EXHIBIT 12 A
CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS
ADOPTED SEPTEMBER 28, 2004, AS AMENDED SEPTEMBER 20, 2005
I. This Code of Ethics (the "Code") for the investment companies within the
Morgan Stanley complex identified in Exhibit A (collectively, "Funds" and
each, a "Fund") applies to each Fund's Principal Executive Officer,
President, Principal Financial Officer and Treasurer (or persons
performing similar functions) ("Covered Officers" each of whom are set
forth in Exhibit B) for the purpose of promoting:
- honest and ethical conduct, including the ethical handling of
actual or apparent conflicts of interest between personal and
professional relationships.
- full, fair, accurate, timely and understandable disclosure in
reports and documents that a company files with, or submits
to, the Securities and Exchange Commission ("SEC") and in
other public communications made by the Fund;
- compliance with applicable laws and governmental rules and
regulations;
- prompt internal reporting of violations of the Code to an
appropriate person or persons identified in the Code; and
- 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. Any question about the
application of the Code should be referred to the General Counsel or his/her
designee (who is set forth in Exhibit C).
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, or appears to interfere, with the interests of, or his
service to, the Fund. For example, a conflict of interest would arise if a
Covered Officer, or a member of his family, receives improper personal benefits
as a result of his 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
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Investment Company Act of 1940 ("Investment Company Act") and the Investment
Advisers Act of 1940 ("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 Fund because of their status as
"affiliated persons" (as defined in the Investment Company Act) of the Fund. The
Fund's and its investment 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 the parameters of this Code, unless
or until the General Counsel determines that any violation of such programs and
procedures is also a violation 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 its investment adviser 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
formally for the Fund or for the investment adviser, or for both), be involved
in establishing policies and implementing decisions that will have different
effects on the Fund and its investment adviser. The participation of the Covered
Officers in such activities is inherent in the contractual relationship between
the Fund and the investment adviser 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 Investment Company Act and the
Investment Advisers Act, such activities will be deemed to have been handled
ethically. In addition, it is recognized by the Funds' Boards of
Directors/Trustees ("Boards") that the Covered Officers may also be officers or
employees of one or more other investment companies covered by this or other
codes.
Other conflicts of interest are covered by the 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 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:
- use his personal influence or personal relationships
improperly to influence investment decisions or financial
reporting by the Fund whereby the Covered Officer would
benefit personally (directly or indirectly);
- 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
- use material non-public knowledge of portfolio transactions
made or contemplated for, or actions proposed to be taken by,
the Fund to trade personally or cause others to trade
personally in contemplation of the market effect of such
transactions.
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Each Covered Officer must, at the time of signing this Code, report to the
General Counsel all affiliations or significant business relationships outside
the Morgan Stanley complex and must update the report annually.
Conflict of interest situations should always be approved by the General
Counsel and communicated to the relevant Fund or Fund's Board. Any activity or
relationship that would present such a conflict for a Covered Officer would
likely also present a conflict for the Covered Officer if an immediate member of
the Covered Officer's family living in the same household engages in such an
activity or has such a relationship. Examples of these include:
- service or significant business relationships as a director on
the board of any public or private company;
- accepting directly or indirectly, anything of value, including
gifts and gratuities in excess of $100 per year from any
person or entity with which the Fund has current or
prospective business dealings, not including occasional meals
or tickets for theatre or sporting events or other similar
entertainment; provided it is business-related, reasonable in
cost, appropriate as to time and place, and not so frequent as
to raise any question of impropriety;
- any ownership interest in, or any consulting or employment
relationship with, any of the Fund's service providers, other
than its investment adviser, principal underwriter, or any
affiliated person thereof; and
- 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, such as compensation or equity ownership.
