EX-99.CODE ETH
CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND
SENIOR FINANCIAL OFFICERS
HSBC INVESTOR FUNDS
HSBC ADVISOR FUNDS TRUST
HSBC INVESTOR PORTFOLIOS
Approved by the Boards of Trustees
HSBC Investor Funds, HSBC Advisor Funds Trust and HSBC Investor Portfolios
as of August 14, 2003
Pursuant to the Sarbanes-Oxley Act of 2002
I. INTRODUCTION AND APPLICATION
HSBC Investor Funds, HSBC Advisor Funds Trust, HSBC Investor Portfolios and HSBC
Absolute Return Portfolio LLC (each a "Trust") recognize the importance of high
ethical standards in the conduct of their business and require this Code of
Ethics ("Code") to be observed by their respective principal executive officers
(each a "Covered Officer") (defined below). In accordance with the
Sarbanes-Oxley Act of 2002 (the "Act") and the rules promulgated thereunder by
the U.S. Securities and Exchange Commission ("SEC") each Trust is required to
file reports pursuant to Section 13(a) or 15(d) of the Securities Exchange Act
of 1934, as amended ("1934 Act"), and must disclose whether they have adopted a
code of ethics applicable to the principal executive officers. Each Trust's
Board of Trustees ("Board"), including a majority of its Independent Trustees
(defined below) has approved this Code as compliant with the requirements of the
Act and related SEC rules. This Code does not supersede or otherwise affect the
separate code of ethics that each Trust has adopted pursuant to Rule 17j-1 under
the Investment Company Act of 1940, as amended ("1940 Act").
All recipients of the Code are directed to read it carefully, retain it for
future reference and abide by the rules and policies set forth herein. Any
questions concerning the applicability or interpretation of such rules and
policies, and compliance therewith, should be directed to the relevant
Compliance Officer (defined below), as specified in Schedule 1.
II. PURPOSE
This Code has been adopted by the Board in accordance with the Act and the rules
promulgated by the SEC in order to deter wrongdoing and promote:
(A) honest and ethical conduct, including the ethical handling of actual or
apparent conflicts of interest between personal and professional relationships;
(B) full, fair, accurate, timely and understandable disclosure in reports
and documents filed by the Trust with the SEC or made in other public
communications by the Trust;
(C) compliance with applicable governmental laws, rules and regulations;
(D) prompt internal reporting to an appropriate person or persons of
violations of the Code; and
(E) accountability for adherence to the Code.
III. DEFINITIONS
(A) "COVERED OFFICER" means the principal executive officer and senior
financial officers, including the principal financial officer, controller or
principal accounting officer, or persons performing similar functions.
(B) "COMPLIANCE OFFICER" means the person appointed by the Trust's Board of
Trustees to administer the Code.
(C) "TRUSTEE" means a trustee of the Trust.
(D) "EXECUTIVE OFFICER" shall have the same meaning as set forth in Rule
3b-7 of the 1934 Act. Subject to any changes in the Rule, an Executive Officer
means the president, any vice president, any officer who performs a policy
making function, or any other person who performs similar policy making
functions for the Trust.
(E) "INDEPENDENT TRUSTEE" means a trustee of the Trust who is not an
"interested person" of the Trust within the meaning of Section 2(a)(19) of the
1940 Act.
(F) "IMPLICIT WAIVER" means the Compliance Officer failed to take action
within a reasonable period of time regarding a material departure from a
provision of the Code that has been made known to an Executive Officer.
(G) "RESTRICTED LIST" means that listing of securities maintained by the
Trust Compliance Officer in which trading by certain individuals subject to the
Trust's 17j-1 code of ethics is generally prohibited.
(H) "WAIVER" means the approval by the Compliance Office of a material
departure from a provision of the Code.
IV. HONEST AND ETHICAL CONDUCT
(A) OVERVIEW. A "conflict of interest" occurs when a Covered Officer's
personal interest interferes with the interests of, or his service to, the
Trust. Certain conflicts of interest arise out of the relationships between
Covered Officers and the Trust and already are subject to the conflict of
interest provisions in the 1940 Act and the Investment Advisers Act of 1940, as
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amended (the "Advisers Act"). The Trust's and each investment adviser and
sub-adviser's compliance programs and procedures are designed to prevent, or
identify and correct, violations of these provisions. This Code does not, and is
not intended to, repeat or replace these programs and procedures, and such
conflicts fall outside of the parameters of this Code.
