This Code of Ethics has been adopted
by Spectrum Financial, Inc. (“SFI”), an investment
adviser registered under the Investment
Advisers Act or 1940, as amended, (the “Advisers
Act”), in compliance with Rule 17j-1 under the
Investment Company Act of 1940, as amended.
Capitalized terms used in this Code are
defined in Appendix 1 to this Code.
All Appendices referred to herein are
attached to and are a part of this Code.
This Code is based on the principle that the
officers, directors, and employees (or persons
having similar status or function) of SFI have a
fiduciary duty to place the interests of the clients
ahead of their own interests.
The Code applies to all Access Persons and
focuses principally on monitoring and reporting of
personal transactions in securities.
Access Persons must avoid activities,
interests and relationships that might interfere
with making decisions in the best interests of the
As fiduciaries, Access Persons must at all
Place the interests of the clients first.
Access Persons must scrupulously avoid
serving their own personal interests ahead of the
interests of the clients.
An Access Person may not induce or cause a
client to take action, or not to take action, for
personal benefit, rather than for the benefit of the
For example, an Access Person would violate this
Code by causing a client to purchase a Security he
or she owned for the purpose of increasing the price
of that Security.
Avoid taking inappropriate advantage of
Access Persons may not, for example, use
their knowledge of portfolio transactions to profit
by the market effect of such transactions.
Receipt of investment opportunities,
prerequisites, or gifts from persons seeking
business with SFI or a client could call into
question the exercise of an Access Person's
Conduct all Personal Securities
Transactions in full compliance with this Code
including the reporting requirements.
Doubtful situations should be resolved in
favor of the clients.
Technical compliance with the Code's
procedures may not automatically insulate from
scrutiny any trades that indicate an abuse of
Appendices to the Code.
The appendices to this Code are attached to
and are a part of the Code.
The appendices include the following:
Definitions (Appendix 1),
Contact Persons (Appendix 2),
Certification of Compliance with Code of
Ethics (Appendix 3),
Personal Securities Holdings and Accounts Disclosure
Form (Appendix 3-A)
Personnel Investment Compliance Form
Initial Public Offering / Private Placement
Clearance Form (Appendix 5)
II. PERSONAL SECURITIES TRANSACTIONS
Prohibited Securities Transactions.
The following Securities Transactions are
prohibited and may not be authorized by the
Compliance Officer (or a designee) absent
The prohibitions apply only to the categories
of Access Persons specified.
Initial Public Offerings (Investment Personnel
prohibited from acquiring any Securities in an
initial public offering without the prior written
approval of the Compliance Officer.
If the initial public offering is authorized,
the Compliance Officer shall retain a record of the
authorization and the rationale supporting the
Pending Buy or Sell Orders (Investment Personnel
purchase or sale of Securities by Investment
Personnel on any day during which any client has a
pending “buy” or “sell” order in the same Security
(or Security Equivalent) until that order is
executed or withdrawn. (See II C.
Always Prohibited Securities Transactions.
The following Securities Transactions are
prohibited and will not be authorized under any
Any transaction in a Security while in
possession of material nonpublic information
regarding the Security or the issuer of the
Transactions intended to rise, lower, or
maintain the price of any Security or to create a
false appearance of active trading.
Any other transactions deemed by the
Compliance Officer (or a designee) to involve a
conflict of interest, possible diversions of a
corporate opportunity, or an appearance of
Private Placements (Investment Personnel
Acquisition of Beneficial Interests in
Securities in a private placement by Investment
Personnel is strongly discouraged.
The Compliance Officer (or a designee) may
give permission only after considering, among other
facts, whether the investment opportunity should be
reserved for a client and whether the opportunity is
being offered to the person by virtue of the
person's position as an Investment Person.
If a private placement transaction is
permitted, the Compliance Officer may maintain a
record of the reasons for such approval (see
Investment Personnel who have acquired
securities in a private placement are required to
disclose that investment to the Compliance Officer
when they play a part in any subsequent
consideration of an investment in the issuer by a
client, and the decision to purchase securities of
the issuer by a client must be independently
authorized by a Portfolio CEO with no personal
interest in the issuer.
