2-Code of Ethics (2)

7/31/2019 2-Code of Ethics (2)

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Module : 1


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Code of Ethics

Code of Ethic 1 Integrity

Code of Ethic 2 Objectivity

Code of Ethic 3 Competence

Code of Ethic 4 Fairness


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Code of Ethic 5 Confidentiality

Code of Ethic 6 Professionalism

Code of Ethic 7 Diligence

Code of Ethic 8 Compliance


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1. Integrity(Moral Soundness)

Rule 101 No misleading communication /advertisement

Rule 102 No dishonesty, fraud,misrepresentation or misleading

statement to a client, to an employer,

to a colleague or any one.


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Rule 103 Following responsibilitiesregarding funds / property of the client.

A For client funds or property will act as per the legalinstrument that is PA or Letter of Authority.

B Maintain complete record about funds etc.

C Will render full accounts of receipt of any fund during thisperiod and full compliance of the clients order.

D Shall not commingle clients fund or property.

E Will carry out investments with the care required of a fiduciary.


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Rule 104 Shall not make any statementmisrepresenting the services they are

capable of providing.


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2. Objectivity

Rule 201 Reasonable and prudentprofessional judgment.

Rule 202 Shall act in the interestof the client.


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Rule 203 Shall disclose about limitationif any

Rule 204 Disclosure regarding conflictof interest and compensation and financial relationship

Rule 205 If services are rendered orallydisclosures under 204 are to be made orally


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Rule 206 Make the client aware ofpotential conflict of interest

Rule 207 Disclosures about compensationto be made annually under Rule 204


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3. Competence

Rule 301 A member shall keephimself informed of developments

regarding financial planning

Rule 302 Offer services only inan area of his competence

Rule 303 Shall have appropriatestandards in the appointment of the

representative


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4. Fairness

Rule 401 Proper communicationprovided to the client about materialinformation concerning the planner,

nature of service to be provided

Rule 402 Compensation to be fairand reasonable.

Rule 403 References toprospective clients from present

and former clients allowed.


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Rule 404 Disclosure to clients about thecapacity in which he is providing services.

Rule 405 A member to maintain samestandards of disclosure and services

respectively.

Rule 407 Disclosure to employer of

affiliation that may compromise theservice. Change in employment or FPSBLicensing status to be advised timely.


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Rule 408 Responsibility towards partners to actin good faith.

Rule 409 Responsibility of mutualdisclosure of important information

to the partners.

Rule 410 Compliance of agreementapplicable to severance of relationship with the

financial planning firm.


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Rule 411 Liable to give information to theemployer/partner about additional compensation

receivable from the client.

Rule 412 Terms of business transactions if any withclient should be reasonable.


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5. Confidentiality

Rule 501 Must not disclose anythingabout the client except to the extent

disclosure reasonably necessary as under.

A To affect the transaction for a client

B Compliance of legal requirement

C To defend the member

D For a dispute between planner and client


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Rule 502 Adherence to similar

confidentiality standards for employers.

Rule 503 Similar standard with regardto partners.


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Rule 504 Similar standard for FPSB India.

Rule 505 Compliance of clients instruction to deliveroriginal documents. Internal notes and working

notes and working documents excluded.


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6. Professionalism

Rule 601 Fairness in competitive practice.

Rule 602 Not act in a manner unbecoming ofprofessional.


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Rule 603 Shall not practice any profession

unless qualified.

Rule 604 Shall maintain professionalindemnity insurance.


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Rule 605 Shall not misrepresent the

status of FPSB India .

Rule 606 Shall not act on behalfof FPSB India.


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7. Diligence(Paying proper attention to the task)

Rule 701 Shall serve diligently.

Rule 702 Shall enter into engagementwith the client only when the relationship

is warranted. Shall offer services only

when he is competent.


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Rule 703 Collect sufficient information.

Rule 704 Shall conduct research onproducts before recommending.


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Rule 705 Shall develop suitable plan for

the client based on information collectedand analyzed.

Rule 706 Must assist the client in comprehendingthe plan and recommendations of plan.


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Rule 707 All important recommendations to madein writing.

Rule 708 A practitioner shall implementonly recommendations suitable to a client.


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Rule 709 Inform the client of theconsequence of limited services.

Rule 710 Must explain reasonsfor moving the investments from one

product to another.


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Rule 711 Must confirm in writing when

subsequent instruction given by the client altersthe strategy.

Rule 712 Must establish written policiesand procedure in a business organization.


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8. Compliance

Rule 801 Must perform according tolaw and rules.

Rule 802 Conduct by employees willconstitute conduct of the member.


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Rule 803 Use of the mark in compliance

of FPSB rule.

Rule 804 Must co-operate with FPSBIndia in investigation.


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Rule 805 Must comply with FPSB India

disciplinary rules concerning complaints,disputes etc.

Rule 806 Shall perform with dedicationin accordance with laws.


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Rule 807 Comply with co-certificationrequirements.

Rule 808 Shall ensure storage of relevant documentsFor seven years.

Rule 809 Effective supervision ofactivities of representatives and employees.


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Graduates with 3 years of relevant work experienceare eligible for enrolling for this program.

12th pass candidate can get CFP certification if he

has 6 years of work experience.

10th pass candidate can enroll but can getcertification only if they clear 12th standard andfulfill work experience criteria.

Regulations

P t C tifi ti R l ti


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Annual Renewal Fee of Rs. 5,000/- 15 CE points annually. Certification period from 01st April 31st March. Penalty of Rs. 500/- if not certification not renewed by01st April.

FPSB, India send notices after 15 days and 45 days ofexpiry of renewal date.

After 90 days of expiry of renewal date the right to useCFP mark is relinquished.

Reinstatement can be allied by paying a fee of Rs.1,000/-. If re-instatement is applied after more than 5 years ofexpiry, then candidate has to appear for Module VI exam

Post Certification Regulations


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Private Censure : Unpublished writtenreproach/warning by FPSB committee.

Public Letter of Admonition : Letter of warning issuedby FPSB committee.

Suspension : Defaulting certificant can be suspendedfor a specified time not exceeding 5 years.

Revocation : The FPSB committee may order

revocation of right to use CFP mark, and it is permanentrevocation.

Disciplinary Actions


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2-Code of Ethics (2)

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