III. DISCLOSURE AND COMPLIANCE
- Each Covered Officer should familiarize himself/herself with
the disclosure and compliance requirements generally
applicable to the Funds;
- each Covered Officer must not knowingly misrepresent, or cause
others to misrepresent, facts about the Fund to others,
whether within or outside the Fund, including to the Fund's
Directors/Trustees and auditors, or to governmental regulators
and self-regulatory organizations;
- each Covered Officer should, to the extent appropriate within
his area of responsibility, consult with other officers and
employees of the Funds and their investment advisers with the
goal of promoting full, fair, accurate, timely and
understandable disclosure in the reports and documents the
Funds file with, or submit to, the SEC and in other public
communications made by the Funds; and
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- 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:
- upon adoption of the Code (thereafter as applicable, upon
becoming a Covered Officer), affirm in writing to the Boards
that he has received, read and understands the Code;
- annually thereafter affirm to the Boards that he has complied
with the requirements of the Code;
- not retaliate against any other Covered Officer, other officer
or any employee of the Funds or their affiliated persons for
reports of potential violations that are made in good faith;
and
- notify the General Counsel promptly if he/she knows or
suspects of any violation of this Code. Failure to do so is
itself a violation of this Code.
The General Counsel 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. However, any
waivers(2) sought by a Covered Officer must be considered by the Board of the
relevant Fund or Funds.
The Funds will follow these procedures in investigating and
enforcing this Code:
- the General Counsel will take all appropriate action to
investigate any potential violations reported to him;
- if, after such investigation, the General Counsel believes
that no violation has occurred, the General Counsel is not
required to take any further action;
- any matter that the General Counsel believes is a violation
will be reported to the relevant Fund's Audit Committee;
- if the directors/trustees/managing general partners who are
not "interested persons" as defined by the Investment Company
Act (the "Independent Directors/Trustees/Managing General
Partners") of the relevant Fund concur that a violation has
occurred, they will consider appropriate action,
- ----------
(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."
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which may include review of, and appropriate modifications to,
applicable policies and procedures; notification to
appropriate personnel of the investment adviser or its board;
or a recommendation to dismiss the Covered Officer or other
appropriate disciplinary actions;
- the Independent Directors/Trustees/Managing General Partners
of the relevant Fund will be responsible for granting waivers
of this Code, as appropriate; and
- 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 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, the Funds' investment advisers, principal
underwriters, 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 unless any provision of this Code conflicts
with any applicable federal or state law, in which case the requirements of such
law will govern. The Funds' and their investment advisers' and principal
underwriters' codes of ethics under Rule 17j-1 under the Investment Company Act
and Morgan Stanley's Code of Ethics 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 Exhibits A, B
or C, must be approved or ratified by a majority vote of the Board of each Fund,
including a majority of Independent Directors/Trustees/Managing General
Partners.
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 Independent
Directors/Trustees/Managing General Partners of the relevant Fund or Funds and
their counsel, the relevant Fund or Funds and their counsel and the relevant
investment adviser and its counsel.
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VIII. INTERNAL USE
The Code is intended solely for the internal use by the Funds and does not
constitute an admission, by or on behalf of any Fund, as to any fact,
circumstance, or legal conclusion
I have read and understand the terms of the above Code. I recognize the
responsibilities and obligations incurred by me as a result of my being subject
to the Code. I hereby agree to abide by the above Code.
