Standarts mais profundo

Question 1

Knowledge of the Law (4)

Answer 1

STANDARD I: PROFESSIONALISM
(A)

-> understand and comply with all applicable laws, rules, and
regulations of any government, regulatory organization, licensing agency, or professional association governing their professional activities;

-> comply with the more strict law, rule, or regulation;

-> If you know that violations of applicable rules or laws are taking place, either by coworkers or clients, CFA Institute strongly encourages members and candidates to report potential violations. (approach your supervisor or compliance department to
remedy the situation)

-> If this cannot be accomplished, you may, in an extreme case, have
to resign from the firm;

Question 2

Knowledge of the Law - Recommendations for Members (6)

Answer 2

STANDARD I: PROFESSIONALISM
(A)
1 - Establish, or encourage employer to establish, procedures to keep employees informed of changes in relevant laws, rules, and regulations;
2 - Review, or encourage employer to review, the firm’s written compliance procedures on a regular basis.
3 - Maintain, or encourage employer to maintain, copies of current laws, rules, and regulations.
4 - When in doubt about legality, consult supervisor, compliance personnel, or a lawyer.
5 - When dissociating from violations, keep records documenting the violations, encourage employer to bring an end to the violations;
6 - There is no requirement in the Standards to report wrongdoers, but local law may require it; members are “strongly encouraged” to report violations to CFA Institute Professional Conduct Program.

Question 3

Knowledge of the Law - Recommendations for Firms (2)

Answer 3

STANDARD I: PROFESSIONALISM
(A)
1 - Have a code of ethics.
2 - Provide employees with information on laws, rules, and regulations governing professional activities

Question 4

Independence and Objectivity (6)

Answer 4

STANDARD I: PROFESSIONALISM
(B)
-> use reasonable care and judgment to achieve and maintain independence and objectivity in their professional activities
-> must not offer, solicit, or accept any gift, benefit, compensation, or consideration that reasonably could be expected to compromise their own or another’s independence and objectivity (modest gifts is ok)
-> Analysts may face pressure or receive inducements to give a security a specific rating, to select certain outside managers or vendors, or to produce favorable or unfavorable research and conclusions
-> Gifts with value can influence independence or objectivity and is a violation;
-> Client gifts must be disclosed to the member’s employer prior to acceptance, if possible, but after acceptance, if not.
-> Members may prepare reports paid for by the subject firm if compensation is a flat rate not tied to the conclusions of the report (and if the fact that the research is issuer-paid is disclosed).

Question 5

Independence and Objectivity - Recommendations for Members (1)

Answer 5

STANDARD I: PROFESSIONALISM
(B)
Members or their firms should pay for their own travel to company events or tours when practicable and limit use of corporate aircraft to trips for which commercial travel is not an alternative.

Question 6

Independence and Objectivity - Recommendations for Firms (3)

Answer 6

STANDARD I: PROFESSIONALISM
(B)
-> Restrict employee participation in IPOs and private placements, require pre-approval for participation.
-> Appoint a compliance officer, have written policies on independence and objectivity and clear procedures for reporting violations
-> Limit gifts, other than from clients, to token items only.

Question 7

Misrepresentation (2)

Answer 7

STANDARD I: PROFESSIONALISM
(C)
-> must not knowingly make any misrepresentations
relating to investment analysis, recommendations, actions, or other professional activities.
-> Misrepresentation includes knowingly misleading investors, omitting relevant information, presenting selective data to mislead investors, and plagiarism

Question 8

Misrepresentation - Actions that would violate the Standard include: (7)

Answer 8

STANDARD I: PROFESSIONALISM
(C)
1 - Presenting third-party research as your own, without attribution to the source.
2 - Guaranteeing a specific return on securities that do not have an explicit guarantee from a government body or financial institution.
3 - Selecting a valuation service because it puts the highest value on untraded security holdings
4 - Selecting a performance benchmark that is not comparable to the investment strategy employed.
5 - Presenting performance data or attribution analysis that omits accounts or relevant variables
6 - Offering false or misleading information about the analyst’s or firm’s capabilities, expertise, or experience.
7 - Using marketing materials from a third party (outside advisor) that are misleading

Question 9

Misrepresentation - Recommendations for Members (6)

Answer 9

STANDARD I: PROFESSIONALISM
(C)
1 - Prepare a summary of experience, qualifications, and services a member is able to perform;
2 - Encourage employers to develop procedures for verifying marketing materials provided by third parties concerning their capabilities, products, and services;
3 - Cite the source of any summaries of materials provided by others
4 - Keep copies of all reports, articles, or other materials used in the preparation of research reports.
5 - Provide a list, in writing, of the firm’s available services and qualification;
6 - Periodically review documents and communications of members for any misrepresentation of employee or firm qualifications and capabilities;