(B) GENERAL POLICY. Each Covered Officer shall adhere to the highest
standards of honest and ethical conduct. Each Covered Officer has a duty to
exercise his or her authority and responsibility for the benefit of the Trust,
to place the interests of the shareholders first and to refrain from having
outside interests that conflict with the interests of the Trust and its
shareholders. Each such person must avoid any circumstances that might adversely
affect or appear to affect his or her duty of complete loyalty to the Trust and
its shareholders in discharging his or her responsibilities, including the
protection of confidential information and corporate integrity.
(C) EXAMPLES OF CONFLICTS. The following list provides examples of
conflicts of interest under the Code but Covered Officers should keep in mind
that these examples are not exhaustive. The overarching principle is that the
personal interest of a Covered Officer should not be placed improperly before
the interest of the Trust.
(1) PROHIBITED CONFLICTS OF INTEREST. Each Covered Officer must:
o not use his personal influence or personal relationships
improperly to influence decisions or financial reporting by the
Trust whereby the Covered Officer would benefit personally to the
detriment of the Trust;
o not cause the Trust to take action, or fail to take action, for
the individual personal benefit of the Covered Officer rather
than benefit the Trust;
o not use material non-public knowledge of portfolio transactions
made or contemplated for the Trust to trade personally or cause
others to trade personally in contemplation of the market effect
of such transactions;
(2) CONFLICTS OF INTEREST THAT MAY BE WAIVED. There are some conflict
of interest situations for which a Covered Officer may seek a Waiver from a
provision(s) of the Code. Waivers must be sought in accordance with Section VIII
of the Code. Examples of these include:
o OUTSIDE EMPLOYMENT OR ACTIVITIES. Covered Officers may not serve
as directors, officers, general partners, consultants, agents,
representatives or employees of any other business unless prior
authorization is obtained from the Compliance Officer. Such
authorization will be based on a determination that the business
of such corporation does not conflict with the interests of the
Trust, and that such service would be consistent with the best
interests of the Trust and its shareholders, and that such
service is not prohibited by law.
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o GIFTS, ENTERTAINMENT, FAVORS OR LOANS. No Covered Officer 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 Trust.
o CORPORATE OPPORTUNITIES. Covered Officers may not exploit for
their own personal gain opportunities that are discovered through
the use of Trust property, information or position unless the
opportunity is fully disclosed, in writing, to the Board and the
Board declines to pursue such opportunity.
o OWNERSHIP INTERESTS. Covered Officers may not have: (i) any
ownership interest in, or any consulting or employment
relationship with, any of the Trust's service providers, other
than its investment adviser, principal underwriter, administrator
or any affiliated person thereof; or (ii) a direct or indirect
financial interest in commissions, transaction charges or spreads
paid by the Trust for effecting portfolio transactions or for
selling or redeeming shares other than an interest arising from
the Covered Officer's employment, such as compensation or equity
ownership.
V. FULL, FAIR, ACCURATE, TIMELY AND UNDERSTANDABLE DISCLOSURE
(A) GENERAL POLICY. This Code is intended to promote the full, fair,
accurate, timely and understandable disclosure in reports and other documents
filed by the Trust with the SEC or made in other public communications by the
Trust. Accordingly, the Covered Officers are expected to consider this to be
central to their roles as officers of the Trust and shall ensure that full,
fair, accurate, timely and understandable disclosure is made in the Trust's
reports and other documents filed with the SEC and in other public
communications.
(B) RESPONSIBILITIES. Covered Officers shall:
(1) familiarize himself with the disclosure requirements generally
applicable to the Trust;
(2) not knowingly misrepresent, or cause other to misrepresent; facts
about the Trust to others, whether within or outside the Trust,
including to the Trust's Trustee's and auditors, and to
governmental regulators and self-regulatory organizations;
(3) to the extent appropriate within his area of responsibility,
consult with the other officers and employees of the Trust and
the adviser with the goal of promoting full, fair, accurate,
timely and understandable disclosure in the reports and documents
the Trust files with, or submit to, the SEC and in other public
communications made by the Trust; and
(4) promote compliance with the standards and restrictions imposed by
applicable laws, rules and regulations.
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(C) CHANGES IN DISCLOSURE PROCESS. If, at any time, a Covered Officer
believes that measures should be taken to improve the Trust's disclosure
process, he or she shall advise the Compliance Officer and shall work with the
Compliance Officer and other appropriate personnel to facilitate any changes in
the process.
VI. INTERNAL REPORTING BY COVERED PERSONS
(A) CERTIFICATIONS. Each Covered Officer shall:
(1) upon adoption of the Code (or thereafter as applicable upon
becoming a Covered Officer), affirm in writing on Schedule A
hereto that the Covered Officer has received, read, and
understands the Code; and
(2) annually thereafter affirm on Schedule A hereto that the Covered
Officer has complied with the requirements of the Code.
