<DOCUMENT>
<TYPE>EX-99.CODE ETH
<SEQUENCE>2
<FILENAME>codeofethics.txt
<DESCRIPTION>CODE OF ETHICS
<TEXT>
                                                                  EX-99.CODE ETH

       FLAHERTY & CRUMRINE PREFERRED INCOME OPPORTUNITY FUND INCORPORATED

                  CODE OF ETHICS FOR SENIOR FINANCIAL OFFICERS



INTRODUCTION
         This Code has been written and adopted in  conformity  with Section 406
of the  Sarbanes-Oxley  Act of 2002 as implemented by SEC rules and regulations.
This Code sets forth  principles  and  establishes  rules of conduct  for Senior
Officers (as defined below) of the Preferred Income Fund Incorporated. This Code
supplements  other Codes that the Fund or its Investment  Adviser has adopted or
may adopt in connection with other matters.


GENERAL PRINCIPLES
         It is the ethical and legal obligation of the Fund's Senior Officers to
strive to insure the full, fair, timely, and comprehensible financial disclosure
to shareholders,  regulatory authorities, and the general public. It is also the
obligation of the Fund's Senior Officers to establish  and/or maintain  adequate
internal  control  safeguards  for the  purposes  of (1)  utilizing  the  Fund's
financial  resources in the manner  authorized  by the Fund's Board of Directors
and  permitted  by  applicable  law and (2)  laying  the  foundation  for proper
financial  accounting.  It is the  obligation of the Fund's  Senior  Officers to
avoid improper conflicts of interest.

         As a guiding principle, a Senior Officer is expected to act in a manner
that he would wish another to act towards him if the roles were reversed.


APPLICABILITY
         For  purposes of this Code,  a Senior  Officer of the Fund means either
the Chief Executive Officer or the Chief Financial Officer or such other officer
performing the tasks of such officers in an official capacity.


COMPLIANCE WITH APPLICABLE LAW AND REGULATIONS
         A Senior  Officer shall maintain  working  knowledge of and comply with
all  applicable  laws,  rules,  and  regulations of any  government,  government
agency,  regulatory  organization and licensing  agencies  governing  matters of
internal controls and financial statement disclosure.

         A Senior  Officer  will not  knowingly  participate  or  assist  in any
violation of such laws, rules, or regulations.

<PAGE>

FINANCIAL DISCLOSURE PROCEDURES
         The  following  procedures  and  rules  are to  apply  in  all  manners
regarding  financial   disclosure.   Financial  disclosure   includes,   without
limitation, regular periodic reports to shareholders (e.g., Annual, Semi-Annual,
and Quarterly  Reports),  press releases,  reports to regulatory  authorities or
securities  exchanges,  reports to taxing  authorities,  web pages,  information
released to statistical subscriber services, etc.

         A Senior  Officer will not knowingly  misstate a material fact nor will
such Officer fail to state a fact that is material under the circumstances.

         A Senior  Officer  will use his best  efforts  to seek to  assure  that
financial disclosure is clear and comprehensible.

         In manners regarding financial disclosure,  a Senior Officer will avoid
selectively disclosing information,  except to service providers of the Fund and
applicable regulatory authorities that are expected to maintain  confidentiality
in accordance with ethical business practice.

         A Senior  Officer will make every  reasonable  effort to make sure that
financial disclosure is made in a timely manner.

         A  Senior  Officer  will  provide  and/or  cause  to be  provided  full
cooperation   with   financial   auditors   and/or   other   regulatory/criminal
investigators.

         A Senior Officer will maintain  familiarity  with such basic principles
of GAAP,  AICPA  standards,  FASB  pronouncements,  etc.,  as are  necessary  to
carrying out the obligation of fair and full financial accounting disclosure.



INTERNAL CONTROL PROCEDURES
         A  Senior  Officer  will  maintain  working  knowledge  of  the  Fund's
foundational governance documents, key contracts, and actions/resolutions of its
Board of Directors and Board Committees.

         A Senior Officer will make every  reasonable  effort to insure that the
terms of the Fund governance documents,  key contracts, and actions of the Board
and its Committees are faithfully carried out.

         A Senior Officer will make every reasonable effort to insure, including
the establishment of procedures as may be necessary, the proper authorization of
securities  transactions and the compliance with requisite investment guidelines
and requirements.

<PAGE>

         A Senior Officer will make every reasonable effort to insure, including
the  establishment  of  procedures  as  may  be  necessary,  that  payments  for
investments,  expenses, shareholder distributions,  and other purposes have been
properly made. This may include the designation of certain persons as authorized
agents.

         A Senior  Officer will review the operations of the Fund and review the
adequacy of internal controls through the mechanism of the Fund's Disclosure and
Internal Controls Committee and such Committee's Procedures.



ACTUAL AND APPARENT CONFLICTS OF INTEREST
         A  "conflict  of  interest"  occurs  when a  Senior  Officer's  private
interest interferes with the interests of, or his service to, the Fund.

