CODE OF ETHICS FORPRINCIPAL EXECUTIVE				AND PRINCIPAL FINANCIALOFFICERS				OF INTEGRITY MUTUALFUNDS, INC.

 

This Code of Ethics (the "Code") for Principal Executive andPrincipal Financial Officers has been adopted by Integrity MutualFunds, Inc., and its subsidiaries (collectively, "Integrity" or "Company") to effectuate compliance with Section406 under the Sarbanes-Oxley Act of 2002 and the rules adopted toimplement Section 406.

 

This Code applies to Integrity's principal executive officer,principal financial officer, controller or persons deemed to beperforming similar critical financial and accountingfunctions  (the "Covered Officers").

 

Purpose of the Code 

This Code sets forth standards and procedures that are reasonablydesigned to promote:

 

·                   Honest and ethical conduct, including the ethical handling ofactual or apparent conflicts of interest between personal andprofessional relationships;

 

·                   Full, fair, accurate, timely and understandable disclosure inreports and documents that a registrant files with, or submitsto, the Securities and Exchange Commission ("SEC") and in otherpublic communications made by Integrity;

 

·                   Compliance with applicable laws and governmental rules andregulations;

 

·                   The prompt internal reporting of violations of the Code to anappropriate person or persons identified in the Code; and

 

·                   Accountability for adherence to the Code.

 

In general, the principles that govern honest and ethicalconduct, including the avoidance of conflicts of interest betweenpersonal and professional relationships, reflect, at the minimum:(1) the duty in performing any responsibilities as a CoveredOfficer, to place the interests of Integrity ahead of personalinterests; (2) the fundamental standard that Covered Officersshould not take inappropriate advantage of their positions; (3)the duty to assure that Integrity's financial reports to itsshareholders are prepared honestly and accurately in accordancewith applicable rules and regulations; and (4) the dutiesperformed by the Covered Officer on behalf of Integrity areconducted in an honest and ethical manner.

 

Each Covered Officer should adhere to a high standard of businessethics and should be sensitive to situations that may give riseto actual and apparent conflicts of interest.

Compliance with Governmental Laws, Rules and Regulations

 

Each Covered Officer shall comply with applicable governmentallaws, rules and regulations, including the rules relating todisclosure in reports and documents that Integrity files with, orsubmits to, the SEC.  Covered Officers will, at all times,take all necessary steps to ensure compliance with establishedaccounting procedures, Integrity's internal controls andgenerally accepted accounting principles.  Covered Officerswill ensure that Integrity makes and keeps books, records, andaccounts, which, in reasonable detail, accurately and fairlyreflect the transactions and dispositions of the assets ofIntegrity.  Covered Officers will also ensure that Integritydevises and maintains a system of internal accounting controlssufficient to provide reasonable assurances that any attempt toenter inaccurate or fraudulent information into Integrity'saccounting system will not be tolerated and will result indisciplinary action, up to and including termination ofemployment.

  

Ethical Handling of Actualand Apparent Conflicts of Interest 

A "conflict of interest" occurs when a Covered Officer's privateinterest interferes with the interests of Integrity. Certainconflicts of interest arise out of the relationships betweenCovered Officers and Integrity.  A conflict situation canarise when an employee, officer or director takes actions or hasinterests that may make it difficult to perform his or her workfor the Company objectively and effectively. Conflicts ofinterest also arise when an employee, officer or director, or amember of his or her family, receives improper personal benefitsas a result of his or her position in the Company.  ThisCode does not, and is not intended to, repeat or replace existingprograms and procedures, and such conflicts fall outside of theparameters of this Code.

  

Prohibited Activities 

The following list provides examples of conflicts of interestunder the Code, but keep in mind that these examples are notexhaustive.  The foremost principle is that the personalinterest of a Covered Officer should not be placed before theinterest of the Company or its shareholders.

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Each Covered Officer must:

 

·         Not use his personal influence or personal relationshipsimproperly to influence investment decisions or financialreporting by Integrity whereby the Covered Officer would benefitpersonally to the detriment of Integrity or its shareholders;

 

·         Not cause Integrity to take action, or fail to take action, forthe individual personal benefit of the Covered Officer ratherthan the benefit the Integrity;

 

·         Not use material non-public knowledge of portfolio transactionsmade or contemplated for the Integrity Mutual Funds to tradepersonally or cause others to trade personally in contemplationof the market effect of such transactions;

 

·         Not intentionally cause Integrity to fail to comply withapplicable laws, rules and regulations, including failure tocomply with the requirement of full, fair, accurate,understandable and timely disclosure in reports and documentsthat Integrity files with, or submits to, the SEC and in publiccommunications made by Integrity;

 

·                   Not fail to acknowledge or certify compliance with this Code onan annual basis.