The following Securities Transactions are
from the restrictions set forth in Section II.A.
Securities issued by any registered open-end
Securities Transactions where neither the
Access Person nor an Immediate Family member knows
of the transaction before it is completed (for
example, Securities Transactions effected for an
Access Person by a trustee of a blind trust or
discretionary trades involving an investment
partnership or investment club in which the Access
Person is neither consulted nor advised of the trade
before it is executed);
Certain Corporate Actions.
Any acquisition of Securities through stock
dividends, dividend reinvestments, stock splits,
reverse stock splits, mergers, consolidations,
spin-offs, or other similar corporate
reorganizations or distributions generally
applicable to all holders of the same class of
Any acquisition of Securities through the
exercise of rights issued by an issuer
to all holders of a class of its Securities, to the
extent the rights were acquired in the issue; and
Any transaction in the following:
(a) bankers’ acceptances, (b) bank
certificates of deposit, (c) commercial paper, (d)
high quality short-term debt, including repurchase
agreements, (e) Securities that are direct
obligations of the U.S. Government, and (f) other
Securities as may from time to time be designated in
writing by the Compliance Officer on the grounds
that the risk of abuse is minimal or non-existent.
Purchases or sales of Securities by
Investment Personnel are permitted before/after
a one calendar day “blackout period” of the purchase
or sale of the same Securities (or Securities
Equivalent) by SFI for the clients.
The “blackout period” will pertain to any
purchase or sale of a security in excess of $10,000.
For example, if SFI does client trades in a Security
on day one, day two is the first day the Investment
Personnel may trade that Security for an account in
which he or she has a beneficial interest. If SFI
Investment Persons owns a security that SFI may
trade they will receive a Notification Letter
(Appendix 6) so they are aware of the need to inform
Compliance prior to a sale of their security.
Prior to purchasing a security whose proposed
cost basis would be in excess of $10,000, Investment
Personnel have the responsibility to inform
Compliance so the need for a “blackout period” can
Application to Commodities, Futures,
Options on Futures and Options on Broad-Based
Commodities, futures (including currency
futures and futures on securities comprising part of
a broad-based, publicly traded market based index of
stocks) and options on futures are not subject to
the one-day blackout and prohibited transaction
provisions, but are subject to transaction
Reporting Requirements for all Access
New Access Person or New Securities
Account: Any person who becomes an Access Person
of SFI must submit within 10 days of becoming an
Access Person Appendix 3-A Personal Securities
Holdings and Accounts Disclosure Form
to the Compliance Officer for all Securities
accounts and securities (open-end mutual funds, bank
certificates of deposit, and US Government bonds are
exempt from reporting) that he or she holds in such
accounts in which that Access Person (or Immediate
Family member) has Beneficial Interest.
Every Access Person who establishes a
Securities account (that may invest in stocks or
bonds) during the quarter in which that Access
Person (or Immediate Family member) has Beneficial
Interest must submit a Personal Securities and
Accounts Disclosure Report (see Appendix 3-A) to the
This report must be submitted to the
Compliance Officer within 30 days after the
completion of each calendar quarter.
In addition, within ten (10) days of
commencement of employment with the Adviser, each
Access Person must certify that he or she has read
and understands this Code and recognizes that he or
she is subject to it.
Annual Reporting Requirements: Every
Access Person must submit annually a Personal
Securities Holdings and Accounts Disclosure Form
(mutual funds, bank certificates of deposit, and US
Government bonds do not need to be reported) in
which that Access Person (or Immediate Family
member) has Beneficial Interest.
The information in the statement must be
current as of a date no more than 45 days before the
statement is submitted.
All Access Persons must certify that he or
she has read and understands this Code and any
amendment, and recognizes that he or she is subject
to it, that he or she has complied with the
requirements of this Code.
should be submitted to the Compliance Officer by
January 31 following the end of the calendar year.
Quarterly Reporting Requirements:
Every Access Person and members of his or her
Immediate Family must arrange for the Compliance
Officer to receive a Personnel Investment Compliance
Form (Appendix 4).