         Certain conflicts of interest arise out of relationships between Senior
Officers and the Fund and already are subject to conflict of interest provisions
in the  Investment  Company Act of 1940 (the  "Investment  Company Act") and the
Investment Advisers Act of 1940 (the "Investment  Advisers Act"). The Fund's and
the  investment  adviser's  compliance  programs and  procedures are designed to
prevent,  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 the parameter 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 Senior  Officers  are
also officers or employees.  As a result,  this Code  recognizes that the Senior
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 Senior Officers in such activities is inherent in
the contractual  relationship between the Fund and the adviser and is consistent
with the  performance by the Senior  Officers of their duties as officers of the
Fund.  Thus, if performed in conformity  with the  provisions of the  Investment
Company Act and the Investment  Advisers Act, such  activities will be deemed to
have been handled ethically.  In addition,  it is recognized by the Fund's Board
of Directors  that the Senior  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 this Code,  even if such
conflicts  of  interest  are not  subject to the  provisions  in the  Investment
Company Act and the Investment  Advisers Act. The overarching  principle is that
the personal interest of a Senior Officer should not be placed improperly before
the interest of the Fund.

<PAGE>

A Senior Officer must:

         (1) not use his personal influence or personal relationships improperly
to influence investment decisions or financial reporting by the Fund whereby the
Senior Officer would benefit personally to the detriment of the Fund;

         (2) not  cause  the Fund to take  action,  or to  refrain  from  taking
action,  for the individual  personal  benefit of the Senior Officer rather than
for the benefit of the Fund;

         (3) not use material  non-public  knowledge  of portfolio  transactions
made or  contemplated  by the Fund to trade  personally or cause others to trade
personally in contemplation of the market effect of such transactions.


SUPERVISION
         A Senior Officer will exercise appropriate  supervision over employees,
officers,  and other  service  providers  to seek to insure  that the  foregoing
procedures are followed.


STANDARD OF CARE
         A Senior Officer will exercise  reasonable  care in the carrying out of
all duties under this Code and as an officer of the Fund.


REPORTING AND ACCOUNTABILITY
         A Senior  Officer must promptly  notify the President of the Fund, or a
Vice President he may  designate,  promptly if he knows of any violation of this
Code. Failure to do so is itself a violation of this Code.

         The President of the Fund,  or a Vice  President he may  designate,  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.

         The Fund will follow these  procedures in  investigating  and enforcing
this Code:

         (1)      the President, or a Vice President he may designate, will take
                  all appropriate action to investigate any potential violations
                  reported to him;

         (2)      if, after such investigation,  the President or Vice President
                  believes that no violation has occurred,  no further action is
                  required;

         (3)      any matter that the President or Vice President  believes is a
                  violation will be reported to the Audit Committee;
<PAGE>

         (4)      if the Audit Committee  concurs that a violation has occurred,
                  it will  inform the Board,  which  will  consider  appropriate
                  action,   which  may  include   review  of,  and   appropriate
                  modifications   to,   applicable   policies  and   procedures,
                  notification  of  appropriate   personnel  of  the  investment
                  adviser  or its board,  or a  recommendation  to  dismiss  the
                  Senior Officer.


         The Board will be responsible  for granting  waivers,  as  appropriate,
such  waiver  also  requiring  a  majority  vote of the  independent  directors.
However, any changes to or waivers of this Code will, to the extent required, be
disclosed as provided by rules of the SEC.


CONSEQUENCES OF FAILURE TO COMPLY WITH THIS CODE
         In the event that a Senior  Officer has not complied with any provision
of this Code, the Audit  Committee shall refer the matter to the Fund's Board of
Directors.  The Board may impose appropriate  sanctions  including,  among other
things, censure and suspension or termination of such person's officership.


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.  Insofar as other
policies  or  procedures  of the Fund,  the Fund's  Investment  Adviser or other
service  providers govern or purport to govern the behavior or activities of the
Senior  Officers who are subject to this Code,  they are superseded by this Code
to the extent that they overlap or conflict  with the  provisions  of this Code.
The Fund's and its Investment  Adviser's  codes of ethics under Rule 17J-1 under
the Investment  Company Act and the Investment  Adviser's  other  compliance and
control policies and procedures are separate requirements applying to the Senior
Officers and others, and are not part of this Code.


ACKNOWLEDGMENT
         Upon the  adoption of this Code and  annually  thereafter  and upon the
appointment  of any individual to a position as a Senior  Officer,  he or she is
required to sign the affirmation set forth on Exhibit A.


ANNUAL REVIEW AND AMENDMENTS
         This Code of Ethics  shall be reviewed and approved by the Fund's Board
of Directors no less frequently than annually.

         The  Directors  may at any  time  make  such  amendments  as they  deem
necessary  or  appropriate  to  effectuate  the  purposes  of  this  Code.  Such
amendments require a majority vote of the Board of Directors and a majority vote
of the non-interested Directors.

<PAGE>


INTERNAL USE
         This Code is intended  solely for the internal use of the Fund and does
not  constitute  an  admission,  by or on behalf  of the  Fund,  as to any fact,
circumstance, or legal conclusion.


Adopted by the Flaherty & Crumrine Preferred Income Opportunity Fund Board of
Directors at its Meeting of July 23, 2004



<PAGE>


                                    EXHIBIT A



AFFIRMATION
         I have read this Code of Ethics for Senior Officers.  I further confirm
that I am a  Senior  Officer  as  defined  therein  and have  complied  with the
requirements of this Code.





---------------------      -----------------------------      ------------
         NAME                               TITLE                 DATE


</TEXT>
</DOCUMENT>
