CODE OF ETHICS
ADOPTED UNDER RULES 204A-1, and 17j-1
FOR
KEELEY ASSET MANAGEMENT CORP., KEELEY INVESTMENT CORP., KEELEY
SMALL CAP VALUE FUND, INC., AND KEELEY FUNDS INC.
(Effective February 15, 2006)
I. STANDARDS OF CONDUCT.
Keeley Small Cap Value Fund, Inc. and the Keeley Funds, Inc. (collectively
referred to herein as the "Funds"), Keeley Asset Management Corp. ("KAMCO"),
Adviser to the Funds, and Keeley Investment Corp. ("KIC"), Distributor of the
Funds, (all four of the aforementioned collectively referred to herein as
"Keeley"); expect all of its Supervised Persons to follow the highest standard
of ethical conduct in their dealings with clients and members of the public.
Keeley believes that its success is based on its reputation of quality, honesty
and fair dealing, and that reputation is a valuable asset which must be nurtured
and protected. Keeley reminds each of its Supervised Persons that each person
must comply with applicable federal securities laws and as fiduciaries they have
an affirmative duty of care, loyalty, honesty and good faith to act in the best
interest of the clients of Keeley that he or she has a fiduciary obligation to
the clients, and they should deal fairly and honestly with all clients. Keeley
expects each of its Supervised Persons to put the client's interests first and
not profit at the expense of any client. Keeley expects its Supervised Persons
to follow not just the letter but also the spirit of the law.
II. DEFINITIONS
A. "Access Persons" are a subset of Supervised Persons who (1) have
access to non public information regarding any client's purchase or
sale of securities or non public information regarding the portfolio
holdings of any fund or account the adviser or its control affiliates
manage; or (2) are involved in making securities recommendations to
clients, or have access to such recommendations that are non public.
Any director, officer of KAMCO or KIC, or interested director of the
Funds is presumed to be an access person.
B. "Administrator" means the party appointed by the Funds and under
contract with them to administer the operation of the Funds. On the
date of the most recent amendment to the Code, the Administrator is
UMB Fund Services, Inc.
C. "Adviser" means Keeley Asset Management, Corp. (KAMCO).
D. "Advisers Act" means the Investment Advisers Act of 1940, as amended.
E. "Advisory Person" of the Funds or the Adviser means: (i) any
employee of the Funds, the Adviser, the Distributor or of any company
in a control relationship to the Funds or the Adviser, who, in
connection with his regular functions or duties, makes, participates
in, or obtains information regarding the purchase or sale of Covered
Securities, or whose functions relate to the making of any
recommendations with respect to such purchases or sales; and (ii) any
natural person in a control relationship to the Funds, Adviser, or
Distributor who obtains information concerning recommendations made to
the Funds with regard to the purchase or sale of Covered Securities by
the Funds.
F. A security is "being considered for purchase or sale" when a
recommendation to purchase or sell a security has been made and
communicated and, with respect to the person making the
recommendation, when such person seriously considers making such a
recommendation.
G. "Beneficial ownership" shall be interpreted in the same manner as
it would be in determining whether a person is subject to the
provisions of Section 16 of the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder, by
virtue of having a pecuniary interest except that the determination of
direct or indirect beneficial ownership shall apply to all securities
which an Access Person has or acquires.
H. "Board" means Board of Directors of the Funds.
I. "CCO" means Chief Compliance Officer.
J. "Code" means this Code of Ethics, as it may be amended from time to
time.
K. "Control" has the same meaning as that set forth in Section
2(a) (9) of the Act.
L. "Covered Security" means a security defined in Section 2(a)(36) of
the Act, except that it does not include: (i) direct obligations of
the Government of the United States; (ii) Bankers' acceptances , bank
certificates of deposit, commercial paper and high quality short-term
instruments, including repurchase agreements; (iii) shares issued by
open-end funds (iv) shares issued by open-end mutual funds other than
the Funds; and (v) shares issued by unit investment trusts that are
invested exclusively in one or more open-end funds other than the
Funds.
M. "Disinterested director" means a director of the Funds who is not
an `interested person" of the Funds within the meaning of Section
2(a)(19).
