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Code of Ethics |
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2006 |
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Vontobel Asset Management, Inc.
CODE OF ETHICS
Vontobel Asset Management, Inc. 450 Park Avenue Telephone +1-212-415 70 00
New York, N.Y.10022 Telefax +1-646-840 58 88
{PAGE}
{TABLE}
{CAPTION}
Vontobel Asset Management, Inc.
TABLE OF CONTENTS
Page(s)
{S} {C}
1. STATEMENT OF GENERAL PRINCIPLES 2
1.1. Adherence to Ethical Standards of Vontobel Group 2
1.2. Compliance with Applicable U.S. Legislation 2
1.3. General Principles 3
2. DEFINITIONS 3-4
3. PRINCIPLES FOR DOING BUSINESS 5
3.1. Confidentiality 5
3.2. Conflicts of Interest 5
3.3. Service as a Director 5
3.4. Personal Fiduciary Appointments 5
3.5. Service on Civic and Charitable Organizations 5
3.6. Fees to Consultants and Agents 6
3.7. Personal Benefits 6
3.8. Personal Fees and Commissions 6
3.9. Dealings with Suppliers 6
3.10. Borrowing 6
3.11. Political Contributions 6
3.12. Duty to Report Violations or Potential Conflicts of Interest 7
3.13. Full Disclosure 7
4. PERSONAL SECURITIES TRANSACTIONS 7
4.1. Summary 7
4.2. Prohibited and Restricted Transactions 7-8
4.3. Blackout Period 8-9
4.4. Short-Term Trading 9
4.5. Prior Written Clearance of Personal Securities Trades and Full 9-11
Disclosure of Securities Holdings
5. INSIDER TRADING 11
5.1. Policy and Policy Statement 11
5.2. Elements of Insider Trading 12
5.3. Penalties for Insider Trading 13
5.4. Procedures 13-14
5.5. Supervision 14-15
Appendix A Excerpts from cited SEC legislation 16-27
Appendix B Officers authorized to approve trades 28
Appendix C Personal securities trading authorization form 29-30
Appendix D Initial, quarterly and annual report forms 31-34
{/TABLE}
1
{PAGE}
Vontobel Asset Management, Inc.
1. STATEMENT OF GENERAL PRINCIPLES
1.1 Adherence to Ethical Standards of Vontobel Group
The emphasis placed on the observance of the highest ethical standards by
the Vontobel Group's management is well known to the Swiss financial
marketplace. The cornerstones of its standing in the financial community
are its integrity and, as a predominantly family-controlled organization,
its independence from commerci al considerations that could lead it to
place its own interest before that of its clients. As a subsidiary of
Vontobel Holding, Vontobel Asset Management, Inc. is held to the same
standards of ethical conduct that govern the business activities of the
Vontobel Group.
1.2 Compliance with Applicable U.S. Legislation
As an investment adviser registered with the US Securities and Exchange
Commission (SEC), Vontobel Asset Management, Inc. is subject to the
provisions of the Investment Advisers Act of 1940 (the "Advisers Act").
Section 206 of the Advisers Act provides that it shall be unlawful for any
investment adviser:
(1) to employ any device, scheme, or artifice to defraud any client or
prospective client;
(2) to engage in any transaction, practice, or course of business which
operates as a fraud or deceit upon any client or prospective client;
(3) acting as principal for his own account, knowingly to sell any
security to or purchase any security from a client, or acting as
broker for a person other than such client, knowingly to effect any
sale or purchase of any security for the account of such client,
without disclosing to such client in writing before the completion of
such transaction the capacity in which he is acting and obtaining the
consent of the client to such transaction;
(4) to engage in any act, practice, or course of business which is
fraudulent, deceptive, or manipulative.
Vontobel Asset Management, Inc. is also subject to certain provisions of
the Investment Company Act of 1940 with respect to fraudulent trading, as
discussed in Section 4 hereunder, and the Insider Trading and Securities
Fraud Enforcement Act of 1988, as discussed in Section 5 hereunder.
