EXHIBIT (P)(3)
RHUMBLINE ADVISERS
CODE OF ETHICS
(June 2000)
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TABLE OF CONTENTS
SECTION 1. "RESTRICTED LIST" PERSONAL SECURITIES
TRANSACTIONS ........................................3
SECTION 2. RESTRICTIONS AND DISCOURAGED PERSONAL
SECURITIES TRANSACTIONS .............................4
SECTION 3. REPORTING ...........................................6
APPENDIX A. CERTIFICATE OF COMPLIANCE
APPENDIX B. POLICY STATEMENT CONCERNING INSIDER
TRADING PROHIBITIONS
APPENDIX C. CLEARANCE FOR SALES OR PURCHASES FOR PERSONAL
ACCOUNT OF SECURITIES WHICH ARE ON RESTRICTED
LIST OR ARE NON-EXEMPT TRANSACTIONS.
APPENDIX D. RHUMBLINE ADVISERS PERSONNEL TRADING REPORT
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SECTION 1: "RESTRICTED LIST" PERSONAL SECURITIES
TRANSACTIONS
RULE 1 Unless a transaction is an exempt transaction, as described
below, for all employees or related person of RhumbLine trades
a security that RhumbLine trades for its clients, the timing
of such transaction must be reviewed by the Compliance Officer
before the transaction is effected to insure that the trade
does not adversely affect the account of any RhumbLine client.
AN EXEMPT TRANSACTION is a trade or series of related trades
of any individual security of an S&P 500 company involving
less than $100,000, or a trade or series of related trades of
any individual NASDAQ security (other than S&P 500 companies
securities) involving less than $50,000, except as to any
particular security or securities placed on a restricted list
by the Compliance Officer, from time to time, as necessary to
avoid potential impact on the account of any RhumbLine client.
A series of related trades refers to a rolling sixth month
period.
Though it is highly unlikely that RhumbLine will engage in research or
participate in offerings that generate material, non-public information, (due to
the structural nature of indexing), the occasion may occur. Thus, RhumbLine's
Director of Compliance must be consulted prior to any trading to insure that the
security to be traded does not appear on the list. All RhumbLine employees are
forbidden to trade any securities on this list with the following exceptions:
1) Involuntary corporate actions (i.e. - mandatory mergers, stock
dividends, spin-offs)
2) Regular dividend reinvestment programs provided that they run directly
by the company.
3) Transactions by a trust in which RhumbLine employee (or a member of
his immediate family) holds a beneficial interest, but for which the
employee has no direct or indirect influence or control with respect
to the selection of investments are involuntary transactions. In
addition, these transactions do not fall within the definition of
"personal securities transactions." Consultation with the Compliance
Officer is required prior to all trading. Should the security appear
on the restricted list or be a non-exempt transaction, the appropriate
form must be executed prior to trading. This form appears in Appendix
C.
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SECTION 2: RESTRICTIONS AND DISCOURAGED PERSONAL SECURITIES
TRANSACTIONS
RULE 1 RhumbLine employees are strongly discouraged from engaging in
short sales and naked option transactions for their personal
accounts.
EXCEPTIONS None.
COMMENT Short sales and naked option transactions by a RhumbLine
employee for his personal account are particularly dangerous,
because a RhumbLine employee may be prevented by the
restrictions in this Code of Ethics or the Policy Statements
from "covering" the short sale or naked option at the
appropriate time. All employees should keep in mind the
limitations on their personal securities trading imposed by
this Code and the Policy Statements when contemplating such an
investment strategy. Engaging in short sales and naked
options transactions on the basis of material, nonpublic
information is prohibited. See Appendix B. Policy Statement
Concerning Insider Trading Prohibitions.
RULE 2 RhumbLine employees are strongly discouraged from engaging in
excessive short-term trading for their personal accounts.
EXCEPTIONS None.
