EXHIBIT 99.CODE ETH
CHESTNUT STREET EXCHANGE FUND
CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND
SENIOR FINANCIAL OFFICERS
The Managing General Partners of The Chestnut Street Exchange Fund (the "Fund")
has adopted this Code of Ethics (the "Code") for certain senior officers of the
Fund to guide and remind such officers of their responsibilities to the Fund,
and shareholders of the Fund. Such officers are expected to act in accordance
with the guidance and standards set forth in this Code.
I. COVERED OFFICERS AND PURPOSE OF THE CODE
The Code applies to the Fund's President, who is the Fund's principal executive
officer, and the Treasurer, who is the Fund's principal financial officer, and
any persons performing similar functions on behalf of the Fund, regardless of
whether such persons are employed by the Fund or a third party (the "Covered
Officers") 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 the Fund 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;
- the 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 is obligated to use his or her best efforts to promote the
factors listed above, 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. ETHICAL HANDLING OF ACTUAL AND APPARENT CONFLICTS OF INTEREST
A. CONFLICTS OF INTEREST - GENERAL
1. 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 and its shareholders, including 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
Fund.
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* If a Covered Person becomes aware that information filed with the SEC or
made available to the public contains any false or misleading information
or omits to disclose necessary information, he or she shall promptly report
it to the Audit Committee.
2. A conflict of interest generally arises if a Covered Officer, or
a member of his or her family, directly or indirectly
participates in any investment, interest, association, activity
or relationship that may impair or appear to impair the Covered
Officer's objectivity.
B. SCOPE
This Code does not, and is not intended to, repeat or replace the
following programs and procedures, and such conflicts that fall
outside of the parameters of this Code:
1. Certain conflicts of interest already are subject to conflicts of
interest provisions in the Investment Company Act of 1940, as
amended (the "1940 Act"), and the Investment Advisers Act of 1940
(the "Advisers Act").
2. The Fund's and the investment adviser's compliance programs and
procedures that are designed to prevent, or identify and correct,
violations of these provisions.
C. TYPES OF CONFLICTS
1. CONTRACTUAL RELATIONSHIPS
Although typically not presenting an opportunity for improper personal
benefit, conflicts arise from, or as a result of, the contractual
relationship between the Fund, investment adviser, or service
providers of which the Covered Officers may also be officers or
employees. As a result, this Code recognizes that the Covered Officers
may, in the normal course of their duties (whether formally for the
Fund, for the investment adviser or for the service providers), be
involved in establishing policies and implementing decisions that will
have different effects on the Fund, the adviser and the administrator.
The participation of the Covered Officers in such activities is
inherent in the contractual relationship between the Fund and the
investment adviser or administrator 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 Advisers Act, such activities will be deemed to have been
handled ethically.
2. OTHER INVESTMENT COMPANIES
In addition, it is recognized by the Fund's Managing General Partners
that the Covered Officers may also be officers or employees of one or
more other investment companies covered by this or other codes.
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3. ADDITIONAL CONFLICTS
Other conflicts of interest may be covered by the Code, even if such
conflicts of interest are not subject to provisions in the 1940 Act
and the Advisers Act.
D. PERSONAL INTERESTS
The major principle of this Code is that the personal interest of a Covered
Officer should not be placed improperly before the interest of the Fund.
The following list provides examples of conflicts of interest under the
Code, but Covered Officers should keep in mind that this list is not
exhaustive.
Each Covered Officer must:
- not use his or her personal influence or personal relationships
improperly to influence investment decisions or financial reporting by
the Fund whereby the Covered Officer would benefit personally to the
detriment of the Fund;
- not cause the Fund to take action, or fail to take action, for the
individual personal benefit of the Covered Officer rather than the
benefit the Fund;
- not use material non-public knowledge of portfolio transactions made
or contemplated for the Fund to trade personally or cause others to
trade personally in contemplation of the market effect of such
transactions; and
- report at least annually affiliations or other relationships with the
Fund, the investment adviser or the distributor, including any related
conflict of interest.
E. REPORTING OF CONFLICTS
1. Required Disclosures
If certain conflict of interest situations are engaged in by
Covered Officers or by members of their family, these conflicts
of interest must be promptly discussed with the Audit Committee.
These conflicts of interest include:
- service as a director on the board of any public or private
company;
- the receipt of any non-nominal gifts in excess of $250.00;
- 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;
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- 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,
administrator or any affiliated person thereof;
- 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; and
- any other interest, relationship or matter that a Covered
Person or the Managing General Partners determine, in his or
her reasonable judgement, warrants disclosure.
2. Recommended Disclosures
There are potential conflict of interest situations, which may be
engaged in by Covered Officers or by members of their family,
that should be discussed with the Audit Committee. A Covered
Person should use reasonable judgement to determine if a
conflict, other than conflicts listed under section E(1), is
material and warrants disclosure to the Audit Committee.
