IPS FUNDS
CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND
PRINCIPAL FINANCIAL OFFICERS
I. Covered Officers/Purpose of the Code
The code of ethics (this "Code") for IPS Funds (the "Trust") applies to
the Trust's Principal Executive Officer, Principal Financial Officer and
Principal Accounting Officer(s) (the "Covered Officers" each of whom are 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 a registrant files with, or submits
to, the Securities and Exchange Commission ("SEC") and in
other public communications made by the Trust;
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.
II. Covered Officers Should Handle Ethically Actual and Apparent
Conflicts of Interest
Overview. A "conflict of interest" occurs when a Covered Officer's
private interest in any material respect interferes with the interests of, or
his service to, the Trust. 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 Trust.
Certain conflicts of interest arise out of the relationships between
Covered Officers and the Trust 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, other than shares of
beneficial interest of the Trust) with the Trust because of their status as
"affiliated persons" of the Trust. 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 arise from, or as a result of, the contractual relationship
between the Trust and the investment adviser/administrator 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/administrator, or for both), be
involved in establishing policies and implementing decisions that may have
different effects on the adviser/administrator and the Trust. The participation
of the Covered Officers in such activities is inherent in the contractual
relationship between the Trust and the adviser/administrator and is consistent
with the performance by the Covered Officers of their duties as officers of the
Trust. 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 Trust'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 Trust.
Each Covered Officer must:
o not use his personal influence or personal relationships
improperly to influence investment decisions or financial
reporting by the Trust whereby the Covered Officer would
benefit personally to the detriment of the Trust;
o not cause the Trust to take action, or fail to take action,
for the individual personal benefit of the Covered Officer to
the detriment of the Trust;
o not use material non-public knowledge of portfolio
transactions made or contemplated for the Trust 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
Trust's Trustees and Officers Questionnaire covers.
There are some conflict of interest situations that should always be
discussed with the Audit Committee of the Trust if such situations might have a
material adverse effect on the Trust. Examples of these include:
o service as a trustee on the board of any public company;
o the receipt of non-nominal gifts;
o the receipt of entertainment from any company with which the
Trust has current or prospective business dealings, including
investments in such companies, 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;
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o 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;
o a direct or indirect financial interest in commissions,
transaction charges or spreads paid by the Trust for effecting
portfolio transactions, including but not limited to certain
soft dollar arrangements, 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 Trust;
o each Covered Officer should not knowingly misrepresent, or
cause others to misrepresent, facts about the Trust to others,
whether within or outside the Trust, including to the Trust's
trustees 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 Trust and the adviser/administrator with the
goal of promoting full, fair, accurate, timely and
understandable disclosure in the reports and documents the
Trust files with, or submits to, the SEC and in other public
communications made by the Trust; 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.
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 Trust or their affiliated persons for reports
of potential violations that are made in good faith; and
o notify the Audit Committee for the Trust promptly if he knows
of any material violation of this Code.
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The Audit Committee 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 Trust will follow these procedures in investigating and enforcing
this Code:
o the compliance officer of the investment adviser to the Trust,
IPS Advisory, Inc. (or such other Trust officer or other
investigator as the Audit Committee may from time to time
designate) (the "Investigator"), shall take appropriate action
to investigate any potential violations reported to him;
o if, after such investigation, the Investigator believes that
no violation has occurred, the Investigator is not required to
take any further action;
o any matter that the Investigator believes is a violation will
be reported to the Audit Committee;
o if the Audit 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/administrator or its board; or a
recommendation to dismiss the Covered Officer;
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.
Any potential violation of this Code by the Investigator shall be reported to
the Audit Committee and the Audit Committee shall appoint an alternative Trust
officer or other investigator to investigate the matter.
V. Other Policies and Procedures
This Code shall be the sole code of ethics adopted by the Trust 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 Trust, the Trust's 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 Trust'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 material 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
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 regulation or this Code,
such matters shall not be disclosed to anyone other than the Board and the Audit
Committee.
VIII. Internal Use
The Code is intended solely for the internal use by the Trust and does
not constitute an admission, by or on behalf of the Trust, as to any fact,
circumstance, or legal conclusion.
Date: _________, 2003
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Exhibit A
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Persons Covered by this Code of Ethics
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Greg D'Amico, President, Chief Financial Officer