Policy required document Financial
Investment Adviser Code of Ethics
Rule 204A-1 requires every SEC-registered adviser to adopt a written code of ethics that sets a standard of business conduct reflecting the adviser's fiduciary duty, requires compliance with federal securities laws, requires access persons to report personal securities holdings and transactions, requires pre-approval of IPO and private placement purchases by access persons, and requires prompt internal reporting of violations.
It is the one adviser document where the rule itself demands a written acknowledgment: every supervised person must receive the code and each amendment and acknowledge receipt in writing.
The code is short compared with the compliance manual and is often published as its own document because it is described in Form ADV Part 2A Item 11 and must be offered to clients on request.
Examiners check that holdings reports were received within the deadlines, that acknowledgments exist for every supervised person including departed ones within the five-year record period, and that the code was amended when the firm's business changed.
Obligation ledger
Who requires it, and what each one says.
| Source | Applies when | What it requires | Status |
|---|---|---|---|
| Advisers Act code of ethics rule 17 CFR 275.204A-1(a) | SEC-registered investment adviser | A written code with a standard of conduct, compliance with securities laws, access person reporting, pre-approval of IPOs and limited offerings, and violation reporting. Legally required. | Mandatory |
| Advisers Act code of ethics rule, acknowledgment 17 CFR 275.204A-1(a)(5) | Every supervised person | Provide each supervised person with a copy of the code and any amendments and require written acknowledgment of receipt. Legally required. This is a signature-class requirement in the rule text. | Mandatory |
| Advisers Act code of ethics rule, reporting 17 CFR 275.204A-1(b) | Access persons | Initial holdings report within ten days of becoming an access person, annual holdings reports, and quarterly transaction reports within 30 days of quarter end, with the listed content. Legally required. | Mandatory |
| Advisers Act books and records 17 CFR 275.204-2(a)(12) and (a)(13) | Always | Keep each code in effect in the past five years, records of violations and actions taken, all written acknowledgments for anyone who was a supervised person in the past five years, holdings and transaction reports, the access person list, and pre-approval decisions. Legally required. | Mandatory |
| Form ADV Part 2A Item 11 | Always | Describe the code briefly and state that a copy is available to any client or prospective client on request. Legally required as a disclosure. | Mandatory |
| SEC adopting release, Investment Adviser Codes of Ethics Release IA-2256 (July 2, 2004) | Always | Explains the minimum elements and the SEC's expectation that codes address gifts, outside business activities and other conflicts even though the rule does not list them. Interpretive guidance; examiner expectation. | Implied |
Required sections
- Standard of business conduct reflecting fiduciary obligations (204A-1(a)(1))
- Requirement to comply with applicable federal securities laws (204A-1(a)(2))
- Definition of access person and the list of access persons maintained by the firm
- Personal securities reporting: initial holdings, annual holdings, quarterly transactions, with content and deadlines (204A-1(b))
- Reporting exceptions: accounts with no influence or control, automatic investment plans, duplicate broker confirmations (204A-1(b)(3))
- Pre-approval of IPOs and limited offerings (204A-1(c))
- Prompt internal reporting of violations to the CCO or designee (204A-1(a)(4))
- Distribution of the code and amendments with written acknowledgment (204A-1(a)(5))
- Sanctions for violations and recordkeeping of violations and actions (204-2(a)(12)(ii))
- Insider trading prohibition and material nonpublic information procedures (Advisers Act 204A; often placed here)
- Gifts and entertainment, outside business activities, political contributions (IA-2256 expectation; not in rule text)
- Review and enforcement responsibilities of the CCO
- Client disclosure statement matching Form ADV Item 11
What the examiner asks for
What changed
Change log.
Frameworks
Where this document is required.
Who looks at it
Where this document gets checked.
No one certifies a document like this on its own. It is read during the audits and inspections below, and by the agency behind each rule.
| Where it is looked at | Who looks at it |
|---|---|
| SEC 206(4)-7 | SEC Division of Examinations staff conduct examinations; state securities regulators examine state-registered advisers. There is no certification or third-party audit requirement |
Who helps write it
Consultants.
Firms that name these standards in their own material.
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Where it lives
Software.
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From the publisher
Manage This Document in AllyMatter
Route it for approval, keep every version, and record a named acknowledgment from everyone who has to read it.
Questions
What people ask.
Who is an access person at a small firm?
If the adviser's primary business is investment advice, all directors, officers and partners are presumed to be access persons, along with any supervised person who has access to nonpublic information about client purchases or recommendations. At most small RIAs that is everyone.
Does the acknowledgment have to be repeated every year?
The rule requires acknowledgment of the code and of each amendment. Annual re-acknowledgment is not in the text but is standard practice because examiners ask for it and because it doubles as the annual holdings certification.
Can the code be a chapter of the compliance manual?
Yes, as long as it contains every required element and can be produced on request to clients. Many firms keep it separate for that reason.
What about employees who left?
Their acknowledgments, reports and any violation records stay on file for five years from the end of the fiscal year in which they left the firm.
Who owns this site?
AllyMatter, a policy management tool that may appear in listings on this page. It is labeled every time, excluded from picks, and receives nothing from the matching form unless you name it.