Frequent Trading of Fund Shares

As excerpted from the Prospectus:

Large and frequent short-term trades in a Fund’s shares increase the administrative costs associated with processing its shareholder transactions. This kind of trading may also potentially interfere with the efficient management of a Fund’s portfolio and increase the costs associated with trading its portfolio securities. In addition, under certain circumstances frequent trading may dilute the returns earned on shares held by a Fund’s other shareholders.

The Funds’ Board of Trustees has determined that the Funds are not designed to serve as vehicles for frequent trading in response to short-term fluctuations in the securities markets, and has therefore adopted a policy intended to discourage shareholders from trading that could be detrimental to long-term shareholders of the Funds (the “Policy”). The Policy provides that the Funds will monitor shareholder trading activity and will seek to restrict a shareholder’s trading privileges in a Fund if that shareholder is found to have engaged in multiple “Round Trip” transactions. A “Round Trip” is defined as a purchase (including exchanges) into a Fund followed by a sale (including exchanges) of the same or a similar number of shares out of the Fund within 30 days of the purchase. The Funds will make inquiries or take action against any such shareholder whose trading appears inconsistent with the Policy. Purchases and sales of Fund shares made through an automatic investment plan or systematic withdrawal plan are not considered when determining Round Trips.

The Funds may reject any purchase or exchange order by any investor for any reason, including orders the Funds believe are made by short-term investors. In particular, under the Policy the Funds reserve the right to restrict or reject purchases of shares (including exchanges) without prior notice whenever they detect a pattern of excessive trading.

With respect to accounts where shareholder transactions are processed, or records are kept, by third-party intermediaries, the Funds use reasonable efforts to monitor such accounts to detect suspicious trading patterns. Transactions placed through the same financial intermediary or omnibus account may be deemed part of a group for this purpose and therefore be rejected. For any account that is so identified, the Funds will make further inquiries and take any other necessary actions to enforce the Policy against the shareholder(s) trading through this account and, if necessary, the third-party intermediary maintaining this account. However, the Funds may not be able to determine that a specific order, especially an order made through an omnibus, retirement plan or similar account, is short term or excessive and whether it may be disruptive to the Funds. There is no assurance, therefore, that the Funds will reject all such orders. The Funds do not have any arrangements with any investor or financial intermediary to permit frequent purchases and redemptions of their shares. The Funds may accept undertakings from intermediaries to enforce frequent trading policies on behalf of the Funds that provide a substantially similar level of protection against excessive trading.

Although the Funds will monitor shareholder transactions for certain patterns of excessive trading activity, there can be no assurance that all such trading activity can be identified, prevented or terminated.

Sarbanes-Oxley Code of Ethics

Code of Ethics for Covered Officers of The Royce Funds

September 2003

The Boards of Directors/Trustees of The Royce Fund, Royce Capital Fund, Royce Value Trust, Inc., Royce Micro-Cap Trust, Inc. and Royce Focus Trust, Inc. (each, a "Fund" and collectively, "The Royce Funds") have adopted the following Code of Ethics (the "Code") applicable to its President, Chief Financial Officer and Manager of Fund Accounting ("Covered Officers") of The Royce Funds to ensure the continuing integrity of financial reporting and transactions. The names of the Covered Officers covered by the Code are listed on Schedule A hereto.

I. Separate Code

This Code is the sole code of ethics adopted by the Funds for purposes of Section 406 of the Sarbanes-Oxley Act of 2002. The Funds' and Royce & Associates, LLC's ("R&A"), the investment adviser to The Royce Funds, code of ethics under Rule 17j-1 under the Investment Company Act of 1940 (the "Investment Company Act") are separate requirements applying to the Covered Officers and others, and are not part of this Code. In addition to this Code, the Investment Company Act, and the Investment Advisers Act of 1940 (the "Advisers Act") and rules promulgated thereunder contain numerous specific provisions designed to protect the Funds from conflicts of interest and overreaching. Any conduct by Covered Officers required by specific Investment Company Act or Advisers Act provisions or the rules thereunder is presumed to be in compliance with this Code. Each Covered Officer is accountable for his or her adherence to this Code. Any violation of this Code by a Covered Officer may result in disciplinary action, including immediate dismissal.

II. Requirements

All Covered Officers must:

  1. Engage in and promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
  2. Act responsibly in producing and produce, full, fair, accurate, timely and understandable disclosure in reports and documents that the Funds file with, or submit to, the Securities and Exchange Commission (the "SEC") and in other public communications made by each of the Funds;
  3. Comply with applicable governmental laws, rules and regulations;
  4. Promptly report suspected material violations of this Code, including violations of securities laws or other laws, rules and regulations applicable to a Fund, to R&A's General Counsel and the Fund's Audit Committee.

Each Covered Officer must act with integrity, including being honest and candid while still maintaining the confidentiality of information where required by law, and place the interests of The Royce Funds before the Covered Officer's own personal interests.

