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Ethics & GIPS > Ethics > Flashcards

Ethics Flashcards

1
Q

AMC

A

Asset manager code

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2
Q

Purpose of AMC

A

to assist firms in developing
+ ethical business
+ risk management practices

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3
Q

Benefits from adopting AMC

A

gaining the trust

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4
Q

4 steps of PCP

A

(1) Inquiries
(2) Investigation
(3) Conclusion
(4) Types of sanction

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5
Q

structure of PCP

A

(1) Responsible for enforcement

(2) Basic structure for enforcing

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6
Q

Six components of the Code of Ethics
(PPPUMA)

A

(1) Act with
(2) Place (market, client, …)
(3) Use (tan tam)
(4) Practice and encourage others to practice
(5) Promote (the integrity and viability…)
(6) Maintain and improve

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7
Q

knowledge of the law

A

(1) Understand and comply with

applicable laws and regulations

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8
Q

3 content in Understand and comply with

applicable laws and regulations

A

(1) Not required to be legal experts
(2) Know how to get compliance guidance
(3) Be vigilant in learning about changing laws

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9
Q

4 step of dissociate from

the activity

A

S1: Stopping the activity
S2: Contacting compliance
S3: Stepping away
S4: Seeking other employment

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10
Q

whistleblowing

A

Report legal and ethical violations

to a regulatory authority is not good because of internal policy can not whistleblowing

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11
Q

priciple of 1B. independence & objectivity

A

avoid situations that could cause a loss of independence or objectivity

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12
Q

best practice of 1B. independence & objectivity

A

reject any offer of gift that could be expected to threaten their independence and objectivity

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13
Q

Example of 1B: IB-Research

Relationships

A

pressure to issue favorable research on current or prospective investment banking clients

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14
Q

example of 1B: Public Companies

A

pressure to issue favorable reports

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15
Q

eg of 1B: Buy-Side Clients

A

may have significant positions in

the security of a company under review

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16
Q

eg of 1B:Fund Manager and

Custodial Relationships

A

+ M&C who are responsible for hiring and retaining outside managers and third-party custodians
+ should not accepts gifts or entertainment

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17
Q

eg of 1B: Credit Rating

Agency Opinions

A

(1) : prevent undue influences from a sponsoring company

(2) should be mindful of the potential conflicts of interest

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18
Q

eg of 1B: Issuer-Paid

Research

A

+ Some companies hire analysts to produce research reports

+ Analyst: limit the type of compensation, only flat fee

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19
Q

eg of 1B: Travel funding

A

+ Best practice: use commercial transportation

+ If unavailable: accept modestly arranged travel

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20
Q

tranh xung dot

A

Create a restricted list, distribute only factual info about the companies on the list

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21
Q

Definition of mispresentation

A

+ any untrue statement or omission of a fact

+ or any false or misleading statement

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22
Q

return on volatile investments

A

+ should not guarantee clients any
specific return on volatile investments
+ except for: risk free assets, cover losses

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23
Q

definition of misconduct

A 
- all conduct that reflects poorly on
\+ professional integrity
\+ good reputation, or competence
- act that involves lying, cheating,
stealing, or other dishonest conduct
- Conduct that damages trustworthiness or competence (uong ruou, danh nhau cho lam viec,...)
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24
Q

material non public infor

A

+ material and non-public info must not be used for direct buying and selling of individual securities or bonds
+ nor to influence investment actions related to derivatives, mutual funds, or other alternative investments

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25
Q

definition Material info

A

+ disclosure would likely have an impact on the price
+ reasonable investors would want to know
the info before making an investment decision
+ Depends on
* source of info
* likely effect on the relevant stock price

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26
Q

definitio of Nonpublic info

A

+ has not been disseminated
+ no available to the market place
+ may use insider information provided legitimately

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27
Q

Mosaic theory

A

public info

nonmaterial nonpublic info

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28
Q

“Firewall”

A

+ restrict the flow of info to appropriate people
+ Appropriate interdepartmental communications
+ Physical separation of departments
+ Prevention of personnel overlap
+

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29
Q

definition of Market

Manipulation

A

+ practices that distort security prices or trading volume
+ with the intent to deceive people or entities
that rely on info in the market.

