Reading 70: code of ethics and standards of professional conduct

Question 1

In the case of a complaint about a member’s professional conduct, CFA Institute Professional Conduct Program staff are least likely to:
review documents and records related to the complaint.
request an interview with the member or with the party making the complaint.
suspend the member’s right to use the CFA designation while an investigation is in progress.

Answer 1

The process for enforcing the Code and Standards does not include suspending a member or candidate while an inquiry is in progress. If CFA Institute Professional Conduct staff receive information that prompts an inquiry, the staff may request information from the member or candidate, interview parties who initiated a complaint, or review relevant records and documents. (LOS 70.a)

Question 2

Which of the following requirements for members and candidates is one of the six components of the Code of Ethics?
Maintain and improve their professional competence.
Do not act or cause others to act on material nonpublic information.
Distinguish between fact and opinion when presenting investment analysis.

Answer 2

One of the six components of the Code of Ethics requires members and candidates to “maintain and improve their professional competence and strive to maintain and improve the competence of other investment professionals.” The other two answer choices are required by the Standards of Professional Conduct but are not components of the Code of Ethics. (LOS 70.b)

Question 3

If a member or candidate is offered an additional compensation arrangement by a client, which of the seven Standards of Professional Conduct states the requirements the member or candidate must follow?
Duties to Clients.
Conflicts of Interest.
Duties to Employers.

Answer 3

The standard related to additional compensation arrangements is a subsection of Standard IV Duties to Employers. (LOS 70.c)