Each Covered Officer is required to familiarize himself or herself with the disclosure requirements applicable to each of the Funds and must not knowingly misrepresent or fail to disclose, or cause others to misrepresent or fail to disclose, material facts about a Fund to others, including but not limited to officers of and counsel to The Royce Funds, and their respective independent directors, independent auditors and governmental regulators.

III. Avoidance of Conflicts

The overarching principle of this Code is that the personal interests of a Covered Officer should not be placed improperly before the interests of The Royce Funds. As a result, each Covered Officer must: (i) handle any actual or apparent conflict of interest in an ethical manner, (ii) not use his or her personal influence or personal relationships to influence investment decisions or financial reporting by a Fund whereby the Covered Officer would benefit personally (directly or indirectly) to the detriment of the Fund; (iii) not cause a Fund to take action, or fail to take action, for the personal benefit of the Covered Officer rather than the benefit of such Fund; and (iv) not use for his or her personal benefit (directly or indirectly) any material non-public knowledge pertaining to a Fund.

Although typically not presenting an opportunity for improper personal benefit, conflicts arise from, or as a result of, the contractual relationship between The Royce Funds and R&A, of which the Covered Officers are also officers and/or employees. As a result, this Code recognizes that the Covered Officers will, in the normal course of their duties (whether formally for a Fund or for R&A, or for both), be involved in establishing policies and implementing decisions that will have different effects on R&A and the Fund. The participation of the Covered Officers in such activities is inherent in the contractual relationship between each of The Royce Funds and R&A and is consistent with the performance by the Covered Officers of their duties as officers and/or employees of The Royce Funds. Thus, if performed in conformity with the provisions of the Investment Company Act and the Advisers Act, such activities will be deemed to have been handled ethically.

The following conflict of interest situations must be disclosed by a Covered Officer to, and pre-approved in writing by, the General Counsel if material. Examples of these include:

  • service as a director on the board of any public company;
  • any ownership interest in, or any consulting or employment relationship with, any of The Royce Funds' service providers, other than its investment adviser, principal underwriter, administrator or any affiliated person thereof; or
  • a direct or indirect financial interest in commissions, transaction charges or spreads paid by any Fund for effecting portfolio transactions.

IV. Materiality

In the event a Covered Officer has any doubt as to (i) whether a suspected violation of this Code would be considered material, (ii) whether information relating to a Fund is of a material nature and therefore subject to public disclosure, (iii) whether non-public knowledge pertaining to a Fund is material in nature, or (iv) whether a particular conflict of interest is material, he or she should seek the advice of R&A's General Counsel.

V. Compliance and Annual Acknowledgment

Each Covered Officer is required: (i) upon receipt of the Code, to sign and submit to R&Amp;A's General Counsel an acknowledgment stating that he or she has received, read and understands the Code; (ii) annually thereafter to submit a statement to R&A's General Counsel confirming that he or she has received, read and understands the Code and has complied with the requirements of the Code; (iii) not to retaliate against any employee subordinate to the Covered Officer for reports of potential violations that are made in good faith; and (iv) to notify R&A's General Counsel, as appropriate, if the Covered Officer observes any irregularities or violations of this Code.

VI. Enforcement of the Code

The Royce Funds will adhere to the following procedures when investigating and enforcing this Code: (i) R&Amp;A's General Counsel will take all appropriate action to investigate any potential violations reported to him or her; (ii) if R&A's General Counsel determines that a violation has occurred, he or she will take all appropriate disciplinary or preventive action and inform the Fund's Board of Directors/Trustees of his or her decision; (iii) all changes to or waivers of this Code will, to the extent required, be disclosed on Form N-CSR or otherwise as required by SEC rules; and (iv) any waiver sought by the President of The Royce Funds will be considered by The Royce Funds' Audit Committees prior to approval of the waiver.

VII. Amendments

Except with respect to Schedule A hereto, which may be updated at any time, this Code may be amended only by the Board of Directors/Trustees of each Fund at a meeting of such Board duly called for that purpose.

VIII. Confidentiality

All reports and records prepared or maintained pursuant to this Code will be considered confidential and will 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 appropriate Board and its counsel and R&A and its affiliated persons.

IX. Internal Use

The Code is intended solely for internal use by The Royce Funds and does not constitute the admission, by or on behalf of any Fund, as to any fact, circumstances or legal conclusion.

Date: September 17, 2003

Privacy Policy

Your Privacy and the Security of Your Personal Information is Very Important to The Royce Funds (the "Funds") and Royce & Associates, LLC

This Privacy and Security Notice (the "Privacy Notice") describes our privacy and data protection practices with respect to your nonpublic personal information that we receive. The provisions of this Privacy Notice apply to your information both while you are a shareholder and after you are no longer invested with the Funds.

