1838 INVESTMENT ADVISERS FUNDS
1838 BOND-DEBENTURE TRADING FUND
CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND
SENIOR FINANCIAL OFFICERS
I. Purpose of the Code
The purpose of this code of ethics (the "Code") is to promote:
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 a registrant files with, or
submits to, the Securities and Exchange Commission ("SEC")
and in other public communications made by the registrant;
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 (defined below) 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
This Code applies to the Principal Executive Officer and the
Principal Financial Officer (the "Covered Officers") of 1838 Investment Advisers
Funds and 1838 Bond-Debenture Trading Fund (collectively, the "Funds" and each a
"Company"). The names of the Covered Officers of each Company are listed on
Exhibit A.
III. Covered Officer's Actual and Apparent Conflicts of Interest
A "conflict of interest" occurs when a Covered Officer's
private interest interferes with the interests of, or his or her service to, the
Company. 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 his or her 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. The Company'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 arise from, or as a result of, the contractual
relationship between the Company and the investment adviser, or any other
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 the Company, for the adviser, for
other Company service providers, or for all of them), be involved in
establishing policies and implementing decisions that will have different
effects on the adviser, other service providers, 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 other service
provider 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 each Company's Board of Directors or Board of Trustees, as the
case may be, ("the Boards") 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 this 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 his or her 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 the Company;
o report to the Company's Board of Directors or Board of
Trustees, as the case may be, any affiliations or other
relationships related to conflicts of interest that are
disclosed on the Company's Directors and Officers
Questionnaire, or Trustees and Officers Questionnaire, as
the case may be.
There are some conflict of interest situations that should
always be approved by the Chief Compliance Officer of the Company if material.
Examples of these include:
o service as a director on the board of any public or private
company;
o the receipt of any gifts of more than a de minimis value;
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 question 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;
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.
IV. Disclosure and Compliance
o Each Covered Officer should familiarize himself or herself
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 or trustees, as the case may be, and
auditors, and to governmental regulators and self-regulatory
organizations;
o Each Covered Officer should, to the extent appropriate
within his or her area of responsibility, consult with other
officers and employees of the Funds, the adviser, and other
affiliated service providers 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
o It is the responsibility of each Covered Officer to promote
compliance with the standards and restrictions imposed by
applicable laws, rules and regulations.
V. 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 or she has received, read, and understands the Code;
o annually thereafter affirm to the Board that he or she has
complied with the requirements of the Code;
o 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;
and
o notify the independent Directors or independent Trustees,
as the case may be, promptly if he or she knows of any
violation of this Code. Failure to do so is itself a
violation of this Code.
The [legal officer] of the Funds' investment adviser 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.1 However, any approvals or waivers2 sought by a Covered
Officer will be considered by the Audit Committee of the Board (the
"Committee").
The Funds will follow these procedures in investigating and
enforcing this Code:
o the Chief Compliance Officer will take all
appropriate action to investigate any potential violations
reported to him;
o if, after such investigation, the Chief Compliance Officer
believes that no violation has occurred, the Chief
Compliance Officer is not required to take any further
action;
o any matter that the Chief 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; notification to appropriate personnel of the
investment adviser or its board; or a recommendation to
dismiss the Covered Officer;
o the Committee 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.
VI. Other Policies and Procedures
This Code shall be the sole code of ethics adopted by the
Funds 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 Funds, the Funds' 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
superseded by this Code to the extent that they overlap or conflict with the
provisions of this Code. The Funds' and their investment adviser's and principal
underwriter's codes of ethics under Rule l7j-l under the Investment Company Act
and the adviser's more detailed policies and procedures set forth in are
separate requirements applying to the Covered Officers and others, and are not
part of this Code.
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1 The Chief Compliance Officer is authorized to consult, as
appropriate, with the chair of the Committee and/or, counsel to the Company, and
is encouraged to do so.
2 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 must also be disclosed, 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
office" of the registrant.
VII. 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 directors or trustees, as the case may be.
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 its
counsel.
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 Company, as to any
fact, circumstance, or legal conclusion.
Date: September 10, 2003
Exhibit A
Persons Covered by this Code of Ethics
1838 INVESTMENT ADVISORS FUNDS
W. Thacher Brown
John J. Kelley
1838 BOND-DEBENTURE TRADING FUND
John H. Donaldson
John J. Kelley