS and MASDI and recognize that it
applies to me and agree to comply in all respects with the policies and
procedures described therein. Furthermore, I hereby certify that I have complied
with the requirements of the Code in effect, as amended, for the year ended
December 31, ____, and that all of my reportable transactions in Covered
Securities were executed and reflected accurately in a Morgan Stanley Account
(as defined in the Code) or that I have attached a report that satisfies the
annual holdings disclosure requirement as described in Section 8(a) of the Code.
Date: _______________, ______ Name: ______________________________
Signature:__________________________
<PAGE>
EXHIBIT B
MILLER ANDERSON & SHERRERD, LLP ("MAS")
ANNUAL CERTIFICATION UNDER RULE 17J-1
OF THE INVESTMENT COMPANY ACT OF 1940
-------------------------------------
Pursuant to Rule 17j-1 under the Investment Company Act of 1940, as amended
(the "1940 Act") and pursuant to the Code of Ethics for MAS, MAS Funds and MAS
Fund Distribution, Inc., MAS hereby certifies to the Board of Trustees of MAS
Funds that MAS has adopted procedures reasonably necessary to prevent Access
Persons (as defined in the Code of Ethics) from violating the Code of Ethics.
Date:_________________ By: ______________________________
Name: Paul A. Frick
Title: Compliance Officer
<PAGE>
EXHIBIT C
MAS FUND DISTRIBUTION, INC.
("MASDI")
ANNUAL CERTIFICATION UNDER RULE 17J-1
OF THE INVESTMENT COMPANY ACT OF 1940
-------------------------------------
Pursuant to Rule 17j-1 under the Investment Company Act of 1940, as amended
(the "1940 Act") and pursuant to the Code of Ethics for MASDI, MAS Funds and
Miller Anderson & Sherrerd, LLP, MASDI hereby certifies to the Board of Trustees
of MAS Funds that MASDI has adopted procedures reasonably necessary to prevent
Access Persons (as defined in the Code of Ethics) from violating the Code of
Ethics.
Date:_________________ By: ______________________________
Name: Paul A. Frick
Title: Compliance Officer