The Type of Nonpublic Personal Information We Collect About You

The Funds collect and maintain nonpublic personal information about you in connection with your shareholder account. Such information may include, but is not limited to:

  • Personal information included on applications or other forms (such as your address and social security number);
  • Account balances, transactions; and mutual fund holdings and positions;
  • Online account access user IDs, passwords, security challenge question responses; and
  • Information received from consumer reporting agencies regarding credit history and creditworthiness (such as the amount of an individual's total debt, payment history, etc.).

We also collect information, often referred to as "cookies," when you visit our website that indicates where on our website you have visited and what you viewed.

How We Use Nonpublic Personal Information About You

The Funds do not sell any information we obtain about you to anyone. We do not disclose any nonpublic personal information about you except as may be required to perform transactions or services you have authorized or as permitted or required by law. We may disclose information about you to:

  • Employees, agents, and affiliates to enable us to conduct ordinary business or comply with obligations to government regulators;
  • Service providers, including, but not limited to, the Funds' affiliates, who assist the Funds as part of the ordinary course of business (such as printing, mailing services, or
  • processing or servicing your account with us) or otherwise perform services on the Funds' behalf, including companies that may perform marketing services;
  • The Funds' representatives such as legal counsel, accountants and auditors; and
  • Fiduciaries or representatives acting on your behalf, such as an IRA custodian or trustee of a grantor trust.

We may disclose nonpublic personal information about you to protect against fraud, or as permitted or required by applicable law, such as in connection with a law enforcement or regulatory request, subpoena, or similar legal process. In the event of a corporate action or in the event one of our service providers change, we may be required to disclose your nonpublic personal information to third parties.

Keeping you Informed of Our Privacy and Security Practices

We will notify you annually of our privacy policy as required by federal law. While we reserve the right to modify this policy at any time we will notify you promptly if this privacy policy changes.

The Funds' Security Practices

We maintain appropriate physical, electronic and procedural safeguards designed to guard your nonpublic personal information. Our internal data security policies restrict access to your nonpublic personal information to authorized employees, who may use your nonpublic personal information for Fund business purposes only. Although we strive to protect your nonpublic personal information, we cannot ensure or warrant the security of any information you provide or transmit to us, and you do so at your own risk.

For questions about our policy or for printed copies of this notice, please contact The Royce Funds, at 745 Fifth Avenue, New York, NY 10151, or 800-221-4268.

Proxy Voting Guidelines

Royce & Associates Proxy Voting Guidelines and Procedures

June 5, 2003 as amended through October 22, 2009

These procedures apply to Royce & Associates, LLC (“Royce”) and all funds and other client accounts for which it is responsible for voting proxies, including all open and closed-end registered investment companies (“The Royce Funds”), limited partnerships, limited liability companies, separate accounts, other accounts for which it acts as investment adviser and any accounts for which it acts as sub-adviser that have delegated proxy voting authority to Royce. Such authority is determined at the inception of each client account and generally: (i) is specifically authorized in the applicable investment management agreement or other written instrument or (ii) where not specifically authorized, is granted to Royce where general investment discretion is given to it in the applicable investment management agreement. The Boards of Trustees/Directors of The Royce Funds (the “Boards”) have delegated all proxy voting decisions to Royce subject to these policies and procedures.  Notwithstanding the above, from time to time the Boards may reserve voting authority for specific securities.

Receipt of Proxy Material

Under the continuous oversight of the Head of Administration, an Administrative Assistant designated by him is responsible for monitoring receipt of all proxies and ensuring that proxies are received for all securities for which Royce has proxy voting responsibility.  All proxy materials are logged in upon receipt by Royce’s Librarian.

Voting of Proxies

Once proxy material has been logged in by Royce’s Librarian, it is then promptly reviewed by the designated Administrative Assistant to evaluate the issues presented.  Regularly recurring matters are usually voted as recommended by the issuer’s board of directors or “management.”  The Head of Administration or his designee, in consultation with the Chief Investment Officer, develops and updates a list of matters Royce treats as “regularly recurring” and is responsible for ensuring that the designated Administrative Assistant has an up-to-date list of these matters at all times, including instructions from Royce’s Chief Investment Officer on how to vote on those matters on behalf of Royce clients.  Examples of “regularly recurring” matters include non-contested elections of directors and non-contested approval of independent auditors.  Non-“regularly recurring” matters are brought to the attention of the portfolio manager(s) for the account(s) involved by the designated Administrative Assistant, and, after giving some consideration to advisories from Glass Lewis & Co., an independent third party research firm, the portfolio manager directs that such matters be voted in a way that he or she believes should better protect or enhance the value of the investment.  If the portfolio manager determines that information concerning any proxy requires analysis, is missing or incomplete, he or she then gives the proxy to an analyst or another portfolio manager for review and analysis.

Proxy Voting Record

Share This Page