EX. - 12 (a)(1)
BAILLIE GIFFORD FUNDS
NOVEMBER 2003
Revised at March 15, 2007
CODE OF ETHICS PURSUANT TO SECTION 406
OF THE SARBANES-OXLEY ACT OF 2002
FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS
I. Covered Officers/Purpose of the Code
This Code of Ethics (this "Code") pursuant to Section 406 of the
Sarbanes-Oxley Act of 2002 has been adopted by Baillie Gifford Funds (the
"Fund") and applies to the Fund's Principal Executive Officer and Principal
Financial Officer (the "Covered Officers," as set forth in EXHIBIT A) for the
purpose of promoting:
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 that the Fund files with, or submits to, the Securities
and Exchange Commission (the "SEC") and in other public communications made by
the Fund;
C. compliance with applicable laws and governmental rules and
regulations;
D. the prompt internal reporting of violations of the Code to an
appropriate person or persons identified in the Code; and
E. accountability for adherence to the Code.
Each Covered Officer should adhere to a high standard of business ethics
and should be sensitive to situations that may give rise to conflicts of
interest.
II. Covered Officers Should Handle Ethically Actual and Apparent Conflicts of
Interest
OVERVIEW. A "conflict of interest" occurs when a Covered Officer's
private interest interferes with the interests of, or his or her service to, the
Fund. For example, a conflict of interest would arise if a Covered Officer, or a
member of the Covered Officer's family, receives improper personal benefits as a
result of the Covered Officer's position with the Fund.
Certain conflicts of interest arise out of the relationships between
Covered Officers and the Fund and already are subject to conflict of interest
provisions in the Investment Company Act of 1940 (including the regulations
thereunder, the "1940 Act") and the Investment Advisers Act of 1940 (including
the regulations thereunder, the "Investment Advisers Act"). For example,
Covered Officers may not engage in certain transactions (such as the purchase or
sale of portfolio securities or other property) with the Fund because of their
status as "affiliated persons" of the Fund. The compliance programs and
procedures of the Fund and its investment adviser, Baillie Gifford Overseas
Limited ("BGO"), 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. See also Section V of this Code.
Although typically not presenting an opportunity for improper personal
benefit, conflicts may arise from, or as a result of, the contractual
relationship between the Fund and BGO of which the Covered Officers are also
officers or employees. As a result, this Code recognizes that the Covered
Officers will, in the normal course of their duties (whether for the Fund or for
BGO, or for both) be involved in establishing policies and implementing
decisions that will have different effects on BGO and the Fund. The
participation of the Covered Officers in such activities is inherent in the
contractual relationships between the Fund and BGO and is consistent with the
performance by the Covered Officers of their duties as officers of the Fund.
Thus, if performed in conformity with the provisions of the 1940 Act and the
Investment Advisers Act, other applicable laws and the Fund's organizational
documents, such activities will be deemed to have been handled ethically. In
addition, it is recognized by the Fund's Board of Trustees (the "Board") that
the Covered Officers may also be directors, officers or employees of one or more
other investment companies covered by this or other codes and that such service,
by itself, does not give rise to a conflict of interest.
Other conflicts of interest are covered by the Code, even if such
conflicts of interest are not the subject of provisions of the 1940 Act and the
Investment Advisers Act. 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 Fund.
Each Covered Officer must not:
A. use his or her personal influence or personal relationships to
influence investment decisions or financial reporting by the Fund whereby the
Covered Officer would benefit personally to the detriment of the Fund;
B. cause the Fund to take action, or fail to take action, for the
individual personal benefit of the Covered Officer rather than the benefit of
the Fund; or
C. retaliate against any other Covered Officer or any employee of the
Fund, BGO or its affiliates for reports of potential violations that are made in
good faith.
There are some situations in which a Covered Officer's proposed action
should always be first approved by the Compliance Officer of BGO (the
"Compliance Officer"). These conflict of interest situations are listed below:
D. service on the board of directors or governing board of a publicly
traded entity;
E. the receipt of any non-nominal gifts valued in excess of (pound)50
from persons or entities who have or are seeking business relationships with the
Fund;
F. the receipt of any entertainment from any company with which the Fund
has current or prospective business dealings unless such entertainment is
business-related, reasonable in cost, appropriate as to time and place, and not
so frequent as to raise any question of impropriety;
G. any ownership interest in, or any consulting or employment
relationship with, any entities doing business with the Fund, other than BGO or
its affiliates. This restriction shall not apply to or otherwise limit the
ownership of publicly traded securities so long as the Covered Person's
ownership does not exceed more than 2% of the outstanding securities of the
relevant class.
