Rule 17j-1 under the Investment Company Act of 1940, as amended (the “1940 Act”), requires every registered investment company to have a written code of ethics that specifically addresses personal trading practices by Access Persons (defined below). This Code of Ethics shall apply to the Mandatory Exchangeable Trust (the “Company”). Rule 17j-1 also requires that reasonable diligence be used and procedures instituted to prevent violations of this Code of Ethics.

all personal securities transactions by such personnel must be conducted consistently with the Code of Ethics and in such a manner as to avoid any actual or potential conflict of interest or any abuse of an individual’s position of trust and responsibility; and

(a)

“Access Person” means, as here relevant, any officer or trustee of the Company who, in connection with his or her regular functions or duties, makes, participates in, or obtains information regarding the purchase or sale of a security by the Company, or whose functions relate to the making of any recommendations with respect to such purchases or sales; and any natural person in a control relationship with the Company who obtains information with respect to the Company with regard to the purchase or sale of a security.

(b)

“Covered Security” shall have the meaning set forth in Section 2(a)(36) of the 1940 Act except the following: (i) direct obligations of the Government of the United States; (ii) bankers’ acceptances, bank certificates of deposit, commercial paper and high quality short-term debt instruments; and (iii) shares issued by registered open-end investment companies.

(c)

A “security held or to be acquired” by the Company means a Covered Security which, within the most recent 15 days (i) is or has been held by the Company; or (ii) is being or has been considered by the Company for purchase by the Company, and includes the writing of an option to purchase or sell a Covered Security. A Covered Security is “being considered for current purchase or sale” when a decision (or recommendation) to purchase or sell a Covered Security has been made and communicated, and, with respect to a person making a decision (or recommendation), when such person believes such decision or recommendation is imminent.

(d)

“Beneficial Ownership” shall have the meaning ascribed thereto under Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

(e)

“Investment Personnel” means, as here relevant, any natural person who controls the Company and obtains information concerning recommendations made to the Company regarding the purchase or sale of securities by the Company.

(ii)

make to the Company any untrue statement of a material fact or omit to state to the Company a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading;

(b)

Investment Personnel may not directly or indirectly acquire beneficial ownership of any securities in an initial public offering or limited offering, as those terms are defined in Rule 17j-1 under the Investment Company Act, unless prior approval from the Company has been obtained.

(iii)

Report to the Board of Trustees (“Board”) the facts contained in any reports filed with the Managing Trustee or other designated agent pursuant to Section 4 of this Code of Ethics when any such report indicates that an Access Person engaged in a transaction in a security held or to be acquired by the Company . Additionally, an annual written report will be provided to the Board, describing any material issues that arose during the previous year under this Code of Ethics.

(b)

On an annual basis, the Board will certify that the Company has adopted procedures reasonably necessary to prevent Access Persons from violating this Code of Ethics.

(a)

Every Access Person shall report to the Company the information described in Section 4(b) of this Code of Ethics with respect to transactions in any Covered Security in which such Access Person has, or by reason of such transaction acquires, any direct or indirect beneficial ownership in the security, except in the following circumstances:

(i)

An Access Person need not make a report as provided in this section with respect to transactions effected for, and Covered Securities held in, any account over which the Access Person has no direct or indirect influence or control.

(ii)

A trustee who is not an “interested person” of the Company and who would be required to make a report solely by reason of being a trustee of the Company need not make (A) an initial holdings report and an annual holdings report; and (B) a quarterly report unless the trustee knew or, in the ordinary course of fulfilling his or her duties as a Company trustee, should have known that during the 15-day period immediately before or after the trustee’s transaction in a Covered Security, the Company purchased or sold the Covered Security or the Company considered purchasing or selling the Covered Security.

