EX-99.CODE ETH
KOBREN INSIGHT FUNDS
CODE OF BUSINESS CONDUCT AND ETHICS
FOR PRINCIPAL EXECUTIVE AND PRINCIPAL FINANCIAL AND ACCOUNTING OFFICERS
Effective October 23, 2003
I. COVERED OFFICERS; PURPOSE OF THIS CODE
This code of ethics (this "CODE") of the Kobren Insight Funds (the
"FUNDS") sets forth legal and ethical standards of conduct for the Funds'
Principal Executive Officer (President) and Principal Financial/Accounting
Officer (Treasurer, and together with the President, the "COVERED OFFICERS"),
the name of each of whom is set forth on EXHIBIT A hereto. This Code is intended
to deter wrongdoing and to promote:
o honest and ethical conduct among Covered Officers, including the
ethical handling of actual or apparent conflicts of interest
between personal and professional relationships;
o full, fair, accurate, timely and understandable disclosure in
reports and documents that a registrant files with, or submits to,
the Securities and Exchange Commission ("SEC") and in other public
communications made by the Funds and that are within the Covered
Officers' responsibilities;
o compliance with applicable laws and governmental rules and
regulations;
o the prompt internal reporting of violations of this Code to the
person or persons identified in this Code; and
o accountability for adherence to this Code.
II. RESPONSIBILITIES OF COVERED OFFICERS
A. HONEST AND ETHICAL CONDUCT
Each Covered Officer should adhere to a high standard of business
ethics and should be sensitive to situations that may give rise to actual as
well as apparent conflicts of interest.
It is the duty of each Covered Officer to encourage and demonstrate
honest and ethical conduct, as well as adhere to and require adherence to this
Code and any other applicable policies and procedures designed to promote this
behavior. Covered Officers must at all times conduct themselves with integrity
and distinction, putting first the interests of the Funds.
Covered Officers also must, at all times, act in good faith,
responsibly and with due care, competence and diligence, without misrepresenting
material facts or allowing their independent judgment to be subordinated.
Covered Officers also should maintain skills appropriate and necessary for the
performance of their duties for the Funds. Covered Officers also should
responsibly use and control all Funds assets and resources entrusted to them.
Covered Officers may not retaliate against others for, or otherwise
discourage the reporting of, actual or apparent violations of this Code or
applicable laws or regulations. Covered Officers should create an environment
that encourages the exchange of information, including concerns of the type that
this Code is designed to address.
B. COMPLIANCE WITH LAWS, RULES AND REGULATIONS
Covered Officers should comply with all laws, rules and regulations
applicable to the Funds. Each Covered Officer is expected to use good judgment
and common sense in seeking to comply with all applicable laws, rules and
regulations and to ask for advice when he is uncertain about them.
If a Covered Officer becomes aware of the violation of any law, rule or
regulation by the Funds, whether by its officers, employees, trustees, or any
third party doing business on behalf of the Funds, it is the responsibility of
the Covered Officer to promptly report the matter to the Compliance Officer of
Kobren Insight Management, Inc., the Funds' investment adviser (the "Adviser").
While it is the Funds' desire to address matters internally, nothing in this
Code should discourage any Covered Officer from reporting any illegal activity,
including any violation of the securities laws, or any other federal, state or
foreign law, rule or regulation, to the appropriate regulatory authority or to a
member of the Funds' Board of Trustees (the "BOARD") or the Board's Audit
Committee. No Covered Officer shall discharge, demote, suspend, threaten, harass
or in any other manner discriminate or retaliate against an employee because
s/he reports any such violation, unless it is determined that the report was
made with knowledge that it was false. This Code should not be construed to
prohibit any Covered Officer from testifying, participating or otherwise
assisting in any state or federal administrative, judicial or legislative
proceeding or investigation.
C. ACTUAL AND APPARENT CONFLICTS OF INTEREST
Covered Officers must act in the best interests of the Funds. Covered
Officers must refrain from engaging in any activity or having a personal
interest that presents a "conflict of interest."
A "conflict of interest" occurs when a Covered Officer's personal
interest interferes, or appears to interfere, with the interests of, or his
service to, the Funds. A conflict of interest can arise whenever a Covered
Officers, as an officer, director, trustee or employee, takes action or has an
interest that prevents him from performing his Fund duties and responsibilities
honestly, objectively and effectively. 1
Certain conflicts of interest arise out of the relationships between
Covered Officers and the Funds and already are subject to conflict of interest
provisions in the Investment Company Act of 1940 (the "INVESTMENT COMPANY ACT")
and, in the case of a Covered Officer employed by the Adviser, the Investment
Advisers Act of 1940 (the "INVESTMENT ADVISERS ACT"). For example, Covered
Officers may not individually engage in certain transactions (such as the
purchase or sale of securities or other property) with the Funds because of
their status as
- --------------------------------------
1 Any activity or relationship that would present a conflict for a Covered
Officer would likely also present a conflict for the Covered Officer if a
member of the Covered Officer's family engages in such an activity or has
such a relationship.