H. a direct or indirect financial interest in commissions, transaction
charges or spreads paid by the Fund for effecting portfolio transactions or for
selling or redeeming shares other than an interest arising from the Covered
Officer's employment with BGO or its affiliates. This restriction shall not
apply to or otherwise limit (i) the ownership of publicly traded securities so
long as the Covered Person's ownership does not exceed more than 2% of the
particular class of security outstanding or (ii) the receipt by BGO or an
affiliate of research or other benefits in exchange for "soft dollars."
III. Disclosure and Compliance
A. Each Covered Officer should familiarize himself or herself with the
disclosure requirements generally applicable to the Fund.
B. Each Covered Officer should not knowingly misrepresent, or cause
others to misrepresent, facts about the Fund to others, whether within or
outside the Fund, including to the Board and auditors, and to governmental
regulators and self-regulatory organizations.
C. Each Covered Officer should, to the extent appropriate within his or
her area of responsibility, consult with other officers and employees of the
Fund or BGO or with counsel to the Fund with the goal of promoting full, fair,
accurate, timely and understandable disclosure in the reports and documents the
Fund files with, or submits to, the SEC (which for the sake of clarity, does not
include any sales literature, omitting prospectuses or "tombstone" advertising
prepared by the Fund's principal underwriter, if any) and in other public
communications made by the Fund.
D. It is the responsibility of each Covered Officer to promote
compliance with the standards and restrictions imposed by applicable laws, rules
and regulations.
IV. Reporting and Accountability
Each Covered Officer must:
A. upon adoption of the Code (or thereafter as applicable, upon becoming
a Covered Officer), affirm in writing to the Fund that he or she has received,
read, and understands the Code;
B. annually thereafter affirm to the Fund that he or she has complied
with the requirements of the Code;
C. provide full and fair responses to all questions asked in any
periodic Director and/or Officer Questionnaire as well as with respect to any
supplemental request for information; and
D. notify the Compliance Officer promptly if he or she knows of any
material violation of this Code. Failure to do so is itself a violation of this
Code.
The Compliance Officer is responsible for applying this Code to specific
situations in which questions are presented under it and has the authority to
interpret this Code in any particular situation. Requests for waivers from the
Code shall be submitted in writing to the Compliance Officer.
The President of the Fund shall be authorized to grant waivers, as he or
she deems appropriate; in the case of requests by the President, the Independent
Trustees of the Fund shall be so authorized. Any changes to or waivers of this
Code will, to the extent required, be disclosed as provided by SEC rules.
The Fund will follow these procedures in investigating and enforcing
this Code.
E. The Compliance Officer will take all appropriate action to
investigate any potential material violations reported to him or her, which may
include the use of internal or external counsel, accountants or other personnel.
F. If, after such investigation, the Compliance Officer believes that no
material violation has occurred, the Compliance Officer is not required to take
any further action.
G. Any matter that the Compliance Officer believes is a material
violation will be reported to the Independent Trustees.
H. If the Independent Trustees concur that a material violation has
occurred, they will inform and make a recommendation to the full Board, which
will consider appropriate action, which may include review of, and appropriate
modifications to, applicable policies and procedures, notification to
appropriate personnel of BGO or its board, or a recommendation to dismiss the
Covered Officer.
V. Other Policies and Procedures
This Code shall be the sole code of ethics adopted by the Fund for
purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms
applicable to registered investment companies thereunder. Insofar as other
policies or procedures of the Fund or BGO govern or purport to govern the
behavior or activities of the Covered Officers who are subject to this Code,
they are superseded by this Code to the extent that they conflict with the
provisions of this Code. The codes of ethics under Rule 17j-1 under the 1940 Act
of the Fund and BGO and BGO's more detailed compliance policies and procedures
are separate requirements applying to the Covered Officers and others, and are
not part of this Code.
VI. Amendments
Any amendments to this Code, other than amendments to EXHIBIT A, must be
approved or ratified by a majority vote of the Board.
VII. Confidentiality
All reports and records prepared or maintained pursuant to this Code
will be considered confidential and shall be maintained and protected
accordingly. Except as otherwise required by law or this Code, such matters
shall not be disclosed to anyone except as authorized by the Board.
VIII. Internal Use
The Code is intended solely for the internal use by the Fund and does
not constitute an admission, by or on behalf of the Fund, as to any fact,
circumstance, or legal conclusion.
EXHIBIT A
---------
PERSONS COVERED BY THIS CODE OF ETHICS
- --------------------------------------
- --------------------- ----------------------------- ----------------------------
FUND PRINCIPAL EXECUTIVE OFFICER PRINCIPAL FINANCIAL OFFICER
- --------------------- ----------------------------- ----------------------------
Baillie Gifford R Robin Menzies Nigel Cessford
Funds
- --------------------- ----------------------------- ----------------------------