Asset Manager Code of conduct

Question 1

AMC Compliance Statement

Answer 1

• “[Insert name of Firm] claims compliance with the CFA Institute Asset Manager Code of Professional Conduct. This claim has not been verified by CFA Institute.”*
• Managers also must notify CFA Institute of their claim of compliance with the Asset Manager Code of Professional Conduct through the CFA Institute online notification process at www.cfainstitute.org/assetcode.

Question 2

AMC General Principles of Conduct (6)

Answer 2

• Act in a professional and ethical manner at all times.
• Act for the benefit of clients.
• Act with independence and objectivity.
• Act with skill, competence, and diligence.
• Communicate with clients in a timely and accurate manner.
• Uphold the applicable rules governing capital markets.

Question 3

Gift Acceptance from Service Providers

Answer 3

Managers must refuse to accept gifts or entertainment from service providers, potential investment targets, or other business partners of more than a minimal value. Managers should define what the minimum value is and should confer with local regulations which may also establish limits.

Question 4

Record Keeping

Answer 4

• Records can be maintained either in hard copy or electronic form.
• Unless otherwise required by local law or regulation Managers should keep records for at least seven years.

Question 5

How to limit the personal trading of employees

Answer 5

• Require employees to receive approval prior to any personal investments in initial public offerings or private placements
• Create a restricted list and/or watch list of securities that are owned in client accounts or may be bought or sold on behalf of clients in the near future
• Require employees to provide the compliance officer with copies of trade confirmations each quarter and annual statements of personal holdings.

Question 6

Fair and equitable trade allocation

Answer 6

• Use block trades and allocate shares on a pro-rata basis by using an average price or some other method that ensures fair and equitable allocations

Question 7

Compliance Officer

Answer 7

• Managers may designate an existing employee to also serve as the compliance officer, may hire a separate individual for that role, or may establish an entire compliance department.
• Should report directly to the CEO or board of directors

Question 8

Risk Mangement

Answer 8

• A firm’s risk management process must be objective, independent, and insulated from influence of portfolio managers.

Question 9

Valuation

Answer 9

• Use fair-market prices to value client holdings
• Overcome conflicts by transferring responsibility for the valuation of assets (including foreign currencies) to an independent third party
• Disclosure should be made by asset class and must be meaningful

Question 10

Performance reporting

Answer 10

• Managers must provide regular, ongoing performance reporting. Managers should report to clients at least quarterly, and when possible, such reporting should be provided within 30 days after the end of the quarter.