N. "Distributor" means Keeley Investment Corp.
O. "Funds" means the Keeley Small Cap Value Fund, Inc. and the Keeley
Funds, Inc.
P. "Investment Personnel" means any employee of KAMCO, KIC or of the
Funds or any company in a control relations to KAMCO who, in
connection with his or her regular function or duties, makes or
participates in making recommendations regarding the purchase or sale
of securities by the managed accounts of KAMCO, and any natural person
who controls KAMCO and who obtains information concerning
recommendations regarding the purchase or sale of securities by the
managed accounts of KAMCO.
Q. "IPO" means an offering of securities registered under the
Securities Act of 1933, the issuer of which, immediately before the
registration, was not subject to the reporting requirements of
sections 13 or 15(d) of the Securities Exchange Act of 1934.
R. "Limited Offering" means an offering that is exempt from
registration under the Securities Act of 1933 pursuant to section 4(2)
or section 4(6) or pursuant to rule 504, 505 or 506 under the
Securities Act of 1933.
S. "Purchase or sale of a Covered Security" includes, among other
things, the writing of an option to purchase or sell a Covered
Security.
T. "Security Held or to be acquired by the managed accounts of KAMCO"
means (i) any Covered Security which, within the most recent 15 days
(A) is or has been held by the managed accounts of KAMCO; or (B) is
being or has been considered by KAMCO for purchase by the managed
accounts of KAMCO; and (ii) any option to purchase or sell, and any
security convertible into or exchangeable for, a Covered Security.
U. "Supervised Persons" means any partner, officer, director (or other
person occupying a similar status or performing similar functions), or
employee of KAMCO, or other person who provides investment advice on
behalf of KAMCO and is subject to the supervision and control of
KAMCO.
III. EXEMPTED TRANSACTIONS
The prohibitions of Section IV of the Code shall not apply to:
A. Purchases or sales effected in any account over which the Access
Person has no direct or indirect influence or control.
B. Purchases or sales of securities which are not eligible for purchase
or sale by the managed accounts of KAMCO.
C. Purchases or sales which are non-volitional on the part of either the
Access Person or the managed accounts of KAMCO.
D. Purchases which are part of an automatic dividend reinvestment plan.
E. Purchases effected upon the exercise of rights issued by an issuer pro
rata to all holders of a class of its securities, to the extent such
rights were acquired from such issuer, and sales of such rights so
acquired.
F. Purchases of U.S. Government securities and repurchase agreements
thereon, bank certificates of deposit, commercial paper and interests
in companies registered as open end investment companies under the
Act.
IV. PROHIBITED PURCHASES AND SALES
Except in a transaction exempted by Section III of the Code:
A. No Supervised Person shall purchase or sell, directly or indirectly,
any security in which he has, or by reason of such transaction
acquires, any direct or indirect beneficial ownership and is not held
by any managed account of KAMCO and which to his actual knowledge at
the time of such purchase or sale is being considered for purchase or
sale by the managed accounts of KAMCO. Allowances may be made subject
to prior written approval from John L. Keeley, Jr., or in the case of
Mr. Keeley's personal transactions, such person who may be designated,
from time to time, by the CCO to approve such transactions. Any such
trades occurring without such prior pre-approval are subject to
cancellation. Notwithstanding the foregoing, solely for purposes of
the requirement to obtain pre-approval under this Section IV.A,
transactions by KAMCO Limited Partnership No. 1, KAMCO Performance
Limited Partnership and KAMCO Thrift Partners Limited Partnership
shall not be considered transactions by John Keeley or Mark Zahorik,
and therefore shall not be subject to pre-approval.
B. Investment Personnel and Supervised Persons shall not purchase any
security which is part of an IPO or a Limited Offering, except with
the prior written approval of Mr. John L. Keeley, Jr. (or with respect
to Mr. Keeley's personal transactions, such person who may be
designated, from time to time, by the CCO to approve such
transactions).
C. All personal trades for Supervised Persons, or for trades in any
account in which the Supervised Person has a Pecuniary Interest, (You
will be considered to have a "Pecuniary Interest" in a Security if
you, directly or indirectly, through any contract, arrangement,
understanding, relationship or otherwise, have the opportunity,
directly or indirectly, to profit or share in any profit derived from
a transaction in such Security.) require pre-approval from KAMCO CEO.
