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CFA L2 Matheus > 5. Ethics > Flashcards

5. Ethics Flashcards

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1
Q

Standard 1 (A) - Definition

A

Knowledge of the Law: M/Cs must understand and comply with all applicable laws, rules and regulations

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2
Q

Standard 1 (B) - Definition

A

Independence & Objectivity: M/Cs must use reasonable care and judgement to achieve and maintain I&O. M/Cs must not offer or solicit gifts, compensation, benefits that compromise

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3
Q

Standard 1 (C) - Definition

A

Misrepresentation: M/Cs must not KNOWINGLY make any misrepresentation related to investment analysis and actions

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4
Q

Standard 1 (D) - Definition

A

Misrepresentation: M/Cs must not ENGAGE in any professional activity involving fraud, dishonesty ou que pega mal na profissão

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5
Q

Standard 2 (A) - Definition

A

MNPI: M/Cs who POSSESS MNPI that could affect markets must not act or cause others to act

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6
Q

Standard 2 (B) - Definition

A

Market Manipulation: M/Cs must not ENGAGE in practices that distort prices or inflate volumes. To be a violation M/C tem que estar mal intencionado. Transaction or Information Based.

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7
Q

Standard 3 (A) - Definition

A

Loyalty, Prudence & Care: M/Cs have a duty of loyalty to clients and must act with reasonable care and judgment.

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8
Q

Standard 3 (B) - Definition

A

Fair Dealing: M/Cs must deal fairly and objectively with all clients

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9
Q

Standard 3 (C) - Definition

A

Suitability: WHEN in advisory relationship, M/Cs must (i) reasonable inquiry (ii) determine suitability and (iii) judge by context. Tactical deviations are allowed, but should stick to mandate (consistent).

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10
Q

Standard 3 (D) - Definition

A

Performance Presentation: M/Cs must make reasonable efforts to ensure that info is FAIR, ACCURATE AND COMPLETE. Additional info may be available upon request.

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11
Q

Standard 3 (E) - Definition

A

Preservation of Confidentiality: M/Cs must keep information on current, former, prospective clients confidential UNLESS required by law, CFA requests or client allows.

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12
Q

Standard 4 (A) - Definition

A

Loyalty to Employers: M/Cs must act for the benefit of employer. Do not deprive employer from your skills.

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13
Q

Standard 4 (B) - Definition

A

Additional Compensation: M/Cs must not accept gifts, compensation or consideration (monetary or not) that competes with current job UNLESS WRITTEN CONSENT FROM ALL PARTIES INVOLVED

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14
Q

Standard 4 (C) - Definition

A

Responsbility of Supervisors: M/Cs must make reasonable efforts to ensure anyone reporting to them complies with everything.

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15
Q

Standard 5 (A) - Definition

A

Diligence & Reasonable Basis: Exercise diligence, independence, thoroughness in analysis. Have reasonable and adequate basis.

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16
Q

Standard 5 (B) - Definition

A

Communication w/ Clients: M/Cs must (i) disclose format and general principles, (ii) significant limitations and (iii) use reasonable judgment and (iv) distinguish fact and opinion

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17
Q

Standard 5 (C) - Definition

A

Record Retention: M/Cs must develop and maintain records. Whatever if electronic or hard copies.

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18
Q

Standard 6 (A) - Definition

A

Disclosure of Conflicts: M/Cs must make FULL and FAIR disclosure BEFORE entering in arrangements with clients, prospective etc. Ensure plain language.

19
Q

Standard 6 (B) - Definition

A

Priority of Transactions: Client > Employer > Me

20
Q

Standard 6 (C) - Definition

A

Referral Fees: M/Cs must disclose to clients, prospective etc BEFORE entering in the arrangements

21
Q

Standard 7 (A) - Definition

A

Conduct: M/Cs must not engage in conduct that compromises reputation and integrity of CFAI. Do not comment broader topics tested etc.

22
Q

Standard 7 (B) - Definition

A

Reference to CFA designation: M/Cs must not misrepresent or exaggerate

23
Q

Standard 1 (A) - Key Words

A

Knowledge of the Law: Comply with most strict law

24
Q

Standard 1 (B) - Key Words

A

Independence & Objectivity: Gifts; Flat Fees

25
Q

Standard 1 (C) - Key Words

A

Misrepresentation: Plágio; Lie; Misleading numbers; Guarantee returns; Deliver PPT knowing of an error

26
Q

Standard 1 (D) - Key Words

A

Misconduct: Dishonesty; Fraud; Theft

27
Q

Standard 2 (A) - Key Words

A

MNPI: Reliable source; Act based in rumour OK; Mosaic Theory

28
Q

Standard 2 (B) - Key Words

A

Mkt Manipulation: Intent to mislead markets

29
Q

Standard 3 (A) - Key Words

A

Loyalty, Prudence & Care: Act in the benefit of the client; soft dollars only to client (mixed software ok); proxy voting; seek best execution or notify if directed trading

30
Q

Standard 3 (B) - Key Words

A

Fair Dealing: Different levels of service are OK; Agir igual discretionary or non-discretionary; Give everyone a fair chance to act

31
Q

Standard 3 (C) - Key Words

A

Suitability: Reasonable inquiry; judge by context; stick to mandate; annual updates to IPS

32
Q

Standard 3 (D) - Key Words

A

Performance Presentation: Fair, Accurate, Complete, Identify info from previous jobs and communicate limitations

33
Q

Standard 3 (E) - Key Words

A

Preservation of Confidentiality: All current, former, prospective clients unless illegal, allowed by client or CFA requested

34
Q

Standard 4 (A) - Key Words

A

Loyalty to Employers: Do not deprive from your skill, stay loyal, OK whistleblow if it is to protect market and clients

35
Q

Standard 4 (B) - Key Words

A

Additional Compensation Arrangement: Get written consent from all parties

36
Q

Standard 4 (C) - Key Words

A

Responsibility of Supervisors: Compliance systems are necessary prior to accepting the job. If suspect from someone, increase supervisory, place limitations but NOT OK to hold hearings.

37
Q

Standard 5 (A) - Key Words

A

Diligence & Reasonable Basis: Diligence, independence, thoroughness

38
Q

Standard 5 (B) - Key Words

A

Communication with Clients: Disclose investment principles; any changes to stock coverage that impacts recommendation; responsible for submanagers you hire

39
Q

Standard 5 (C) - Key Words

A

Record Retention: Reg requirement or 7 years

40
Q

Standard 6 (A) - Key Words

A

Disclosure of Conflicts: DISCLOSE

41
Q

Standard 6 (B) - Key Words

A

Priority of Transactions: Clients > Employers > Me. Not unethical if client is not disadvantaged, professional does not benefit and professional is in compliance

42
Q

Standard 6 (C) - Key Words

A

Referral Fees: Disclose employers, clients, prospective cleints of any consideration or benefit received for recommendations

43
Q

Standard 7 (A) - Key Words

A

Conduct as CFA member: Do not cheat, comment topics tested, share exam content. Does NOT cover opinions. Do not use CFA volunteering to benefit yourself.

44
Q

Standard 7 (B) - Key Words

A

Reference to CFAI: Superiors return guaranteed NOT ok; Do not overstate CFA designation. 4 years of work experience.

CFA L2 Matheus (9 decks)

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