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Exhibit 23(p)(10)
CODE OF ETHICS
INCLUDING A STATEMENT OF POLICIES AND PROCEDURES REGARDING
CONFIDENTIAL INFORMATION AND CONFLICTS OF INTEREST
For Access Persons of
ICAP FUNDS, INC.
and
INSTITUTIONAL CAPITAL CORPORATION
Restated Effective as of September 30, 1998 and amended March 1, 2000
I. DEFINITIONS
A. "Act" means the Investment Company Act of 1940, as amended.
B. "Advisers Act" means the Investment Advisers Act of 1940, as amended.
C. "Fund" means ICAP Funds, Inc.
D. "ICAP" means Institutional Capital Corporation.
E. "Access person" means ICAP, any director, officer or advisory person
of ICAP or any director, officer or advisory person of the Fund.
F. "Candidate List" includes those securities under active consideration
for purchase by ICAP for the Fund or any client.
G. "Advisory person" means: (i) any employee of the Fund or of ICAP; and
(ii) any natural person in a control relationship to the Fund or ICAP
who obtains information concerning recommendations made to the Fund
with regard to the purchase or sale of a security on ICAP's Candidate
List.
H. A security is "being considered for purchase or sale" when: (i) a
recommendation to purchase or sell a security has been made and
communicated; (ii) the security appears on ICAP's Candidate List; or
(iii) with respect to the person making the recommendation, when such
person seriously considers making such a recommendation.
I. "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 promulgated thereunder, except that the
determination of direct or indirect beneficial ownership shall apply
to all securities which an access person has or acquires. As a
general matter, "beneficial ownership" will be attributed to an access
person in all instances where the person (i) possesses the ability to
purchase or sell the security (or the ability to direct the
disposition of the security); (ii) possesses the voting power
(including the power to vote or to direct
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the voting) over such security; or (iii) receives any benefits
substantially equivalent to those of ownership.
Although the following is not an exhaustive list, a person generally
would be regarded to be the beneficial owner of the following:
(i) securities held in the person's own name;
(ii) securities held with another in joint tenancy, as tenants
in common, or in other joint ownership arrangements;
(iii) securities held by a bank or broker as a nominee or
custodian on such persons' behalf or pledged as
collateral for a loan;
(iv) securities held by members of the person's immediate
family sharing the same household if the person is a
custodian, guardian or otherwise has controlling
influence over the purchase, sale, or voting of such
securities ("immediate family" means any child,
stepchild, grandchild, parent, stepparent, grandparent,
spouse, sibling, mother-in-law, father-in-law, son-in-
law, daughter-in-law, brother-in-law or sister-in-law,
including adoptive relationships);
(v) securities held by a relative not residing in the
person's home if the person is a custodian, guardian, or
otherwise has controlling influence over the purchase,
sale, or voting of such securities;
(vi) securities held by a trust for which the person serves as
a trustee and in which the person has a pecuniary
interest (including pecuniary interests by virtue of
performance fees and by virtue of holdings by the
person's immediate family);
(vii) securities held by a trust in which the person is a
beneficiary and has or shares the power to make purchase
or sale decisions;
(viii) securities held by a general partnership or limited
partnership in which the person is a general partner; and
(ix) securities owned by a corporation which is directly or
indirectly controlled by, or under common control with,
such person.
Any uncertainty as to whether an access person beneficially owns a
security should be brought to the attention of ICAP's Compliance
Officer or the Assistant Compliance Officer. Such questions will be
resolved in accordance with, and this definition is subject to, the
definition of "beneficial owner" found in Rules 16a-1(a)(2) and (5)
promulgated under the Securities Exchange Act of 1934.
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J. "Control" shall be interpreted as it would be in Section 2(a)(9) of
the Act. As a general matter, "control" means the power to exercise a
controlling influence. The "power to exercise a controlling influence"
is intended to include situations where there is less than absolute
and complete domination and includes not only the active exercise of
power, but also the latent existence of power. Anyone who beneficially
owns, either directly or through one or more controlled entities, more
than 25% of the voting securities of an entity shall be presumed to
control such entity.
