EXHIBIT 10(a)(1)
ASSET MANAGEMENT FUND
ASSET MANAGEMENT FUND LARGE CAP EQUITY INSTITUTIONAL FUND, INC.
SHAY ASSETS MANAGEMENT, INC.
SHAY FINANCIAL SERVICES, INC.
CODE OF ETHICS
OCTOBER 16, 2003
1. Purpose
This Code of Ethics has been adopted by the Board of Directors/Trustees
of Asset Management Fund, Asset Management Fund Large Cap Equity Institutional
Fund, Inc., Shay Assets Management, Inc. and Shay Financial Services, Inc. in
accordance with Rule 17j-1 under the Investment Company Act of 1940 (the "Act").
Rule 17j-1 under the Act generally proscribes fraudulent or manipulative
practices with respect to purchases or sales of securities held or to be
acquired by investment companies, if effected by associated persons of such
companies. The purpose of this Code of Ethics is to provide regulations and
procedures consistent with the Act and Rule 17j-1 designed to give effect to the
general prohibitions set forth in Rule 17j-1(b) as follows:
It is unlawful for any affiliated person of or principal underwriter
for an investment company registered under the Act, or any affiliated person of
an investment adviser of or principal underwriter for a registered investment
company, in connection with the purchase or sale, directly or indirectly, by
such person of a security held or to be acquired by the investment company:
(1) to employ any device, scheme or artifice to defraud the
investment company;
(2) to make any untrue statement of a material fact to the
investment company or omit to state a material fact necessary
in order to make the statements made to the investment
company, in light of the circumstances under which they are
made, not misleading;
(3) to engage in any act, practice, or course of business that
operates or would operate as a fraud or deceit on the
registered investment company; or
(4) to engage in any manipulative practice with respect to the
investment company.
2. Definitions
(a) "Access Person" means with respect to a Fund (i) any trustee,
director, officer, general partner or Advisory Person of the Fund or the
Adviser; and (ii) any director, officer or general partner of the Distributor
who, in the ordinary course of business, makes, participates in
or obtains information regarding, the purchase or sale of Covered Securities by
the Fund, or whose functions or duties in the ordinary course of business relate
to the making of any recommendation to the Fund regarding the purchase or sale
of Covered Securities.
(b) "Adviser" means Shay Assets Management, Inc.
(c) "Advisory Person" of a Fund or the Adviser means (i) any employee
of the Fund or Adviser (or of any company in a control relationship to the Fund
or Adviser), who, in connection with his or her regular functions or duties,
makes, participates in, or obtains information regarding the purchase or sale of
a Covered Security by the Fund, or whose functions relate to the making of any
recommendations with respect to the purchase or sale of Covered Securities; and
(ii) any natural person in a control relationship to the Fund or Adviser who
obtains information concerning recommendations made to the Fund with regard to
the purchase or sale of Covered Securities by the Fund.
(d) "Beneficial ownership" shall be interpreted in the same manner as
it would be in Rule 16a-1(a)(2) under the Securities Exchange Act of 1934,
except that the determination of direct or indirect beneficial ownership shall
apply to all securities which an Access Person has or acquires (see Annex A).
(e) "Control" shall have the same meaning as that set forth in Section
2(a)(9) of the Act.
(f) "Covered Security" means a security as defined in Section 2(a)(36)
of the Act, except that it shall not include (i) direct obligations of the
Government of the United States; (ii) banker's acceptances, bank certificates of
deposit, commercial paper and high quality short-term debt instruments,
including repurchase agreements; and (iii) shares issued by registered open-end
investment companies.
(g) "Disinterested Director" means a director or trustee of a Fund who
is not an "interested person" of the Adviser or Distributor within the meaning
of Section 2(a)(19) of the Act. For purposes of this Code, trustees shall be
referred to as directors.
(h) "Distributor" means Shay Financial Services, Inc.
(i) "Ethics Committee" shall mean, with respect to each Fund, the
Adviser or the Distributor, the person or persons appointed or designated by the
Adviser to administer this Code of Ethics.
(j) "Funds" means Asset Management Fund and Asset Management Fund Large
Cap Equity Institutional Fund, Inc., "Fund" means any of the Funds.
(k) "Initial Public Offering" means an offering of securities
registered under the Securities Act of 1933, the issuer of which, immediately
before the registration, was not subject to the reporting requirements of
Sections 13 or 15(d) of the Securities Exchange Act of 1934.
