Module : 1

CFPCM Code of Ethics & Rules of Professional Conduct

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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

Code of Ethic 5 Confidentiality

Code of Ethic 6 Professionalism

Code of Ethic 7 Diligence

Code of Ethic 8 Compliance

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.

Rule 103 Following responsibilities regarding funds / property of the client.

A For client funds or property will act as per the legal instrument 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 this period 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.

Rule 104 Shall not make any statement misrepresenting the services they are capable of providing.

2. Objectivity
Rule 201 Reasonable and prudent professional judgment.

Rule 202 Shall act in the interest of the client.

Rule 203 Shall disclose about limitation if any

Rule 204 Disclosure regarding conflict of interest and compensation and financial relationship

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

Rule 206 Make the client aware of potential conflict of interest

Rule 207 Disclosures about compensation to be made annually under Rule 204

3. Competence
Rule 301 A member shall keep himself informed of developments regarding financial planning Rule 302 Offer services only in an area of his competence

Rule 303 Shall have appropriate standards in the appointment of the representative

4. Fairness
Rule 401 Proper communication provided to the client about material information concerning the planner, nature of service to be provided Rule 402 Compensation to be fair and reasonable.

Rule 403 References to prospective clients from present and former clients allowed.

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

Rule 405 A member to maintain same standards of disclosure and services respectively.

Rule 407 Disclosure to employer of affiliation that may compromise the service. Change in employment or FPSB Licensing status to be advised timely.

Rule 408 Responsibility towards partners to act in good faith.

Rule 409 Responsibility of mutual disclosure of important information to the partners.

Rule 410 Compliance of agreement applicable to severance of relationship with the financial planning firm.

Rule 411 Liable to give information to the employer/partner about additional compensation receivable from the client.

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

5. Confidentiality
Rule 501 Must not disclose anything about 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

Rule 502 Adherence to similar confidentiality standards for employers.

Rule 503 Similar standard with regard to partners.

Rule 504 Similar standard for FPSB India.

Rule 505 Compliance of clients instruction to deliver original documents. Internal notes and working notes and working documents excluded.

6. Professionalism
Rule 601 Fairness in competitive practice.

Rule 602 Not act in a manner unbecoming of professional.

Rule 603 Shall not practice any profession unless qualified.

Rule 604 Shall maintain professional indemnity insurance.

Rule 605 Shall not misrepresent the status of FPSB India .

Rule 606 Shall not act on behalf of FPSB India.

7. Diligence
(Paying proper attention to the task)
Rule 701 Shall serve diligently.

Rule 702 Shall enter into engagement with the client only when the relationship is warranted. Shall offer services only when he is competent.

Rule 703 Collect sufficient information.

Rule 704 Shall conduct research on products before recommending.

Rule 705 Shall develop suitable plan for the client based on information collected and analyzed.

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

Rule 707 All important recommendations to made in writing.

Rule 708 A practitioner shall implement only recommendations suitable to a client.

Rule 709 Inform the client of the consequence of limited services.

Rule 710 Must explain reasons for moving the investments from one product to another.

Rule 711 Must confirm in writing when subsequent instruction given by the client alters the strategy.

Rule 712 Must establish written policies and procedure in a business organization.

8. Compliance
Rule 801 Must perform according to law and rules.

Rule 802 Conduct by employees will constitute conduct of the member.

Rule 803 Use of the mark in compliance of FPSB rule.

Rule 804 Must co-operate with FPSB India in investigation.

Rule 805 Must comply with FPSB India disciplinary rules concerning complaints, disputes etc.

Rule 806 Shall perform with dedication in accordance with laws.

Rule 807 Comply with co-certification requirements.

Rule 808 Shall ensure storage of relevant documents For seven years.

Rule 809 Effective supervision of activities of representatives and employees.

Regulations

Graduates with 3 years of relevant work experience are 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 get certification only if they clear 12th standard and fulfill work experience criteria.

Post Certification Regulations

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 by 01st April. FPSB, India send notices after 15 days and 45 days of expiry of renewal date. After 90 days of expiry of renewal date the right to use CFP 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 of expiry, then candidate has to appear for Module VI exam

Disciplinary Actions

Private Censure : Unpublished written reproach/warning by FPSB committee. Public Letter of Admonition : Letter of warning issued by FPSB committee. Suspension : Defaulting certificant can be suspended for a specified time not exceeding 5 years. Revocation : The FPSB committee may order revocation of right to use CFP mark, and it is permanent revocation.

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