Washington (March 18, 2004) -- The Financial Planning Association has lent its support to a Securities and Exchange Commission proposal requiring registered investment advisors to adopt a specific code of ethics, but at the same time, asked the commission to consider the obligations that certified financial planners have under the CFP Board Code of Ethics.
Last month, the commission proposed that federally registered investment advisors be required to adopt a code of ethics that would set standards of conduct to be expected of advisory personnel, including compliance with federal securities laws. In addition, the proposed code would safeguard material nonpublic information about client transactions, require investment advisors to report their personal securities transactions, and require advisors to report promptly any violations.
In a four-page comment letter to the SEC, Neil Simon, FPA director of government relations, noted that many of the SEC's proposed code requirements duplicate provisions of the CFP Board Code of Ethics.
"We do not believe that CFP certificants should be required to adopt redundant provisions in the codes of ethics they would be required to adopt under the proposed rule," the letter said. "We propose instead that CFP certificants be permitted to incorporate by reference the CFP Board Code of Ethics and include in the SEC-required codes only those provisions that do not have an analogue in the CFP Board Code of Ethics. Conversely, for non-CFP certificants, we recommend use of the CFP Board Code as the basis for the codes of ethics required by the commission.”
Simon pointed out that some 18,000 of the FPA’s 28,000 members are already CFP practitioners "who have taken the extra step to demonstrate their professionalism by submitting to the rigorous CFP certification process." He added, "The Code of Ethics and Professional Responsibility describes the minimum standards of acceptable professional conduct for individuals authorized to use the CFP Board's CFP certification marks."
-- WebCPA staff
