EXHIBIT 12(A)
MEMBERS MUTUAL FUNDS
ULTRA SERIES FUND
FORM OF
CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND
SENIOR FINANCIAL OFFICERS
AUGUST 31, 2005
Covered Officers/Purpose of the Code
This code of ethics (this "Code") for each of MEMBERS Mutual Funds and the Ultra
Series Fund (each, a "Trust," and collectively, the "Trusts") has been adopted
by the board of trustees ("Board") for each Trust and applies to each Trust's
Principal Executive (i.e., each Trust's president) and Senior Financial (i.e.,
each Trust's treasurer and assistant treasurers) Officers (such persons are
hereinafter referred to collectively as the "Covered Officers," and each such
person is set forth in Exhibit A hereto) 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 registrant files with, or submits to, the SEC and
in other public communications made by the Trusts;
- 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.
The Board has adopted this Code for the purpose of furthering compliance with
Item 2 of Form N-CSR,(1) which implements Section 406 of the Sarbanes-Oxley Act
of 2002 (the "2002 Act").(2) Section 406 of the 2002 Act requires disclosure by
management investment companies that are
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(1) Item 2 of Form N-CSR requires a registered management investment company to
disclose annually whether, as of the end of the period covered by the
report, that company has adopted a code of ethics that applies to the
registrant's principal executive officer, principal financial officer,
principal accounting officer, or controller, or persons performing similar
functions. If the registrant has not adopted such a code of ethics, the
registrant must explain why it has not done so. Under Item 2, the
registrant also must: (1) file with the SEC a copy of such code as an
exhibit to its annual report; (2) post the text of the code on it's
internet website and disclose, in its annual report, its internet address,
and the fact that it as posted the code on its website; or (3) undertake in
its most recently filed semi-annual report on Form N-CSR to provide to any
person without charge, upon request, a copy of the code and explain the
manner in which this request may be made. Disclosure also is required of
amendments to, or waivers (including implicit waivers) from, a provision of
the code in the registrant's annual report on Form N-CSR or on the
registrant's website. If the registrant intends to satisfy the disclosure
requirement by posting this information on its website, the registrant will
be required to disclose its internet address and such intention. Investment
companies must make the disclosure discussed in this footnote irrespective
of whether these officers are employed by the registrant or a third party.
(2) The SEC rules require disclosure only about whether the registrant has
adopted a code of ethics in accordance with the 2002 Act, but, in view of
the seniority of the officers covered by the Code, it has been deemed
appropriate that the Trusts' respective Boards of Trustees also adopt this
Code for the Trusts.
registered with the Securities and Exchange Commission (the "SEC") under the
Investment Company Act of 1940 (the "1940 Act"), concerning a code of ethics for
senior financial officers of these investment companies.
ROLE OF THE DESIGNATED PERSONS. As set forth in greater detail below, the
Covered Officers shall report to the Vice President of Corporate Compliance for
CUNA Mutual Group, another designated senior legal or compliance officer of the
Trusts or of a company ("Control Company") in a control relationship to the
Trusts (as such term is defined under Section 2(a)(19) of the 1940 Act, a
designated senior legal or compliance officer of a Control Company of the
Trusts, or another appropriate designated person (each hereinafter referred to
as a "Designated Person").(3)
As discussed in footnote 3, given the seniority of the Covered Officers,
investigations, interpretations and waivers(4) regarding any existing, actual or
potential violation of this Code shall be the responsibility of the Designated
Person(s); except that interpretations or waivers sought by the President of the
affected Trusts shall be considered by the Audit Committee or the Board of
Trustees of such Trust.
NOT A 1940 ACT RULE 17J-1 CODE OF ETHICS. This Code is not adopted under, nor
intended to serve as a basis for complying with the requirements of, Rule 17j-1
under the 1940 Act.
II. COVERED OFFICERS SHOULD ACT HONESTLY AND CANDIDLY
This Code is applicable to all Covered Officers of the Trusts. 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.
Each Covered Officer must:
- act with integrity, including being honest and candid while still
maintaining the confidentiality of information where required by law
of the Trust's policies;
- observe applicable laws and governmental rules and regulations,
accounting standards and Trust policies;
- adhere to a high standard of business ethics; and
- place the interests of the Trust and its shareholders before the
Covered Officer's own personal interests.
All activities of Covered Officers should be guided by and adhere to these
standards.
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(3) The SEC has indicated that any Designated Person "should have sufficient
status within the company to engender respect for the [C]ode and the
authority to adequately deal with the persons subject to the [C]ode
regardless of their stature in the company." In addition a Designated
Person also may be a Trustee of a Trust who is not deemed to be an
"interested person" of the Trust, as that term is defined under Section
2(a)(19) of the 1940 Act (hereinafter, an "Independent Trustee"), the
chairperson of the Audit Committee of the Board of Trustees ("Audit
Committee") of a Trust, or even the counsel to the Independent Trustees, as
appropriate.
