FIRSTHAND FUNDS
CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND
SENIOR FINANCIAL OFFICERS
I. Covered Officers/Purpose of the Code
This Code of Ethics (the "Code") shall apply to the Firsthand Funds' (the
"Trust") Principal Executive Officer, Principal Financial Officer, Controller,
Principal Accounting Officer and persons performing similar functions (the
"Covered Officers," each of whom is named in Exhibit A attached hereto) for the
purpose of promoting:
o honest and ethical conduct, 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 the Trust files with, or submits to, the Securities and
Exchange Commission (the "SEC") and in other public communications made by
the Trust;
o compliance with applicable laws and governmental rules and regulations;
o the prompt internal reporting of violations of the Code to an appropriate
person or persons identified in the Code; and
o 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 actual as well as
apparent 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 Trust.
For example, a conflict of interest would arise if a Covered Officer, or a
member of his or her family, receives improper personal benefits as a result of
his or her position with the Trust. Covered Officers must avoid conduct that
conflicts, or appears to conflict, with their duties to the Trust. All Covered
Officers should conduct themselves such that a reasonable observer would have no
grounds for belief that a conflict of interest exists. Covered Officers are not
permitted to self-deal or otherwise to use their positions with the Trust to
further their own or any other related person's business opportunities.
This Code does not, and is not intended to, repeat or replace the programs
and procedures or codes of ethics of the Trust's investment adviser or
distributor.
1
Although typically not presenting an opportunity for improper personal
benefit, conflicts may arise from, or as a result of, the contractual
relationship between the Trust and its service providers, including the
investment adviser, of which the Covered Officers may be officers or employees.
As a result, this Code recognizes that the Covered Officers will, in the normal
course of their duties (whether formally for the Trust, the investment adviser,
or other service providers), be involved in establishing policies and
implementing decisions that will have different effects on the service providers
and the Trust. The participation of the Covered Officers in such activities is
inherent in the contractual relationship between the Trust and its service
providers and is consistent with the performance by the Covered Officers of
their duties as officers of the Trust. Thus, if performed in conformity with the
provisions of the Investment Company Act of 1940, as amended (the "Investment
Company Act") and the Investment Advisers Act of 1940, as amended (the
"Investment Advisers Act"), such activities will be deemed to have been handled
ethically. In addition, it is recognized by the Trust's Board of Trustees (the
"Board") that the Covered Officers may also be officers or employees of one or
more other investment companies covered by this or other codes.
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.
* * * *
Each Covered Officer must not:
o use his or her personal influence or personal relationship improperly to
influence investment decisions or financial reporting by the Trust whereby
the Covered Officer would benefit personally to the detriment of the
Trust;
o cause the Trust to take action, or fail to take action, for the individual
personal benefit of the Covered Officer rather than the benefit of the
Trust; or
o retaliate against any other Covered Officer or any employee of the Trust
or their affiliated persons for reports of potential violations by the
Trust of applicable rules and regulations that are made in good faith.
Each Covered Officer must discuss certain material conflict of interest
situations with the Trust's Audit Committee. Examples of such situations
include:
o service as a director, trustee, general partner, or officer of any
unaffiliated business organization. This rule does not apply to
charitable, civic, religious, public, political, or social organizations,
the activities of which do not conflict with the interests of the Trust;
o the receipt of any non-nominal gifts;
o the receipt of any entertainment from any company with which the Trust 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 raise any question of impropriety;
2
o 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, transfer agent, custodian
or any affiliated person thereof; and
o 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.
III. Disclosure and Compliance
o Each Covered Officer should familiarize himself or herself with the
disclosure requirements generally applicable to the Trust.
o Each Covered Officer should not knowingly misrepresent, or cause others to
misrepresent, facts about the Trust to others, whether within or outside
the Trust, including to the Trust's Board, the Trust's Audit Committee and
the Trust's independent auditors, and to governmental regulators and
self-regulators and self-regulatory organizations.
o Each Covered Officer should, to the extent appropriate within his or her
area of responsibility, consult with other officers and employees of the
Trust and its service providers with the goal of promoting full, fair,
accurate, timely and understandable disclosure in the reports and
documents the Trust files with, or submits to, the SEC and in other public
communications made by the Trust.
o It is the responsibility of each Covered Officer to promote and encourage
professional integrity in all aspects of the Trust's operations.
IV. Reporting and Accountability
Each Covered Officer must:
o upon adoption of this Code (or thereafter as applicable, upon becoming a
Covered Officer), sign and return a report in the form of Exhibit B to the
Trust's compliance officer affirming that he or she has received, read,
and understands the Code;
o annually sign and return a report in the form of Exhibit C to the Trust's
compliance officer as an affirmation that he or she has complied with the
requirements of the Code; and
o notify the Trust's Audit Committee promptly if he or she knows of any
violation of this Code. Failure to do so is itself a violation of this
Code.
3
The Trust's Audit Committee 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 including any
approvals or waivers sought by the Covered Persons.
The Audit Committee will follow these procedures in investigating and
enforcing this Code:
o The Audit Committee will take all appropriate actions to investigate any
potential violations reported to the Committee.
o If, after such investigation, the Audit Committee believes that no
violation has occurred, the Audit Committee is not required to take any
further action.
o Any matter that the Audit Committee believes is a violation of this Code
will be reported to the full Board.
o If the Board concurs that a violation has occurred, it will notify the
appropriate personnel of the applicable service provider and may dismiss
the Covered Officer as an officer of the Trust.
o The Audit Committee will be responsible for granting waivers of provisions
of this Code, as appropriate.
o Any changes to or waivers of this Code will, to the extent required, be
disclosed as provided by SEC rules.
V. Other Policies and Procedures
This Code shall be the sole code of ethics adopted by the Trust for
purposes of Section 406 of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley
Act") and the rules and forms applicable to registered investment companies
thereunder. Insofar as other policies or procedures of the Trust, the Trust's
investment adviser, principal underwriter, or other service providers 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
overlap or conflict with the provisions of this Code. The Trust's, investment
adviser's and principal underwriter's codes of ethics under Rule 17j-1 under the
Investment Company Act and the investment adviser's more detailed 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, including a majority of
independent Trustees.
4
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 other than the Trust's Board or Audit Committee.
VIII. Internal Use
The Code is intended solely for the internal use by the Trust and does not
constitute an admission, by or on behalf of the Trust, as to any fact,
circumstance, or legal conclusion.
Date: November 8, 2003
5
EXHIBIT A
Persons Covered by this Code of Ethics:
Kevin M. Landis
President
Omar Billawala
Treasurer
6
EXHIBIT B
INITIAL CERTIFICATION FORM
This is to certify that I have read and understood the Code of Ethics for
Principal Executive and Senior Financial Officers of Firsthand Funds, dated
November 8, 2003, and that I recognize that I am subject to the provisions
thereof and will comply with the policy and procedures stated therein.
Please sign your name here: ________________________________
Please print your name here: _______________________________
Please date here: __________________________________________
7
EXHIBIT C
ANNUAL CERTIFICATION FORM
This is to certify that I have read and understood the Code of Ethics for
Principal Executive and Senior Financial Officers of Firsthand Funds, dated
November 8, 2003 (the "Code"), and that I recognize that I am subject to the
provisions thereof and will comply with the policy and procedures stated
therein.
This is to further certify that I have complied with the requirements of
the Code during the period of _____________ through ______________.
Please sign your name here: ________________________________
Please print your name here: _______________________________
Please date here: __________________________________________