All copies must be received no later than 30
days after the end of the calendar quarter.
Each confirmation or statement must disclose
the following information:
the date of the transaction;
the title (and interest rate and maturity date, if
the number of shares and principal amount
the nature of the transaction (e.g., purchase,
the price of the Security; and
the name of the broker, dealer or bank through
which the trade was affected
Exempted from this report are all investments
held or managed by SFI.
Exemptions, Disclaimers and Availability
A Securities Transaction involving the
following circumstances or Securities are
from the Reporting Requirements discussed above:
(1) neither the Access Person nor an
Immediate Family Member had any direct or indirect
influence or control over the transaction; (2)
Securities directly issued by the U.S. Government;
(3) bankers’ acceptances; (4) bank certificates of
deposit; (5) commercial paper; (6) high quality
short-term debt instruments, including repurchase
agreements; (7) shares issued by open-end mutual
funds; and (8) other Securities as may from time to
time be designated in writing by the Compliance
Officer on the grounds that the risk of abuse is
minimal or non-existent.
In addition, no Access Person of SFI shall be
required to make a Quarterly Transaction Report
where such report would duplicate information
recorded pursuant to Rule 204-2(a) of the Investment
Advisers Act of 1940.
Any report of a Securities Transaction for
the benefit of a person other than the individual in
whose account the transaction is placed may contain
a statement that the report should not be construed
as an admission by the person making the report that
he or she has any direct or indirect beneficial
ownership in the Security to which the report
Availability of Reports.
All information supplied pursuant to this
Code may be made available for inspection to the
Board of Directors of SFI, the Compliance Officer,
any party to which any investigation is referred by
any of the foregoing, the SEC, any self-regulatory
organization of which SFI is a member, any state
securities commission, and any attorney or agent of
IV. FIDUCIARY DUTIES
Access Persons are prohibited from revealing
information relating to the investment intentions,
activities or portfolios of the clients except to
persons whose responsibilities require knowledge of
The following provisions on gifts apply to
all Investment Personnel.
On occasion, because of their position with
SFI or the clients, Investment Personnel may be
offered, or may receive without notice, gifts from
clients, brokers, vendors, or other persons not
affiliated with such entities.
Acceptance of extraordinary or extravagant
gifts is not permissible.
Any such gifts must be declined or returned
in order to protect the reputation and integrity of
SFI and the clients.
Gifts of a nominal value (i.e., gifts
whose reasonable value is no more than $100 a year),
and customary business meals, entertainment (e.g.,
sporting events), and promotional items (e.g.,
pens, mugs, T-shirts) may be accepted.
If an Investment Person receives any gift
that might be prohibited under this Code, the
Investment Person must inform the Compliance
Solicitation of Gifts.
Investment Personnel may not solicit gifts or
Investment Personnel may not personally give
any gift with a value in excess of $100 per year to
persons associated with securities or financial
organizations, including exchanges, other member
organizations, commodity firms, news media, or
clients of SFI.
Access Persons may not take personal
advantage of any opportunity properly belonging to
SFI or the clients.
This includes, but is not limited to,
acquiring Securities for one's own account that
would otherwise be acquired for a SFI client.
Access Persons may not cause or attempt to
cause any SFI client or Fund to purchase, sell or
hold any Security in a manner calculated to create
any personal benefit to the Access Person.
If an Access Person or Immediate Family
member stands to benefit materially from an
investment decision for, SFI clients
which the Access Person is recommending or
participating in, the Access Person must disclose to
those persons with authority to make investment
decisions for SFI (or, if the Access Person in
question is a person with
Authority to make investment decisions for SFI, to
the Compliance Officer) any Beneficial Interest that
the Access Person (or Immediate Family member) as in
that Security or a Security Equivalent, or in the
issuer thereof, where the decision could create a
material benefit to the Access Person (or Immediate
Family member) or the appearance of impropriety.
The person to whom the Access Person reports
the interest, in consultation with the Compliance
Officer, must determine whether or not the Access
Person may be restricted in making investment
Service as a Director.
No Investment Person may serve on the board
of directors of a publicly-held company (not
including public non-profits) absent prior written
authorization by the Compliance Officer.