(4) 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" and "implicit
waiver," which also must be disclosed in the Form N-CSR, as "the
registrant's failure to take action within a reasonable period of time
regarding a material departure from a provision of the code of ethics that
has been made known to an executive officer of the registrant."
III. COVERED OFFICERS SHOULD HANDLE ETHICALLY ACTUAL AND APPARENT CONFLICTS OF
INTEREST
OVERVIEW. The 1940 Act is designed, in part, to address inherent conflicts of
interest that exist in the management of an investment company's assets by a
third party (i.e., the investment company's investment adviser). Similarly, the
Investment Advisers Act of 1940, as amended, (the "Advisers Act"), addresses
conflicts of interest faced by an investment adviser in the management of client
assets. The principles set forth in this section relating to conflicts of
interest reflect the fact that investment companies and investment advisers
thereof already are subject to prohibitions on certain activities, including
self-dealing, and substantial limitations regarding conflicts of interest by the
1940 Act and the Advisers Act and the SEC rules promulgated thereunder. In light
of the existing structural, statutory and regulatory environment for registered
investment companies, a code of ethics broader than necessary to meet the new
2002 Act code of ethics requirement may be unnecessary. This Code, however, is
intended to reflect the general principal recognizing the need to hold persons
responsible for managing other people's money to the highest standards of
integrity.
GUIDING PRINCIPLES. A "conflict of interest" occurs when a Covered Officer's
private interest interferes with the interests of, or his or her service to, a
Trust. A conflict of interest can arise when a Covered Officer has interests
that may make it difficult to perform that Covered Person's work related to the
Trust objectively. 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 such Covered Officer's position in the Trust. Service to the
Trust should not be subordinated to personal gain and advantage.
Certain conflicts of interest arise out of the relationships between Covered
Officers and the Trust that already are subject to conflict of interest
provisions in the 1940 Act and 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 the Trust because of their status as
"affiliated persons" of the Trust, as that term is defined under Section 2(a)(3)
of the 1940 Act. The Trust's and the 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 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 the Trust and the 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
Trust or for the adviser, or for both), be involved in establishing policies and
implementing decisions which will have different effects on the adviser and the
Trust. The participation of the Covered Officers in such activities is inherent
in the contractual relationship between the Trust and the adviser and is
consistent with the performance by the Covered
Officers of their duties as officers of the Trust and, if addressed in
conformity with the provisions of the 1940 Act and the Advisers Act will be
deemed to have been handled ethically. In addition, it is recognized by the
Board of Trust 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 Acts. In reading the following
examples of conflicts of interest under the Code, Covered Officers should keep
in mind that such a list cannot ever be exhaustive by covering every possible
scenario. It follows that the overarching principle is that the personal
interest of a Covered Officer should not be placed improperly before the
interest of the Trust.
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Each Covered Officer must:
- not use personal influence or personal relationships improperly to
influence investment decisions or financial reporting by a Trust
whereby the Covered Officer would benefit personally to the detriment
of the Trust;
- not cause a Trust to take action, or fail to take action, for the
individual personal benefit of the Covered Officer rather than the
benefit the Trust;
- not use material non-public knowledge of portfolio transactions made
or contemplated for a Trust to profit or cause others to profit in
contemplation of the market effect of such transactions;
- report at least annually on the Trust's "Trustees and Officers
Questionnaire" any and all material transactions, affiliations or
relationships that could reasonably expected to give rise to, or be
related to, a conflict of interest; and
- handle any actual or apparent conflict of interest ethically.
Certain conflict of interest situations should always, if material, be discussed
with the Designated Persons. Examples of these include:
- service as a director or trustee on the board of any non-charitable or
commercial company;
- the receipt of any gifts of more than de minimis value (i.e., gifts in
excess of $100) from any person or entity that does business with or
on behalf of a Trust;
- the receipt of any entertainment from any company with which a 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 to raise any question of impropriety;
- 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 or any
affiliated person thereof;
- 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.
In addition, any activity or relationship that would present a conflict of
interest for a Covered Officer also would likely present a conflict for the
Covered Officer if a member of the Covered Officer's family engages in such an
activity or has such a relationship.
Disclosure and Compliance
- Each Covered Officer should be familiar with the disclosure
requirements generally applicable to the Trusts;
- each Covered Officer should not knowingly misrepresent, or cause
others to misrepresent, facts about the Trusts to others, whether
within or outside the Trusts, including to the Trusts' trustees and
auditors, and to governmental regulators and self-regulatory
organizations;
- each Covered Officer should, to the extent appropriate within his or
her area of responsibility, consult with other officers and employees
of the Trusts and the adviser with the goal of promoting full, fair,
accurate, timely and understandable disclosure in the reports and
documents the Trusts file with, or submit to, the SEC and in other
public communications made by the Trusts; and
- it is the responsibility of each Covered Officer to promote compliance
with the standards and restrictions imposed by applicable laws, rules
and regulations.