_____________________________
Date:________________________
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EXHIBIT A
FUND LIST
AT
MARCH 31, 2007
RETAIL FUNDS
OPEN-END RETAIL FUNDS
TAXABLE MONEY MARKET FUNDS
1. Active Assets Government Securities Trust ("AA Government")
2. Active Assets Institutional Government Securities Trust ("AA Institutional
Government")
3. Active Assets Institutional Money Trust ("AA Institutional Money")
4. Active Assets Money Trust ("AA Money")
5. Morgan Stanley Liquid Asset Fund Inc. ("Liquid Asset")
6. Morgan Stanley U.S. Government Money Market Trust ("Government Money")
TAX-EXEMPT MONEY MARKET FUNDS
7. Active Assets California Tax-Free Trust ("AA California")
8. Active Assets Tax-Free Trust ("AA Tax-Free")
9. Morgan Stanley California Tax-Free Daily Income Trust ("California
Tax-Free Daily")
10. Morgan Stanley New York Municipal Money Market Trust ("New York Money")
11. Morgan Stanley Tax-Free Daily Income Trust ("Tax-Free Daily")
EQUITY FUNDS
12. Morgan Stanley Allocator Fund ("Allocator Fund")+
13. Morgan Stanley Capital Opportunities Trust ("Capital Opportunities")+
14. Morgan Stanley Developing Growth Securities Trust ("Developing Growth")+
15. Morgan Stanley Dividend Growth Securities Inc. ("Dividend Growth")+
16. Morgan Stanley Equally-Weighted S&P 500 Fund ("Equally-Weighted S&P 500")+
17. Morgan Stanley European Equity Fund Inc. ("European Equity")+
18. Morgan Stanley Financial Services Trust ("Financial Services")+
19. Morgan Stanley Focus Growth Fund ("Focus Growth")+
20. Morgan Stanley Fundamental Value Fund ("Fundamental Value")+
21. Morgan Stanley Global Advantage Fund ("Global Advantage")+
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22. Morgan Stanley Global Dividend Growth Securities ("Global Dividend
Growth")+
23. Morgan Stanley Health Sciences Trust ("Health Sciences")+
24. Morgan Stanley Institutional Strategies Fund ("Institutional Strategies")+
25. Morgan Stanley International Fund ("International Fund")+
26. Morgan Stanley International SmallCap Fund ("International SmallCap")+
27. Morgan Stanley International Value Equity Fund ("International Value")+
28. Morgan Stanley Japan Fund ("Japan Fund")+
29. Morgan Stanley Mid-Cap Value Fund (Mid-Cap Value")+
30. Morgan Stanley Multi-Asset Class Fund ("Multi-Asset Class")+
31. Morgan Stanley Nasdaq-100 Index Fund ("Nasdaq-100")+
32. Morgan Stanley Natural Resource Development Securities Inc. ("Natural
Resource")+
33. Morgan Stanley Pacific Growth Fund Inc. ("Pacific Growth")+
34. Morgan Stanley Real Estate Fund ("Real Estate")+
35. Morgan Stanley Small-Mid Special Value Fund (Small-Mid Special Value")+
36. Morgan Stanley S&P 500 Index Fund ("S&P500 Index")+
37. Morgan Stanley Special Growth Fund ("Special Growth")+
38. Morgan Stanley Special Value Fund ("Special Value")+
39. Morgan Stanley Technology Fund ("Technology Fund")+
40. Morgan Stanley Total Market Index Fund ("Total Market Index")+
41. Morgan Stanley Utilities Fund ("Utilities Fund")+
42. Morgan Stanley Value Fund ("Value Fund")+
BALANCED FUNDS
43. Morgan Stanley Balanced Growth Fund ("Balanced")+
ASSET ALLOCATION FUND
44. Morgan Stanley Strategist Fund ("Strategist Fund")+
TAXABLE FIXED-INCOME FUNDS
45. Morgan Stanley Convertible Securities Trust ("Convertible Securities")+
46. Morgan Stanley Flexible Income Trust ("Flexible Income")+
47. Morgan Stanley Income Trust ("Income Trust")+
48. Morgan Stanley High Yield Securities Inc. ("High Yield Securities")+
49. Morgan Stanley Limited Duration Fund ("Limited Duration Fund")
50. Morgan Stanley Limited Duration U.S. Government Trust ("Limited Duration
U.S. Government")
51. Morgan Stanley Mortgage Securities Trust ("Mortgage Securities")+
52. Morgan Stanley U.S. Government Securities Trust ("Government Securities")+
TAX-EXEMPT FIXED-INCOME FUNDS
53. Morgan Stanley California Tax-Free Income Fund ("California Tax-Free")+