Question 10

Misconduct

Answer 10

STANDARD I: PROFESSIONALISM
(D)
Members and Candidates must not engage in any professional conduct involving dishonesty, fraud, or deceit or commit any act that reflects adversely on their professional reputation, integrity, or competence

Question 11

Misconduct - Recommendations for Firms (3)

Answer 11

STANDARD I: PROFESSIONALISM
(D)
-> Develop and adopt a code of ethics and make clear that unethical behavior will not be
tolerated
-> Give employees a list of potential violations and sanctions, including dismissal.
-> Check references of potential employees

Question 12

Material Nonpublic Information (1)

Answer 12

STANDARD II: INTEGRITY OF CAPITAL MARKETS
(A)
-> Members and Candidates who possess material nonpublic information that could affect the value of an investment must not act or cause others to act on the information.

Question 13

mosaic theory

Answer 13

Material Nonpublic Information
STANDARD II: INTEGRITY OF CAPITAL MARKETS
(A)
reaching an investment conclusion through perceptive analysis of public information combined with non-material nonpublic information is not a violation of the Standard.

Question 14

Material Nonpublic Information - Recommendations for Members (2)

Answer 14

STANDARD II: INTEGRITY OF CAPITAL MARKETS
(A)
1 - Make reasonable efforts to achieve public dissemination by the firm of information they possess.
2 - Encourage their firm to adopt procedures to prevent the misuse of material nonpublic information.

Question 15

Material Nonpublic Information - Recommendations for Firms (3)

Answer 15

STANDARD II: INTEGRITY OF CAPITAL MARKETS
(A)
Use a firewall within the firm, with elements including:
1 - Exercise substantial control of relevant interdepartmental communications through a
clearance area, such as the compliance or legal department
2- Review employee trades.
3 - Maintain “watch,” “restricted,” and “rumor” lists.

Question 16

Market Manipulation

Answer 16

STANDARD II: INTEGRITY OF CAPITAL MARKETS
(B)
must not engage in practices that distort prices or artificially inflate trading volume with the intent to mislead market participants.

Question 17

Loyalty, Prudence, and Care (3)

Answer 17

STANDARD III: DUTIES TO CLIENTS
(A)
-> must act with reasonable care and exercise prudent judgment
-> must act for the benefit of their clients and place their clients’ interests before their employer’s or their own interests.
-> Standard does not impose a fiduciary duty on members or candidates where one did not already exist

Question 18

Loyalty, Prudence, and Care - Members and candidates must: (7)

Answer 18

STANDARD III: DUTIES TO CLIENTS
(A)

1 - Exercise the prudence, care, skill, and diligence under the circumstances that a person acting in a like capacity and familiar with such matters would use.

2 - Manage pools of client assets in accordance with the terms of the governing documents, such as trust documents or investment management agreements.

3 - Make investment decisions in the context of the total portfolio.

4 - Inform clients of any limitations in an advisory relationship (e.g., an advisor who may only recommend her own firm’s products).

5 - Vote proxies in an informed and responsible manner. Due to cost-benefit considerations, it may not be necessary to vote all proxies.

6 - Client brokerage, or “soft dollars” or “soft commissions,” must be used to benefit the client.

7 - The “client” may be the investing public as a whole rather than a specific entity or person.

Question 19

Loyalty, Prudence, and Care - Recommendations for Members (10)

Answer 19

STANDARD III: DUTIES TO CLIENTS
(A)

1 - Follow applicable rules and laws.

2 - Establish investment objectives of client.

3 - Consider suitability of a portfolio relative to the client’s needs and circumstances, the investment’s basic characteristics, or the basic characteristics of the total portfolio.

4 - Diversify.

5 - Deal fairly with all clients in regard to investment actions.

6 - Disclose conflicts.

7 - Disclose compensation arrangements.

8 - Vote proxies in the best interest of clients and ultimate beneficiaries.

9 - Maintain confidentiality.

10 - Seek best execution.

Question 20

Fair Dealing - Deal fairly and objectively with all clients when: (4)

Answer 20

STANDARD III: DUTIES TO CLIENTS
(B)
1 - Providing investment analysis
2 - Making investment recommendations
3 - Taki ng investment action
4 - Engaging in other professional activities

Question 21

Fair Dealing - Guidance