THE GKM FUNDS
CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR
FINANCIAL OFFICERS
I. COVERED OFFICERS/PURPOSE OF THE CODE
The code of ethics (this "Code") for The GKM Funds (the "Company") applies
to the Company's Principal Executive Officer and Principal Financial Officer
(the "Covered Officers" each of whom is set forth in Exhibit A) for the purpose
of promoting:
o honest and ethical conduct, including the ethical handling of actual
or apparent conflicts of interest between personal and professional
relationships;
o full, fair, accurate, timely and understandable disclosure in
reports and documents that the Company files with, or submits to,
the Securities and Exchange Commission ("SEC") and in other public
communications made by the Company;
o compliance with applicable laws and governmental rules and
regulations;
o the prompt internal reporting of violations of the Code to an
appropriate person or persons identified in the Code; and
o 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.
II. COVERED OFFICERS SHOULD HANDLE ETHICALLY ACTUAL AND APPARENT CONFLICTS OF
INTEREST
OVERVIEW. A "conflict of interest" occurs when a Covered Officer's private
interests interfere with the interests of, or his service to, the Company. 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 Company.
Certain conflicts of interest arise out of the relationships between
Covered Officers and the Company and already are subject to conflict of interest
provisions in the 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 Company because
of their status as "affiliated persons" of the Company. This Code does not, and
is not intended to, repeat or replace any compliance programs and procedures of
the Company or the investment adviser designed to prevent, or identify and
correct, violations of the Investment Company Act and the Investment Advisers
Act.
Although typically not presenting an opportunity for improper personal
benefit, conflicts arise from, or as a result of, the contractual relationship
between the Company and the investment adviser or the administrator of which a
Covered Officer is also an officer or employee. As a result, this Code
recognizes that the Covered Officers will, in the normal course of their duties,
whether formally for the Company and/or for the adviser or the administrator, be
involved in establishing policies and implementing decisions that will have
different effects on the adviser or the administrator and the Company. The
participation of the Covered Officers in such activities is inherent in the
contractual relationship between the Company and the adviser or the
administrator and is consistent with the performance by the Covered Officers of
their duties as officers of the Company. 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 Company's Board of Trustees ("Board") that the Covered
Officers may also be officers or employees of one or more investment companies
covered by 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 Company.
Each Covered Officer must:
o not use personal influence or personal relationships improperly to
influence investment decisions or financial reporting by the Company
whereby the Covered Officer would benefit personally to the
detriment of the Company;
o not cause the Company to take action, or fail to take action, for
the individual personal benefit of the Covered Officer rather than
the benefit of the Company;
o 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;
o report at least annually any affiliations or other relationships
related to conflicts of interest that the Company's Trustees and
Officers Questionnaire covers.
There are some conflict of interest situations that should always be
discussed with the compliance officer of the Company appointed by the Board (the
"Compliance Officer"), if material. Examples of these include:
o service as a director on the board of any public company;
o the receipt of any non-nominal gifts;
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o the receipt of any entertainment from any company with which the
Company 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 questions
of impropriety;
o any ownership interest in, or any consulting or employment
relationship with, any of the Company's service providers, other
than its investment adviser, principal underwriter, administrator or
any affiliated person thereof; and
o a direct or indirect financial interest in commissions, transaction
charges or spreads paid by the Company 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
o Each Covered Officer should familiarize himself with the disclosure
requirements generally applicable to the Company.
o Each Covered Officer should not knowingly misrepresent, or cause
others to misrepresent, facts about the Company to others, whether
within or outside the Company, including to the Company's directors
and auditors, and to governmental regulators and self-regulatory
organizations.
o Each Covered Officer should, to the extent appropriate within his
area of responsibility, consult with other officers and employees of
the Company and of the adviser or the administrator with the goal of
promoting full, fair, accurate, timely and understandable disclosure
in the reports and documents the Company files with, or submits to,
the SEC and in other public communications made by the Company.
o 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:
o upon adoption of the Code (or thereafter as applicable, upon
becoming a Covered Officer), affirm in writing to the Board that he
has received, read, and understands the Code;
o annually thereafter affirm to the Board that he has complied with
the requirements of the Code;
o not retaliate against any other Covered Officer or any employee of
the Company or their affiliated persons for reports of potential
violations that are made in good faith; and
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o notify the Compliance Officer for the Company promptly if he knows
of any violation of this Code. Failure to do so is itself a
violation of this Code.
The Compliance Officer for the Company 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
approvals or waivers sought by a Covered Officer will be considered by the Audit
Committee (the "Committee"), which will make recommendations to the Board.
The Company will follow these procedures in investigating and enforcing
this Code:
o the Compliance Officer for the Company will take all appropriate
action to investigate any potential violations reported to him;
o the Compliance Officer will review with the outside legal counsel to
the Company the findings and conclusions of such investigation;
o if, after such investigation and review, the Compliance Officer
believes that no violation has occurred, the Compliance Officer is
not required to take any further action;
o any matter that the Compliance Officer believes is a violation will
be reported to the Committee;
o if the Committee concurs 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 (including
changes to this Code); notification of the violation to appropriate
personnel of the investment adviser or the administrator or its
board; or a recommendation to take disciplinary action against the
Covered Officer, which may include, without limitation, dismissal;
o the Board will be responsible for granting waivers, as appropriate;
and
o 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 Company 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 Company, the Company's adviser, principal
underwriter, the administrator 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 Company's and its investment
adviser's and principal underwriter's codes of ethics under Rule 17j-1 under the
Investment Company Act are separate requirements applying to the Covered
Officers and others, and are not part of this Code.
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VI. AMENDMENTS
Any amendments to this Code, other than amendments to Exhibit A, must be
approved or ratified by a majority vote of the Board, including a majority of
independent trustees.
VII. CONFIDENTIALITY
To the extent possible, all records, reports and other information
prepared, maintained or acquired pursuant to this Code will be treated as
confidential, it being understood that it may be necessary or advisable, that
certain matters be disclosed to third parties (e.g., to the board of directors
or officers of the adviser or the administrator).
VIII. INTERNAL USE
The Code is intended solely for the internal use by the Company and does
not constitute an admission, by or on behalf of the Company, as to any fact,
circumstance, or legal conclusion.
Date: June 25, 2003
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EXHIBIT A
Persons Covered by this Code of Ethics
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Timothy J. Wahl
Mark J. Seger
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CODE OF ETHICS
FOR PRINCIPAL EXECUTIVE
AND
SENIOR FINANCIAL OFFICERS
CERTIFICATE OF COMPLIANCE
As a Covered Officer as defined in the Code of Ethics For Principal
Executive and Senior Financial Officers of The GKM Funds (the "Code"), I hereby
certify that I have received and have read and fully understand the Code, and I
recognize that I am subject to the Code. I further certify that I will comply
with the requirements of the Code.
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Signature
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Name (Please Print)
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Date
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