Gfedu slides ethics

www.gfedu.net Ethics 2017年CFA二级培训项目 讲师：单晨玮 1-247 www.gfedu.net 单晨玮 工作职称：金程教育金融研究院资深培训师 教育背景：澳大利亚新南威尔士大学金融学硕士 工作背景：单老师毕业亍新南威尔士大学金融学与业，学术功底深厚。金程 教育CFA项目资深研究员，负责金程教育CFA项目的资料体系建设和学术研 发工作。曾亲自参不中国工商银行总行、中国银行总行、西安外国语大学等 CFA培训项目。在金程讲授CFA培训课程，课程清晰易懂，深受学员欢迎。 曾服务亍工商银行、浦发银行、某国有企业 讲授课程：CFA一、二、三级；AP经济学、统计学课程 参与出版：曾参不出版了注册金融分析师系列丛书、金程教育CFA课埻笔记 、CFA冲刺宝典、CFA中文NOTES等公开出版物及内部出版物。并参不翻译 CFA协会官方参考书《企业理财》，《国际财务报告分析》等书籍。 2-247 www.gfedu.net Topic Weightings in CFA Level II Content Session NO Weightings Study Session 1-2 Ethics & Professional Standards Study Session Quantitative Methods 5-10 Study Session Economic Analysis 5-10 Study Session 5-6 Financial Statement Analysis 15-20 Study Session 7-8 Corporate Finance 5-15 Study Session 9-11 Equity Analysis 15-25 Study Session 12-13 Fixed Income Analysis 10-20 Study Session 14 Derivative Investments 5-15 Study Session 15 Alternative Investments 5-10 Study Session 16-17 Portfolio Management 5-10 3-247 10-15 www.gfedu.net Framework  Code of Ethics and Standards of Ethics  Research Objectivity Standards Practice  Case study • Case 1: The Glenarm Company • Case 2: Preston Partners • Case 3: Super Selection • Trade Allocation: Fair Dealing And Disclosure • Case 4: Changing Investment Objectives 4-247 www.gfedu.net Reading Code of Ethics and Standards of Practice 5-247 www.gfedu.net Proceedings  Primary Principles:  fairness of the process to members and candidates  confidentiality of the proceedings  CFA Institute Disciplinary Review Committee (DRC) of the Board has responsibility for the Professional Conduct Program (PCP) and enforcement of the Code and Standards  Self-disclosure on annual Professional Conduct Statements of involvement in civil litigation or a criminal investigation, or that the member or candidate is the subject of a written complaint  Written complaints about professional conduct received by the Professional Conduct staff  Evidence of misconduct by a member or candidate that the Professional Conduct staff received through public sources, such as a media article or broadcast  A report by a CFA exam proctor of a possible violation during the examination 6-247 www.gfedu.net Proceedings  Once an inquiry is initiated, Professional Conduct staff may requests (in writing) an explanation from the subject member or candidate and may:  interview the subject member or candidate  interview the complainant or other third parties  collect documents and records relevant to the investigation  The Designated Officer may decide:  that no disciplinary sanctions are appropriate Designated Officer finds a violation  to issue a cautionary letter  to discipline the member or candidate Proposes a  Sanctions imposed may include private censure, disciplinary sanction public censure, timed suspension, time revocation, Member or suspension, revocation (increasing) Candidate  The hearing panel reviews materials and presentations from the Designated Officer and Accept Reject from the member or candidate The hearing panel’s task is to determine whether a violation of the Code Referred to a panel for a hearing and Standards occurred and, if so, what sanction should be imposed 7-247 www.gfedu.net The hearing panel  If the member or candidate does not accept the proposed sanction, the matter is referred to a hearing panel composed of DRC (Discipline Review Committee) members and CFA Institute member volunteers affiliated with the DRC  The hearing panel reviews materials and presentations from the Designated Officer and from the member or candidate  The hearing panel’s task is to determine whether a violation of the Code and Standards occurred and, if so, what sanction should be imposed 8-247 www.gfedu.net Comparisons of AMC and Code and Standards  AMC  The Asset Manager Code of Professional Conduct (AMC), which is designed, in part, to help asset managers comply with the regulations mandating codes of ethics for investment advisers  AMC was drafted specifically for firms  Code and Standards  Aimed at individual investment professionals who are members of CFA Institute or candidates in the CFA Program 9-247 www.gfedu.net Ethics & Professional Standards  Members of CFA Institute (“Members and Candidates”) must: • Act with integrity, competence, diligence, respect, and in an ethical manner with the public, clients, prospective clients, employers, employees, colleagues in the investment profession, and other participants in the global capital markets • Place the integrity of the investment profession and the interests of clients above their own personal interests • Use reasonable care and exercise independent professional judgment when conducting