The CEO will signify his approval of the trade by signing the trade
ticket. Any personal trades by the CEO require approval by the Vice
President Portfolio Managers who will signify his approval by signing
the trade ticket.
i. Personal trades in securities that are held by any client of
KAMCO will be permitted on the days these securities are traded on behalf
of a KAMCO client, and in those instances the KAMCO client shall receive
the same or better price for the security.
ii. All Supervised employees are required to provide hard copies of
all external brokerage account statements to the KAMCO Secretary.
These statements will be maintained and reviewed, as necessary.
Statements for Supervised Employees who maintain their brokerage
accounts at Keeley Investment Corp. will be maintained in electronic
format.
iii. Notwithstanding the foregoing, solely for purposes of the
requirement to obtain pre-approval under this Section III.A,
transactions by KAMCO Limited Partnership No. 1, KAMCO Performance
Limited Partnership and KAMCO Thrift Partners Limited Partnership
shall not be considered transactions by John Keeley or Mark Zahorik,
and therefore shall not be subject to pre-approval.
Nothing herein shall prohibit any Advisory Person (including an Advisory Person
who is an Access Person) from making recommendations for, and effecting,
purchases or sales of securities for the managed accounts of KAMCO, even if the
Advisory Person has a beneficial interest in such managed account, provided that
if the transaction or recommendations for the other managed account or accounts
are the same (i.e., both for purchases or for sales), the securities so
purchased or sold are allocated on a pro rata basis based on average price, such
allocations are fair and equitable compared to allocations to the Advisory
Person's other managed accounts, and the transactions otherwise comply with the
provisions of the Act and the rules and regulations issued thereunder.
V. OTHER RESTRICTIONS
A. No Access Person shall accept, from any person who does business with
KAMCO, or the Fund, any gift or other gratuity; provided, however,
that his provision shall not prohibit any Access Person from accepting
any item which has a nominal value (i.e. $25 or less), nor shall it
prohibit the acceptance of traditional holiday gifts of food or
similar items given or made available to all personnel of the adviser
or underwriter of a nominal value with respect to each person
benefiting therefrom.
B. No Access Person shall serve as a member of the board of directors of
any entity which has a class of securities registered under the
Securities Exchange Act of 1934, or whose securities are listed for
trading on any stock exchange or are traded or quoted in the
over-the-counter market, unless the CCO shall specifically pre-approve
such Access Person's so serving.
C. Unlawful Actions. (Pursuant to Rule 17j-1(b) of the Investment Company
Act of 1940.) It is unlawful for any affiliated person of or principal
underwriter for the Funds, or any affiliated person of KAMCO, or
principal underwriter for the Funds, in connection with the purchase
or sale, directly or indirectly, by the person of a Security Held or
to be Acquired by the Funds:
1. To employ any device, scheme or artifice to defraud the Funds;
2. To make any untrue statement of a material fact to the Funds or
omit to state a material fact necessary in order to make the
statements made to the Funds, in light of the circumstances under
which they are made, not misleading;
3. To engage in any act, practice or course of business that operates
or would operate as a fraud or deceit on the Funds; or
4. To engage in any manipulative practice with respect to the Funds.
D. Insider trading -- Trading Securities while in possession of material,
nonpublic information or improperly communicating such information to
others -- may expose a person to stringent penalties. Criminal
sanctions may include a fine of up to $1,000,000 and/or ten years'
imprisonment. The Securities and Exchange Commission may recover the
profits gained, or losses avoided, through insider trading, obtain a
penalty of up to three times the illicit windfall, and/or issue an
order permanently barring any person engaging in insider trading from
the securities industry. In addition, investors may sue seeking to
recover damages for insider trading violations.
Any such violation constitutes grounds for disciplinary sanctions,
including dismissal and/or referral to civil or governmental
authorities for possible civil or criminal prosecution.
VI. REPORTING.
A. Every Supervised Person shall report to the KAMCO CCO or the CCO of
the Funds as required the information described in Section VI.C of the
Code with respect to transactions in any security in which such Person
has, or by reason of such transaction acquires, any direct or indirect
beneficial ownership in the security; provided, however, that an
Access Person shall not be required to make a report with respect to
transactions effected pursuant to an automatic investment plan, or for
any account over which such person does not have any direct or
indirect influence or control.
