3. THE FRAMEWORK OF THE ETHICAL CODE The ethical values consist of three major parts which are· Shariah foundationsof financial services marketing ethics.· Principles of ethicsfor financial services marketing.· Rules of ethicalconduct for financial services marketing.The first part states Shariah foundations and principles of faith onwhich the ethical principles for financial services marketing. The second part comprises the general ethical principles de from Shariahfoundations and those contained in available codes of professional provided thelatter do not contravene the Shariah rules principle.
The third part, a procedural section includes the rules of ethi conductderived from the general ethical principles laid down in the second section.These rules meant to provide guidance for thefinancial services to what is and what is not behaviour from a Shariah andprofessional perspective in situations that involve ethical issues which in thecourse of performing professional duties or services. 3.1 Shariah Foundations of Financial ServicesMarketing Ethics are integralpart of Islamic Shariah.
Islam accords them high value and considers them oneof the objectives of as by the Prophetic tradition: “I have been sent tocomplement the most noble morals” (narrated by Ahmad). It is knownthat some of fundamentals of ethics which are exhorted by Islam are also humanthought, while others are unique to revealed faiths, particularly Islam, whichwas their culmination. The major faiths, foundation of financial servicesmarketing ethics are the following: 3.1.1 Integrity Islam is a religion that highly values integrityand makes it govern all acts. Islam also values the capability to performduties, which requires the financial planner and others who are in charge becompetent and adequately qualified.
This is confirmed in the Holy Qur’an: “trulythe best of men for thee to employ is the (man) who is strong and trusty”(al-Qasas, 28:26) and also in the saying of the Prophet (saw): “Every oneof you is a shepherd and every one of you is responsible for his flock”(narrated by al-Bukhari and Muslim); and “Give back the trust to whoeverhas entrusted you with it (narrated by al-Tabrani in his Mujam). The great importance accorded to may be fact thatIslam itself is considered a trust for those who are following it. Thisrequires them to be true to Allah, themselves and to their societies. This isestablished in Allah’s saying: “We did indeed offer the trust to theHeavens and the Earth and the Mountains; but they refused to undertake it,bring afraid thereof but man undertook it: he was indeed unjust andfoolish” (al-Ahzab, 33:72) 3.1.
2 The Principleof Vicegerency of Humanity on Earth Allah expressed theprinciple of vicegerency in the Holy Qur’an: I will create a vicegerent onearth” (al-Baqarah 9:30); and “It is He who hath made you theinheritors of the earth” (al-an’am 6:165) and “It is He who hath produced youfrom the earth and settled you therein” (Hud, 11:61) Meaning He you withthe task of developing the earth. This vicegerency is based on the principlethat the supreme of property that of the Allah the Almighty, and that man’sownership of property is not an end in itself, but a means to provide a decentlife for him and for his family and society. Man should also observe commandmentsand prohibitions of Allah the mighty in owning property and the disposing ofit, because he is responsible for it property and will be held accountable forthe way he has acquired it and how he used it, as recorded in the hadith narratedby al-Tabrani in his mu’jam al-Kabir.
Shariah has pervasiveobjectives, one of which being the preservation of property. That is, propertyand funds should not be squandered and wasted uselessly or used in prohibitedmatters (e.g. usurious transactions) or traded unjustly or by denying therights established in it for Allah the Almighty and for His servants.
Anythingthat is prohibited in Shariah should not be given neither verbal nor withdocumentary support in any way whatsoever. Allah, the Almighty, says: “Help yeone another in righteousness and piety, but help ye not one another in sin andrancor” (al-Ma’idah, 5:2), The accountant,therefore, has to comply with this principle in performing his professionalduty 3.1.3 Sincerity This means that the person who perform financial services marketingshould seek to obey Allah in performing his work, and not to seek hypocrisy,fame, flattery boasting or ostentation. The sincerity entails that the financialservices marketing does not subject himself to external influences or pressuresbut applies himself to his work as a religious commitment as a performance ofhis professional duty. Thus, his ordinary occupationaland professional duty turns into a form of worship, because one of theestablished Shariah fundamentals is that good intention turns a habit intoworship. Hence, the financial services marketing becomes worthy of reward fromAllah the Almighty, apart from the material gain, and the usual praise he receivesfor hiss efforts without making such gains and praise his sole objective. 3.
1.4 Piety Piety is fearingAllah in secret and in public as a way of protecting one’s self from adverseconsequences as a result of departure from the Shariah, particularly whenproperty is involved, which diverts man’s attention and leads him into transgression.Piety is realized by observing Allah’s commandments and respecting Hisprohibitions. One of the prerequisites of this is the righteous deed, enjoininggood evil, and that man guards himself against being led astray. Allah the Almightysays: “O ye who believe Fear Allah as He should be feared” (Al-‘Imran,3:102). He also says: “For those who fear Allah, He ever prepares a way out; Heprovides for him from could expect” (al Talaq, 65:2-3) Another verse,Allah says: “By the time, verily man is in loss, except such as have faithand do righteous deeds, and (join together) in the mutual enjoining of truth,and of patience and constancy” (al- Asr, 103:1-1); and He also says:”Let there arise out of you a band of people inviting to all that is good,enjoining what is right and forbidding what is wrong: They are the ones to attainfelicity” (Al-Imran).