investment analysis, making investment recommendations, taking investment actions, and engaging in other professional activities • Practice and encourage others to practice in a professional and ethical manner that will reflect credit on themselves and the profession • Promote the integrity and viability of the global capital markets for the ultimate benefit of society • Maintain and improve their professional competence and strive to maintain and improve the competence of other investment professionals 10-247 www.gfedu.net CFA Institute Research Objectivity Standards  Disclosure in research reports of all subject companies:  Whether the subject company is corporate client;  Market-making in the securities of the subject company;  Whether the firm’s stock ownership position ≥ 1% as of business days before report issuance;  Whether the firm permits the author or immediate families to trade in the securities of the subject company;  Ownership or beneficiary interests of employees and their immediate families;  Relationships with the subject company (director, officer, advisory board member);  Material gifts from the subject company in previous 12 months 233-247 www.gfedu.net CFA Institute Research Objectivity Standards  Disclosure in reports and websites if the subject company is corporate client:  About the firm  The nature of the corporate client relationship (IPO, M&A);  Whether receiving compensation during the previous 12 months or the next months;  About the author*  Nature of some non-research activities (evaluation for acceptability as a corporate client, marketing activities); and whether the report author(s) assisted the firm in non-research activities  Whether the compensation of the author depends on investment banking or corporate finance 234-247 www.gfedu.net CFA Institute Research Objectivity Standards 11.0 Rating System: (Recommendation)  Firms should provide:  Appropriate statistical or other quantitative and qualitative presentations of information about their recommendations or ratings  Distributions of ratings by category and how these ratings have changed over time  Information about prices of the securities of the subject company  Price information should be presented at least years prior to the issuance of the research report  Price charts that identifies ratings and the dates of rating changes  Firms should disclose valuation methods for price targets and description of any risk factors 235-247 www.gfedu.net CFA Institute Research Objectivity Standards 11.0 Rating System: (Recommendation)  Avoid one-dimensional rating system  *Rating system should include three elements:  Recommendation or rating categories, Absolute: buy, hold, sell Relative: market outperform, neutral, underperforms (identify the relevant benchmark, index or objective)  Time horizon categories  Risk Categories  Communications of rating or recommendation always include all three elements of the rating  Clearly identify whether the time horizon measures the period over which the expected price target would be achieved or sustained  *Prohibit employees’ recommendation different from published recommendation  Provide a complete description of the firm’s rating system on request and regularly inform clients and prospective clients the availability of this description and how to acquire 236-247 www.gfedu.net Reading Case study 237-247 www.gfedu.net Case Study Case 1:The Glenarm Company  Case Outline Outside Consulting Activity Peter Sherman took items solicited Pearl’s clients Pearl Investment Management Glenarm Company 238-247 Items including: Pearl marketing presentations 2.Computer stock selection models that he developed 3.Research materials 4.News articles on firms that he had been following 5.A list of research ideas that were rejected by Pearl www.gfedu.net Case Study Case 1:The Glenarm Company  Case Results: not disclose outside consulting activity  Violations of Standard:  Standard IV(A) - Duties to Employers: Loyalty  Standard IV(B) - Duties to Employers: Additional Compensation Arrangements  Standard VI(A) - Disclosure of Conflicts  Standard I(B) - Independence and Objectivity  Action Required:  Sherman should not solicit Pearl’s clients or prospects until he leaves Pearl’s employment  Sherman should not have taken Pearl property  Sherman must disclose all details about outside compensation to Glenarm and obtain written permission from Glenarm in advance of entering into any such arrangements 239-247 www.gfedu.net Case Study Case 2:The Preston Partners  Case Outline Sheldon preston Presiden t Preston partners Okapuu CEO Smithson Information Jones Add stocks to all clients Allocating