B. Every Supervised Person required to report information under Section
VI.C shall direct all brokers with whom he maintains an account or
transacts brokerage business to supply to the Adviser and the Funds or
their designee, on a timely basis, duplicate copies of confirmations
of all personal securities transactions and copies of periodic
statements for all securities accounts. Copies of these statements are
then delivered to the KAMCO CCO, or the Funds CCO as appropriate. The
CCO reviews the trading activities of all Supervised Persons.
C. Every (transaction) report required to be made by Section VI.A of the
Code shall be made not later than thirty (30) days after the end of
the calendar quarter in which the transaction to which the report
relates was effected, and shall contain the following information:
1. For each security, the date of the transaction, the title and as
applicable then ticker symbol or CUSIP number, interest rate and
maturity date and the principal amount (for debt securities), and the
number of shares;
2. The nature of the transaction (i.e., purchase, sale or any other type
of acquisition or disposition);
3. The price at which the transaction was effected;
4. The name of the broker, dealer or bank with or through whom the
transaction was effected; and
5. The date on which the report is submitted.
D. Each person who becomes a Supervised Person, on or before becoming a
Supervised Person, shall report to the KAMCO CCO, the Funds CCO or his
designees all of his personal security holdings. The holdings report
must be current as of a date not more than 45 days prior to the
individual being an access person (Initial Report) or the date the
report is submitted (Annual Report). Such report shall contain the
following information:
1. The title and type of security, and as applicable the exchange ticker
or CUSIP number, number of share and principal amount of each Covered
Security in which the Access Person had any direct or indirect
beneficial ownership when the person became an Access Person;
2. The name of any broker, dealer or bank with whom the Access Person
maintained an account in which any securities were held for the direct
or indirect benefit of the Access Person as of the date the person
became an Supervised Person; and
3. The date the report is submitted by the Supervised Person.
E. Each Supervised Person shall report to KAMCO or its designee, on an
annual basis, all of his or her personal security holdings, in the
same form and containing the same information required under Section
VI.D. The information in each report submitted under this Section VI.E
shall be current as of date no more than 45 days before the report is
submitted.
F. Any report filed pursuant to Section VI.A, VI.D or VI.E of the Code
may contain a statement that the report shall not be construed as an
admission by the person making such report that he has any direct or
indirect beneficial ownership in the security to which the report
relates.
G. Every Supervised Person who shall not file a report for any quarter
shall certify to KAMCO that no report was required for such quarter.
H. Every Supervised Person shall certify to KAMCO, KIC or the Funds, on
an annual basis that he has read and understands the Code, recognizes
that he is subject to it, has complied with the requirements of the
Code and has disclosed or reported all personal securities
transactions required to be disclosed or reported by him under the
Code.
I. The KAMCO CCO shall prepare an annual report that summarizes existing
procedures concerning personal investing and any changes in the
procedures made during the past year, identifies any violations
requiring significant remedial action during the past year, and
identifies any recommended changes in existing restrictions or
procedures based upon KAMCO's experience under the Code, evolving
industry practices, or development in applicable laws or regulations,
and shall include a certification in writing that KAMCO has adopted
procedures reasonably necessary to prevent Access Persons from
violating the Code.
VII. DISTRIBUTION OF CODE AND AMENDMENTS
Each Supervised Person will be provided with a copy of the Code and with any
amendments to the Code. Each Supervised Person must acknowledge, in writing, his
receipt of the Code and any amendments.
VIII. REPORTING OF VIOLATIONS; ENFORCEMENT AND SANCTIONS
A. The CCO has primary responsibility for enforcing this Code. The CCO
will review all reports submitted by Access Persons under this Code.
B. Any Supervised Person who becomes aware of any violation of the Code
will promptly report the violation to the CCO. Supervised Persons are
encouraged to discuss any questions about compliance with the CCO;
Supervised Persons do not need to have made a determination that
someone has violated the Code to discuss an issue with the CCO. It is
a violation of this Code for any person to retaliate against any
person who makes a report.