K. "Disinterested director" means (i) 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 and (ii) a director of ICAP who is not an employee
of ICAP.
L. "Limited offering" means an offering of securities to a limited number
of purchasers. Such offerings are ordinarily made pursuant to a
private offering memorandum or similar document, although they need
not be, and are exempt from the registration requirements of the
federal securities laws.
M. "Purchase or sale of a security" includes, among other things, the
writing of an option to purchase or sell a security.
N. "Security" shall have the meaning set forth in Section 2(a)(36) of the
Act and shall include: common stocks, preferred stocks, debt
securities; options on and warrants to purchase common stocks,
preferred stocks or debt securities; shares of closed-end investment
companies, futures, commodities and Related Securities. "Related
Securities" are instruments and securities that are related to, but
not the same as, a security. For example, a Related Security may be
convertible into a security, or give its holder the right to purchase
the security. The term "Security" also includes private investments,
including oil and gas ventures, real estate syndicates and other
investments which are not publicly traded. It shall not include shares
of registered open-end investment companies, direct obligations of the
Government of the United States, high quality short-term debt
instruments, bankers' acceptances, bank certificates of deposit,
commercial paper, and such other money market instruments as
designated by the Fund's Board of Directors.
II. FIDUCIARY PRINCIPLES
Incorporated within this Code of Ethics is a Statement of Policies and
Procedures Regarding Confidential Information and Conflicts of Interest
(the "Statement"). Failure to observe the policies and procedures outlined
in the Statement and/or the Code could result in the imposition of
sanctions (including dismissal) and could constitute a criminal act in
violation of, among other, federal and/or state securities laws.
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A. The Statement
ICAP seeks to foster a reputation for integrity and professionalism.
That reputation is a vital business asset. The confidence and trust
placed in ICAP by our clients is something we value and must endeavor
to protect. Any breach of that confidence or trust could have a
disastrous, long-term effect on ICAP's client relationships.
In the course of their employment with ICAP, employees will have
access to confidential information concerning ICAP, its clients and
various other matters. The proper treatment of such information is a
key aspect of preserving ICAP's integrity. Accordingly, employees
shall not disclose, directly or indirectly, confidential information
to anyone other than employees and agents of ICAP who need such
information to discharge their duties.
As far as investments and investment opportunities are concerned,
employees should remember that their first obligation is to the
client. To meet this obligation, ICAP must ensure that all advice
rendered by employees is free from any conflict of interest.
Therefore, no employee shall engage in any activity which may in any
way jeopardize his or her ability to render impartial and
disinterested investment counseling. This includes scrupulously
avoiding any affiliation which may influence or even appear to
influence the employee's ability to treat each client in an unbiased
manner.
ICAP's business depends, in part, on investor confidence in the
fairness and integrity of the securities markets. The problem of
insider trading poses a serious threat to that confidence. While
there is no precise statutory definition of insider trading, the term
is generally understood to mean participating in a decision to buy,
sell or tender securities while in possession of material nonpublic
information. Material nonpublic information is any information (i)
that is not generally available and (ii) which would be important to
an investor in making a decision to buy, sell, or tender a security.
The prohibition against trading on material nonpublic information
extends to any situation where an employee participates in a decision
to buy, sell or tender securities based on material nonpublic
information that they acquire from an issuer or its representatives
prior to the information being made available to the public. An
employee participates in a decision to buy, sell or tender securities
if he or she influences or controls the decision. Thus, this policy
would apply to transactions in which an employee exercises investment
discretion or influence even though he or she does not own the
securities (such as accounts for which the employee serves as an
advisor or fiduciary). Specifically, the policy against insider
trading would prohibit ICAP employees from "tipping" clients, friends,
family or third parties based on their knowledge of material nonpublic
information. As used herein, "Trading" includes any securities
transactions in
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which an employee participated, exerted influence, "tipped" or was
tipped by others. Employees are absolutely prohibited from engaging in
any activities that would fall within the above description of insider
trading.
