EX-99.CODE ETH
HATTERAS MASTER FUND, L.P.
HATTERAS MULTI-STRATEGY FUND I, L.P.
HATTERAS MULTI-STRATEGY TEI FUND, L.P.
HATTERAS MULTI-STRATEGY INSTITUTIONAL FUND, L.P.
HATTERAS MULTI-STRATEGY TEI INSTITUTIONAL FUND, L.P.
CODE OF ETHICS FOR PRINCIPAL EXECUTIVE
AND SENIOR FINANCIAL OFFICERS
Effective Date: March 10, 2005
I. COVERED OFFICERS/PURPOSE OF THE CODE
This Code of Ethics (the "Code") for the investment companies within the
Hatteras Master Fund, L.P., Hatteras Multi-Strategy Fund I, L.P., Hatteras
Multi-Strategy TEI Fund, L.P., Hatteras Multi-Strategy Institutional Fund, L.P.
and Hatteras Multi-Strategy TEI Institutional Fund, L.P. (collectively the
"Funds' and each, a "Fund") applies to the Funds' Principal Executive Office,
Principal Financial Officer, and Principal Accounting Officer, if any (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 a Fund files with, or submits to, the
Securities and Exchange commission ("SEC"), and in other public
communications made by a 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 shall adhere to a high standard of business
ethics and shall be sensitive to situations that may give rise to
actual or apparent conflicts of interest.
II. ADMINISTRATION OF THE CODE
ADMINISTRATION. The administration of the Code shall be supervised by
the Funds' Chief Compliance Officer.
Any waivers sought by the Covered Officer must be approved by each
Audit Committee of the Funds (collectively, the "Audit Committee").
III. MANAGING CONFLICTS OF INTEREST
OVERVIEW. A "conflict of interest" occurs when a Covered Officer's
private interest interferes with the interests of, or his/her service to, a
Fund. For example, a conflict of interest would arise if a Covered Officer,
or a family member, receives improper personal benefits as a result of the
Covered Officer's position with a Fund.
Certain conflicts of interest arise out of the relationships between
Covered Officers and a Fund and already are subject to conflict of interest
provisions in the Investment Company Act of 1940, as amended (the "Company
Act"), and the Investment Advisers Act of 1940, as amended (the "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 a Fund because of their status as "affiliated persons" of the Fund. A
Fund's and its investment adviser's compliance programs and procedures are
designed to prevent, or identify and correct, violations of those
provisions. This Code does not, and is not intended to, repeat or replace
those 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 may arise from, or as a result of, the contractual
relationship between a Fund and its investment adviser, administrator,
principal underwriter, pricing and bookkeeping agent and/or transfer agent
(each, a "Service Provider") 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 a
Fund or for a Service Provider, or for both), be involved in establishing
policies and implementing decisions that will have different effects on the
Service Provider and a Fund. The participation of the Covered Officers in
such activities is inherent in the contractual relationship between the
Fund and the Service Provider and is consistent with the performance by the
Covered Officers of their duties as officers of a Fund. 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 or
other codes.
Other conflicts of interest are covered by the Code, even if such
conflicts of interest are not subject to provisions of the Company Act and
the 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 a Fund.
Each Covered Officer must:
- not use personal influence or personal relationships
improperly to influence investment decisions or financial
reporting by a Fund whereby the Covered Officer or an
immediate family member would benefit personally to the
detriment of a Fund;
- not cause a Fund to take action, or fail to take action, for
the individual personal benefit of the Covered Officer or an
immediate family member rather than the benefit of the
Fund;(1)
- not use material non-public knowledge of portfolio
transactions made or contemplated for the Company to trade
personally or cause others to trade personally in
contemplation of the market effect of such transactions; and
- report at least annually his or her affiliations and other
relationships on each Fund's annual Directors and Officers
Questionnaire.
There are some conflict of interest situations that must be approved
by the Chief Compliance Officer, after consultation with the Chief Legal
Officer. Those situations include, but are not limited to:
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(1) For purposes of this Code, personal trading activity of the Covered
Officers shall be monitored in accordance with the Funds Code of Ethics.
Each Covered Officer shall be considered an "Access Person" under such
Code. The term "immediate family" shall have the same meaning as provided
in such Code.
- serve as director on the board of any public or private
company;
- the receipt during any 12-month period of any gifts in
excess of $100 in the aggregate from a third party that does
or seeks to do business with the Funds; and
- the receipt of any entertainment from any company with which
a 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.
IV. DISCLOSURE AND COMPLIANCE
Each Covered Officer shall:
- be familiar with the disclosure requirements generally
applicable to the Funds;
- not knowingly misrepresent, or cause others to misrepresent,
facts about any Fund to others, whether within or outside
the Fund, including to the Fund's trustees or directors and
auditors, and to governmental regulators and self-regulatory
organizations;
- to the extent appropriate within his/her 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 file with, or submit to, the
SEC and in other public communications made by the Funds;
and
- promote compliance with the standards and restrictions
imposed by applicable laws, rules and regulations.
V. REPORTING AND ACCOUNTABILITY
Each Covered Officer must:
- upon adoption of the Code (or after becoming a Covered
Officer), affirm in writing to the Board that he/she has
received, read and understands the Code;
- annually affirm to the Board compliance with the
requirements of the Code;
- not retaliate against any other Covered Officer or any
employee of the Funds or their affiliated persons for
reports of potential violations that are made in good faith;
- notify the Chief Compliance Officer promptly if he/she knows
of any violation of this Code; and
- respond to questionnaires circulated periodically in
connection with the preparation of disclosure documents for
the Funds.
The Chief Compliance Officer shall maintain records of all activities
related to this Code.
The Funds will follow the procedures set forth below in investigating
and enforcing this Code:
- The Chief Compliance Officer will take all appropriate
action to investigate any potential violation reported to
him/her;
- If, after such investigation, the Chief Compliance Officer
determines that no violation has occurred, the Chief
Compliance Officer will notify the person(s) reporting the
potential violation, and the Chief Compliance Officer will
report his/her conclusions to the Audit Committee;
- Any matter that the Chief Compliance Officer determines may
be a violation will be reported to the Audit Committee;
- If the Audit Committee determines that a violation has
occurred, it will inform and make a recommendation to the
Board, which will consider appropriate action, which may
include review of, and appropriate modifications to,
applicable policies and procedures; notification to the
Chief Executive Officer of the Funds; or a recommendation to
sanction or dismiss the Covered Officer;
- The Audit Committee will be responsible for granting waivers
in its sole discretion;
- Any changes to or waivers of this Code will, to the extent
required, be disclosed as provided by SEC rules.
The Chief Compliance Officer shall:
- report to the Audit Committee quarterly any approvals
provided in accordance with Section III of this Code; and
- report to the Audit Committee quarterly any violations of,
or material issues arising under, this Code.
VI. OTHER POLICIES AND PROCEDURES
This Code shall be the sole code of ethics adopted by the Funds for the
purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms
applicable to registered investment companies thereunder. Insofar as other
polices or procedures of the Funds or the Funds' Service Providers govern or
purport to govern the behavior or activities (including, but not limited to,
personal trading 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 Funds' and their investment
advisers' and principal underwriter's codes of ethics under Rule 17j-1 under the
Company Act and any policies and procedures of the Service Providers are
separate requirements applicable to the Covered Officers and are not part of
this Code.
VII. AMENDMENTS
All material amendments to this Code must be approved or ratified by the
Board, including a majority of independent directors or trustees.
VIII. CONFIDENTIALITY
All reports and records prepared or maintained pursuant to this Code will
be considered confidential and shall be maintained and protected accordingly.
IX. 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.