Ethics: Code of Ethics & Standards of Prof. Conduct

Question 1

What book provides guidance to the people who grapple with real ethical dilemmas in the investment profession on a daily basis?

Answer 1

Standards of Practice Handbook (Handbook)

Question 2

What is the purpose of the “handbook”?

Answer 2

The Handbook provides guidance in understanding the interconnectedness of the aspirational and practical principles and provisions of the Code of Ethics and Standards of Professional Conduct (Code and Standards). The Code contains high-level aspirational ethical principles that drive members and candidates to create a positive and reputable investment profession.

The Standards contain practical ethical principles of conduct that members and candidates must follow to achieve the broader industry expectations. However, applying the principles individually may not capture the complexity of ethical requirements related to the investment industry. The Code and Standards should be viewed and interpreted as an interwoven tapestry of ethical requirements. Through members’ and candidates’ adherence to these principles as a whole, the integrity of and trust in the capital markets are improved.

Question 3

What is the “CFA Mission Statement”?

Answer 3

To lead the investment profession globally by promoting the highest standards of ethics, education, and professional excellence for the ultimate benefit of society.

Question 4

What is the CFA “Code of Ethics Principle”?

Answer 4

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

Question 5

What is the “Standard Regarding Supervisors”?

Answer 5

Members and Candidates must make reasonable efforts to ensure that anyone subject to their supervision or authority complies with applicable laws, rules, regulations, and the Code and Standards.

Question 6

What is the “SEVEN STANDARDS MNEMONIC”?

Answer 6

(1) Professionals
(2) IN Capital Markets
Have a Duty To:
(3) Clients
(4) Employers
(5) To make Investment Analysis, Recommendations, and Actions
(6) Free from Conflicts of Interest
(7) As a Responsible Member or Candidate

——- CORRELATES TO ——

(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