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30
Q

eg of Identifying the actual investment client

A

defined benefit pension plan

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31
Q

eg of Developing the

clients’ portfolio

A

+ Follow any guidelines set out by client for the management of assets
+ Judge investment decisions on context of total portfolio

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32
Q

eg of Soft commission policies

Soft dollar

A

+ pays a higher brokerage commission than normal to allow for the purchase of goods or services
+ obligated to seek: best price and best execution

33
Q

eg of Proxy voting policies

A
34
Q 
Addressing Unsolicited
Trading Requests (Thuc hien khoan dau tu khong phu hop IPS)
A

+ minimum impact on the entire portfolio -> ok and education

+

35
Q

non-compete agreement,

A

Related to:
+ contact clients
+ contact information

36
Q

non-soliciting agreement

A
37
Q

independent contractors

A

là loại hợp đồng thời vụ với employer, mức độ yêu cầu loyalty sẽ phụ thuộc điều kiện điều khoản trên HĐ

38
Q

cach tranh trach nhiem khi nhan vien vi pham

A

effective compliance systems

39
Q

communication to client

A
  1. Disclose to clients the basic format and
    general principles of the investment processes
  2. Disclose to clients clients significant limitations and risks associated with the investment process
  3. Use reasonable judgment in identifying
    which factors are important to investment
  4. Distinguish between fact and opinion
    in the presentation of investment
40
Q

whistleblowing

A

which members and candidates must act contrary to their employer’s interests in order to comply with their duties to the market and clients.

41
Q

sub type of I.Professionalism

A

A. Knowledge of the law
B. Independence & Objectivity
C. Mispresentation
D. Misconduct

42
Q

II Integrity of Capital market

A

A. Material nonpublic information
B. market Manipulation

43
Q

III. Duties to clients

A

A. Loyalty, prudence and care
B. Fair Dealing
C. Suitability
D. Performance presentation
E. Preservation of confidentiality

44
Q

IV Duties to employer

A

A. Loyalty
B. Additional compensation arrangement
C. Responsibility of supervisor

45
Q

V. Investment analysis, recommendation and action

A

A. Diligence and reasonable basis
B. Communication with clients and perspective clients
C. Record attention

46
Q

VI. Conflicts of interest

A

A. Disclosure of conflict
B. Priority of transactions
C. Referral fees

47
Q

who most likely determine whether:
+ violation CFA code & standard
+ testing policies
+ what sanction should be impost

A

+ Professional conduct staff
+ Disciplinary review committee

48
Q

disciplinaty CFAI may be impose
A. Fines for violation
B. revocation of membership
C. banishment from industry

A

B. revocation of membership

49
Q

If you are be internal auditor accuse, arcoding CFA, you should:
A. disclose the complaint to CFAI
B. refuse further bonuses until the issue is resolved
C. request temporary suspension of CFA member

A

A. disclose the complaint to CFA

50
Q

under “knowledge of the law”, you must understand:
A. applicable law
B. all the law (update, outdate, …)

A

A, applicable law

51
Q

with violations of other, should you report ?

A

(1) If the person do violation is member & candidate -> should report to PCP
(2) If the person do violation is not M&C:
+ If law is do not allow leak internal infor -> no need to report
+ If law is force -> should report

52
Q

are they violate ?
A. receive the gift from client (after transaction)
B. receive the gift from entities seeking to influence of M&C

A

A. not violate (disclose to employer after that)
B. violate

53
Q

the relationships related to Professionalism

A

(1) IB - Analysis (đội BSC đang ngồi chung)
(2) Public company - Analysis
(3) Buy-side clients - Analysis (thường là mqh giữa cty quỹ và bp phân tích của CTCK)
(4) Fund manager: các fund manager muốn đi cửa sau để được tuyển dụng
(5) Custodial relationship: hối lộ để được làm vendor
(6) credit rating agency: agency được trả tiền để xếp hạng tín nhiệm -> conflict -> solution: phải là phí cố định
(7) Issuer paid research: phải là phí cố định
(8) travel funding

54
Q

Lí giải việc “create a restricted list”

A

Khi CTCK có deal với cổ phiếu niêm yết lên sàn -> CTCK phải đưa vào ds hạn chế -> analysis chỉ được đưa ra factual information , not opinion

55
Q

vấn đề worked completed for employer

A

Khi nghỉ việc, CTCK có thể tái đăng bài nghiên cứu của tôi và loại bỏ tên tôi ra khỏi báo cáo.

56
Q

Vấn đề Misconduct

A

Không áp dụng cho các vấn đề:
+ personal problem
+ polistic problem
+ not related to Ethics problem
Eg: enviromental problems

57
Q

Vấn đề material non public information: nếu giao dịch gián tiếp qua CCQ, detivative thì có được không ?

