2018 Study Session # 1, Reading # “CODE OF ETHICS AND STANDARDS OF PROFESSIONAL CONDUCT” M&C = Members & Candidates COE = Code of Ethics SOPC = Standards of Professional conduct BOG=Board of Governors PDP=Professional Development Program Los1.a CFAI PCP ⇒ covered by CFAI Bylaws & Rules for Procedures Related to Professional Conduct PCP is based on principles of fairness to M&C& confidentiality of proceedings DRC of CFAI BOG ⇒ responsible for PCP & enforcement of code & standards CFAI = CFA Institute PCP = Professional Conduct Program DRC = Disciplinary Review Committee PCS = Professional Conduct Statement Circumstances Which Can Prompt Inquiry Self disclosure by member/candidate on PCS which comprehensively questions professional conduct such as involvement in civil litigation, criminal investigation or any complaint (written) against the member/candidate etc Written complaints about member/candidate received by professional conduct staff Evidence of misconduct by member/candidate received by professional conduct staff through public source A report by CFA proctor of a possible violation during examinations CFAI designated officer conducts inquiries Professional conduct staff (in writing) may request explanation from subject member/candidate & may: Interview the subject member/candidate Interview the complainant / third party Collect relevant documents& records Designated officer may decide: That disciplinary sanctions are not required To issue a cautionary letter To discipline the member/candidate If disciplinary sanction is proposed, the subject member/candidate may accept the sanction If sanction is rejected ⇒ matter may be referred to CFAI panel for hearing Sanctions may include Condemnation by member’s peers Suspension of candidate’s continued participation in CFAI program Los1.b 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 of and uphold the rules governing capital markets Maintain and improve their professional competence and strive to maintain and improve the competence of other investment professionals Copyright © FinQuiz.com All rights reserved 2018 Study Session # 1, Reading # Standards of Professional Conduct Professionalism Integrity of Capital Markets Duties to Clients Conflicts of Interest Los1.c Duties to Employers Investment Analysis, Recommendations& Actions Responsibilities as a CFAI Member or CFAI Candidate Professionalism A Knowledge of Law B Independence & Objectivity C Misrepresentation D Misconduct Integrity of Capital Markets A Material Non-Public Information B Market Manipulation Duties to Clients A Loyalty, Prudence, and Care B Fair Dealing C Suitability D Performance Presentation E Preservation of Confidentiality Duties to Employers B Additional Compensation Arrangements A Loyalty C Responsibility of Supervisors Investment Analysis, Recommendations& Actions A Diligence & Reasonable Basis B Communication with Clients & prospective Clients C Record Retention Conflicts of Interest A Disclosure of conflicts B Priority of Transactions C Referral Fees Responsibilities as a CFAI Member or CFAI Candidate A Conduct as Members and Candidates in the CFA Program B Reference to CFA Institute, the CFA Designation, and the CFA Program Copyright © FinQuiz.com All rights reserved ...2 018 Study Session # 1, Reading # Standards of Professional Conduct Professionalism Integrity of Capital Markets Duties to Clients Conflicts of Interest Los1.c Duties to Employers... Responsibilities as a CFAI Member or CFAI Candidate A Conduct as Members and Candidates in the CFA Program B Reference to CFA Institute, the CFA Designation, and the CFA Program Copyright © FinQuiz.com... A Material Non-Public Information B Market Manipulation Duties to Clients A Loyalty, Prudence, and Care B Fair Dealing C Suitability D Performance Presentation E Preservation of Confidentiality