III. COMPLIANCE AND DISCLOSURE
A. COMPLIANCE
Each Covered Officer should:
1. familiarize himself or herself with the disclosure requirements
generally applicable to the Fund;
2. 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 and auditors, governmental
regulators and self-regulatory organizations and any other
organization;
3. to the extent appropriate within his or her area of responsibility,
consult with other officers and employees of the Fund, investment
adviser and other service providers 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 and in other
public communications made by the Fund; and
4. promote compliance with the standards and restrictions imposed by
applicable laws, rules and regulations.
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B. DISCLOSURE
Unless otherwise required by law, this Code shall be disclosed as
required by the SEC.
IV. ACCOUNTABILITY
Each Covered Officer must:
- upon adoption of the Code (or thereafter as applicable, upon becoming
a Covered Officer), affirm in writing to the Managing General Partners
on the certification attached hereto as Appendix A that he or she has
received, read, and understands the Code;
- annually thereafter affirm to the Managing General Partners that he or
she has complied with the requirements of the Code and reported any
violations of the Code;
- not retaliate against any other Covered Officer or any employee of the
Fund or their affiliated persons or the Fund's service providers for
reports of potential violations that are made in good faith; and
- notify the Chairman of the 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.
V. REPORTING PROCEDURES
1. RESPONSIBILITY**
- The Fund'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.
- The Fund's Audit Committee may consult Fund counsel in order to
effectively discharge its responsibilities.
2. INVESTIGATION PROCEDURES**
The Fund will follow these procedures in investigating and enforcing
the Code:
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** The Audit Committee may delegate its reporting procedures, responsibilities
and investigation procedures to the Chairman of the Audit Committee.
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- The Audit Committee will take all appropriate action to
investigate any potential violations of the Code;
- If, after such investigation, the Audit Committee believes that
no violation has occurred, the Audit Committee is not required to
take any further action;
- Any matter that the Audit Committee believes is a violation of
this Code will be reported to the Managing General Partners; and
- If the Managing General Partners concur that a violation has
occurred, it will take action which it considers appropriate.
Such action may include a review of, and appropriate
modifications to, applicable policies and procedures;
notification to appropriate personnel of each service provider or
its governing body; or a recommendation to dismiss the Covered
Officer.
3. WAIVERS
Any approvals or waivers, implicit or otherwise, sought by a Covered
Person will be considered by the Audit Committee. Such Committee will
be responsible for granting waivers, as appropriate; and any changes
to or waivers of this Code will, to the extent required, be disclosed
as provided by SEC rules.
A waiver is the approval of a material departure from a provision of
this Code. An implicit waiver is the Fund's failure to take action
within a reasonable period of time regarding a material departure from
a provision of this Code that has been made known to the Managing
General Partners of the Fund.
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, the investment adviser, distributor, 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
Fund's and its investment adviser's and distributor's codes of ethics under Rule
17j-1 under the 1940 Act (see Exhibit A for a list of the investment adviser and
distributor of the Fund) 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 Managing General Partners.
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VII. CONFIDENTIALITY AND RECORDKEEPING
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 Audit Committee.
Subject to the confidentiality provisions above, the Fund will maintain and
preserve for a period of not less than six (6) years from the date of submission
or action is taken, the first two (2) years in an easily accessible place, a
copy of the Covered Officer's annual certifications and any information or
materials supplied to the Audit Committee that provided the basis for any
amendment or waiver to this Code or relating to any violation of the Code and
sanctions imposed for such violation, together with a written record of the
approval or action taken by the Managing General Partners.
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 any Fund, as to any fact,
circumstance, or legal conclusion.
Adopted: September 18, 2003
Amended: October 29, 2007
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EXHIBIT A
Adviser
BlackRock Capital Management, Inc.
APPENDIX A
CHESTNUT STREET EXCHANGE FUND
CERTIFICATION AND ACKNOWLEDGMENT OF RECEIPT OF CODE OF ETHICS FOR
PRINCIPAL OFFICERS AND SENIOR FINANCIAL OFFICERS
I acknowledge and certify that I have received a copy of the Code of Ethics for
Principal Officers and Senior Financial Officers of The Chestnut Street Exchange
Fund (the "Code"). I understand and agree that it is my responsibility to read
and familiarize myself with the policies and procedures contained in the Code
and to abide by those policies and procedures.
I acknowledge my commitment to comply with the Code.
APPLICABLE NEXT YEAR:
I acknowledge that I complied with the Code for the one-year period ended August
31, 2009.
I acknowledge that I reported all violations of this Code of Ethics for the
one-year period ended August 31, 2009 of which I am aware.
(PLEASE SUBMIT ON A SEPARATE PIECE OF PAPER, EXCEPTIONS TO THESE
ACKNOWLEDGEMENTS.)
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Officer Name (Please Print) Officer Signature
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Date