The reputation and integrity of Homestead Funds, Inc. (and Homestead Funds Trust collectively the “Fund”) are valuable assets that are vital to the Fund’s success. The Fund’s senior officers are responsible for conducting the Fund’s business in a manner that demonstrates a commitment to the highest standards of integrity. The Fund’s senior officers are set forth in the appendix to this Senior Officer Code of Ethics (the “Code”), as may be amended from time to time, and include the principal executive officer, the principal financial officer, comptroller or principal accounting officer, and any person who performs a similar function.
The Sarbanes-Oxley Act of 2002 (the “Act”) effected sweeping corporate disclosure and financial reporting reform with respect to public companies, including mutual funds, to address corporate malfeasance and assure investors that the companies in which they invest are accurately and completely disclosing financial information. Under the Act, all public companies must either have a code of ethics for their senior officers or disclose why they do not. The Act was intended to foster corporate environments that encourage employees to question and report unethical and potentially illegal business practices. The Fund has chosen to adopt this Code to encourage its senior officers to act in a manner consistent with the highest principles of ethical conduct.
Purposes of the Code
The purposes of this Code are:
- To promote honest and ethical conduct by the Fund’s senior officers, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
- To promote full, fair, accurate, timely and understandable disclosure in reports and documents that the Fund files with or submits to the SEC and in other public communications made by the Fund;
- To promote compliance with applicable laws, rules and regulations;
- To encourage the prompt internal reporting to an appropriate person of violations of this Code; and
- To establish accountability for adherence to this Code.
Questions About This Code
The Fund’s chief compliance officer (“CCO”) is designated to oversee the Fund’s Code of Ethics adopted pursuant to Rule 17j-1 and shall be responsible for the implementation and administration of this Code. Senior officers should direct their questions about this Code to the CCO.
The Fund has adopted the following guidelines under which the Fund’s senior officers must perform their official duties and conduct the business affairs of the Fund.
- Ethical and honest conduct is of paramount importance. The Fund’s senior officers must act with honesty and integrity and avoid violations of this Code, including the avoidance of actual or apparent conflicts of interest with the Fund in personal and professional relationships.
- Senior officers must disclose material transactions or relationships. The Fund’s senior officers must disclose to the CCO any actual or apparent conflicts of interest the senior officers may have with the Fund that reasonably could be expected to give rise to any violations of this Code. Such conflicts of interest may arise as a result of material transactions or business or personal relationships to which a senior officer may be a party. If it is not possible to disclose the matter to the CCO, it should be disclosed to the Fund’s outside counsel or another appropriate person. In addition to disclosing any actual or apparent conflicts of interest in which a senior officer is personally involved, the Fund’s senior officers have an obligation to report any other actual or apparent conflicts that they discover or of which they otherwise become aware. If a senior officer is unsure whether a particular fact pattern gives rise to a conflict of interest, or whether a particular transaction or relationship is “material,” the senior officer should bring the matter to the attention of the CCO.
- Standards for quality of information shared with service providers. The Fund’s senior officers must at all times seek to provide information to the Fund’s service providers (adviser, administrator, independent accountants, outside counsel, custodian, etc.) that is accurate, complete, objective, relevant, timely, and understandable.
- Standards for quality of information included in periodic reports. The Fund’s senior officers must at all times endeavor to ensure full, fair, timely, accurate and understandable disclosure in the Fund’s periodic reports.
- Compliance with laws. The Fund’s senior officers must comply with the federal securities laws and other laws and rules applicable to the Fund, such as the Internal Revenue Code.
- Standard of care. The Fund’s senior officers must at all times act in good faith and with due care, competence and diligence, without misrepresenting material facts or allowing their independent judgment to be subordinated. The Fund’s senior officers must conduct the affairs of the Fund in a responsible manner consistent with this Code.
- Confidentiality of information. The Fund’s senior officers must respect and protect the confidentiality of information acquired in the course of their professional duties, except when authorized by the Fund to disclose it or where disclosure is otherwise legally mandated. The Fund’s senior officers may not use confidential information acquired in the course of their work for personal advantage.
- Sharing of information and educational standards. The Fund’s senior officers should share information with relevant parties to keep them informed of the business affairs of the Fund, as appropriate, and maintain skills important and relevant to the Fund’s needs.
- Promote ethical conduct. The Fund’s senior officers should at all times proactively promote ethical behavior among peers in their work environment.
- Standards for recordkeeping. The Fund’s senior officers must at all times endeavor to ensure that the Fund’s financial books and records are thoroughly and accurately maintained to the best of their knowledge in a manner consistent with applicable laws and this Code.
Waivers of this Code
A senior officer may request a waiver of a provision of this Code by submitting his or her request in writing to the CCO for appropriate review and consideration. For example, if a senior officer’s family member works for a service provider that helps prepare the Fund’s financial statements, the senior officer may have a potential conflict of interest in reviewing those statements and should seek a waiver of this Code in order to review the work. The CCO may consult, as necessary, with another appropriate party (such as an executive officer of the Fund, the Board, or a designated Board or Audit Committee member) in deciding whether to grant a waiver. All waivers of this Code must be disclosed to the Fund’s shareholders to the extent required by SEC rules.
Affirmation of the Code
Upon adoption of the Code, the Fund’s senior officers must affirm in writing that they have received, read and understand the Code, and annually thereafter must affirm that they have complied with the requirements of the Code. To the extent necessary, the Fund’s CCO will provide guidance on the conduct required by this Code and the manner in which violations or suspected violations must be reported and waivers must be requested.
In the event that a senior officer discovers or in good faith suspects a violation of this Code, the senior officer must immediately report the violation or suspected violation to the CCO. The CCO may, in his or her discretion, consult with another member of the Fund’s senior management or the Board in determining how to address the suspected violation. For example, a Code violation may occur when a periodic report or financial statement omits a material fact, or is technically accurate, but, in the view of the senior officer, is written in a way that obscures its meaning. Senior officers who report violations or suspected violations in good faith will not be subject to retaliation of any kind. Reported violations will be investigated and addressed promptly and will be treated as confidential to the extent possible.
Violations of the Code
Dishonest or unethical conduct or conduct that is illegal will constitute a violation of this Code, regardless of whether this Code specifically refers to such conduct. A violation of this Code may result in disciplinary action up to and including removal as a senior officer of the Fund. A variety of laws apply to the Fund and its operations, including the Securities Act of 1933, the Investment Company Act of 1940, state laws relating to duties owed by Fund officers and criminal laws. The Fund will report any suspected criminal violations to the appropriate authorities, and will investigate, address and report, as appropriate, non-criminal violations.
Last amended March 26, 2019