Standard IV: Duties to employers

Question 1

What are the three substandards in IV: Duties to Employers?

Answer 1

IV(A): Loyalty
IV(B): Additional Compensation Arrangements
IV(C): Responsibilities of Supervisors

Question 2

What does standard IV(A) require?

Answer 2

Loyalty:
- Act for the benefit of their employer and not deprive their employer of:
- advantage of their skills and
capabilities
- Divulge confidential information
- Otherwise cause harm to their
employer

Question 3

What are the rules under standard IV(A) in relation to an independent practice?

Answer 3

If member has a private practice of the same nature of employer, must disclose services rendered, the duration of the services and the compensation

Question 4

What are the rules in relation to loyalty when leaving an employer under IV(A)?

• In terms of skills and experience
• In terms of clients

Answer 4

• Can utilise skills or experience gained
  however cannot misappropriate trade secrets, confidential information, or solicit any clients before leaving.
• Can contact old clients as long as not using the prior firms records to reach the client, or violate a non-compete agreement

Question 5

Are social media accounts firm property ?

Answer 5

In some cases - yes - where the firm has approved business-related account, they would be considered part of the firms assets

Question 6

What are the rules in relation to whistleblowing?

Answer 6

Being disloyal to employee may be justified where whistleblowing is utilised to protect the integrity of capital markets, or the interests of clients
- Employers interests always come after the interests of protecting integrity of capital market and client interests

Question 7

If an employee receives no compensation, do they still have a duty of loyalty to their employer?

Answer 7

Yes

Question 8

What does standard IV(B) require?

Answer 8

Must not accept gifts, benefits or additional compensation that competes with or might reasonable create a conflict with employers interests
- Unless written consent from all parties involved is obtained

Question 9

What does standard IV(C) require?

Answer 9

Responsibilities of supervisors:
Must make reasonable efforts to ensure that any one subject to their supervision or authority complies with applicable laws, rules, regulations and the standards

Question 10

What does standard IV(C) require in relation to delegated supervision?

Answer 10

Must make efforts to prevent and detect violations by ensuring the establishment of effective compliance systems

Question 11

What are the rules if someone under your supervision does is non a member of the CFA?

Answer 11

They still need to comply with the standards and laws when under your supervision