December 1, 2023

Via CFP Board web portal

Certified Financial Planner Board of Standards, Inc.
1425 K Street, NW, Suite 800
Washington DC 20005

Re: SIFMA comment re: CFP Board’s Proposed Revisions to Sanctions Guidelines

Dear Sir / Madam:

The Securities Industry and Financial Markets Association (“SIFMA”)1 appreciates the opportunity to comment on the CFP Board’s proposed revisions to its sanctions guidelines (“Proposal”).2 As you know, SIFMA member firms employ tens of thousands of CFP certificants (“Certificants”), representing a significant percentage of the total number of Certificants, which current stands at over 97,000.3 These Certificants provide a wide variety of products and services on behalf of their firms, and are subject to extensive regulatory oversight by the SEC, FINRA, and state securities and insurance regulators, among others. They are also subject to robust supervision by the firms with which they are associated.

The Proposal would significantly increase the recommended/default sanction for many offenses under the CFP Board’s Sanctions Guidelines (“Guidelines”). For most of the listed violations, the Guidelines would now provide a heightened default sanction, and shift the burden to the Certificant to prove mitigating circumstances for a lesser sanction. The Guidelines would also allow for the CFP Board to apply a higher sanction if it finds certain aggravating factors.

Introduction
Before sharing our specific comments on the Proposal, it is important to highlight our industry’s growing concern with CFP Board’s evolving policies and practices. As we have stated over many years, our primary concern is that although CFP Board is a private credentialing organization, it increasingly purports to function and act as a regulator. In doing so, CFP Board has imposed and continues to impose significant supervisory, compliance, regulatory and legal risks on the firms that employ Certificants.

As you know, Certificants and their firms are already subject to extensive regulation by the SEC, FINRA, and state securities and insurance regulators, among others. Each of these regulators subject Certificants to investigations for prospective violations of their rules. Each imposes sanctions when they find violations. And each does so pursuant to their own sanctions guidelines. CFP Board’s separate sanctions and sanctions standards are an unnecessary overlay. With respect to these regulated Certificants, CFP Board can and should rely exclusively on the existing robust regulatory sanctions regime.

CFP Board also imposes on Certificants a separate disclosure obligation for sanctions it imposes. This disclosure is likewise an unnecessary overlay on the existing robust regulatory disclosure regime. Information about the professional and disciplinary backgrounds of registered representatives and broker-dealers, as well as investment adviser firms and investment adviser representatives, is maintained on BrokerCheck,4 a free online tool maintained by FINRA, whose data is drawn from CRD5 and IARD,6 respectively. Information about investment adviser firms and investment adviser representatives is also maintained on the Investment Adviser Public Disclosure (IAPD) website,7 a free online tool maintained by the SEC, whose data is drawn from IARD. Under most circumstances, the information reported by firms, financial advisors and regulators is available in BrokerCheck and IAPD on the business day following its upload to CRD and/or IARD. For these reasons, CFP Board’s sanctions disclosures should be limited to those already disclosed on BrokerCheck and IAPD. At a minimum, CFP Board should allow Certificants to satisfy any separate disclosure obligation by timely reporting on Form U4, Form U5, or Form ADV.

Finally, and as detailed below, CFP Board’s foray into the role of adjunct regulator continues to expose firms that employ or associate with Certificants to significant risk. In undertaking investigations, bringing disciplinary actions and imposing sanctions, CFP Board often times incentivizes Certificants to produce documents or information that are the property of their firm, or that contain their firm’s confidential, privileged, or proprietary information, or a client’s personal information. At a minimum, CFP Board should undertake:

• to not use such documents and information;
• to notify the firm when a Certificant produces such documents and information;
• to keep such documents and information strictly confidential; and
• to sanction Certificants when they produce such documents and information without the firm’s written permission.

1 SIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. On behalf of our industry’s nearly 1 million employees, we advocate on legislation, regulation, and business policy, affecting retail and institutional investors, equity and fixed income markets and related products and services. We serve as an industry coordinating body to promote fair and orderly markets, informed regulatory compliance, and efficient market operations and resiliency. We also provide a forum for industry policy and professional development. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit
http://www.sifma.org.
2 https://www.cfp.net/news/2023/09/cfp-board-requests-comments–on-revised-sanction-guidelines-and-fitnessstandards.
3 https://www.cfp.net/knowledge/reports-and-statistics/professionaldemographics#:~:text=The%20CFP%C2%AE%20professional%20demographic%20data%20below%20is%20drawn,certification%20renewal%20cycle.%20Number%20of%20CFP%C2%AE%20professionals%2089%2C753.
4 https://brokercheck.finra.org/.
5 https://www.finra.org/registration-exams-ce/classic-crd.
6 https://www.sec.gov/divisions/investment/iard.shtml.
7 IAPD – Investment Adviser Public Disclosure – Homepage (sec.gov).