This authorization may rarely, if ever, be
granted and, if granted, normally may require that
the affected Investment Person be isolated, through
a “Chinese Wall” or other procedures, from those
making investment decisions related to the issuer on
whose board the person sits.
COMPLIANCE WITH THIS CODE OF ETHICS
Compliance Officer Review
Investigating Violations of the Code.
All supervised persons are required to report
violations of the Code to the CCO.
The Compliance Officer is responsible for
investigating any suspected violation of the Code
and shall report the results of each investigation
to the CEO of SFI.
The CEO of SFI together with the Compliance
Officer is responsible for reviewing the results of
any investigation of any reported or suspected
violation of the Code.
Any violation of the Code by an Access Person
will be reported to the Boards of Directors of SFI
no less frequently than each regular quarterly
The Compliance Officer should review the Code
at least once a year, in light of legal and business
developments and experience in implementing the
Code, and should report to the Boards of Directors
Summarizing existing procedures concerning
personal investing and any changes in the procedures
made during the past year;
Identifying any violation requiring
significant remedial action during the past year;
Identifying any recommended changes in
existing restrictions or procedures based on its
experience under the Code, evolving industry
practices, or developments in applicable laws or
If the Compliance Officer and the CEO of SFI
determine that an Access Person has committed a
violation of the Code following a report of the
Compliance Officer, the Compliance Officer and the
CEO of SFI may impose sanctions and take other
actions as they deem appropriate, including a letter
of caution or warning, suspension of personal
trading rights, suspension of employment (with or
without compensation), fine, civil referral to the
SEC, criminal referral, and termination of the
employment of the violator for cause.
The Compliance Officer and the CEO of SFI
also may require the Access Person to reverse the
trade(s) in question and forfeit any profit or
absorb any loss derived there from.
The amount of profit shall be calculated by
the Compliance Officer and the CEO of SFI and shall
be forwarded to a charitable organization selected
by the Compliance Officer and the CEO of SFI.
The Compliance Officer and the CEO of SFI may
not review his or her own transaction.
The Compliance Officer and the CEO of SFI
have sole authority, subject to the review set forth
in Section V.B.3 below, to determine the remedy for
any violation of the Code, including appropriate
disposition of any monies forfeited pursuant to this
Failure to promptly abide by a directive to
reverse a trade or forfeit profits may result in the
imposition of additional sanctions.
Whenever the Compliance Officer and the CEO
of SFI determine that an Access Person has committed
a violation of this Code that merits remedial
action, they may report no less frequently than
quarterly to the Board of Directors of
SFI, information relating to the
investigation of the violation, including any
The Board of Directors of SFI may modify such
sanctions as it deems appropriate.
The Board of Directors of SFI and the
Compliance Officer and the CEO of SFI shall have
access to all information considered by the
Compliance Officer in relation to the case.
The Compliance Officer may determine whether
or not to delay the imposition of any sanctions
pending review by the applicable Board.
For material violations of the Code by an
Access Person involving a client, the CEO of SFI
shall inform the board of directors of such
violation in a timely manner.
Exceptions to the Code.
Although exceptions to the Code may rarely,
if ever, be granted, the Compliance Officer may
grant exceptions to the requirements of the Code on
a case by case basis if the Compliance Officer finds
that the proposed conduct involves negligible
opportunity for abuse.
All such exceptions must be in writing and
must be reported as soon as practicable to the Board
of Directors of SFI at its next regularly scheduled
meeting after the exception is granted.
Each current Access Person and each
newly-hired Access Person shall certify that he or
she has received, read and understands the Code by
executing the Certification of Compliance with the
Code of Ethics form (see Appendix 3).
In addition, annually all Access Persons may
be required to re-certify on such form (see Appendix
3) that they have read and understand the Code, that
they have complied with the requirements of the
Code, and that they have reported all Securities
Transactions required to be disclosed or reported
pursuant to the requirements of this Code.
Inquiries Regarding the Code.
The Compliance Officer should answer any
questions about the Code or any other
Amended March 2012
(Adopted as of June 22, 2004)