(B) REPORTING. A Covered Officer shall promptly report any knowledge of a
material violation of this Code to the Compliance Officer. Failure to do so is
itself a violation of the Code.
(C) REQUIRED DOCUMENTATION. Any such report shall be in writing, and shall
describe in reasonable detail the conduct that the Covered Officer believes to
have violated this Code. If the Compliance Officer concludes that there has been
a violation of the Code, he or she shall determine appropriate sanctions in
accordance with Section IX(A) below. Notwithstanding the foregoing, the
Compliance Officer shall be entitled to grant a Waiver of one or more provisions
of this Code as set forth in Section VIII of the Code.
VII. WAIVERS OF PROVISIONS OF THE CODE
(A) WAIVERS. The Compliance Officer may grant Waivers to the Code in
circumstances that present special hardship. Waivers shall be structured to be
as narrow as is reasonably practicable with appropriate safeguards designed to
prevent abuse of the Waiver. To request a Waiver from the Code, the Covered
Officer shall submit to the Compliance Officer a written request describing the
transaction, activity or relationship for which a Waiver is sought. The request
shall briefly explain the reason for engaging in the transaction, activity or
relationship.
(B) IMPLICIT WAIVERS. In the event that the Compliance Officer has not
acted upon a properly submitted request for a Waiver within a reasonable amount
of time and a material departure from the Code has taken place in accordance
with the request, the Compliance Officer may nevertheless, in lieu of finding a
violation of the Code, determine retroactively to grant a Waiver.
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(C) DOCUMENTATION. The Compliance Officer shall document all Waiver
determinations. If a Waiver is granted under paragraphs (A) or (B), above, the
Compliance Officer shall prepare a brief description of the nature of the
Waiver, the name of the Covered Officer and the date of the Waiver so that this
information may be disclosed in the next Form N-CSR to be filed on behalf of the
Trust or posted on the Trust's internet website within five business days
following the date of the Waiver. All Waivers must be reported to the Board at
each quarterly meeting as set forth in Section IX below.
VIII. REPORTING AND MONITORING
(A) SANCTIONS. Compliance by Covered Officers with the provisions of the
Code is required. Covered Officers should be aware that in response to any
violation, the Trust will take whatever action is deemed necessary under the
circumstances, including, but not limited to, fines, suspension or termination.
(B) BOARD REPORTING. The Compliance Officer shall report any material
violations of the Code to the Board for its consideration on a quarterly basis.
At a minimum, the report shall:
(1) describe the violation under the Code and any sanctions imposed;
(2) identify and describe any Waivers to the Code; and
(3) identify any recommended changes to the Code.
(C) AMENDMENTS TO THE CODE. The Covered Officers and the Compliance Officer
may recommend amendments to the Code for the consideration and approval of the
Board. In connection with any amendment to the Code, the Compliance Officer
shall prepare a brief description of the amendment, so that the necessary
disclosure may be made with the next Form N-CSR to be filed on behalf of the
Trust or posted on the Trust's internet website within five business days
following the date of the amendment.
IX. RECORD-KEEPING
The Compliance Officer shall maintain all records, including any internal
memoranda, relating to compliance with the Code or Waivers of the Code, for a
period of 6 years from the end of the fiscal year in which such document was
created, 2 years in an accessible place. Such records shall be furnished to the
SEC or its staff upon request.
XI. CONFIDENTIALITY
All reports and records prepared or maintained pursuant to this Code will be
considered confidential and shall be maintained on a confidential basis and will
be reasonably secured to prevent access to such records by unauthorized
personnel.
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SCHEDULE 1
COMPLIANCE OFFICER
Martin R. Dean
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EXHIBIT A
CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND
SENIOR FINANCIAL OFFICERS
INITIAL AND ANNUAL CERTIFICATION OF
COMPLIANCE WITH THE
CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND
SENIOR FINANCIAL OFFICERS
[ ] I hereby certify that I have received the Code of Ethics for Principal
Executive and Senior Financial Officers adopted pursuant to the Sarbanes-Oxley
Act of 2002 (the "Code") and that I have read and understood the Code. I further
certify that I am subject to the Code and will comply with each of the Code's
provisions to which I am subject.
[ ] I hereby certify that I have received the Code of Ethics for Principal
Executive and Senior Financial Officers adopted pursuant to the Sarbanes-Oxley
Act of 2002 (the "Code") and that I have read and understood the Code. I further
certify that I have complied with and will continue to comply with each of the
provisions of the Code to which I am subject.
___________________________________________
(Signature)
Name:______________________________________
Title/Department:__________________________
Date:______________________________________
Received By (Name/Title):_____________________________
Signature:____________________________________________
Date:_________________________________________________
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