In the event an employee receives material nonpublic information
regarding an issuer, the employee must immediately notify the
Compliance Officer or the Assistant Compliance Officer who will place
the issuer's securities on a Restricted List. Employees are
prohibited from trading in the securities of issuers placed on the
Restricted List.
B. General Fiduciary Principles
In addition to the specific principles enunciated in this Code and the
Statement, all access persons shall be governed by the following
general fiduciary principles:
(i) The duty at all times to place the interests of Fund
shareholders and clients of ICAP above all others. Access
persons must scrupulously avoid serving their own personal
interests ahead of the interests of ICAP's clients.
(ii) The requirement that all personal securities transactions be
conducted consistent with the Code and in such a manner as
to avoid any actual or potential conflict of interest or any
abuse of an individual's position of trust and
responsibility; and
(iii) The fundamental standard that no access person should take
inappropriate advantage of their position with the Fund or
ICAP.
(iv) Information as to what securities ICAP has recommended or
will recommend is to be held in strictest confidence.
III. POLICY ON SECURITY OWNERSHIP
In addition to the prohibitions contained in Section IV below, it is the
general policy of the Fund and ICAP that no access person shall have any
direct or indirect beneficial ownership of any security which is also owned
by the Fund or ICAP's clients. Upon the discovery by ICAP or any access
person that an access person has a direct or indirect beneficial ownership
of a security which is also owned by the Fund or ICAP's clients, such
access person shall promptly report such fact to ICAP's Compliance Officer
or Assistant Compliance Officer, and may be required to divest himself or
herself of such ownership if the Compliance Officer or Assistant Compliance
Officer determines that any significant conflict of interest or potential
conflict of interest exists as a result of such ownership. This policy
shall not apply to disinterested directors.
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IV. PROHIBITED ACTIVITIES - DISINTERESTED DIRECTORS
No disinterested director shall purchase or sell a security if such
disinterested director knew or, in the ordinary course fulfilling his or her
official duties as a director, should have known that, during the 15-day
period immediately before or after the date of the transaction by the
disinterested director, such security was: (i) purchased or sold by the Fund
or ICAP on behalf of its clients; (ii) being considered by the Fund or ICAP
on behalf of its clients for purchase or sale; or (iii) on ICAP's Candidate
List.
V. PROHIBITED ACTIVITIES - ALL OTHERS
A. No access person shall purchase or sell, directly or indirectly, any
security in which he or she has, or by reason of such transaction
acquires, any direct or indirect beneficial ownership if such security
is owned by the Fund, any client of ICAP, is on ICAP's Candidate List,
or is otherwise being considered for purchase by ICAP on behalf of its
clients. ICAP employees are responsible for ascertaining the
securities listed from time to time on the Candidate List which, if
the employee does not have a copy, is always available in the trading
room.
B. An access person may sell a previously held position in a security
which is being considered for purchase or is on the Candidate List
until ICAP purchases such security for a client or the Fund. At the
time ICAP purchases such securities and so long as ICAP holds such
securities for a client or the Fund, the access person must refrain
from selling such securities until all positions in such issuer's
securities are liquidated, except with the prior written approval of
the Compliance Officer or the Assistant Compliance Officer.
C. No access person shall acquire any securities in an initial public
offering.
D. No access person shall engage in (i) any short sale transaction, or
(ii) any transaction in an option, future or an option on a future in
which ICAP actively deals except with the prior written approval of
the Compliance Officer or the Assistant Compliance Officer.
E. No access person shall acquire securities in a Limited offering,
without prior approval from ICAP's Compliance Officer or Assistant
Compliance Officer. In determining whether approval should be
granted, the Compliance Officer or Assistant Compliance Officer should
consider:
(i) whether the investment opportunity should be reserved for the
Fund or clients of ICAP; and
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(ii) whether the opportunity is being offered to an individual by
virtue of his or her position with the Fund, ICAP or ICAP's
advisory relationship with any client.
