Nov. 2011
In July 2004, the SEC adopted Rule 204A-1 of the Investment Advisers Act of 1940 to
require federally-registered investment advisers to adopt a Code of Ethics to address not
only personal trading, but to also adopt standards of business conduct, including
provisions that require compliance with federal securities laws. In addition to certain
required provisions discussed below, a Code of Ethics should set forth ideals for ethical
conduct founded on principles of openness, integrity, and honesty, and should effectively
convey to the adviser’s employees the value the firm places on ethical conduct.
Importantly, Code of Ethics also should set the bar for employees to live up not only to
the letter of the law, but also to the ethical ideals of the organization. While many states
follow the SEC’s rules for investment advisers, whether a state-registered investment
adviser must adopt a Code of Ethics varies from state to state dependent upon the
requirements of the applicable state’s laws, rules and regulations.
To read the full PDF article, click here.