CFP Board Seeks Comments on Proposed Non-disciplinary Public Disclosure of Single Bankruptcy Filings
CFP® Professionals and Stakeholders Encouraged to Comment
Washington, DC, January 18, 2012 – Certified Financial Planner Board of Standards, Inc. announced today that it is seeking comments from CFP® professionals and stakeholders on proposed changes to the way it addresses bankruptcy filings by CFP® professionals and candidates for CFP® certification.
Overview of Proposed Changes
Comment Notice: Comments may be received during a 30-day public comment period, which ends February 17, 2012. Comments received will be posted to CFP Board's website and reviewed and considered by CFP Board staff. Final proposed amendments will be presented to the Board of Directors for review and approval in March 2012.
If, based on the comments received, CFP Board determines that significant additional changes are needed to the proposed process for addressing and disclosing matters involving a bankruptcy filing, CFP Board may distribute a revised proposal and schedule a second comment period.
Candidates for CFP® certification are asked on the Initial Application for CFP® Certification whether they have filed bankruptcy. Once an individual attains CFP® certification, the same question is asked on the Renewal Application for CFP® Certification, which a CFP® professional is required to complete every two years. Currently, CFP Board inquires about bankruptcies to determine whether a candidate is fit for CFP® certification and, in the case of a CFP® professional, to determine whether the bankruptcy filing resulted from conduct that could warrant discipline. Each of these approaches is punitive in nature in that candidates may be denied the right to certification for a period of time, and CFP® professionals may receive a sanction as severe as a revocation.
CFP Board proposes replacing the current disciplinary approach to cases involving a single bankruptcy filing (bankruptcy-only cases) with a non-disciplinary, disclosure-oriented approach in which the public has access to notice of the bankruptcy filing to assist it in making an informed decision when evaluating whether to work with a CFP® professional who has filed for bankruptcy.
Under the proposed approach, CFP Board would no longer investigate, and the Disciplinary and Ethics Commission (DEC) would no longer hear, bankruptcy-only cases. Rather, CFP Board would verify the bankruptcy filing and note it in the individual’s public profile, which is available through the “Find a CFP® Professional” and/or “Verify an Individual’s CFP® Certification” search functions in CFP Board’s website, as well as through responses CFP Board provides to individuals who contact CFP Board regarding an individual’s certification status. This disclosure of the bankruptcy in an individual’s public profile would continue for 10 years from the date CFP Board is notified of the bankruptcy, whether through disclosure by the individual or discovery by CFP Board.
Additional details of this proposed approach are available on CFP Board’s website at: www.CFP.net/downloads/CFPBoard_Bankruptcy_Disclosure_Proposal_2012-01.pdf
CFP Board believes the proposed approach of noting all bankruptcies filed in the past five years in an individual’s public profile is aligned with its mission to benefit the public. CFP Board also believes that this proposed approach will benefit CFP® professionals and candidates for CFP® certification because they will no longer be subject to potential discipline in bankruptcy-only cases.
CFP® professionals wishing to comment on the proposal should submit written comments no later than February 17, 2012. Comments may be sent to CFP Board by email to email@example.com or by mail to:
c/o Michael P. Shaw, Esq.
1425 K Street NW #500
Washington, DC 20005
Note Regarding Comments: Comments received will be reviewed and considered by CFP Board and will be posted to CFP Board’s website in their entirety. If you wish for your comment to remain confidential, please omit any personally-identifying information from your comment or include in your comment a clearly-stated request that it not be published.
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