ICAP's Compliance Officer must maintain a record of any decision, and
the reasons supporting the decision, to approve the acquisition by an
access person for at least five years after the end of the fiscal year
in which the approval is granted. In the event approval is granted,
the access person must disclose the investment when he or she plays a
material role in a client's or the Fund's, subsequent consideration of
an investment in the issuer. In such circumstances, the decision to
purchase securities of the issuer will be subject to an independent
review by investment personnel with no personal interest in the
issuer.
F. No access person shall receive 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 Fund or any client of ICAP. On occasion, an access
person may be offered, or may receive without notice, gifts from
clients, brokers, vendors, or other persons not affiliated with such
entities, including companies that ICAP on behalf of its clients may
be invested in or may be considering making an investment in.
Acceptance of extraordinary or extravagant gifts is not permissible.
G. No access person shall serve on the board of directors of a publicly
traded company without prior authorization from ICAP's Board of
Directors and the Fund's Board of Directors based upon a determination
that the board service would be consistent with the interests of the
Fund and clients of ICAP. In the event the board service is
authorized, access persons serving as directors must be isolated from
those making investment decisions through a "Chinese wall."
VI. EXEMPTED TRANSACTIONS
The prohibitions of Sections IV and V shall not apply to:
A. Purchases or sales effected in any account over which an access person
has no direct or indirect influence or control (e.g., a blind trust);
B. Purchases or sales of securities which are not eligible for purchase
or sale by ICAP's client accounts or the Fund;
C. Purchases or sales which are non-volitional on the part of either the
access person, the Fund or ICAP's client accounts;
D. Purchases which are part of an automatic dividend reinvestment plan;
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E. Purchases effected upon the exercise of rights issued by an issuer
pro rata to all holders of a class of its securities, to the extent
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such rights were acquired from such issuer, and sales of such rights
so acquired; and
F. Purchases or sales which receive the prior approval of ICAP's
Compliance Officer or Assistant Compliance Officer because (i) they
are only remotely potentially harmful to the Fund and ICAP's clients;
(ii) they would be very unlikely to affect a highly institutional
market; or (iii) they clearly are not related economically to
securities to be purchased, sold or held by the Fund or ICAP's
clients.
VII. REPORTING - DISINTERESTED DIRECTORS
A disinterested director shall report quarterly to Sunstone Financial
Group, Inc. ("Sunstone") or ICAP's Compliance Officer even if such
director has no securities transactions to report for the reporting
period.
Such report shall be in the form described in Section VIII(E) and may
contain the statement that the report shall not be construed as an
admission that the director has any direct or indirect beneficial
ownership in the security to which the report relates.
A disinterested director need only report a transaction in a security if
such director, knew or, in the ordinary course of fulfilling his or her
official duties as a disinterested director, should have known that,
during the 15-day period immediately before or after the date of the
transaction by the disinterested director, such security was: (i)
purchased or sold by the Fund or ICAP on behalf of its clients; (ii) being
considered by the Fund or ICAP on behalf of its clients for purchase or
sale; or (iii) on ICAP's Candidate List.
VIII. REPORTING - ALL OTHERS
A. All securities transactions in which an access person has a direct or
indirect beneficial ownership interest will be monitored by Sunstone
and ICAP's Compliance Officer. To facilitate Sunstone's monitoring,
ICAP's Compliance Officer shall inform Sunstone on a timely basis of
any changes in ICAP's Candidate List.
B. ICAP's Compliance Officer shall report his or her personal securities
transactions in accordance with this Section VIII and shall also
report such transactions directly to the Assistant Compliance Officer
who shall additionally monitor such transactions.
C. Every access person shall report to Sunstone and ICAP's Compliance
Officer the information described in Section VIII(E) with respect to
the transactions in any
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security in which such access person has, or by reason of such
transaction acquires, any direct or indirect beneficial ownership.
D. Every access person shall report quarterly to Sunstone and ICAP's
Compliance Officer even if such access person has no securities
transactions to report for the reporting period.
E. Every report required to be made by Sections VII and VIII shall be
made not later than ten (10) days after the end of the calendar
quarter in which the transaction to which the report relates and shall
contain the following information:
(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 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 security at which the transaction was
effected; and
(iv) The name of the broker, dealer or bank with or through whom the
transaction was effected.
