Ethics Flashcards
What does ethics encompass, morale/ethical principles and ethical conduct?
What is a code of ethics, standards of conduct and violations
Describe ethics and professionalism
Describe professionalism within investment management
How do professions promote trust 1-6
How do professions promote trust 7-10
What are the expectations of a profession
What do ethics in investment industry enhance? Why is trust in important within investments?
What are the three challenges to ethical conduct?
Difference between legal and ethical standards?
Explain ethical decision making frameworks
Describe the professional conduct programme
What do conduct inquires result from?
What happens after an inquiry is initiated and what may it result in?
What are the potential sanctions and describe how the code and standards are adopted?
Asset manager code of professional conduct, Why do ethics matter and whose interests do they protect?
Code of ethics, act with…. and place the….?
Code of ethics, use reasonable……, Practice and….., promote the….., and Maintain and ……..?
Standards of professional conduct, 1 and 2?
Standards of professional conduct, 3,4,5,6,7?
Duties to, Duties to, Investment, Conflicts, Responsibilities
Professionalism: Knowledge of the law and guidance
Knowledge of law: C/S vs applicable laws, Participation in or association with violations by others
Knowledge of law: Investment products and applicable laws, Compliance
Professionalism: Independence and objectivity
Independence and objectivity: Guidance, Investment banking relationships
Independence and objectivity: Public companies, buy-side clients, Fund managers, credit rating agencies, Issuer-paid research
Indendence and objectivity: Travel funding, Performance measurement, Influence during manager selection process
Independence and objectivty: Recommended procedures for compliance
Professionalism: Misrepresentation and guidance for impact on investment practice
Misrepresentation: Guidance on performance reporting, omissions, social media and plagiarism
Misrepresentation: Guidance on plagiarism (cont), work completed for employer
Misrepresentation: Recommended procedures for compliance
Professionalism: Misconduct , guidance and recommended procedures for compliance
Integrity of capital markets: Material non-public information, material definition, test, non-public definition
Material non-public information: Mosiac theory, Social media, Using industry experts, Investment research reports
Material non-public information: recommended procedures for compliance
Material non-public information: recommended procedures for compliance (cont)
Integrity of capital markets: Market manipulation, what does it include and information-based and transaction-based manipulation?
Duties to clients: Loyalty, prudence and cares
Loyalty, prudence and care: Identifying the actual investment client, developing the clients portfolio, Soft commission policies
Loyalty, prudence and care: Recommended procedures for compliance (client approval and firm policies)
Duties to clients: Fair dealing
Fair dealing: investment recommendations and investment action
Fair dealing: Investment action (cont) and recommended procedures for compliance
Fair dealing: Recommended procedures for compliance (Allocations)
Duties to clients: Suitability
Suitability: Guidance and recommended procedures for compliance
Duties to clients: Performance presentation and guidance for compliance
Duties to clients: Preservation of confidentiality
Preservation of confidentiality: procedures for compliance
Duties to employers: Loyalty
Loyalty: employer responsibilities and independent practice, leaving an employer
Loyalty: Leaving an employer cont, whistle blowing and procedures for guidance
Duties to employer: Additional compensation agreements
Duties to employers: Responsibilities of supervisors
Responsibilities of supervisors: Compliance procedures and Inadequate procedures
Responsibilities of supervisors: Recomended procedures for compliance cont
Investment A, R and A: Diligence and reasonable basis, defining diligence and reasonable basis,
Diligence and reasonable basis: Quant orientated research, developing quant orientated techniques and selecting external advisors
Diligence and reasonable basis: Group research and procedures for compliance
Investment A, R and A: Communication with clients and prospective clients
Communication with clients and prospective clients: Different forms of communication, Identifying limitations of analysis, distinction between fact and opinion
Distinction Between Facts and Opinions
M/C may be in violation by failing to
identify limitations of statistically developed
projections ⇒ merely an estimate of future results
Investment A, R and A: Record retention
Record retention: Records are firm property, Local requirements, recommended procedures for compliance
Conflicts of Interest: Disclosure of conflicts
Disclosure of conflicts: To employers, to clients
Disclosure of conflicts: To clients, Conflicts with stock ownership and as director
Disclosure of conflicts: Procedures for compliance
Conflicts of interest: Priority of transactions
Priority of transactions: Impact on all beneficial accounts and recommended procedures for compliance (IPO, private placements, trade restriction, porting reqs)
Priority of transactions: Recomenned procedures for compliance, reporting reqs cont
Conflicts of interest: Referral fees
Responsibilities as a CFA Institute M/C: Conduct as a M/C in the CFA programme, Confidential info, additional restrictions and expressing opinions
Responsibilities as a CFA Institute M/C: Reference to CFA programme and CFA Membership requirements
Reference to CFA Institute, the CFA designation, and
the CFA Program: Using CFA designation, Referring to candidacy
Referring to Candidacy in the CFA Program
- never state/imply partial designation or
cite an expected completion date
- if you pass all 3 levels in consecutive
years, you can say so, but you can’t say it gives
you superior ability
⇒ Proper use of the CFA marks
- must be used only after a name or as an
adjective
- cannot be used as part of the name of a firm
Mission of GIPS and what 3 things is it meant to overcome
What is GIPS and its objectives
Who can claim compliance and who benefits
What are composites and definition of the firm?
Definition of discretion and Verification