-2-
"affiliated persons" of the Funds. Each Covered Officer is an
employee of the Adviser. The Funds' and the 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.
Although typically not presenting an opportunity for improper personal
benefit, conflicts arise from, or as a result of, the contractual relationship
between the Funds and the Adviser of which the Covered Officers are also
officers or employees. As a result, the Board recognizes that the Covered
Officers will, in the normal course of their duties (whether formally for the
Funds or for the Adviser or both), be involved in establishing policies and
implementing decisions which will have different effects on the Adviser and the
Funds. The participation of the Covered Officers in such activities is inherent
in the contractual relationship between the Funds and the Adviser and is
consistent with the performance by the Covered Officers of their duties as
officers of the Funds. Thus, if such participation is performed in conformity
with the provisions of the Investment Company Act and/or the Investment Advisers
Act, as applicable to the Covered Officer, and the terms of the applicable
contract, such activity will be presumed to have been handled ethically. In
addition, it is recognized by the Board that the Covered Officers may also be
officers or employees of one or more other investment companies covered by this
Code or other codes of ethics.
Other conflicts of interest are covered by this Code, even if such
conflicts of interest are not subject to provisions in the Investment Company
Act and the Investment Advisers Act. The following list provides examples of
conflicts of interest under this 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 Funds.
Each Covered Officer must:
o not use his personal influence or personal relationships
improperly to influence investment decisions or financial
reporting by the Funds whereby the Covered Officer would benefit
personally to the detriment or potential detriment of the Funds;
o not improperly use his position with the Funds for personal or
private gain to himself, his family, or any other person; and
o not cause the Funds to take action, or fail to take action, for
the individual personal benefit of the Covered Officer rather than
for the benefit of the Funds.
III. DISCLOSURE AND COMPLIANCE
Each Covered Officer should:
o Be familiar with the disclosure requirements generally applicable
to the Funds;
o Not knowingly misrepresent, or cause others to misrepresent, facts
about the Funds to others, whether within or outside the Funds,
including to the Funds' trustees,
-3-
committees of the trustees, and auditors, and to governmental
regulators and self-regulatory organizations;
o To the extent appropriate within his area of responsibility,
consult with other officers and employees of the Funds and the
Adviser with the goal of promoting full, fair, accurate, timely
and understandable disclosure in the reports and documents the
Funds files with, or submits to, the SEC and in other public
communications made by the Funds; and
o Promote compliance with the standards and restrictions imposed by
applicable laws, rules and regulations regarding the Funds.
IV. SCOPE OF RESPONSIBILITIES
A Covered Officer's responsibilities under this Code are limited to:
o Fund matters over which the Covered Officer has direct
responsibility or control, matters in which the Covered Officer
routinely participates, and matters with which the Covered Officer
is otherwise involved (I.E., matters within the scope of the
Covered Officer's responsibilities as a Fund officer); and
o Fund matters of which the Covered Officer has actual knowledge.
V. REPORTING AND INVESTIGATING
Each Covered Officer must promptly report to the Compliance Officer,
and promote the reporting of, any known or suspected violations of this Code.
Examples of violations of the Code include, but are not limited to, the
following:
o Unethical or dishonest behavior;
o Obvious lack of adherence to policies surrounding review and
approval of public communications and regulatory filings;
o Failure to report violations of the Code;
o Known or obvious deviations from applicable laws by the Funds, the
Adviser, the Funds' officers or the Funds' service providers, in
each case as they relate to, or may reasonably be expected to
affect, the Funds; and
o Failure to acknowledge and certify adherence to this Code.
HOW TO REPORT. Any known or suspected violations of this Code must be
promptly reported to the Compliance Officer or if the violation involves the
Compliance Officer, to the President of the Adviser.
PROCESS FOR VIOLATION REPORTING TO THE COMPLIANCE OFFICER. The Funds
will follow these procedures in investigating and enforcing this Code:
-4-
o the Compliance Officer will take reasonably appropriate action to
investigate any potential violations reported to him, including
consulting with the Board, the Funds' Audit Committee, independent
Board members, and/or the Funds' legal counsel. The Compliance
Officer has the authority to use all reasonable resources to
investigate violations, including retaining or engaging legal
counsel, accounting firms or other consultants, subject to
applicable law;
o if, after such investigation, the Compliance Officer believes that
no violation has occurred, the Compliance Officer is not required
to take any further action, unless the Compliance Officer, in his
discretion, elects to report to the Board on the matter;
o The Compliance Officer will report to the Board any matter that he
believes is a violation of this Code; and
o if the Board concurs that a violation has occurred, it will inform
and make a recommendation, which will consider appropriate action,
which may include review of, and appropriate modifications to,
applicable policies and procedures; notification to appropriate
personnel of the Adviser; or a recommendation of sanctions,
including possibly to dismiss the Covered Officer; and in
connection with the foregoing, the Board will consult with the
Compliance Officer.