The determination date for timely compliance is the date the report is
received by Sunstone and ICAP's Compliance Officer, which date must be
recorded on the report.
F. Any report filed pursuant to Section VIII(E) of this Code of Ethics
may contain a statement that the report shall not be construed as an
admission by the person making such report that he or she has any
direct or indirect beneficial ownership in the security to which the
report relates.
G. In addition to the above reporting requirements, every access person
shall direct his or her brokers to supply to Sunstone and ICAP's
Compliance Officer, on a timely basis, duplicate copies of all
personal securities transactions and copies of periodic statements for
all securities accounts in which such access person has a beneficial
ownership interest. Attached hereto as Appendix 1 is a form letter
that may be used to request such documents from the respective broker,
dealer, or bank. It is the responsibility of the access person to make
sure that his or her broker does in fact send ICAP and Sunstone the
duplicate confirmations and the duplicate statements. These forms,
confirmations and statements will be maintained in strictest
confidence in the respective files of ICAP and Sunstone.
H. In addition to the above reporting requirements, every access person
shall disclose to ICAP's Compliance Officer and Sunstone all personal
securities holdings
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within ten (10) days of such person's commencement of employment, such
disclosures shall be made on the form attached hereto at Appendix 2.
Shortly after becoming an access person, such person must meet with
the Compliance Officer to review the obligations imposed by the
Statement and this Code of Ethics. Each such access person shall then
sign an acknowledgment, attached hereto as Appendix 3, to affirm that
they have reviewed the Statement and this Code of Ethics.
I. In addition to the above reporting requirements, every access person
shall disclose to ICAP's Compliance Officer and Sunstone all personal
securities holdings in an annual report which reflects such person's
securities holdings as of June 30/th/. Such disclosures must be made
on the form attached hereto as Appendix 4 and received by the
Compliance Officer and Sunstone no later than July 31/st/ of each
year.
IX. COMPLIANCE WITH THE CODE OF ETHICS
A. All access persons and shall certify annually in the form attached
hereto as Appendix 5 that:
(i) They have read and understand the Code of Ethics and recognize
that they are subject thereto; and
(ii) They have complied with the requirements of the Code of Ethics
and disclosed or reported all personal securities transactions
required to be disclosed or reported pursuant to the Code.
B. Sunstone, in conjunction with ICAP's Compliance Officer and the Fund's
legal counsel, shall include a report in the Fund's Board of Directors
quarterly materials and ICAP shall include a report in its Board of
Directors quarterly materials which shall:
(i) Identify any violations during the previous quarter or state that
no violations occurred during the previous quarter; and
(ii) Identify any recommended changes in existing restrictions or
procedures based upon the Fund's experience under its Code of
Ethics, evolving industry practices, or developments in laws or
regulations.
C. The quarterly reports shall be summarized in an annual report to the
Fund's Board of Directors and shall include a certification from the
Fund and ICAP stating that the respective entity has adopted
procedures reasonably necessary to prevent its access persons from
violating this Statement and Code of Ethics.
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X. SANCTIONS
Upon discovering a violation or potential violation of this Statement or
Code of Ethics, the Compliance Officer or Assistant Compliance Officer will
conduct an inquiry into the circumstances and, if appropriate, will report
such violation or potential violation to the Board of Directors of ICAP and
the Fund. Technical compliance with the Code's procedures will not
automatically insulate from scrutiny any trades that indicate an abuse of
fiduciary duties. Each Board of Directors may impose such sanctions as it
deems appropriate, including, among other sanctions, a letter of censure or
suspension, or termination of the employment of the violator. Each Board
of Directors will be promptly informed of any serious violations of this
Code of Ethics or the Statement.