(i)

An initial holdings report, which must be made within 10 days from the date in which the person becomes an Access Person and which must contain the following information that is current as of a date not more than 45 days prior to the date the person becomes an Access Person:

(A)

the title, number of shares, and the principal amount of each Covered Security in which the Access Person had any direct or indirect beneficial ownership when the person became an Access Person;

(B)

the name of any broker, dealer or bank with whom the Access Person maintained an account in which any securities were held for the direct or indirect benefit of the Access Person as of the date the person became an Access Person; and

(ii)

Quarterly transaction reports, which must be made no later than 30 days after the end of the calendar quarter and which must contain the following information:

(1)

the date of the transaction, the title, interest rate, and maturity date (if applicable), the number of shares, and the principal amount of each Covered Security involved;

(B)

With respect to any account established by the Access Person in which any securities were held during the quarter for the direct or indirect benefit of the Access Person:

(iii)

Annual holdings reports, which information must be current as of a date no more than 45 days before the report is submitted and contain the following information:

(B)

the name of any broker, dealer or bank with whom the Access Person maintains an account in which any securities are held for the direct or indirect benefit of the Access Person; and

The Board must initially approve the Code of Ethics for the Company, and the Board must approve any material changes to the Code of Ethics within six (6) months of such change. The Managing Trustee or his designee shall provide to the Board a written report outlining any material issues that arose during the previous year and annually certify that the Company has adopted procedures in compliance with this Code of Ethics.

The Managing Trustee has been designated to implement this Code of Ethics for the Company. The Managing Trustee or his delegate shall create a list of all Access Persons and update the list with reasonable frequency. The Managing Trustee or his delegate shall circulate a copy of this Code of Ethics (in hard copy or electronically) to each Access Person at least once each year.

Upon learning of facts which indicate that a violation of this Code of Ethics may have occurred, the Board shall determine whether, in their judgment, the conduct being considered did in fact violate the provisions of this Code of Ethics. If the Board determines that a violation of this Code of Ethics has occurred, the Board may impose such sanctions (including but not limited to a letter of censure, suspension, termination of employment, and/or a disgorging of any profits made) as it deems appropriate in the circumstances. If the person whose conduct is being considered by the Board is a Trustee, he/she shall not be eligible to participate in the judgment of the Board as to whether a violation has occurred or in whether, or to what extent, sanctions should be imposed.

The undersigned certifies that he has received a copy of the Code of Ethics for the Mandatory Exchangeable Trust, that he has read it, and that he understands its contents and his obligations as an Access Person as provided therein.

During the quarter referred to above, the following transactions were effected in securities in which I had, or by reason of such transaction acquired, direct or indirect beneficial ownership, and which are required to be reported pursuant to this Code of Ethics adopted by the Company.

This report (i) excludes transactions not required to be reported, and (ii) is not an admission that I have or had any direct or indirect beneficial ownership in the securities listed above.

NOTE: Do not report transactions in U.S. Government securities, bankers’ acceptances, bank certificates of deposit, commercial paper and registered open-end investment companies.

This Supplemental Code of Ethics (the “Code”) for persons performing the functions of principal executive officer, principal financial officer, principal accounting officer or controller (the “Covered Persons”) of the Mandatory Exchangeable Trust (the “Trust”) is intended to guide and remind the Covered Persons of their responsibilities to the Trust and the holders of its securities (“Holders”), as well as governmental authorities. Covered Persons are expected to act in accordance with the guidance and standards set forth in this Code. The Board of Trustees of the Trust (the “Board”) has adopted this Code.

This Code is intended to serve as the code of ethics contemplated by Section 406 of The Sarbanes-Oxley Act of 2002 and Form N-CSR. To the extent that a Covered Person is subject to the Trust’s code of ethics adopted pursuant to Rule 17j-1 (the “Rule 17j-1 Code”) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), this Code is intended to supplement and be interpreted in the context of the Rule 17j-1 Code. This Code should also be interpreted in the context of all applicable laws, regulations, the Trust’s Amended and Restated Trust Agreement and Bylaws, as amended, and all other governance and disclosure policies and documents adopted by the Board. All Covered Persons must become familiar and fully comply with this Code.

full, fair, accurate, timely, and understandable disclosure in reports and documents that the Trust files with, or submits to, the Securities and Exchange Commission (the “SEC”) and in any other public communications by the Trust;

Covered Persons are expected to observe both the form and the spirit of the ethical principles contained in this Code. Covered Persons must perform their duties and responsibilities for the Trust:

Covered Persons who are certified public accountants are expected to carry out their duties and responsibilities in a manner consistent with the principles governing the accounting profession, including any guidelines or principles issued by the Public Company Accounting Oversight Board or the American Institute of Certified Public Accountants from time to time.