COMMENTS 1. Although a RhumbLine employee's short-term trading may not
itself constitute a conflict of interest with RhumbLine
clients, RhumbLine believes that its clients' confidence in
RhumbLine will be enhanced and that the likelihood of
RhumbLine's achieving better investment results for its
clients over the long term will be increased if RhumbLine
employees rely on their investment-as opposed to trading-
skills in transactions for their own account. Moreover,
short-term trading by a RhumbLine employee for his or her own
account diverts an employee's attention from the task of
servicing RhumbLine clients, and increases the possibilities
for transactions that are in actual or apparent conflict with
RhumbLine client transactions.
RULE 3 No portfolio manager shall cause a RhumbLine client to take
action for the portfolio manager's own personal benefit.
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EXCEPTIONS None.
COMMENTS 1. A portfolio manager who engages in trading particular
securities for a RhumbLine client account in order to support
the price of securities in his personal account, or who "front
runs" a RhumbLine client order is in violation of this Rule.
Portfolio managers should be aware that this Rule is not
limited to personal transactions in securities.
Thus, a portfolio manager who "front runs" a RhumbLine client
purchase or sale of obligation of the U.S. government is in
violation of this Rule, although U.S. government obligations
are excluded from the definition of "security."
2. This rule is not limited to instances when a portfolio
manager has malicious intent. It also prohibits conduct
that creates an appearance of impropriety. Portfolio
managers who have questions about whether proposed
conduct creates an appearance of impropriety should seek
a prior written determination from the Director of
Compliance.
RULE 4 With regard to initial public offerings and private
placements, investment personnel of RhumbLine shall obtain
express prior written approval from the Compliance Officer for
any direct or indirect acquisition of a beneficial interest in
securities in an initial public offering or a private
placement. The Compliance Officer in making such
determination, shall consider, among other factors, whether
the investment opportunity should be reserved for the clients
of RhumbLine and whether such opportunity is being offered to
such investment personnel by virtue of his or her position
with RhumbLine, and, after authorization to acquire securities
in an initial public offering or private placement has been
obtained, disclose such personal investment with respect to
any subsequent consideration by RhumbLine for investment in
that issuer. "Investment Personnel" shall mean any employee of
RhumbLine or of any company in a control relationship to
RhumbLine 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 RhumbLine or
any other client of RhumbLine or whose functions relate to any
recommendation with respect to such purchases or sales and any
natural person in a control relationship with RhumbLine who
obtains information regarding the purchase or sale of
securities.
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SECTION 3: REPORTING
RULE 1 All employees who have access to client investment
information, are required to submit a quarterly transaction
report no later than 10 days after the end of the calendar
quarter. Copies of the brokerage confirmations or monthly
account statements from the brokerage, dealer, or bank
maintaining your securities account must be attached.
RULE 2 Should an exemption to restricted trading be required, the
appropriate form must be completed and signed by the
Compliance Officer prior to trading.
RULE 3 Every new employee of RhumbLine must provide the Compliance
Officer an initial annual holdings report for their personal
portfolio as of the date of commencement of employment. In
addition, by January 15th of the following year and every year
thereafter that they are employed by RhumbLine, an annual
holdings report from the previous year must also be provided
to the Director of Compliance. Any employee that started with
RhumbLine prior to January 1, 2000 must provide the Compliance
Officer with its annual holdings from the previous year by
September 1, 2000. In addition they will be required to
provide by January 15th of the next year an annual holdings
report from the previous year as long as RhumbLine employs
them.
EXCEPTIONS None.
IMPLEMENTATION All employees required to file such a report will receive a
blank form at the end of the quarter from the Compliance Officer. The form
will specify the information to be reported.
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APPENDIX A: CERTIFICATE OF COMPLIANCE
TO: RhumbLine Director of Compliance
CERTIFICATE
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I have read, understood and will comply with the provisions of the
RhumbLine Code of Ethics, including the Code's Policy Statement
Concerning Insider Trading Prohibitions.
