HOW TO REDUCE CYBER RISKS IN CLIENT ACCOUNTS
CFP® Certificants in the News
CFP Board’s recent background and disclosure review project resulted in a higher-than-expected number of reviews, investigations, and disciplinary actions taken against CFP® certificants. Solely in the author’s opinion, the scope and depth of the disclosure violations, when coupled with the CFP Board’s strategic goal of utmost public trust, may have influenced a proposal to increase sanctions (discipline) for nondisclosure. According to the July 28, 2021, News Release entitled CFP BOARD REQUESTS COMMENTS ON PROPOSED REVISIONS TO SANCTION GUIDELINES AND PROCEDURAL RULES, nondisclosure violations will be likely to result in public, rather than private, discipline. The News Release went on to summarize context and the proposed revisions to Sanction Guidelines.
Context
According to the News Release, “The proposed changes reflect the first set of recommendations from CFP Board’s Commission on Sanctions and Fitness, which was formed in February 2021 to review and recommend changes to the Sanction Guidelines and Fitness Standards for Candidates for CFP® Certification and Former Professionals Seeking Reinstatement. The Commission on Sanctions and Fitness will review the comments on the proposed changes and make a recommendation to CFP Board’s Board of Directors. The Board of Directors will decide whether to adopt the changes at an upcoming meeting. If the proposed changes are adopted, they will be announced with an effective date that allows adequate time for CFP Board to educate CFP® professionals about the reporting requirement before the revised guidelines take effect.”
Proposed Revisions to the Sanction Guidelines
Quoting directly from the News Release, “CFP Board’s Code and Standards require CFP® professionals to report certain categories of information to CFP Board within 30 calendar days of its occurrence. Additionally, CFP Board requires candidates and CFP® professionals to complete an Ethics Declaration that contains a series of questions that requires the individual to report certain categories of information that may reveal misconduct.
Under the current Sanction Guidelines, a ‘Failure to Timely Report Information to CFP Board’ and/or submitting an ‘Inaccurate Ethics Declaration’ results in a sanction guideline of a private censure.
The proposed changes increase the sanction guidelines for these two conduct categories to public censure. For both conduct categories:
- CFP Board considered whether the appropriate sanction should be a monetary sanction instead of a public censure.
- While CFP Board concluded that a public censure is the most appropriate sanction, CFP Board is evaluating whether to impose an administrative fee on those who engage in self-reporting violations to help offset the costs of enforcement.
- The proposed sanction guidelines include factors that might make the sanction higher or lower than a public censure, depending on the circumstances.
- The proposed guidelines include a policy note indicating that no violation will be found if the information was timely reported on Form U4 (Uniform Application for Securities Industry Registration or Transfer).”
A redline version of the Proposed Sanction Guidelines can be found here.
Your Invitation to Comment
CFP Board invites your comments on its proposed changes at Comment on Proposed Revisions. According to CFP Board, “The public comment period for the proposed revisions to the Sanction Guidelines and Procedural Rules is July 28 through September 21, 2021. Comments received are posted on this page with the name of the commenter and date submitted [emphasis added], with received comments posted on at least a weekly basis.”