Vontobel Personnel shall at all times comply with these and all other laws
and regulations that may be applicable to Vontobel Asset Management, Inc.'s
business. In some instances, where such laws and regulations may be
ambiguous and difficult to interpret, Vontobel Personnel shall seek the
advice of Vontobel Asset Management, Inc.'s management, who shall obtain
the advice of outside counsel as is necessary to comply with this policy of
observance of all applicable laws and regulations. Excerpts from the
securities legislation cited above are provided in APPENDIX A.
2
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Vontobel Asset Management, Inc.
1.3 General Principles
This Code of Ethics is based on the following principles:
(a) The officers, directors and employees of Vontobel Asset Management,
Inc. owe a fiduciary duty to all Vontobel Clients and, therefore, must
at all times place the interests of Vontobel Clients ahead of their
own.
(b) Vontobel Personnel shall avoid any conduct that could create any
actual or potential conflict of interest, and must ensure that their
personal securities transactions do not in any way interfere with, or
appear to take advantage of, the portfolio transactions undertaken on
behalf of Vontobel Clients.
(c) Vontobel Personnel shall not take inappropriate advantage of their
positions with Vontobel Asset Management, Inc. to secure personal
benefits that would otherwise be unavailable to them.
It is imperative that all Vontobel Personnel avoid any situation that might
compromise, or call into question, the exercise of fully independent
judgment in the interests of Vontobel Clients. All Vontobel Personnel are
expected to adhere to these general principles in the conduct of the firm's
business, even in situations that are not specifically addressed in this
Code's provisions, procedures and restrictions. Serious and/or repeated
violations of this Code may constitute grounds for dismissal.
2. DEFINITIONS
For purposes of this Code:
"Beneficial Ownership" and "Beneficial Owner(s)" shall be as defined in
Section 16 of the Securities Exchange Act of 1934, which, generally
speaking, encompasses those situations where the Beneficial Owner has the
right to enjoy some economic benefits which are substantially equivalent to
ownership regardless of who is the registered owner (see APPENDIX A). This
would include:
(a) securities which a person holds for his or her own benefit either in
bearer form, registered in his or her own name or otherwise,
regardless of whether the securities are owned individually or
jointly;
(b) securities held in the name of a member of his or her immediate family
or any adult living in the same household;
(c) securities held by a trustee, executor, administrator, custodian or
broker;
(d) securities owned by a general partnership of which the person is a
member or a limited partnership of which such person is a general
partner;
(e) securities held by a corporation which can be regarded as a personal
holding company of a person; and
(f) securities recently purchased by a person and awaiting transfer into
his or her name.
The "Corporation" shall mean Vontobel Asset Management, Inc.
3
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Vontobel Asset Management, Inc.
"Security" shall have the meaning set forth in Section 202(a)(18)of the
Investment Advisers Act of 1940 (see APPENDIX A), irrespective of whether
the issuer is a US or non-US entity and whether the security is being held
by a US or non-US custodian or, directly or indirectly, in personal
custody; except that it shall not include:
- shares of an investment club account
- securities issued by the US Government or US federal agencies that are
direct obligations of the US
- bankers' acceptances, bank certificates of deposits and commercial
paper.
The following are expressly deemed to be securities subject to this Code:
- securities issued by any foreign government or agency thereof
- futures or options on futures
- corporate bonds
- shares of registered open-end investment companies (mutual funds)
- closed-end investment funds.
"Purchase or sale of a security" shall include the writing of an option to
purchase or sell a security.
A security is "being considered for purchase or sale" or is "being
purchased or sold" when a recommendation to purchase or sell the security
by a Vontobel Asset Management, Inc. portfolio manager is under serious
consideration or has already been made and the transaction executed.
"Vontobel Client(s)" shall mean both individual and institutional clients
(including corporations, investment companies, trusts, endowments,
foundations and other legal entities), whether resident or non-US-resident,
for whom Vontobel Asset Management, Inc. provides investment supervisory
services (discretionary management) or manages investment advisory accounts
not involving investment supervisory services (non-discretionary
management).
"Vontobel Employee(s)" shall include officers and employees of the
Corporation.
"Vontobel Personnel" shall include officers, employees and directors of the
Corporation.
4
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Vontobel Asset Management, Inc.