(l) "Investment Department Personnel" means with respect to any Fund
(i) any employee of the Fund or the Adviser (or of any company in a control
relationship to the Fund or
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the Adviser) who, in connection with his or her regular functions or duties,
makes or participates in making recommendations regarding the purchase or sale
of securities by the Fund or assists in the trading process; and (ii) any
natural person who controls the Fund or the Adviser and who obtains information
concerning recommendations made to the Fund regarding the purchase or sale of
securities by the Fund, but shall not include any person who is an officer or
director of a Fund who is not also an officer, director, partner or employee of
the Adviser or Distributor or of any affiliate of the Adviser or Distributor.
(m) "Limited Offering" means an offering that is exempt from
registration under the Securities Act of 1933 pursuant to Section 4(2) or
Section 4(6) or pursuant to Rule 504, Rule 505, or Rule 506 under the Securities
Act of 1933.
(n) "Security Held or to be Acquired" by a Fund means: (i) any Covered
Security which, within the most recent 15 days (A) is or has been held by the
Fund or (B) is being or has been considered by the Fund or its Adviser for
purchase by the Fund; and (ii) any option to purchase or sell, and any security
convertible into or exchangeable for, a Covered Security described in clause
(n)(i).
(o) "Purchase or Sale of a Covered Security" includes, inter alia, the
writing of an option to purchase or sell a Covered Security.
(p) For purposes of this Code, (i) securities or instruments that are
convertible into or exchangeable for a security shall be considered to be the
same security as the security into which they are convertible or exchangeable,
(ii) options and warrants with respect to a security shall be considered to be
the same security as the security for which they are exercisable and (iii)
securities and instruments that otherwise are economically related to a security
shall be considered to be the same security as such other security.
3. Prohibited Purchases and Sales
(a) (i) No Access Person of a Fund shall purchase or sell, directly or
indirectly, any Covered Security in which he or she has, or by reason of such
transaction acquires, any direct or indirect beneficial ownership and which to
his or her actual knowledge at the time of such purchase or sale:
(A) is being considered for purchase or sale by the Fund; or
(B) is being purchased or sold by the Fund,
"until either the Fund's transactions have been completed or consideration of
such transaction is abandoned."
(ii) No Investment Department Personnel shall purchase or sell,
directly or indirectly, any Covered Security in which he or she has, or by
reason of such transaction acquires, any direct or indirect beneficial ownership
and which to his or her actual knowledge at the time of such purchase or sale;
(A) is being considered for purchase or sale by any Fund; or
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(B) is being purchased or sold by any Fund
until either the Fund's transactions have been completed or consideration of
such transactions is abandoned.
(b) No Access Person of a Fund shall reveal to any other person (except
in the normal course of his or her duties on behalf of the Fund) any information
regarding securities transactions by the Fund or consideration by the Fund or
the Adviser of any securities transactions, other than information that is
contained in reports to shareholders of the Fund or otherwise is publicly
available.
(c) No Access Person of a Fund shall recommend any securities
transactions for the Fund without having disclosed his or her interest, if any,
in such securities or the issuer thereof, including without limitation (i) his
or her direct or indirect beneficial ownership of any securities of such issuer,
(ii) any contemplated transaction by such person in such securities, (iii) any
position with such issuer or its affiliates and (iv) any present or proposed
business relationship between such issuer or its affiliates, on the one hand,
and such person or any party in which such person has a significant interest, on
the other.
(d) No Investment Department Personnel may acquire beneficial
ownership, directly or indirectly, in any security in an Initial Public Offering
or in a Limited Offering without the express prior approval of the Ethics
Committee. Investment Department Personnel who have been authorized to acquire a
security in an Initial Public Offering or in a Limited Offering pursuant to this
subsection must disclose that investment if they participate in any subsequent
consideration by the Adviser of an investment in the issuer of that security.
The Adviser's investment decision with respect to such a security must be
independently reviewed by investment personnel with no personal interest in the
issuer of the security.
(e) No Investment Department Personnel of a Fund may execute a
securities transaction on a day during which the Fund has a pending "buy" or
"sell" order in that same security (other than transactions for the account of
other bona fide advisory clients of the Adviser) until that order is executed or
withdrawn. In addition, a portfolio manager of a Fund may not buy or sell a
security within seven calendar days before or after a portfolio that he or she
manages trades in that security; provided, however, a portfolio manager may sell
a security within seven calendar days after the portfolio executed a sales
transaction in that same security if the portfolio no longer has a position in
that security. Any profits realized by Investment Department Personnel in
contravention of this subsection must be disgorged, as determined by the Ethics
Committee, to either the Fund or a charitable entity. Any payments to a charity
will be directed by the Ethics Committee in a manner that does not produce any
benefits to the Adviser or the person violating the Code.