Each Covered Person 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. A “conflict of interest” occurs when a Covered Person’s private interest interferes with the interests of, or the Covered Person’s service to, the Trust. The overarching principle is that Covered Persons are expected to maintain objectivity, to avoid undisclosed conflicts of interest, and to avoid improperly placing their personal interests before the interests of the Trust. In the performance of their duties and responsibilities for the Trust, Covered Persons must:

avoid participation in any activity or relationship that constitutes a conflict of interest unless that conflict has been completely disclosed to affected parties;

avoid direct or indirect participation in any investment, interest, association, activity or relationship that may impair or appear to impair their objectivity;

not use their personal influence or personal relationships improperly to influence investment decisions or financial reporting by the Trust whereby they would benefit personally to the detriment of the Trust;

not receive, directly or indirectly (such as through a member of the Covered Person’s family), improper personal benefits as a result of his or her position with the Trust.

Any Covered Person who may be involved in a situation or activity that might be a conflict of interest or give the appearance of a conflict of interest should consider reporting such situation or activity using the reporting procedures set forth in Section 4 of this Code. The Audit Committee will not be responsible for monitoring or enforcing this conflict of interest policy; rather, each Covered Person is responsible for self-compliance with this conflict of interest policy.

The following list provides examples of some potential conflict of interest situations that should be reported using the reporting procedures set forth in Section 4 of this Code; Covered Persons should keep in mind that these examples are not exhaustive:

the receipt of any entertainment from any company with which the Trust 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 Trust’s service providers, other than its administrator or any affiliated person thereof.

Covered Persons must not knowingly make any misrepresentations regarding the Trust’s financial statements or any facts in the preparation of the Trust’s financial statements, and must comply with all applicable laws, standards, principles, guidelines, rules and regulations in the preparation of the Trust’s financial statements. This section is intended to prohibit:

failing to correct the Trust’s financial statements or records that are materially false or misleading when he or she has the authority to record an entry; and

Covered Persons must be scrupulous in their application of generally accepted accounting principles. No Covered Person may (i) express an opinion or state affirmatively that the financial statements or other financial data of the Trust are presented in conformity with generally accepted accounting principles, or (ii) state that he or she is not aware of any material modifications that should be made to such statements or data in order for them to be in conformity with generally accepted accounting principles, if such statements or data contain any departure from generally accepted accounting principles then in effect in the United States.

Covered Persons must follow the laws, standards, principles, guidelines, rules and regulations established by all applicable governmental bodies, commissions or other regulatory agencies in the preparation of financial statements, records and related information. If a Covered Person prepares financial statements, records or related information for purposes of reporting to such bodies, commissions or regulatory agencies, the Covered Person must follow the requirements of such organizations in addition to generally accepted accounting principles.

In dealing with the Trust’s independent auditor, Covered Persons must be candid and not knowingly misrepresent facts or knowingly fail to disclose material facts, and must respond to specific inquiries and requests by the Trust’s independent auditor.

Covered Persons must not take any action, or direct any person to take any action, to fraudulently influence, coerce, manipulate or mislead the Trust’s independent auditor in the performance of an audit of the Trust’s financial statements for the purpose of rendering such financial statements materially misleading.

It is the Trust’s policy to provide full, fair, accurate, timely, and understandable disclosure in reports and documents that the Trust files with, or submits to, the SEC and in any other public communications by the Trust. The Trust has designed and implemented Disclosure Controls and Procedures to carry out this policy.

Covered Persons are expected to use their best efforts to promote, facilitate, and prepare full, fair, accurate, timely, and understandable disclosure in all reports and documents that the Trust files with, or submits to, the SEC and in any other public communications by the Trust.