block trade Utah biochemical Merged Aggressive Norgood PLC Conservative 240-247 www.gfedu.net Case Study Case 2: The Preston Partners  Violation of standards:  III ( C): suitability  consider objectivity and policy  III ( B): fair dealing  block trade should not disadvantage smaller clients  Action Required:  Be sure that Smithson’s clients have written investment objectives and policy statements  For accounts which contain unsuitable investments, the shares should be sold, and Preston Partners should reimburse any loss  Detailed guidelines covering block trades must be prepared, emphasizing fairness to clients, timely executions, and accuracy  Preston must have proper procedures established that would have prevented violations such as those that occurred  A compliance officer should be designated 241-247 www.gfedu.net Case Study Case 3:The Super Selection  Case Outline pressured by James to buy AMD stock Patricia Cuff Compliance officer Josey James Karen Trader Portfolio manager Super Selection President AMD 242-247 www.gfedu.net Case Study Case 3:The Super Selection  Case Results: purchase stock for clients to increase price for personal owning stock options  Violations of Standard:  Standard IV(C) - Duties to Employers: Responsibilities of Supervisors  Standard VI(A) - Disclosure of Conflicts  Standard V(A) - Diligence and Reasonable Basis  Standard III(A) - Duties to Clients: Loyalty, Prudence and Care  Standard III(C) - Duties to Clients: Suitability  Standard VI(B) - Priority of Transactions 243-247 www.gfedu.net Case Study Case 3:The Super Selection  Action Required:  Cuff must take prompt reporting the violations to senior management  Cuff is a compliance officer and must monitor Trader’s personal trades and impose sanctions when necessary  If the senior management does not back up Cuff, other options include disclosing the incident to the Board, to the regulators, and even resigning from the firm  As a supervisor, Cuff must take action by limiting behavior and imposing sanctions  Trader should have conducted due diligence and thorough research before making an investment decision for clients’ accounts Any change in opinion must have a reasonable basis Trader must also inform clients of any AMD conflicts such as directorship and stock options 244-247 www.gfedu.net Trade Allocation Trade Allocation Practice Critique An ad hoc allocation procedure may be based on:  Compensation arrangements  Client relationships with the firm  Such arrangement violates III(B) Fair Dealing and III (A) Loyalty, prudence and care Appropriate Response to Inadequate Trade Allocation  Get advanced indication  Distribute new issues by client  Have a fair and objective method  Be fair to clients  Execute orders promptly and efficiently  Keep records 245-247 www.gfedu.net Changing Investment Objectives Disclosure of Investment Objectives  Standard III(C) - Duties to Clients: Suitability  The investment must fit within the mandate or within the realm of investments that are allowed according to the fund’s disclosures  Appropriate Response to Inadequate Disclosure Procedure  Determine the clients  Adequately disclose  Conduct regular internal checks  Stick to the strategy  Notify any potential Change 246-247 www.gfedu.net It’s not the end but just beginning Always believe that good things are possible, and remember that mistakes can be lessons that lead to discoveries Take your fear and transform it into trust; learn to rise above anxiety and doubt Turn your "worry hours" into "productive hours" Take the energy that you have wasted and direct it toward every worthwhile effort that you can be involved in You will see beautiful things happen when you allow yourself to experience the joys of life You will find happiness when you adopt positive thinking into your daily routine and make it an important part of your world 请坚信，美好的降临并非丌可能，失误也许是成功的前奏。将惶恐化作信仸， 学会超越担忧和疑虑。让―诚惶诚恐‖的时光变得―富有成效‖。丌要挥霍浪费精力， 将它投到有意义的事情中去。当你下意识品尝生命的欢愉时，美好就会出现。当 你积极地看待生活，并以此作为你的日常准则时，你就会找到快乐的真谛。 247-247 ... Investments 5-10 Study Session 16-17 Portfolio Management 5-10 3-247 10-15 www .gfedu. net Framework  Code of Ethics and Standards of Ethics  Research Objectivity Standards Practice  Case study • Case... Disclosure • Case 4: Changing Investment Objectives 4-247 www .gfedu. net Reading Code of Ethics and Standards of Practice 5-247 www .gfedu. net Proceedings  Primary Principles:  fairness of the... 、CFA冲刺宝典、CFA中文NOTES等公开出版物及内部出版物。并参不翻译 CFA协会官方参考书《企业理财》，《国际财务报告分析》等书籍。 2-247 www .gfedu. net Topic Weightings in CFA Level II Content Session NO Weightings Study Session 1-2 Ethics & Professional Standards Study Session Quantitative