54. Morgan Stanley Limited Term Municipal Trust ("Limited Term Municipal")
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55. Morgan Stanley New York Tax-Free Income Fund ("New York Tax-Free")+
56. Morgan Stanley Tax-Exempt Securities Trust ("Tax-Exempt Securities")+
SPECIAL PURPOSE FUNDS
57. Morgan Stanley Select Dimensions Investment Series ("Select Dimensions")
- Balanced Growth Portfolio
- Capital Opportunities Portfolio
- Developing Growth Portfolio
- Dividend Growth Portfolio
- Equally-Weighted S&P 500 Portfolio
- Flexible Income Portfolio
- Focus Growth Portfolio
- Global Equity Portfolio
- Growth Portfolio
- Money Market Portfolio
- Utilities Portfolio
58. Morgan Stanley Variable Investment Series ("Variable Investment")
- Aggressive Equity Portfolio
- Dividend Growth Portfolio
- Equity Portfolio
- European Equity Portfolio
- Global Advantage Portfolio
- Global Dividend Growth Portfolio
- High Yield Portfolio
- Income Builder Portfolio
- Limited Duration Portfolio
- Money Market Portfolio
- Income Plus Portfolio
- S&P 500 Index Portfolio
- Strategist Portfolio
- Utilities Portfolio
CLOSED-END RETAIL FUNDS
TAXABLE FIXED-INCOME CLOSED-END FUNDS
59. Morgan Stanley Income Securities Inc. ("Income Securities")
60. Morgan Stanley Prime Income Trust ("Prime Income")
TAX-EXEMPT FIXED-INCOME CLOSED-END FUNDS
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61. Morgan Stanley California Insured Municipal Income Trust ("California
Insured Municipal")
62. Morgan Stanley California Quality Municipal Securities ("California
Quality Municipal")
63. Morgan Stanley Insured California Municipal Securities ("Insured
California Securities")
64. Morgan Stanley Insured Municipal Bond Trust ("Insured Municipal Bond")
65. Morgan Stanley Insured Municipal Income Trust ("Insured Municipal Income")
66. Morgan Stanley Insured Municipal Securities ("Insured Municipal
Securities")
67. Morgan Stanley Insured Municipal Trust ("Insured Municipal Trust")
68. Morgan Stanley Municipal Income Opportunities Trust ("Municipal
Opportunities")
69. Morgan Stanley Municipal Income Opportunities Trust II ("Municipal
Opportunities II")
70. Morgan Stanley Municipal Income Opportunities Trust III ("Municipal
Opportunities III")
71. Morgan Stanley Municipal Premium Income Trust ("Municipal Premium")
72. Morgan Stanley New York Quality Municipal Securities ("New York Quality
Municipal")
73. Morgan Stanley Quality Municipal Income Trust ("Quality Municipal Income")
74. Morgan Stanley Quality Municipal Investment Trust ("Quality Municipal
Investment")
75. Morgan Stanley Quality Municipal Securities ("Quality Municipal
Securities")
+- Denotes Retail Multi-Class Fund
INSTITUTIONAL FUNDS
OPEN-END INSTITUTIONAL FUNDS
1. Morgan Stanley Institutional Fund, Inc. ("Institutional Fund Inc.")
Active Portfolios:
- Active International Allocation Portfolio
- Emerging Markets Portfolio
- Emerging Markets Debt Portfolio
- Focus Equity Portfolio
- Global Franchise Portfolio
- Global Real Estate Portfolio
- Global Value Equity Portfolio
- International Equity Portfolio
- International Growth Equity Portfolio
- International Magnum Portfolio
- International Real Estate Portfolio
- International Small Cap Portfolio
- Large Cap Relative Value Portfolio
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- Money Market Portfolio
- Municipal Money Market Portfolio
- Small Company Growth Portfolio
- Systematic Active Large Cap Core Portfolio
- Systematic Active Small Cap Core Portfolio
- Systematic Active Small Cap Growth Portfolio
- Systematic Active Small Cap Value Portfolio
- U.S. Large Cap Growth Portfolio
- U.S. Real Estate Portfolio
Inactive Portfolios*:
- China Growth Portfolio
- Gold Portfolio
- Large Cap Relative Value Portfolio
- MicroCap Portfolio
- Mortgage-Backed Securities Portfolio
- Municipal Bond Portfolio
- U.S. Equity Plus Portfolio
2. Morgan Stanley Institutional Fund Trust ("Institutional Fund Trust")