Covered Persons must review the Trust’s Disclosure Controls and Procedures to ensure that they are aware of and carry out their duties and responsibilities in accordance with the Disclosure Controls and Procedures and the public reporting obligations of the Trust. Covered Persons are responsible for monitoring the integrity and effectiveness of the Trust’s Disclosure Controls and Procedures.

Covered Persons are expected to know, respect and comply with all laws, rules and regulations applicable to the conduct of the Trust’s business. If a Covered Person is in doubt about the legality or propriety of an action, business practice or policy, the Covered Person should seek advice from the Trust’s legal counsel.

In the performance of their work, Covered Persons must not knowingly be a party to any illegal activity or engage in acts that are discreditable to the Trust.

Covered Persons are expected to promote the Trust’s compliance with applicable laws, rules and regulations. To promote such compliance, Covered Persons may establish and maintain mechanisms to educate employees carrying out the finance and compliance functions of the Trust about any applicable laws, rules or regulations that affect the operation of the finance and compliance functions and the Trust generally.

Covered Persons should promptly report any conduct or actions by a Covered Person that do not comply with the law or with this Code. Failure to do so is itself a violation of this Code. Covered Persons and the Trust shall adhere to the following reporting procedures:

Any Covered Person who questions whether a situation, activity or practice is acceptable must immediately report such practice to the Managing Trustee of the Trust or to the Trust’s legal counsel. The person receiving the report shall consider the matter and respond to the Covered Person within a reasonable amount of time.

If the Covered Person is not satisfied with the response of the Managing Trustee, the Covered Person must report the matter to all members of the Trust’s Audit Committee, who will consider the matter and respond to the Covered Person within a reasonable amount of time.

If, after receiving a response, the Covered Person concludes that appropriate action was not taken, he or she should consider any responsibility that may exist to communicate to third parties, such as regulatory authorities or the Trust’s independent auditor. In this matter, the Covered Person may wish to consult with his or her own legal counsel.

The Audit Committee and the Trust will not be responsible for monitoring or enforcing this reporting of violations policy; rather, each Covered Person is responsible for self-compliance with this reporting of violations policy.

If the Audit Committee determines that a Covered Person violated this Code, failed to report a known or suspected violation of this Code, or provided intentionally false or malicious information in connection with an alleged violation of this Code, the Trust may take disciplinary action against any such Covered Person to the extent the Audit Committee deems appropriate. No Covered Person will be disciplined for reporting a concern in good faith.

All Covered Persons will be held accountable for compliance with this Code. On an annual basis, each Covered Person shall certify in writing his or her receipt, familiarity and commitment to compliance with this Code, by signing the Acknowledgment Form (Appendix A to this Code). Covered Persons will not retaliate against any other Covered Person or their affiliated persons for reports of potential violations that are made in good faith.

Any waiver of this Code, including an implicit waiver, that has been granted to a Covered Person, may be made only by the Board or a committee of the Board to which such responsibility has been delegated, and must be disclosed by the Trust in the manner prescribed by law and as set forth above in Section 6 (Disclosure of this Code).

This Code may be amended by the affirmative vote of a majority of the Board. Any amendment of this Code, must be disclosed by the Trust in the manner prescribed by law and as set forth above in Section 6 (Disclosure of this Code), unless such amendment is deemed to be technical, administrative, or otherwise non-substantive. Any amendments to this Code will be provided to the Covered Persons.

Certification and Acknowledgment of Receipt of Supplemental Code of Ethics for Persons Performing the Functions of Principal Executive Officer and Senior Financial Officers of the Trust

I acknowledge and certify that I have received a copy of the company’s Supplemental Code of Ethics for Persons Performing the Functions of Principal Executive Officer and Senior Financial Officers of the Trust (the “Code”). I understand and agree that it is my responsibility to read and familiarize myself with the policies and procedures contained in the Code and to abide by those policies and procedures.

Signature:

Print Name:

Title:

Date:

Date of

Transaction

Number of Shares or Principal Amount

Dollar Amount

of Transaction

Nature of

Transaction

(Purchase, Sale,

Other)

Broker/Dealer

or Bank through

Whom Effected