 

There are some conflict of interest situations that should alwaysbe discussed with the Compliance Department or, under certaincircumstances, the Board of Directors if material.  Examplesof these include:

 

·         Service as a director on the board of any public company absentprior authorization by the Board;

 

·         The receipt of any gifts of more than de minimis value, generallygifts in excess of $100;

 

·         The receipt of any entertainment from any company with whichIntegrity has current or prospective business dealings unlesssuch entertainment is business related, reasonable in cost,appropriate as to time and place, and not so frequent as to raisea suggestion of unethical conduct;

 

·         Any ownership interest in, or employment relationship with, anyof Integrity's service providers, other than its investmentadviser, principal underwriter, administrator or any affiliatedpersonthereof.                                                                                                                                               

 

Disclosure andCompliance 

**·         **Each Covered Officer must familiarize himself with the disclosurerequirements generally applicable to Integrity;

 

·         Each Covered Officer must not knowingly misrepresent, or causeothers to misrepresent, facts about Integrity to others,including to Integrity's directors and auditors, and togovernmental regulators and self-regulatory organizations;

 

·         Each Covered Officer should, to the extent appropriate within hisarea of responsibility, consult with other officers and employeesof Integrity and the adviser with the goal of promoting full,fair, accurate, timely and understandable disclosure in thereports and documents Integrity files with the SEC and in otherpublic communications made by Integrity; and

 

·          Itis the responsibility of each Covered Officer to promotecompliance with the standards and restrictions imposed byapplicable laws, rules and regulations.

Reporting and Accountability 

Each Covered Officer must:

 

·         Upon adoption of the Code or upon becoming a Covered Officer,affirm in writing to the Board that he has received, read,understands and will adhere to this Code;

 

·         Annually affirm to the Board that he has received and read theCode and that he understands that he is subject to, and hascomplied with, the requirements of the Code;

 

·         Not retaliate against any other Covered Officer or any employeeof Integrity or their affiliated persons for reports of potentialviolations that are made in good faith; and

 

·         Notify Compliance, who will then notify Integrity's AuditCommittee or Integrity's legal counsel promptly if he knows ofany violation of this Code or if a potential violationexists.  Failure to do so is itself a violation of thisCode.

 

Integrity's Audit Committee (the "Committee") or in theirdiscretion, Integrity's legal counsel, is responsible forapplying this Code to specific situations in which questions arepresented under it and has the authority to interpret this Codein any particular situation.  Any approvals or waiverssought by the Principal Executive Officer will be considered bythe Committee. In determining whether to waive any of theprovisions of this Code, the Committee will consider whether theproposed waiver (1) is prohibited by the Code; (2) is consistentwith honest and ethical conduct; and (3) will result in aconflict of interest between the Covered Officer's personal andprofessional obligations to Integrity.  

 

Investigating Actual andApparent Conflicts of Interest          

Integrity willfollow these procedures in investigating and enforcing theCode:

 

·         The Committee will take all appropriate action to investigate anypotential violations reported to them;

 

·         If, after such investigation, the Committee believes that noviolation has occurred, no further action is necessary;

 

·         Any matter that the Committee believes is a violation will bereported to the Board;

 

·          Ifthe Board agrees that a violation has occurred, it will considerappropriate action, which may include review of, and appropriatemodifications to, applicable policies and procedures;notification to appropriate personnel of the investment adviseror its board; or a recommendation to dismiss the CoveredOfficer;

 

·         TheCommittee will be responsible for granting waivers, asappropriate; and

 

·         Any changes to or waivers of this Code will, to the extentrequired, be disclosed as provided by SEC rules.

 

Amendments andDisclosure 

At least annually, the Audit Committee of the Board will reviewthe Code and determine whether any amendments or waivers of theCode are necessary or desirable.  Any amendments to thisCode, other than amendments to Exhibit A, must be approved orratified by a majority vote of the Board, including a majority ofindependent directors.  Integrity's Code for CoveredOfficers will be posted and maintained on Integrity's Internetsite and will be filed as an exhibit to Integrity's Annual Reporton Form 10-KSB.  Integrity's Form 10-KSB shall disclose thatthe Code is maintained on Integrity's Internet site and shallindicate if changes to and waivers of the Code will be posted tothe Internet site.

 

 

Record Retention andConfidentiality 

All reports and records prepared or maintained pursuant to thisCode will be considered confidential and shall be maintained andprotected accordingly to the extent permitted by applicable laws,rules and regulations.  Except as otherwise required by lawor this Code, such matters shall not be disclosed to anyone otherthan the appropriate Board and its counsel.

 

For Internal Use Only 

The Code is intended solely for the internal use by Integrity anddoes not constitute an admission, by or on behalf of Integrity,as to any fact, circumstance, or legal conclusion. 

 

 

By /s/ Robert E. Walstad

Robert E. Walstad

Chief Executive Officer

  

Date: September 22, 2005

  

 

Exhibit A 

Persons covered by this Code of Ethics:

 

Chief Executive Officer

Chief Financial Officer

Controller