Ethics Flashcards
What are the components of Standard-7?
Responsibility as CFA Institute member or CFA Candidate.
a) Conduct as participants in CFA Institute programs
b) Reference to CFA Institute, Designation or CFA Program
Are the words ‘improvised skills’ allowed to be written in CFA bio?
Yes
But exaggeration is not allowed.
Are the words ‘obtained highest set of credential’ allowed to be written in CFA bio?
Yes
Are the words ‘As a CFA charter holder’ allowed to be written in CFA bio?
No
What are the components of Standard-2?
Integrity of capital markets
a) Material non public information
b) Market Manipulation
What is mosaic thoery?
It is allowed, it is non material non public info + material public info
If firm discloses its agreement with member to boost transactions over initial launch, liquidity pumping strategy. Is it allowed?
Yes
Working on rumour after disclosure is a violation?
No
What are the components of Standard-1?
Professionalism
a) Knowledge of law
b) Misconduct
c) Misrepresentation
d) Independence
Which type of fees is recommended-
a) Issuer pay
b) Flat fee
Flat fee.
Is it necessary to credit the source of information, table, stats if obtained from recognised financial and statistical reporting services?
No
True or False
Personal Bankruptcy is misconduct but not professional misconduct.
True
What are the components of Standard-3?
Duty towards your client
a) Loyalty, Prudence and care
b) Fair dealing
c) Suitability
d) Performance presentation
e) Confidentiality preservation
Should the member include terminated accounts as part of historical performance?
Yes, and state why tey were terminated.
What are the components of Standard-4?
Duties towards employer-
a) Additional Compensation Arrangements
b) Loyalty
c) Responsibility of Supervisor
Should the member take prior approval and disclosure to start a new business that is unrelated and work outside working hours?
Only disclosure is required
Soliciting employer clients from data gathered during course of a job is a violation?
Yes,
However, employer can solicit client from former employer through memory or publicly available data.
Is creating a list of work done at previous organisation a violation?
No
What are the components of Standard-5?
Investment Analysis, recommendation and actions-
a) Diligence and Reasonable basis
b) Communication with client and prospective client
c) Record retention
True or False
Quick and simple means member was not diligent.
False, It does not.
Expectations bases on statistical analysis are facts?
No
For how many minimum years should company keep records?
7
Can a member use record obtained from previous employer at new firm?
No, because supporting is unavailable.
Further, for future use, he can recreate the records at new firm with information gathered through public sources or directly but not from memory or sourced obtained from previous employer.
What are the components of Standard-6?
Conflicts of Interest-
a) Referral Fees
b) Disclosure of conflicts
c) Priority of Transactions
