Registered investment advisers are required by Rule 204A‑1 under the Investment Advisers Act of 1940 – the so-called “code of ethics rule” (Rule) – to establish, maintain and enforce written codes of ethics. The Rule spells out the minimum requirements for a code of ethics. In practice, however, most fund managers go beyond the basic requirements, such as including additional ethics-related policies and expanding the scope of individuals to which the code of ethics applies. This three-part series reviews the fundamentals of codes of ethics, focusing on the Rule’s three core elements: establish, maintain and enforce. This second article centers on the “establish” element, explaining what codes of ethics must include – and also what they may include. The third article, concentrating on the “maintain” and “enforce” elements, will discuss how to monitor compliance with codes of ethics, including the role of technology, and handle violations by employees. The first article outlined why fund managers need codes of ethics, as well as the consequences of failing to comply with the Rule’s requirements. For common questions fund managers ask about codes of ethics, see “ACA 2019 Hedge Fund Survey Examines SEC Exam Experience, Codes of Ethics, Electronic Communications and Expense Allocations (Part One of Two)” (Aug. 8, 2019).