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(Date) (Employee Signature)
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APPENDIX B: INSIDER TRADING
PREAMBLE
RhumbLine has always forbidden trading on material nonpublic information
("inside information") by its employees. New and tougher federal laws make it
important for RhumbLine to restate that prohibition in the strongest possible
terms, and to establish, maintain and enforce written policies and procedures to
prevent the misuse of material nonpublic information.
Unlawful trading while in possession of inside information in breach of a
duty can be made a crime. Today, federal law provides that an individual
convicted of trading on inside information go to jail for some period of time.
There is also significant monetary liability for an inside trader; the
Securities and Exchange commission can seek a court order requiring a violator
to pay back profits, and penalties of up to three times those profits. In
addition, private plaintiffs can seek recovery for harm suffered by them. The
inside trader is not the only one subject to liability. In certain cases,
"controlling persons" of the inside traders (including supervisors of inside
traders or RhumbLine itself) can be liable for large penalties.
Section 1 of this Policy Statement contains rules concerning inside
information.
Section 2 contains a discussion of what constitutes unlawful insider
trading.
Neither material nonpublic information nor unlawful insider trading is easy
to define. Section 2 of this Policy Statement gives a general overview of the
law in this area. However, the legal issues are complex and must be resolved by
the Director of Compliance. If an employee has any doubt as to whether he has
received material nonpublic information, he must consult with the Director of
Compliance prior to using that information in connection with purchase or sale
of security, or communicating the information to others. If an employee has
failed to consult the Director of Compliance, RhumbLine will not excuse employee
misuse of inside information on the grounds that the employee claims to have
been confused about this Policy Statement or the nature of the information in
his possession.
If RhumbLine determines, in its sole discretion, that an employee has
failed to abide by this Policy Statement, or has engaged in conduct
that raises a significant question concerning insider trading, he will be
subject to disciplinary action, which will include termination of employment.
THERE ARE NO EXCEPTIONS TO THIS POLICY STATEMENT AND NO ONE IS EXEMPT.
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SECTION 1. RULES CONCERNING INSIDE INFORMATION
RULE 1 No RhumbLine employee shall purchase or sell any security
listed on the Restricted List for his personal account.
IMPLEMENT-
ATION When an employee contacts the Director of Compliance seeking
clearance for a personal securities transaction, the
Compliance Officer responds as to whether a security appears
on the Restricted List.
COMMENT This rule is designed to prohibit any employee from trading
a security while RhumbLine may have inside information
concerning that security or the issuer. Every trade is
subject to this Rule.
RULE 2 No RhumbLine employees shall purchase or sell any security,
either. For a personal account or for the account of a
RhumbLine clients, while in possession of material nonpublic
information concerning that security or the issuer, without
the prior written approval of the Director of Compliance.
IMPLEMENT-
ATION In order to obtain prior written approval of the Director of
Compliance, a RhumbLine employee should follow the reporting
steps prescribed in Rule 3.
COMMENTS 1. Rule 1 concerns the conduct of an employee when
RhumbLine possesses material nonpublic information. Rule 2
concerns the conduct of an employee who himself possesses
material nonpublic information about a security that is not
yet on the Restricted List.
2. If an employee has any question as to whether
informationhe possesses is material and/or nonpublic
information, he must contact the Director of Compliance in
accordance with Rule 3 prior to purchasing or selling any
security related to the information or communicating the
information to others. The Director of Compliance shall
have the sole authority to determine what constitutes
material nonpublic information for the purposes of this
Policy Statement. An employee's mistaken belief that the
information was not material nonpublic information will not
excuse a violation of this Policy Statement
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RULE 3 Any RhumbLine employees who believes he may have received
material nonpublic information concerning that security or
the issuer shall immediately report the information to the
Director of Compliance and to no one else. After reporting
the information, the RhumbLine employee shall comply
strictly with Rule 2 by not trading in the security without
the prior written approval of the Director of Compliance and
shall: (a) take precautions to ensure the continued
confidentiality of the information; and (b) refrain from
communicating the information in question to any person.