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Appendix 1
Form of Letter to Broker, Dealer or Bank
(Date)
(Broker Name and Address)
Subject: Account # __________________
Dear _______________:
Institutional Capital Corporation ("ICAP"), my employer, is a registered
investment adviser. You are requested to send duplicate confirmations of
individual transactions as well as duplicate periodic statements for the above-
referenced account to ICAP and Sunstone Financial Group, Inc. Please address
the confirmations and statements directly to:
General Counsel Compliance Officer
Sunstone Financial Group, Inc. Institutional Capital Corporation
207 E. Buffalo Street, Suite 400 225 W. Wacker Drive, Suite 2400
Milwaukee, WI 53202 Chicago, IL 60606
Your cooperation is most appreciated. If you have any questions regarding
these requests, please contact me or Mr. Donald Niemann of ICAP at (312) 424-
9100.
Sincerely,
(Name of Access Person)
cc: Mr. Donald Niemann
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Appendix 2
PERSONAL SECURITIES HOLDINGS - INITIAL
In accordance with Section VIII(H) of the Code of Ethics, please provide a
list of all securities in which you have a beneficial interest.
(1) Name of Access Person: ____________________________
(2) If different than (1), name of the person
in whose name the account is held: ____________________________
(3) Relationship of (2) to (1): ____________________________
(4) Broker at which Account is maintained: ____________________________
(5) Account Number: ____________________________
(6) Contact person at Broker and phone number: ____________________________
(7) For each account, attach the most recent account statement listing
securities in that account. If you have a beneficial interest in
securities that are not listed in an attached account statement, list them
below:
Name of Security Quantity Value Custodian
---------------- -------- ----- ---------
1. _____________________________________________________________________________
2. _____________________________________________________________________________
3. _____________________________________________________________________________
4. _____________________________________________________________________________
5. _____________________________________________________________________________
(Attach separate sheet if necessary)
I certify that this form and the attached statements (if any) include all
of the securities in which I have a beneficial interest.
______________________________
Access Person Signature
Dated: __________________ ______________________________
Print Name
Date of commencement of employment: ________________________________
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Appendix 3
ACKNOWLEDGMENT OF RECEIPT OF STATEMENT AND CODE OF ETHICS
I acknowledge that I have received and understand the Statement and Code of
Ethics dated September 30, 1998 and amended March 1, 2000 and represent:
1. In accordance with the Code of Ethics, I will report all securities
transactions in which I have a beneficial interest and which are required to be
reported.
2. I will comply with the Statement and Code of Ethics in all other
respects.
_________________________________
Signature
__________________________________
Print Name
Dated:____________________
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Appendix 4
PERSONAL SECURITIES HOLDINGS - ANNUAL
In accordance with Section VIII(I) of the Code of Ethics, please provide a
list of all securities in which you have a beneficial interest as of June 30th.
(1) Name of Access Person: _____________________________
(2) If different than (1), name of the person
in whose name the account is held: _____________________________
(3) Relationship of (2) to (1): _____________________________
(4) Broker at which Account is maintained: _____________________________
(5) Account Number: _____________________________
(6) For each account, attach the account statement listing securities in that
account as of June 30th. If you have a beneficial interest in securities
that are not listed in an attached account statement, list them below:
Name of Security Quantity Value Custodian
---------------- -------- ----- ---------
1. _____________________________________________________________________________
2. _____________________________________________________________________________
3. _____________________________________________________________________________
4. _____________________________________________________________________________
5. _____________________________________________________________________________
(Attach separate sheet if necessary)
I certify that this form and the attached statements (if any) include all
of the securities in which I have a beneficial interest.
___________________________________
Access Person Signature
____________________ ___________________________________
Dated: Print Name
[This form must be received by the Compliance Officer and Sunstone no later than
July 31/st/.]
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Appendix 5
ANNUAL CERTIFICATION OF COMPLIANCE WITH
THE STATEMENT AND CODE OF ETHICS
I certify that during the past year:
1. I have reported all securities transactions which I am required to
report pursuant to the Code of Ethics.
2. I have complied with the Statement and Code of Ethics in all other
respects.
3. I have read and understand the Statement and Code of Ethics and
recognize that I am subject thereto.
_________________________________
Signature
__________________________________
Print Name
Dated:____________________