In addition, each Covered Officer is required to be familiar, and to comply,
with the relevant Trust's Disclosure Controls and Procedures in connection with
the 2002 Act so that the Trust's subject reports and documents filed with the
SEC comply in all material respects with the applicable federal securities laws
and SEC rules. Moreover, each Covered Officer having direct or supervisory
authority regarding these SEC filings or the relevant Trust's other public
communications, also should consult, to the extent appropriate within the
Covered Person's area of responsibility, with Control Company officers and
employees and take appropriate steps regarding such disclosures with the goal of
rendering such disclosures full, fair, accurate, timely and understandable.
Reporting and Accountability
Each Covered Officer must:
- upon adoption of the Code, sign and submit to the MCA Chief Compliance
Officer a written acknowledgement that he or she has received, read,
and understands the Code;
- annually thereafter affirm to the MCA Chief Compliance Officer in
writing that he or she has complied with the requirements of the Code;
- not retaliate against any employee or Covered Officer for reports of
potential violations that are made in good faith; and
- notify the Designated Person(s) promptly if he or she knows of any
violation of this Code. Failure to do so is itself a violation of this
Code.
Except as otherwise described below, the Designated Person(s) will be
responsible for applying this Code to specific situations in which questions are
presented under it and shall have the
authority to interpret this Code in any particular situation. The Designated
Person(s) shall take all actions that such Designated Person(s) may deem
necessary and appropriate to investigate any reported existing, actual or
potential violations. Such actions will include reporting any existing or actual
violations of this Code to the MCA Chief Compliance Officer, as well as
reporting, when such Designated Person deems necessary or appropriate, potential
violations of this Code to the MCA Chief Compliance Officer. In addition, any
conflicts of interest that pertain to a Trust's president shall be submitted for
consideration to the Chief Compliance Officer for CUNA Mutual Group (the "CCO").
The CCO shall be responsible for making a recommendation as to any approvals or
waivers sought by the President of a Trust and shall refer such recommendation
to the MCA Chief Compliance Officer, which shall then follow such
recommendation. The MCA Chief Compliance Officer shall report, or cause to be
reported, to each Trust's Board, on an annual basis, any issues arising under
this Code. The Trusts will follow these procedures in investigating and
enforcing this Code:
- Designated Person(s) will take all appropriate action to investigate
any potential violations reported thereto;
- if, after such investigation, a Designated Person determines that no
violation has occurred, he or she is not required to take any further
action;
- any matter that a Designated Person determines is a violation will be
reported to the MCA Chief Compliance Officer;
- if the MCA Chief Compliance Officer concurs that a violation has
occurred, he or she will consider appropriate action, which may
include review of, and appropriate modifications to, applicable
policies and procedures, as well as notification to appropriate
personnel of the investment adviser or its board, or of the affected
Trust's Control Company. In addition, the MCA Chief Compliance Officer
shall determine whether to refer the matter to the affected Trust's
Board for a determination of whether to dismiss the Covered Officer is
appropriate, if, in its judgment, such corrective action may be
warranted;
- the Designated Person(s) will be responsible for granting waivers, as
appropriate, and will make a report concerning such waivers to the MCA
Chief Compliance Officer; and
- any changes to or waivers of this Code will, to the extent required,
be disclosed as provided by SEC rules.
VI. OTHER POLICIES AND PROCEDURES
This Code shall be the sole code of ethics adopted by the Trusts for purposes of
Section 406 of the 2002 Act and the rules and forms applicable to registered
investment companies thereunder. Insofar as other policies or procedures of the
Trusts, the Trusts' 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 superceded by this Code to the extent
that they overlap or conflict with the provisions of this Code. The Trusts' and
their investment adviser's and principal underwriter's codes of ethics under
Rule 17j-1 under the 1940 Act and the Advisers Act are separate requirements
applying to the Covered Officers and others, and are not part of this Code.
VII. AMENDMENTS
Except as to Exhibit A, this Code may not be amended except in written
form, which is specifically approved or ratified by a majority vote of each
Trust's respective Board, including a majority of its independent 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.
Except as otherwise required by law or this Code, such matters shall not be
disclosed to anyone other than the appropriate Board and their counsel, the
appropriate Trust and its adviser, the MCA Chief Compliance Officer, Designated
Person(s), appropriate personnel within the Office of the General Counsel and
other appropriate compliance personnel.
IX. INTERNAL USE
The Code is intended solely for the internal use by the Trusts and does not
constitute an admission, by or on behalf of any Trust, as to any fact,
circumstance, or legal conclusion.
EXHIBIT A
COVERED PRINCIPAL EXECUTIVE AND FINANCIAL OFFICERS
MEMBERS MUTUAL FUNDS
David P. Marks, President
Mary E. Hoffmann, Treasurer
ULTRA SERIES FUND
David P. Marks, President
Mary E. Hoffmann, Treasurer