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SECTION 2. OVERVIEW OF INSIDER TRADING
A. Introduction
This section of the Policy Statement provides guidelines for employees as
to what may constitute inside information. It is possible that in the course of
his employment, and employee may receive inside information. No employee should
misuse that information, either by trading for his own account or by
communicating the information to others.
B. What constitutes unlawful insider trading?
The basic definition of unlawful insider trading is trading on material,
nonpublic information (also called "inside information") by an individual who
has a duty not to "take advantage" of the information. What does this
definition really mean? The following sections help explain the definition.
1. What is material information?
Trading on inside information is not a basis for liability unless the
information is material. Information is "material" if a reasonable person would
attach importance to the information in determining his course of action with
respect to a security. Information which is reasonably likely to affect the
price of a company's securities is "material," but effect on price is not the
sole criterion for determining materiality. Information that employees should
consider material includes, but is not limited to: dividend changes, earnings
estimates, changes in previously released earnings estimates, reorganization,
recapitalization, asset sales, merger or acquisition proposals or agreements,
major litigation, liquidity problems, significant contracts and extraordinary
management developments.
Material information does not have to relate to a company's business. For
example, a court considered as material certain information about the contents
of a forthcoming newspaper column that was expected to affect the market price
of a security. In that case, a reporter for The Wall Street Journal was found
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criminally liable for disclosing to others the dates that reports on various
companies would appear in the Journal's "Heard on the Street column and whether
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those reports would be favorable or not.
2. What is nonpublic information?
Information is nonpublic until it has been effectively communicated to, and
absorbed by, the marketplace. 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 Securities and Exchange Commission, or appearing in
Dow Jones, Reuters Economic Services, The Wall Street Journal or other
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publications of general circulation would be considered public.
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3. Who has a duty not to "take advantage" of inside information?
Unlawful insider trading occurs only if there is a duty not to "take
advantage" of material nonpublic information. Generally, a lawyer must answer
questions as to whether a duty exists.
a. Insider and Temporary Insiders. Corporate "insiders" have a duty not
to take advantage of inside information. The concept of "insider" is broad. It
includes officers, directors and employees of a corporation. In addition, a
person can be a "temporary insider" if he enters into a special confidential
relationship with a corporation and as a result is given access to information
considered to be confidential.
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APPENDIX C: CLEARANCE FOR SALES OR PURCHASES FOR PERSONAL ACCOUNT OF
SECURITIES WHICH ARE ON RESTRICTED LIST OR ARE NON-EXEMPT
TRANSACTIONS.
TO: Director of Compliance
FROM:
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DATE:
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RE: Personal Securities Transaction of
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This serves as prior written approval of the personal securities
transaction described below:
NAME OF PORTFOLIO MANAGER CONTEMPLATING PERSONAL
TRADE:
SECURITY TO BE TRADED:
AMOUNT TO BE TRADED:
(Please attach additional sheets if necessary.)
APPROVED:
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DATE:
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APPENDIX D
RHUMBLINE ADVISERS PERSONAL TRADING REPORT
Name: Quarter ending:
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Please list all security transactions for yourself or family members that you
executed over the past quarter AND attach a copy of each confirmation statement
from each broker.
Cost
Date Security Buy/Sell Shares Description Price Total Broker
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During the quarter referred to above, the following transactions were effected
in securities which are required to be reported by RhumbLine's Code of Ethics
and Rule 17j-1 of the Investment Company Act of 1940.
I did did not do any security trading during the past three months.
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Signature: Date:
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DEVCAP TRUST
ACCESS PERSON LIST
FOR THE CALENDAR QUARTER ENDED SEPTEMBER 30, 2000
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ACCESS PERSON FORM SENT RESPONSE RECEIVED TRANSACTIONS
COMPARED
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JD NELSON
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WAYNE T. OWEN
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EDWIN EK
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DENISE A.
D'ENTREMONT
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KIM R. MCCANT
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JULIE LIND
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STEPHEN L. SEXENY
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BRENDA H.
SCHOFIELD
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GUERGANA LAZAROVA
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THOMAS CASSIDY
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