What must be included in a SEC registered investment adviser’s code of ethics?
SEC Rule 204A-1 requires a SEC registered investment adviser’s code of ethics to set forth the standards of business conduct expected of the investment adviser’s “supervised persons” and it must address personal securities trading (“PST”) by such individuals. A SEC registered investment adviser is not required to adopt a particular standard of business ethics. Rather, the standard that an investment adviser selects should reflect the investment adviser’s fiduciary obligations to its investment advisory clients and the fiduciary obligations of the individuals it supervises and require compliance with the federal securities laws. A code of ethics should set out ideals for ethical conduct premised on fundamental principals of openness, integrity, honesty and trust. A good code of ethics should effectively convey to investment adviser representatives and employees the value that the investment adviser places on ethical conduct, and the code of ethics should challenge the investment adviser
