Update: the SEC approves new investment adviser code of ethics rule

On May 26, 2004, the Securities and Exchange Commission voted to adopt a new rule, Rule 204A-1, that will require investments advisers that are registered with the SEC to adopt and enforce codes of ethics applicable to the activities of their supervised persons. The SEC also adopted related amendments to Rule 204-2, Form ADV, and Rule 17J-1(2) under the Investment Company Act of 1940. The adoption of new Rule 204A-1 is, among other things, another example of the SEC's continuing attempt to address the fall-out of the recent scandals in the investment management industry. Soft-dollars, market timing, late trading, and related issues have cast a negative light on the SEC and the investment management industry.