4. Exempted Transactions
The prohibitions of Section 3 of this Code shall not apply to:
(a) Purchases or sales effected in any account over which the Access
Person has no direct or indirect influence or control.
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(b) Purchases or sales which are non-volitional on the part of the
Access Person.
(c) Purchases which are part of an automatic dividend reinvestment
plan.
(d) Purchases effected upon the exercise of rights issued by an
issuer pro rata to all holders of a class of its securities, to
the extent such rights were acquired from such issuer, and sales
of such rights so acquired.
(e) Purchases or sales which are determined by the Ethics Committee
for the applicable Fund to be only remotely potentially harmful
to the Fund because they would be very unlikely to affect the
market for the securities involved, or because they clearly are
not related economically to the securities to be purchased, sold
or held by a Fund.
(f) Purchases or sales of securities which are not eligible for
purchase or sale by the applicable Fund, except that Section 3(d)
of this Code shall continue to apply.
5. Preferential Treatment, Gifts and Entertainment
No Access Person of a Fund, other than a Disinterested Director, may
seek or accept gifts, favors, preferential treatment or valuable consideration
of more than a de minimis nature from any broker-dealer or other company or
person that does business with or has proposed doing business with the Fund or
any company in a control relationship with the Fund. No Disinterested Director
of a Fund may seek or accept gifts, favors, preferential treatment or valuable
consideration of more than a de minimis nature, because of his or her
association with the Fund, from a broker/dealer or other company or person that
does business with or has proposed doing business with the Fund or any company
in a control relationship with the Fund. For purposes of this subsection, de
minimis is defined as reasonable and customary business entertainment, such as
lunch or dinner or tickets to sporting or cultural events, but does not include
trips or similar activities.
6. Service as a Director
Investment Department Personnel are prohibited from serving on the
board of directors of any publicly traded company, absent prior authorization by
the Ethics Committee based upon a determination that the board service would be
consistent with the interests of the Funds and that adequate procedures exist to
ensure isolation from those making investment decisions.
7. Reporting
(a) Unless excepted by Section 7(b) of this Code, every Access Person
of a Fund or of the Adviser or the Distributor of such Fund must report to the
Ethics Committee for such Fund:
(1) Initial Holdings Reports. No later than 10 days after
the person becomes an Access Person, the following
information:
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(A) The title, number of shares and principal
amount of each Covered Security in which the
Access Person had any direct or indirect
beneficial ownership as of the date the
person became an Access Person;
(B) The name of any broker, dealer or bank with
whom the Access Person maintained an account
in which any securities were held for the
direct or indirect benefit of the Access
Person as of the date the person became an
Access Person; and
(C) The date that the report is submitted by the
Access Person.
(2) Quarterly Transaction Reports. No later than 10 days
after the end of a calendar quarter the following
information:
(A) With respect to any transaction during the
quarter in a Covered Security in which the
Access Person had any direct or indirect
beneficial ownership:
(i) The date of the transaction, the
title, the interest rate and
maturity date (if applicable), the
number of shares and the principal
amount of each Covered Security
involved;
(ii) The nature of the transaction
(i.e., purchase, sale or any other
type of acquisition or
disposition);
(iii) The price of the Covered Security
at which the transaction was
effected;
(iv) The name of the broker, dealer or
bank with or through which the
transaction was effected; and
(v) The date that the report is
submitted by the Access Person.
(B) With respect to any account established by
the Access Person in which any securities
were held during the quarter for the direct
or indirect benefit of the Access Person:
(i) The name of the broker, dealer or
bank with whom the Access Person
established the account;
(ii) The date the account was
established; and
(iii) The date that the report is
submitted by the Access Person.
(3) Annual Holdings Reports. Annually, the following
information (which information must be current as of
a date no more than 30 days before the report is
submitted):
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(A) The title, number of shares and principal
amount of each Covered Security in which the
Access Person had any direct or indirect
beneficial ownership;
(B) The name of any broker, dealer or bank with
whom the Access Person maintains an account
in which any securities are held for the
direct or indirect benefit of the Access
Person; and
(C) The date that the report is submitted by the
Access Person.
