Views on improving the integrity of global capital markets
06 June 2017

Asset Owners Voice Their Strong Support of the Asset Manager Code

UPDATED 24 July 2017: Due to pending system upgrades, CFA Institute has decided to defer until further notice the implementation of an annual renewal process for the Asset Manager Code. As a result, firms that have not submitted updated information will now not be required to do so. This post has been updated to reflect this change and provide up-to-date information. Please contact us at ethics@cfainstitute.org with any questions.

Last week (late May), investment managers received a vivid reminder of how much large, influential investors value compliance with the CFA Institute Asset Manager Code by the investment management firms that they hire. At the same time, those managers who already adhere to that Code were reminded about the coming annual renewal requirement for their claim of compliance.

Open Letter Signatories Double for 2017

For the second straight year, CFA Institute sponsored an “Open Letter” Campaign to promote the Asset Manager Code in conjunction with the CFA Institute Annual Conference. This year, the number of influential plan sponsors expressing support for the Asset Manager Code doubled from 8 to 16. Returning signatories included CalPERS, CalSTRS, the Illinois Municipal Retirement Fund, and the Massachusetts Pension Reserves Investment Management Board, and they were joined by new signatories that included the Arizona State Retirement System; Pennsylvania Public School Retirement System; the teachers and employees retirement systems in Texas; and the employees and teachers retirement system and fire pension fund in New York City. By signing the letter, these leading organizations “urge[d] investment managers to embrace the standards set forth in the Asset Manager Code. We are convinced that doing so will send a powerful message to our employees, our business partners, and our stakeholders who count on us to manage the assets entrusted to our care.”

CFA Institute sponsored publication of this letter, with the list of signatories, in the Wall Street Journal and Pension & Investments. The distinguished asset owners who signed the open letter are seeking to raise awareness of the Asset Manager Code by publicly stating their interest in having their investment managers adhere to the standards set forth in the Code. We believe that a public and united show of support for the Code by a significant set of asset owners will spur managers to consider compliance with the Asset Manager Code.

Annual Renewal of Claims of Compliance to Come

This letter appears at an opportune time, not only for firms considering adoption of the Asset Manager Code, but also for firms that have been longtime adherents to the Code. The letter reinforces to investment managers the importance their clients place on ethical and professional conduct and placing investors interests first. And it also reminds them that we will be implementing an annual renewal requirement in the future. In the past, firms only needed to notify CFA Institute of their claim of compliance when they initially made the claim. We had hoped to implement this requirement beginning this year (2017), and annually thereafter, but an organization-wide update of our technological infrastructure has lead to us deciding to delay the implementation.

The move to annual notification will further our goal of making the Asset Manager Code not only an industry best practice, but a more rigorous one as well because it signals to firms and investors that compliance with fundamental ethical standards is not a “check the box,” or “one and done” proposition, but an ongoing process of continual commitment to ethical practice and working for clients’ best interest. In addition, annual notification will ensure that the information we have on file is regularly updated and that firms who may have claimed compliance years ago but no longer do so (but did not notify us) are dropped from the list of complying firms. It will also regularly update our contact information for compliant firms. That will allow us to easily reach firms when there are updates to the standards or other CFA Institute products that might interest them are released.

Renewal of Claim of Compliance Will Keep Firms Listed

We will be implementing changes to the Asset Manager Code notification form to allow firms to easily provide updates to their information, rather than complete the form every year. Once implemented, firms will be required to update their claims each year or they will be dropped from the list of compliant firms found on the CFA Institute website and will no longer be able to claim compliance. The outreach and awareness efforts represented by the Open Letter, the increased demand for compliance by investors, such as the Open letter signatories, and news about the coming rigorous annual notification standard are having the desired effect. Since 1 September 2016, more than 100 new firms have claimed compliance with the Asset Manager Code. You should urge your firm to meet investor demand and lead the way in promoting ethical and professional behavior in the investment industry by joining these firms in claiming compliance with the Asset Manager Code.

Need to update your firm’s information? Simply fill out this form.

If you liked this post, consider subscribing to Market Integrity Insights.


Photo Credit: CFA Institute

About the Author(s)
Jon Stokes

Jon Stokes is the Director of Ethics and Standards Education at CFA Institute. His responsibilities include design and creation of on-line ethics education, development and maintenance of the CFA Institute Code of Ethics and Standards of Professional Conduct, and the design and management of the CFA Institute Ethical Decision-Making and Giving Voice to Values education programs. Stokes holds a JD degree.

Leave a Reply

Your email address will not be published. Required fields are marked *



By continuing to use the site, you agree to the use of cookies. more information

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.

Close