The financial services marketer, therefore, has to fearAllah in performing his professional duty 3.1.5 Righteousness and Making One’s Work Perfect The financialservices marketer should not only confine himself to performing hisoccupational and professional duties, but should also strive to attain thedegree of righteousness and perfection in his work by performing the dutiesassigned to him in the best manner possible.
This cannot be realized exceptthrough academic qualifications, practical experience and acquisition ofreligious knowledge, which is a religious duty in accounting work. 3.2 Principles of ethics for financial servicesmarketing The Shariah foundations of the ethical principlesfor financial and the principles contained in the current codes of professionalethics for financial services marketing provided that these principles do notcontravene the Shariah rules and principles. The following principles forfinancial services marketing are derived: 3.2.1 Trustworthiness The financial services marketing should be trustworthyand honest in performing his professional duties or services. Trustworthinessalso entails that the financial services marketer should have a high degree of truthfulness,honesty and probity, and that he should respect the confidentiality of informationacquired in the course of performing professional services to his organizationor his client. Further, the financial services marketer should not deliberatelypresent or promote facts untruthfully.
3.2.2 Legitimacy The financial services marketer should make certainof the legitimacy of everything relating to his performing professional dutiesor services according to Shariah rules and principles.
3.2.3 Objectivity The institution of financial services marketingshould be fair, impartial and unbiased, free from conflicts of interest andindependent in fact as well as in appearance.
Objectivity also entails thatfinancial services to not subordinate professional judgement and duties to suggesstionsof others. 3.2.
4 Professional Competence and Diligence The financial services marketer should beprofessionally competent and well equipped for carrying out tasks required inthe course of performing professional duties or services so that he can performsuch tasks diligently and properly, saving no effort in order to discharge and responsibilitiestowards Allah the Almighty and towards his society, profession, superiors,client, and himself. 3.2.5 Faith-Driven Conduct The financial services marketer behaviour andconduct should be consistent with faith values derived from Shariah rules andprinciples. 3.
2.6 Professional Conduct and Technical Standards In the course of performing his duties, thefinancial services marketer should observe the rules of professional conductpresented in part 3 and comply with the financial services. Some of the ethicalprinciples contained in this code have common bases from both Shariah and thefinancial planner profession, such as trustworthiness, objectivity andprofessional competence and diligence. Other principles are based entirely on aShariah foundation, such as religious legitimacy and faith driven conduct.
Finally, some of the ethical principles are based solely on a professionalbasis which does not violate the Shariah rules and principles, such as theprinciple of professional conduct and technical standards. 3.3 Rules of Ethical Conduct for Financial Planner Rules of ethical conduct for the financial servicesmarketing are derived from the ethical principles presented in part 2. Theseshould be considered as minimum requirements of ethical conduct that must beprofession duties or services.The following paragraphs detail some of the basicrules of ethical conduct, grouped by the ethical principle underlying them.
3.3.1 Rules of Ethical Conduct Based on thePrinciple of Trustworthiness The financial services marketer should performprofessional duties or services at the highest level of trustworthiness,integrity, truthfulness, honesty and probity.
In particular, the financialservices marketer has a responsibility to: · Present andcommunicate favourable as well as unfavourable information and professional inpromote and opinions honestly truthfully, and with adequate transparency.· Refrain fromdisclosing confidential information acquired in the course of performingprofessional duties or services, unless obligated to do so according todisclosure requirements · Refrain from usingconfidential information acquired in the course of performing his professionalduties or services for unethical personal advantage or for the advantage ofthird parties· Refrain from eitheractively or passively engaging in any behaviour or activity t would jeopardise theattainment of the institution’s religious and ethical objective 3.3.2 Rules of Ethical Conduct Based on thePrinciple of Religious Legitimacy The financial services marketer is responsible forverifying the religious legitimacy of everything relating to him performingduties or services. In this respect the financial services should alwaysremember his responsibilities towards Allah the Almighty and towards hissociety, profession, superiors, client and himself. The following rules ofconduct originate from the principle of religious legitimacy: · The financialservices marketer should discharge his responsibility toward Allah the Almightyin the best way possible, giving precedence to such responsibility over anyother the Almighty in the responsibility towards Allah the Almighty isconducive to discharging other responsibilities.
· The financialservices marketing is responsible for being aware of Shariah of financial andprinciples of marketing should receive transactions. Hence, the financialservices should receive formal, adequate training in jurispundence of financialdealings.· The financialservices marketing is responsible for adhering to Shariah rules and principleswhen ascertaining the legitimacy of dealings, actions and in general, relatingto the performance of professional duties or services.
· Anything that is notin conformity with Shariah should be considered illegitimate even though it mayotherwise agree with laws or established traditions of the profession. 3.3.
3 Rules of Ethical Conduct Based on theobjectivity Principle The financial services marketing is responsible forprotecting his independence in fact and in appearance. Thus, he should avoidsituations involving conflicts of interest which might threaten his neutralityand fairness. The financial services marketing should also avoid subjectinghimself to the influence of others in order ensure the objectivity of his professionaljudgements and should refrain from presenting information untruthfully.Based on the objectivity principle, the financialservices marketing has a responsibility to:· Refuse any gift, favouror hospitality that would threaten the objectiviry of his professionaljudgement. · Avoid actual orapparent conflict of interest with those to whom he provides services, such ashaving personal or family relationships with the client that would threaten hisobjectivity and professional independence.· Avoid contingentfees because it has detrimental effect on the financial services marketingindependence and objectivity while performing professional duties and services.