Ethical Obligations

Question 1

What are the five high-level ethical obligations set by the CFA code of ethics for investment firms?

Answer 1

1. Act with loyalty to clients and act with reasonable care exercise prudent judgement.
2. Deal fairly and objectively with all clients when providing investment analysis, investment recommendations, taking investment action or engaging in professional activities
3. Provide suitable recommendations when in an advisory relationship.
4. Provide accurate and complete information when communicating investment performance.
5. Preserve confidentiality of client information unless it’s concerning. E.g illegal activities, required by regulation, permitted by client

Question 2

What are some examples of the employees’ duties with regards to their employers with regards to ethical observations?

Answer 2

1. Employees should act for the benefit of the employer.
2. Employees should not deprive their employer of the advantage of the skills and abilities (i.e. should use their skills to benefit employer rather than negative impact)
3. Employees should not divulge/ share confidential information
4. Employees should not cause harm to the employer.
5. Employees should not accept gifts, benefits, compensation or consideration that introduces conflict of interest unless they obtain a written consent from ALL parties involved.