SEQUOIA FUND, INC.
CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL
OFFICERS
I. Covered Officers/Purpose of the Code
This code of ethics (the "Code") for
Sequoia Fund, Inc. (the "Fund") applies
to the Fund's Principal Executive Officer, Principal
Financial Officer and any other officer serving similar
functions (the "Covered Officers," each
of whom is set forth in Exhibit A) for the purpose
of promoting: honest and ethical conduct, including
the ethical handling of actual or apparent conflicts
of interest between personal and professional relationships:
- full, fair, accurate, timely and understandable
disclosure in reports and documents that the Fund
files with, or submits to, the U.S. Securities and
Exchange Commission ("SEC") and in other
public communications made by the Fund;
- compliance with applicable laws and governmental
rules and regulations;
- the prompt internal reporting of violations of
the Code to an appropriate person or persons identified
in the Code; and
- accountability for adherence to the Code.
Each Covered Officer 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 Should Handle Ethically
Actual and Apparent Conflicts of Interest
Overview. A "conflict of interest" occurs
when a Covered Officer's private interest interferes
with the interests of, or his service to, the Fund.
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 Fund.
Certain conflicts of interest arise out of the relationships
between Covered Officers and the Fund and already
are subject to conflict of interest provisions in
the Investment Company Act of 1940 (the "1940
Act") and the Investment Advisers Act of 1940
("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 Fund because of their status as
"affiliated persons" of the Fund. The Fund'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 Fund and the investment adviser 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 Fund or for the adviser,
or for both), be involved in establishing policies
and implementing decisions that will have different
effects on the adviser and the Fund. The participation
of the Covered Officers in such activities is inherent
in the contractual relationship between the Fund and
the adviser and is consistent with the performance
by the Covered Officers of their duties as officers
of the Fund. Thus, if performed in conformity with
the provisions of the 1940 Act and the Advisers Act,
such activities will be deemed to have been handled
ethically. In addition, it is recognized by the Fund's
Board of Managers (the "Board") 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 the Code,
even if such conflicts of interest are not subject
to provisions in the 1940 Act and the 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 Fund.
* * * *
Each Covered Officer must:
- not use his personal influence or personal relationships
improperly to influence investment decisions or financial
reporting by the Fund whereby the Covered Officer
would benefit personally to the detriment of the Fund;
- not cause the Fund to take action, or to fail to
take action, for the individual personal benefit of
the Covered Officer rather than the benefit the Fund;
- not use material non-public knowledge of portfolio
transactions made or contemplated for the Fund to
trade personally or cause others to trade personally
in contemplation of the market effect of such transactions;
- report at least annually any ownership interest
in the Fund or its adviser.
There are some conflict of interest situations that
should always be discussed with the [Compliance Officer],
if material. Examples of these include:
- service as a director on the board of any public
or private company;
- the receipt of any gifts other than ones of de
minimis value;
- the receipt of any entertainment from any company
with which the Fund 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;
- any ownership interest in, or any consulting or
employment relationship with, any of the Fund's service
providers, other than its investment adviser, principal
underwriter, if any, administrator or any affiliated
person thereof;
- a direct or indirect financial interest in commissions,
transaction charges or spreads paid by the Fund 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.
III. Disclosure and Compliance
- Each Covered Officer should familiarize himself
with the disclosure requirements generally applicable
to the Fund.
- Each Covered Officer should not knowingly misrepresent,
or cause others to misrepresent, facts about the Fund
to others, whether within or outside the Fund, including
to the Fund's directors and auditors, and to governmental
regulators and self-regulatory organizations.
- Each Covered Officer should, to the extent appropriate
within his area of responsibility, consult with other
officers and employees of the Fund and the adviser
with the goal of promoting full, fair, accurate, timely
and understandable disclosure in the reports and documents
the Fund files with, or submits to, the SEC and in
other public communications made by the Fund.
- 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:
- 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;
- annually thereafter affirm to the Board that he
has complied with the requirements of the Code;
- not retaliate against any other Covered Officer
or any employee of the Fund or its affiliated persons
for reports of potential violations that are made
in good faith; and
- notify the [Compliance Officer] promptly if he
knows of any violation of this Code. Failure to do
so is itself a violation of this Code.
The [Compliance Officer] 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 waivers(2) sought by the
Principal Executive Officer will be considered by
the Board.
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1 - The Compliance Officer is authorized to consult,
as appropriate, with the Board and counsel to the
Fund, 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 officer" of the registrant.
The Fund will follow these procedures in investigating
and enforcing this Code:
- The [Compliance Officer] will take all appropriate
action to investigate any potential violations reported
to him;
- if, after such investigation, the [Compliance Officer]
believes that no violation has occurred, the [Compliance
Officer] is not required to take any further action;
- any matter that the [Compliance Officer] believes
is a violation will be reported to the Board;
- if the Board concurs that a violation has occurred,
it will consider appropriate action, which may include:
(i) review of, and appropriate modifications to, applicable
policies and procedures; (ii) notification to appropriate
personnel of the investment adviser or its board;
or (iii) a recommendation to dismiss the Covered Officer;
- the Board will be responsible for granting waivers,
as appropriate; and
- any changes to or waivers of this Code will, to
the extent required, be disclosed as provided by SEC
rules.
V. Other Policies and Procedures
This Code shall be the sole code of ethics adopted
by the Fund for purposes of Section 406 of the Sarbanes-Oxley
Act and the rules and forms applicable to registered
investment companies thereunder. If other policies
or procedures of the Fund, the Fund's adviser or other
service providers that govern or purport to govern
the behavior or activities of the Covered Officers
who are subject to this Code overlap or conflict with
the provisions of this Code, the [Compliance Officer]
will determine whether the provisions of this Code
or such other policy or procedure will apply. The
Fund's and its investment adviser's codes of ethics
under Rule 17j-1 under the 1940 Act are separate requirements
applying to the Covered Officers and others, and are
not part of this Code.
VI. 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.
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 this Code, such matters
shall not be disclosed to anyone other than the Fund
and its adviser.
VIII. Internal Use
The Code is intended solely for the internal use
by the Fund and does not constitute an admission,
by or on behalf of the Fund, as to any fact, circumstance,
or legal conclusion.
Adopted: September 8, 2003
Exhibit A
Persons Covered by this Code of Ethics:
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Robert D. Goldfarb - President
David M. Poppe - Executive Vice President
Joseph Quinones, Jr. - Vice President, Secretary &
Treasurer
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