A

KHông

58
Q

what is material information

A

(1) type of information
(2) source of information

59
Q

selective disclosed information problem

A

liên quan đến việc analyst tiếp cận thông tin tại buổi họp báo, tuy nhiên sau đó các thông tin tại buổi họp báo vì 1 lý do nào đó ko được công bố -> analyst phải rất lưu ý để tránh vi phạm phải thông tin nonpublic information

60
Q

hơw to do Firewall

A

(1) appropriate interdepartment communication (thường sẽ thông qua pháp chế trước)
(2) physical separate of department
(3) prevention of overlap personel

61
Q

Khi có giao dịch IB, cấm tất cả các giao dịch tự doanh, liệu có hợp lý không ?

A

KHỔNG
vì dứt dây động rừng -> IB sẽ có động cơ để moi móc thông tin

62
Q

voting right proxy problem ?
Trường hợp có nhiều ĐH cổ đông cùng diễn ra thì nên đi cái nào

A

Đi đại hội nào có nhiều vấn đề quan trọng hơn

63
Q

Tình huống phát sinh cơ hội đầu tư, appropriate for 2 client, tuy nhiên có 1 KH phù hợp, KH còn lại phù hợp, tuy nhiên theo thông tin cung cấp tại thời điểm xây IPS ban đầu, KH không còn nguồn tài chính nào khác, vậy có vi phạm ko ?

A

Không

64
Q

credible performance

A

(1) accurate
(2) fair: phản ánh dược năng lực quản lý quỹ hiệu quả của người cung cấp thông tin

65
Q

Vấn đề vi phạm chuẩn mực “confidentiality” in group Zalo, Facebook ? How to resolve

A

Trước khi add thành viên, phải warning các thành viên không được tiết lộ thông tin

66
Q

Vấn đề làm thêm bên ngoài, cần phải báo cáo khi nào ?

A

(1) Công việc có ảnh hưởng
(2) công việc không ảnh hưởng, nhưng có nhận lương

67
Q

vấn đề additional compensation arrangerment

A

(1) không cấm
(2) phải có chấp thuận bằng văn bản (written consent) bởi employer

68
Q

Đối với trường hợp responsible of supervisor, để xem supervisor có vi phạm hay không ? Trước đó nếu có xảy ra, có hành động gì để tránh tái diễn không ? (supervisor phải xây dựng lại khung pháp chế tốt)

A
69
Q

Problem related to reasonable basis

A

(1) Using secondary/ third party research (phải kiểm tra báo cáo có đủ tốt cho KH ko?
(2) Using Quantitative oriented research (phải hiểu các tham số, điều kiện, giả định, …)
(3) developing quantitative oriented techniques
(4) selecting external advisor & Sub-advisor (phải đánh giá ông advisor theo các tiêu chí cụ thể (1) ethics, (2)compliance & internal process (3) quality of public infor (4) investment process

70
Q

group research & Decision making

A

kết luận bản phân tích trái ngược với hội đồng (nếu mình tin tưởng đã tuân thủ quy trình chuẩn -> vẫn có quyền để tên trên báo cáo)
Hội đồng chót -> không được issue khác hội đồng

71
Q

VD dựa trên báo cáo của bên phân tích địa chất mỏ dựa trên mẫu vật -> fact or opinion (will) ?

A

Opinion vì bản chất là ý kiến dựa trên mẫu vật -> suy ra tổng thể

72
Q

Lưu trữ dữ liệu ? năm

A

7 năm
Nếu có strict hơn thì theo cái strict 5 năm

73
Q

Nếu đang được giao nhiệm vụ viết báo cáo vè MWG, tuy nhiên cá nhân hiện đang nắm CCQ có MWG -> có phải disclose không ?

A

Có

74
Q

vấn đề blackout period / restricted period

A

thời gian cấm giao dịch vì phát sinh deal KH lớn, cần thời gian để hoàn tất giao dịch cho KH

75
Q

Nếu phát sinh referral fee thì cần làm gì

A

Cần báo với các potential client về contractor, trước khi KH đồng ý thuê

76
Q

a firm ……. adopt the CFA Institute Code of Ethics and Standards of Professional Conduct, the firm ….. adopt the CFA Institute Asset Manager Code

A

Can - can

77
Q

conform CFAI

A

tuân thủ CFAI

78
Q

verbal consent

A

sự đồng ý bằng lời nói

79
Q

Whistleblowing is always allowed ?

A

incorrect because Whistleblowing for
personal gain is not allowed

Ethics & GIPS (3 decks)

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