A NEW code of conduct bringing investment advisers and dealers into line with international operating principles has been released by the Securities and Futures Commission. The code is the latest move in a number of SFC initiatives aimed at establishing acceptable business principles in line with those already in place in 51 other countries. All those registered with the SFC under the Securities Ordinance and the Commodities Trading Ordinance will be required to comply with the code, which will ultimately determine whether a person is a fit and proper operator. The code is designed to provide guidance to investment advisers, registered dealers, dealing partnerships, dealer's representatives, commodity trading advisers, investment advisers' partnerships, investment representatives, and commodity trading adviser's representatives. Towry Law compliance director John Bridel welcomed the code as a vehicle for greater protection for investors, but said there were several areas where there was still room for improvement. In particular, Mr Bridel said the code, in its present form, lacked a clause that would protect clients' money. ''Ideally, clients' money should be kept in a separate trust account so their funds cannot be claimed by creditors in the event that an adviser goes bankrupt,'' Mr Bridel said. Under the new code, investment advisers will have to obtain proof of identification when dealing with clients for the first time. The onus will also be on advisers to obtain background information on clients, in part to help ensure that funds earmarked for investment are not the product of a laundering scam, or have not originated from any other criminal source. Mr Bridel said that to address investor protection successfully within the industry, the new code should also clarify the different roles of independent and non-independent financial advisers. ''This is a major omission,'' he said. According to Thomas Spencer and Associates managing director David Thomas, the code has arrived just in time. ''Any step that improves the standard of advice and service provided by the industry is a good thing,'' he said. ''The financial services industry is greatly in need of the tighter regulation that the code of conduct, although long overdue, will provide.'' Mr Thomas said the code would help ensure that financial advisers know their clients and that clients, in turn, have a clear understanding of the advice they are receiving. The new code is similar to one recently introduced for members of the Stock Exchange of Hong Kong. And, according to the SFC, The Hong Kong Futures Exchange is in the process of drafting a similar code for its members. SFC public affairs and policy manager Dr Patrick Leung said submissions from the industry would be studied during December, and that the new code should be ready early next year. Submissions on the draft code must be lodged with the SFC by Friday, December 3.