As we enter proceed through January of 2026, refreshing your organization’s Code of Ethics is essential to align with evolving regulatory requirements. This post outlines best practices for keeping your Code of Ethics relevant; relevance of your Code of Ethics is an essential component of your compliance program.
1. Start the Year Clean: Key Refresh Points
- Plain Language & Accessibility: Ensure your Code is readable commensurate with that of your audience.
- Modern Topics: Consider if contemporary topics such as AI usage should be in your Code of Ethics.
- Tone from the Top: Include a brief, strong message from leadership that integrates the company’s purpose and values to demonstrate commitment.
2. When Updates Are Required
- Periodic Reviews: It should be reviewed annually, but it is not required. Even if you “know” that it doesn’t need updating, review it anyway.
- Organizational Shifts: Mergers, leadership changes, or changes in the firm’s advisory business or practices may necessitate an update.
3. Employee Attestation Best Practices
- Clear Ownership: Assign appropriate persons to drive the attestation process.
- Interactive Training: Rather than just handing out the document, consider conducting training sessions with real-life scenarios and ethical dilemmas.
- Documentation: Maintain detailed records of policy acknowledgments and training completion to foster accountability.
4. Personal Securities Reporting Reminders
- Initial & Annual Holdings: New "Access Persons" must submit holdings reports within 10 days of hire. All Access Persons must submit an annual report within each 12-month period, current as of no more than 45 days prior to submission.
- Quarterly Transactions: Reports are due within 30 days of the end of each calendar quarter if there were transactions (unless your policy explicitly excuses duplicates already held by the firm).
- Content Requirements: Reports must include the security identifier (ticker/CUSIP), transaction date, type (purchase/sale), number of shares, and the broker used.
5. Handling New Hires and Role Changes
- Onboarding: New hires should receive the Code and complete their initial attestation immediately.
- Role Changes: When an employee moves into a role designated as an "Access Person," they must submit an initial holdings report within 10 days of that change.
- Targeted Training: Role changes may require supplemental ethics training if the new position involves higher risks, such as handling sensitive personal data or financial decision-making.
Other topics that you might consider for your firm’s Code of Ethics are other business activities, the receipt and giving of gifts, and political contributions if applicable to your firm.