3. PRINCIPLES FOR DOING BUSINESS
3.1 Confidentiality
Confidentiality is a fundamental principle of the investment management
business. Vontobel Employees must maintain the confidential relationship
between the Corporation and each of its Clients. Confidential information
such as the identity of Vontobel Clients and the extent of their account
relationship, must be held inviolate by those to whom it is entrusted and
must never be discussed outside the normal and necessary course of the
Corporation's business. To the extent possible, all information concerning
Vontobel Clients and their accounts shall be shared among Vontobel
Employees on a strictly need-to-know basis. In this regard, Vontobel
Employees shall be careful not to divulge to their colleagues or any third
party any information concerning a Vontobel Client that could be considered
"inside information", as that term is defined in Section 5 hereof.
3.2 Conflicts of Interest
It shall be the first obligation of every Vontobel Employee to fulfill his
or her fiduciary duty to Vontobel Clients. No Vontobel Employee shall
undertake any outside employment, or engage in any personal business
interest, that would interfere with the performance of this fiduciary duty.
No Vontobel Employee may act on behalf of the Corporation in any
transaction involving persons or organizations with whom he or she, or his
or her family, have any significant connection or financial interest. In
any closely held enterprise, even a modest financial interest held by the
Vontobel Employee, or any member of his or her family, should be viewed as
significant.
3.3 Service as an Outside Director
No Vontobel Employee shall become a director or any official of a business
organized for profit without first obtaining written approval from the
Board of Directors of the Corporation based upon its determination that
such board service would not be inconsistent with the interests of the
Corporation and its Clients.
3.4 Personal Fiduciary Appointments
No Vontobel Employee shall accept a personal fiduciary appointment without
first obtaining the written approval of the Board of Directors of the
Corporation, unless such appointment results from a close family
relationship.
3.5 Service on Civic and Charitable Organizations
The Corporation encourages its employees to participate in local civic and
charitable activities. In some cases, however, it may be improper for a
Vontobel Employee to serve as a member, director, officer or employee of a
municipal corporation, agency, school board, or library board. Such service
is appropriate when adequate assurances, in writing, are first given to the
Corporation that business relationships between the Corporation and such
entities would not be prohibited or limited because of statutory or
administrative requirements regarding conflicts of interest.
5
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Vontobel Asset Management, Inc.
3.6 Fees to Consultants and Agents
Any and all fees and payments, direct or indirect, to consultants, agents,
solicitors and other third-party providers of professional services must be
approved by the Chief Executive Officer prior to conclusion of any formal
arrangements for services. No remuneration or consideration of any type
shall be given by any Vontobel Employee to any person or organization
outside of a contractual relationship that has received the prior approval
of the Chief Executive Officer.
3.7 Personal Benefits
No Vontobel Employee, or member of his or her family, may accept a personal
gift, benefit, service, form of entertainment or anything of more than de
minimis value ("gift") from Vontobel Clients, suppliers, service providers,
brokers and all other parties with whom the Corporation has contractual or
other business arrangements if such gift is made because of the recipient's
affiliation with the Corporation or with a Vontobel Employee. Any Vontobel
Employee who receives a gift of more than de minimis value, or a gift with
an unclear status under this Section 3.7, shall promptly notify the
Compliance Officer and may accept the gift only upon the latter's written
approval. The Compliance Officer shall determine whether the gift shall be
retained by the Vontobel Employee or member of his or her family, returned
to the donor, or donated without tax deduction to a charitable organization
selected by the Compliance Officer, subject to the approval of the Chief
Executive Officer.
3.8 Personal Fees and Commissions
No Vontobel Employee shall accept personal fees, commissions or any other
form of remuneration in connection with any transactions on behalf of the
Corporation or any of its Clients.
3.9 Dealings with Suppliers
Vontobel Employees shall award orders or contracts to outside suppliers on
behalf of the Corporation solely on the basis of merit and competitive
pricing, without regard to favoritism or nepotism.
3.10 Borrowing
No Vontobel Employee, or member of his or her family, may borrow money from
any Vontobel Client or any of the Corporation's suppliers, service
providers, brokers and all other parties with whom the Corporation has
contractual or other business arrangements under any circumstances.
3.11 Political Contributions
Vontobel Asset Management, Inc. shall make no contributions to political
parties or candidates for public office.