(b) Exceptions from Reporting Requirements
(1) A person need not make a report under Section 7(a) of
this Code with respect to transactions effected for,
and Covered Securities held in, any account over
which the person has no direct or indirect influence
or control.
(2) A director of a Fund who is not an "interested
person" of the Fund within the meaning of Section
2(a)(19) of the Act, and who would be required to
make a report solely by reason of being a Fund
director, need not make:
(A) An initial holdings report under Section
7(a)(1) of this Code and an annual holdings
report under Section 7(a)(3) of this Code;
and
(B) A quarterly transaction report under Section
7(a)(2) of this Code, unless the director
knew or, in the ordinary course of
fulfilling his or her official duties as a
Fund director, should have known that during
the 15-day period immediately before or
after his or her transaction in a Covered
Security, the Fund purchased or sold the
Covered Security, or the Fund or its Adviser
considered purchasing or selling the Covered
Security.
(3) An Access Person to the Fund's Distributor need not
make a report to the Distributor under Section 7(a)
of this Code if:
(A) The Distributor is not an affiliated person
of any Fund or the Adviser; and
(B) The Distributor has no officer, director or
general partner who serves as an officer,
trustee, director or general partner of the
Fund or of the Adviser.
(4) An Access Person of the Adviser need not make a
quarterly transaction report to the Adviser under
Section 7(a)(2) of this Code if all the information
in the report would duplicate information recorded
under Rule 204-2(a)(12) or 204-2(a)(13) under the
Investment Advisers Act of 1940.
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(5) An Access Person need not make a quarterly
transaction report under Section 7(a)(2) of this Code
if the report would duplicate information contained
in broker trade confirmations or account statements
received by the Compliance Officer with respect to
the Access Person in the time period required by
Section 7(a)(2) of this Code, if all of the
information required by that Section is contained in
the broker trade confirmations or account statements,
or in the records of the Fund, the Adviser or the
Distributor.
(c) Any report required by Section 7(a) of this Code may contain a
statement that the report will not be construed as an admission that the person
making the report has any direct or indirect beneficial ownership in the Covered
Security to which the report relates.
8. Review of Reports
The Ethics Committee must review the reports submitted pursuant to
Section 7(a) of this Code and monitor personal trading activity of all Access
Persons for compliance with this Code.
9. Notification of Reporting Obligation
Each Fund and the Adviser and the principal underwriter of each Fund
must identify all of their respective Access Persons who are required to make
reports pursuant to Section 7(a) of this Code and must inform those Access
Persons of their reporting obligations.
10. Reporting of Violations; Sanctions
(a) The Adviser shall provide a written report to the Board of
Directors of each Fund, and the Board of Directors shall consider, at least
quarterly any issues arising under this Code or related compliance procedures
since the most recent prior report, including but not limited to any material
violations of this Code or related compliance procedures and the nature of any
action taken by the Ethics Committee in respect of such violation.
(b) Upon discovering a violation of this Code by any officer, director,
employee or general partner of the Adviser or Distributor or of any company
that, directly or indirectly, controls or is under common control with the
Adviser or Distributor, the Ethics Committee may impose such sanctions as it
deems appropriate, including, inter alia, a letter of censure or suspension,
termination of the employment of the violator or disgorgement of profits.
(c) With respect to a violation of this Code by any officer, director,
or employee of a Fund, the Board of Directors of the Fund may impose such
sanctions as it deems appropriate, including inter alia, a letter of censure,
suspension of any officer or employee, termination of the employment of the
violator or disgorgement of profits.
11. Miscellaneous
(a) Management of each Fund and the Adviser and the Distributor shall
certify to the Board of Directors of such Fund, no less frequently than
annually, that the Fund, Adviser or Distributor, as applicable, has adopted such
procedures as are reasonably necessary to prevent
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Access Persons who are directors, officers, general partners or controlling
persons of the Adviser or Distributor from violating this Code of Ethics and to
monitor compliance with this Code of Ethics by access persons who are officers,
directors or employees of the Fund.
(b) The Ethics Committee on behalf of the Funds, Adviser and
Distributor shall prepare an annual report to the Board of Directors of each
Fund that (i) summarizes existing procedures concerning personal investing and
any changes in the procedures made during the past year, (ii) identifies any
violations requiring significant remedial action during the past year, and (iii)
identifies any recommended changes in existing restrictions or procedures based
upon the Fund's experience under this Code of Ethics, evolving industry
practices, or developments in applicable laws or regulations.
