Ethics

Question 1

Code of ethics

Members and candidates must:

Answer 1

Act with integrity, competence, diligence and respect and in an ethical manner which the public, clients, prospects, employers, employees, colleagues in the profession and other participants in global capital markets.

Place the integrity of the investment profession and interests of clients above their own interests.

Use reasonable care and exercise independent professional judgement when consulting investment analysis.

Practice and encourage others to practice in a professional and ethical manner that will reflect credit on themselves and the profession

Promote the integrity and viability of the global capital markets for the ultimate benefit of society

Maintain and improve their professional competence and strive to maintain and improve the competence of other investment professionals

Question 2

Standards of professional conduct

Answer 2

1. Professionalism
2. Integrity of capital markets
3. Duties to clients
4. Duties to employers,
5. Investment analysis, recommendations and actions
6. Conflicts of interest
7. Responsibilities as a CFA institute member or CFA candidate.

Question 3

1. Professionalism

Answer 3

Knowledge of the law
Independence and objectivity
Misrepresentation
Misconduct.

Question 4

2. Integrity of capital markets

Answer 4

Material Non Public info

Market manipulation

Question 5

3. Duties to clients

Answer 5

Loyalty, Prudence and care.
Fair dealing
Suitability
Performance presentation
Presentation of confidentiality

Question 6

4. Duties to employers

Answer 6

Loyalty
Additional compensation agreements
Responsibilities of supervisors

Question 7

5. Investment analysis, recommendations and actions

Answer 7

Diligence and reasonable basis - thoroughness in analyzing investments
V(A): Diligence and Reasonable Basis
V(B): Communication with Clients and Prospective Clients; and
V(C): Record Retention
Adequate basis to support appropriate research.
Communication with clients and prospective clients Disclose investment processes used.

Question 8

6. Conflicts of interest

Answer 8

Disclosure of conflicts
Priority of transactions
Referral fees

Question 9

7. Responsibilities as a CFA institute member or CFA candidate.

Answer 9

Conduct as participants in CFA institute programs. Do not compromise integrity of CFA institue.
Do not exaggerate the CFA designation.

Question 10

Can Investment managers buy ‘hot issues’ IPOs?

Answer 10

No it is a violation for IMs to purchase hot issues.