2
THE PARNASSUS FUNDS
SARBANES-OXLEY
CODE OF ETHICS FOR THE PRINCIPAL EXECUTIVE OFFICER,
PRINCIPAL FINANCIAL OFFICER AND PRINCIPAL ACCOUNTING OFFICER
(ADOPTED JULY 22, 2003)
Introduction
The Parnassus Fund and the Parnassus Income Trust
(collectively the "Funds") expect all of their officers to
maintain high ethical standards of conduct and to comply
with applicable laws and governmental regulations. Officers
include, without limitation, the Funds' principal executive
officer, principal financial officer and principal
accounting officer (the principal executive officer,
principal financial officer and principal accounting officer
of the Funds are collectively referred to herein as the
"Senior Financial Officers"). (The Funds anticipate that
most of the time the Senior Financial Officers will consist
of only one or two persons.) In this regard, the Funds
require all of its officers, including the Senior Financial
Officers, to adhere to such other rules, codes and
guidelines as the Funds may adopt from time to time,
including, without limitation, the code of ethics adopted
pursuant to Rule 17j-1 under the Investment Company Act of
1940 (collectively, the "Fund Guidelines").
To deter wrongdoing and to promote honest and ethical
conduct, compliance with applicable laws and regulations,
avoidance of conflicts of interest and full, fair, accurate,
timely and understandable disclosure in the Funds' public
filings and communications, the Funds have approved this
Sarbanes-Oxley Code of Ethics to codify certain standards to
which the Senior Financial Officers will be held accountable
and certain specific duties and responsibilities applicable
to the Senior Financial Officers. As the professional and
ethical conduct of the Senior Financial Officers is
essential to the proper conduct and success of the Funds'
business, the Senior Financial Officers must adhere to the
standards, duties and responsibilities set forth in this
Sarbanes-Oxley Code of Ethics in addition to adhering to the
Fund Guidelines. To the fullest extent possible, the Fund
Guidelines and this Sarbanes-Oxley Code of Ethics should be
read to supplement one another. If there is a conflict
between the Fund Guidelines and this Sarbanes-Oxley Code of
Ethics, then this Sarbanes-Oxley Code of Ethics will
control.
Code of Ethics
General Standards
The Funds and the Funds' Board of Directors will hold
each Senior Financial Officer accountable for adhering to
and advocating the following standards to the best of his or
her knowledge and ability:
A. Act in an honest and ethical manner, including in
connection with the handling and avoidance of actual or
apparent conflicts of interest between personal and
professional relationships;
B. Comply with all applicable laws, rules and regulations
of federal, state and local governments (both United States
and foreign) and other applicable regulatory agencies
(collectively, the "Laws");
C. Proactively promote full, fair, accurate, timely and
understandable disclosure in reports and documents that the
Funds file with, or submit to, the Securities and Exchange
Commission (the "SEC") and in other public communications
the Funds make; and
D. Proactively promote ethical and honest behavior within
the Funds, including, without limitation, the prompt
reporting of violations of, and being accountable for
adherence to, this Sarbanes-Oxley Code of Ethics.
Specific Duties and Responsibilities
In adhering to and advocating the standards set forth
above, each Senior Financial Officer shall fulfill the
following duties and responsibilities to the best of his or
her knowledge and ability:
1. Each Senior Financial Officer shall handle all
conflicts of interest between his or her personal and
professional relationships in an ethical and honest manner,
and shall disclose in advance to the Audit Committee of the
Funds' Board of Directors ("Audit Committee") the relevant
details of any transaction or relationship that reasonably
could be expected to give rise to an actual or apparent
conflict of interest between the Funds and such Senior
Financial Officer. The Audit Committee shall thereafter
take such action with respect to the conflict of interest as
it shall deem appropriate. It is the general policy of the
Funds that conflicts of interest should be avoided whenever
practicable. For purposes of this Sarbanes-Oxley Code of
Ethics, a "conflict of interest" will be deemed to be
present when an individual's private interest interferes in
any way, or even appears to interfere, with the interests of
the Funds as a whole.
2. Each Senior Financial Officer will use his or her best
efforts to ensure the timely and understandable disclosure
of information that, in all material respects, is accurate,
complete, objective and relevant in all reports and
documents the Funds file with, or submit to, the SEC or in
other public communications that the Funds make. As part of
this undertaking, each Senior Financial Officer will
periodically consider the adequacy and effectiveness of the
Funds' "internal controls" and "disclosure controls and
procedures" (as such terms are defined or used in rules
proposed or adopted by the SEC).
3. Each Senior Financial Officer will use his or her best
efforts to ensure compliance in all material respects by
such Senior Financial Officer and the Funds with all
applicable Laws.
4. Each Senior Financial Officer shall respect the
confidentiality of information acquired in the course of his
or her work and shall not disclose such information, except
when the Senior Financial Officer believes he or she is
authorized or legally obligated to disclose the information.
No Senior Financial Officer may use confidential information
acquired in the course of his or her work for his or her
personal advantage.
5. No Senior Financial Officer may take or direct or allow
any other person to take or direct any action to
fraudulently influence, coerce, manipulate or mislead the
Funds' independent auditing firm.
6. No Senior Financial Officer may engage the Funds'
auditing firm to perform audit or non-audit services without
the Audit Committee's (or its designee's) preapproval in
accordance with the Audit Committee's charter.
Reporting Violations
If any person believes that a Senior Financial Officer
has violated this Sarbanes-Oxley Code of Ethics or the Funds
have or are about to violate a Law, or a Senior Financial
Officer believes that he or she is being asked to violate
this Sarbanes-Oxley Code of Ethics or any Law in the
performance of his or her duties for the Funds, then the
matter should be promptly reported to the Audit Committee.
The Audit Committee will take appropriate steps to maintain
the confidentiality of the reporting person's identity, to
the extent consistent with the Funds' obligations to
investigate and remedy the matter and, if appropriate, to
report the matter to government officials. Persons may
report violations of this Sarbanes-Oxley Code of Ethics on
an anonymous basis. No retribution will be taken against a
person for reporting, in good faith, a violation or
suspected violation of this Sarbanes-Oxley Code of Ethics.
Interpretation and Enforcement
The Audit Committee is responsible for overseeing the
interpretation and enforcement of this Sarbanes-Oxley Code
of Ethics. When the Audit Committee considers any matter
relating to this Sarbanes-Oxley Code of Ethics, it shall act
in executive session.
Each Senior Financial Officer will be held accountable
for his or her adherence to this Sarbanes-Oxley Code of
Ethics by the Funds' Board of Directors. A Senior Financial
Officer's failure to adhere to this Sarbanes-Oxley Code of
Ethics will be subject to appropriate disciplinary action,
ranging from warnings to possible termination or removal.
Only the Audit Committee may waive or amend this
Sarbanes-Oxley Code of Ethics. All waivers and amendments
of this Sarbanes-Oxley Code of Ethics must be publicly
disclosed in a manner that complies with the requirements of
the SEC and other applicable Laws.