(c) Recordkeeping: The Adviser shall maintain the following records in
the manner specified for the benefit of the Funds:
(1) A copy of this Code and any amendment thereof and a
copy of each code of ethics which is or at any time
within the past five years has been in effect with
respect to a Fund or the Adviser or Distributor shall
be preserved in an easily accessible place;
(2) A record of any violation of this Code, as in effect
from time to time, and of any action taken as a
result of such violation, shall be preserved in an
easily accessible place for a period of not less than
five years following the end of the fiscal year in
which the violation occurs;
(3) A copy of each report made by an Access Person
pursuant to this Code (including any information
provided pursuant to Section 7(b)(5)) shall be
preserved by the entity receiving the report for a
period of not less than five years from the end of
the fiscal year in which it is made, the first two
years in an easily accessible place;
(4) A list of all persons who are, or within the past
five years have been, required to make reports
pursuant to this Code shall be maintained in an
easily accessible place;
(5) A list of the names of all persons who are, or within
the past five years, have been, responsible for
reviewing the reports filed pursuant to Section 7 of
this Code shall be maintained in an easily accessible
place;
(6) A record of any approvals granted pursuant to Section
3(d) shall be preserved for a period of five years
from the end of the fiscal year in which such
approval is given; and
(7) A copy of each report made pursuant to Section 11(b)
of this Code must be maintained for at least five
years after the end of the fiscal year in which it
was made, the first two years in an easily accessible
place.
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*************************
I acknowledge that I have read the Code of Ethics (a copy of which has
been supplied to me, which I will retain for future reference) and agree to
comply in all respects with the terms and provisions thereof. I have disclosed
or reported all personal securities transactions required to be disclosed or
reported by this Code of Ethics.
Print Name______________________________
Date_______________________________ Signature_______________________________
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Annex A
The term "beneficial ownership" of securities would include not only
ownership of securities held by an Access Person for his or her own benefit,
whether in bearer form or registered in his or her own name or otherwise, but
also ownership of securities held for his or her benefit by others (regardless
of whether or how they are registered) such as custodians, brokers, executors,
administrators, or trustees (including trusts in which he or she has only a
remainder interest), and securities held for his or her account by pledgees,
securities owned by a partnership in which he or she is a member, and securities
owned by any corporation which he or she should regard as a personal holding
corporation and securities in which the Access Person otherwise has a direct or
indirect pecuniary interest as defined in Rule 16a-1(2) under the Securities
Exchange Act of 1934. It would exclude securities held by a corporation or
similar entity in which the Access Person is a shareholder if the Access Person
is not a controlling shareholder of the corporation or entity and the Access
Person does not have or share investment control over the entity's portfolio.
Correspondingly, this term would exclude securities held by an Access Person for
the benefit of someone else.
Ordinarily, this term would not include securities held by executors or
administrators in estates in which an Access Person is a legatee or beneficiary
unless there is a specific legacy to such person of such securities or such
person is the sole legatee or beneficiary and there are other assets in the
estate sufficient to pay debts ranking ahead of such legacy, or the securities
are held in the estate more than a year after the decedent's death.
Securities held in the name of another should be considered as
"beneficially" owned by an Access Person where such person enjoys "benefits
substantially equivalent to ownership." The SEC has said that although the final
determination of beneficial ownership is a question to be determined in the
light of the facts of the particular case, generally a person is regarded as the
beneficial owner of securities held in the name of his or her spouse and their
minor children. Absent special circumstances such relationship ordinarily
results in such person obtaining benefits substantially equivalent to ownership,
e.g., application of the income derived from such securities to maintain a
common home, to meet expenses which such person otherwise would meet from other
sources, or the ability to exercise a controlling influence over the purchase,
sale or voting of such securities.
An Access Person also may be regarded as the beneficial owner of
securities held in the name of another person, if by reason of any contract,
understanding, relationship, agreement or other arrangement, he or she obtains
therefrom benefits substantially equivalent to those of ownership. Moreover, the
fact that the holder is a relative or relative of a spouse and sharing the same
home as an Access Person may in itself indicate that the Access Person would
obtain benefits substantially equivalent to those of ownership from securities
held in the name of such relative. Thus, absent countervailing facts, it is
expected that securities held by relatives who share the same home as an Access
Person will be treated as being beneficially owned by the Access Person.
An Access Person also is regarded as the beneficial owner of securities
held in the name of a spouse, children, or other person, even though he or she
does not obtain therefrom the aforementioned benefits of ownership, if he or she
can vest or revest title in him/herself at once or at some future time
A-1