Active Portfolios:
- Advisory Portfolio
- Advisory Foreign Fixed Income II Portfolio
- Advisory Foreign Fixed Income Portfolio
- Balanced Portfolio
- Core Fixed Income Portfolio
- Core Plus Fixed Income Portfolio
- Equity Portfolio
- Equity Plus Portfolio
- High Yield Portfolio
- Intermediate Duration Portfolio
- International Fixed Income Portfolio
- Investment Grade Fixed Income Portfolio
- Limited Duration Portfolio
- Long Duration Fixed Income Portfolio
- Mid-Cap Growth Portfolio
- Municipal Portfolio
- U.S. Mid-Cap Value Portfolio
- ----------
* Have not commenced or have ceased operations
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- U.S. Small-Cap Value Portfolio
- Value Portfolio
Inactive Portfolios*:
- Balanced Plus Portfolio
- Growth Portfolio
- Investment Grade Credit Advisory Portfolio
- Mortgage Advisory Portfolio
- New York Municipal Portfolio
- Targeted Duration Portfolio
- Value II Portfolio
3. The Universal Institutional Funds, Inc. ("Universal Funds")
Active Portfolios:
- Core Plus Fixed Income Portfolio
- Emerging Markets Debt Portfolio
- Emerging Markets Equity Portfolio
- Equity and Income Portfolio
- Equity Growth Portfolio
- Global Franchise Portfolio
- Global Real Estate Portfolio
- Global Value Equity Portfolio
- High Yield Portfolio
- International Growth Equity Portfolio
- International Magnum Portfolio
- Mid-Cap Growth Portfolio
- Small Company Growth Portfolio
- U.S. Mid-Cap Value Portfolio
- U.S. Real Estate Portfolio
- Value Portfolio
Inactive Portfolios*:
- Balanced Portfolio
- Capital Preservation Portfolio
- Core Equity Portfolio
- International Fixed Income Portfolio
- Investment Grade Fixed Income Portfolio
- Latin American Portfolio
- Multi-Asset Class Portfolio
- Targeted Duration Portfolio
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4. Morgan Stanley Institutional Liquidity Funds ("Liquidity Funds")
Active Portfolios:
- Government Portfolio
- Money Market Portfolio
- Prime Portfolio
- Tax-Exempt Portfolio
- Treasury Portfolio
Inactive Portfolios*:
- Government Securities Portfolio
- Treasury Securities Portfolio
CLOSED-END INSTITUTIONAL FUNDS
5. Morgan Stanley Asia-Pacific Fund, Inc. ("Asia-Pacific Fund")
6. Morgan Stanley Eastern Europe Fund, Inc. ("Eastern Europe")
7. Morgan Stanley Emerging Markets Debt Fund, Inc. ("Emerging Markets Debt")
8. Morgan Stanley Emerging Markets Fund, Inc. ("Emerging Markets Fund")
9. Morgan Stanley Global Opportunity Bond Fund, Inc. ("Global Opportunity")
10. Morgan Stanley High Yield Fund, Inc. ("High Yield Fund")
11. The Latin American Discovery Fund, Inc. ("Latin American Discovery")
12 The Malaysia Fund, Inc. ("Malaysia Fund")
13. The Thai Fund, Inc. ("Thai Fund")
14. The Turkish Investment Fund, Inc. ("Turkish Investment")
15. India Investment Fund ("India Investment")
CLOSED-END FUND OF HEDGE FUNDS
16. Morgan Stanley Institutional Fund of Hedge Funds ("Fund of Hedge Funds")
IN REGISTRATION
MORGAN STANLEY RETAIL FUNDS
1. Morgan Stanley American Franchise Fund
FUNDS OF HEDGE FUNDS
1. Morgan Stanley Absolute Return Fund
2. Morgan Stanley Institutional Fund of Hedge Funds II
- ----------
* Have not commenced or have ceased operations
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EXHIBIT B
INSTITUTIONAL FUNDS
COVERED OFFICERS
Ronald E. Robison - President and Principal Executive Officer
James W. Garrett - Chief Financial Officer and Treasurer
RETAIL FUNDS
COVERED OFFICERS
Ronald E. Robison - President and Principal Executive Officer
Francis Smith - Chief Financial Officer and Treasurer
MORGAN STANLEY INDIA INVESTMENT FUND, INC.
COVERED OFFICERS
Ronald E. Robison - President and Principal Executive Officer
James W. Garrett - Chief Financial Officer and Treasurer
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EXHIBIT C
GENERAL COUNSEL
Amy R. Doberman
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