VI. QUESTIONS; CERTIFICATIONS; WAIVERS
QUESTIONS REGARDING THIS CODE. If a Covered Officer has any questions
regarding this Code or its application in any situation, he should contact the
Compliance Officer of the Adviser or Fund counsel.
CERTIFICATIONS. Each Covered Officer must:
o upon adoption of this Code (or thereafter as applicable, upon
becoming a Covered Officer), affirm in writing to the Board that
he has received, read, and understands this Code;
o annually thereafter affirm to the Board that he has complied with
the requirements of this Code; and
o report at least annually any change in his affiliations from the
prior year.
INTERPRETATION AND WAIVERS. The Compliance Officer is responsible for
applying this Code to specific situations in which questions are presented to
him and has the authority to interpret this Code in any particular situation.
The Compliance Officer may consult, as he deems appropriate, with the President
of the Adviser or counsel to the Funds in carrying out his responsibilities
under this Code. While some of the policies contained in this Code must be
strictly adhered to and no waivers 2 can be allowed, in other cases waivers may
be possible. Any
- -------------------------------------
2 Item 2 of Form N-CSR defines "waiver" as "the approval by the registrant of
a material departure from a provision of the code of ethics" and "implicit
waiver," which must also be disclosed, as "the registrant's failure to take
action within a reasonable period of time regarding a material departure
from a provision of the code of ethics that has been made known to an
executive officer" of the registrant.
-5-
Covered Officer who believes that a waiver to any of these policies is
appropriate in his case should first contact the Compliance Officer. 3 The
request must include the rationale for the request and must explain how the
waiver would be in furtherance of the standards of conduct described in, and the
underlying purposes of, this Code. If the Compliance Officer agrees that an
exception is appropriate, the approval of the Board must be obtained, which may
be granted or withheld in its sole discretion. Any waiver of this Code to a
Covered Officers may be made only by the Board and will be publicly disclosed as
required by applicable law. The Board shall maintain a record of all requests
for exceptions to any of these policies and the disposition of such requests,
including the rationale for granting or denying the waiver.
VII. OTHER FUND POLICIES AND PROCEDURES
This Code shall be the sole code of ethics adopted by the Funds for
purposes of Section 406 of the Sarbanes-Oxley Act of 2002 and the rules and
forms applicable to registered investment companies thereunder. Insofar as other
policies or procedures of the Funds or the Adviser govern or purport to govern
the behavior or activities of the Covered Officers who are subject to this Code,
they are superceded by this Code only to the extent that they overlap or
conflict with the provisions of this Code. The Funds' and the Adviser's codes of
ethics under Rule 17j-1 under the Investment Company Act, including the Code of
Conduct, and the Adviser's more detailed policies and procedures are separate
requirements applying to the Covered Officers and others, are not part of this
Code, and are not superceded by this Code.
VIII. AMENDMENTS
The Funds reserves the right to amend, alter or terminate this Code at
any time for any reason. Any amendments to this Code, other than amendments to
EXHIBIT A, must be approved or ratified by a majority vote of the Board,
including a majority of the independent trustees. Any such amendments will be
publicly disclosed as required by applicable law.
IX. 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, in compliance with a
regulatory request or this Code, such matters shall not be disclosed to anyone
other than the Board and its Audit Committee, the Adviser, and legal counsel.
X. USE
This Code is intended solely for the use by the Funds and does not
constitute an admission, by or on behalf of the Funds, as to any fact,
circumstance, or legal conclusion. This Code is not an employment contract
between the Funds and any of its Covered Officers.
Date: October 23, 2003
- ---------------------------------------
3 There would not be a waiver of the Code if the Compliance Officer or the
Board determines that a matter is not a deviation from the Code's
requirements or is otherwise not covered by the Code.
-6-
EXHIBIT A
PERSONS COVERED BY THIS CODE OF BUSINESS CONDUCT AND ETHICS
AS OF OCTOBER 23, 2003
Principal Executive Officer - Eric M. Kobren
Principal Financial/Accounting Officer - Eric J. Godes
A-1
EXHIBIT B
KOBREN INSIGHT FUNDS
CERTIFICATION
CODE OF BUSINESS CONDUCT AND ETHICS FOR PRINCIPAL EXECUTIVE
AND PRINCIPAL FINANCIAL AND ACCOUNTING OFFICERS
I, ___________________, Principal [Executive][Financial/Accounting]
Officer of the Kobren Insight Funds, hereby certify and acknowledge that (i) I
am a Covered Officer under the Sarbanes-Oxley Code of Business Conduct and
Ethics for Principal Executive, Principal Financial and Principal Accounting
Officers (the "CODE") of the Kobren Insight Funds, (ii) I have received, read
and understood the requirements and provisions of the Code, and (iii) I have
adhered to the Code and will continue to comply with the requirements thereof.
-------------------------------
Name:
Date:
B-1