6
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Vontobel Asset Management, Inc.
3.12 Duty to Report Violations or Potential Conflicts of Interest
The Corporation's management and Board of Directors must be informed at all
times of matters that may constitute violations of this Code of Ethics, or
that may be considered of fraudulent or illegal nature, or potentially
injurious to the good reputation of the Corporation or the Vontobel Group.
Vontobel Employees shall have a duty to report such events immediately to
the Compliance Officer or the Chief Executive Officer or, if such events
concern the Corporation's management, they should be reported to the
Chairman.
3.13 Full Disclosure
In responding to requests for information concerning the Corporation's
business practices from the Corporation's internal or independent
accountants and auditors, counsel, regulatory agencies or other third
parties, Vontobel Employees shall be truthful in their communications and
shall make full disclosure at all times.
4. PERSONAL SECURITIES TRANSACTIONS
4.1 Summary
This Section 4 of the Code of Ethics is based on the recommendations of the
Advisory Group on Personal Investing of the Investment Company Institute in
its May 1994 report. The key provisions of this Code with respect to
personal trading are summarized as follows:
o Prohibition on investing in initial public offerings
o Restrictions on investing in private placements
o Prior written clearance of personal trades
o Seven-day blackout period
o Sixty-day ban on short-term trading profits of securities held, or
likely to be held, in portfolios of Vontobel Clients
o Full disclosure of all securities trades and securities holdings
4.2 Prohibited and Restricted Transactions
4.2.1 In addition to the prohibitions of Section 206 of the Advisers Act cited
in Section 1.2 above, Vontobel Asset Management, Inc. is subject to the
provisions of Rule 17j-1 under the Investment Company Act of 1940 (the
"Company Act"). Rule 17j-1 requires investment advisers to investment
companies to adopt written codes of ethics designed to prevent fraudulent
trading and, further, to use reasonable diligence and institute procedures
reasonably necessary to prevent violations of their code of ethics.
Vontobel Employees shall not engage in any act, practice or course of
conduct that would violate the provisions of Rule 17j-1.
All Vontobel Employees are considered "access persons" as that term is
defined under Rule 17j-1 of the Company Act. As may be required by the
investment companies for which it acts as adviser or subadviser, Vontobel
shall provide periodic reports with respect to the personal securities
transactions of its access persons, as well as an annual compliance report.
No Vontobel Employee shall purchase or sell, directly or indirectly, any
security in which he/she has, or by reason of such transaction acquires,
Beneficial Ownership and which, to his/her actual knowledge at the time of
such purchase or sale, (i) is being considered for purchase or sale on
behalf of a Vontobel Client; or (ii) is being purchased or sold by a
Vontobel Client; except that the prohibitions of this section shall not
apply to:
7
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Vontobel Asset Management, Inc.
(a) purchases or sales which are nonvolitional on the part of any Vontobel
Employee;
(b) purchases which are part of an automatic dividend reinvestment or
other plan established by any Vontobel Employee prior to the time the
security involved came within the purview of this Code; and
(c) purchases effected upon the rights issued by an issuer pro rata to all
holders of a class of its securities, to the extent such rights were
acquired from such issuer, and sales of such rights so acquired.
4.2.2 No Vontobel Employee shall acquire any securities in an initial public
offering.
4.2.3 No Vontobel Employee shall acquire securities in a private placement
without the prior written approval of the Compliance Officer or other
officer designated by the Chief Executive Officer. In considering a request
to invest in a private placement, the Compliance Officer will take into
account, among other factors, whether the investment opportunity should be
reserved for a Vontobel Client, and whether the opportunity is being
offered to a Vontobel Employee by virtue of his or her position with the
Corporation.
4.3 Blackout Period*
4.3.1 No Vontobel Employee shall execute a securities transaction on a day
during which Vontobel Asset Management, Inc. has a pending "buy" or "sell"
order in that same security for a Vontobel Client or its own account until
that order is executed or withdrawn.
4.3.2 Vontobel Employees are prohibited from purchasing or selling a security
within seven (7) calendar days before or after the date on which a
transaction in the same security is effected for a Vontobel Client.
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