Ethics

Question 1

What does ethics encompass, morale/ethical principles and ethical conduct?

Answer 1

Question 2

What is a code of ethics, standards of conduct and violations

Answer 2

Question 3

Describe ethics and professionalism

Answer 3

Question 4

Describe professionalism within investment management

Answer 4

Question 5

How do professions promote trust 1-6

Answer 5

Question 6

How do professions promote trust 7-10

Answer 6

Question 7

What are the expectations of a profession

Answer 7

Question 8

What do ethics in investment industry enhance? Why is trust in important within investments?

Answer 8

Question 9

What are the three challenges to ethical conduct?

Answer 9

Question 10

Difference between legal and ethical standards?

Answer 10

Question 11

Explain ethical decision making frameworks

Answer 11

Question 12

Describe the professional conduct programme

Answer 12

Question 13

What do conduct inquires result from?

Answer 13

Question 14

What happens after an inquiry is initiated and what may it result in?

Answer 14

Question 15

What are the potential sanctions and describe how the code and standards are adopted?

Answer 15

Question 16

Asset manager code of professional conduct, Why do ethics matter and whose interests do they protect?

Answer 16

Question 17

Code of ethics, act with…. and place the….?

Answer 17

Question 18

Code of ethics, use reasonable……, Practice and….., promote the….., and Maintain and ……..?

Answer 18

Question 19

Standards of professional conduct, 1 and 2?

Answer 19

Question 20

Standards of professional conduct, 3,4,5,6,7?
Duties to, Duties to, Investment, Conflicts, Responsibilities

Answer 20

Question 21

Professionalism: Knowledge of the law and guidance

Answer 21

Question 22

Knowledge of law: C/S vs applicable laws, Participation in or association with violations by others

Answer 22

Question 23

Knowledge of law: Investment products and applicable laws, Compliance

Answer 23

Question 24

Professionalism: Independence and objectivity

Answer 24

Question 25

Independence and objectivity: Guidance, Investment banking relationships

Answer 25

Question 26

Independence and objectivity: Public companies, buy-side clients, Fund managers, credit rating agencies, Issuer-paid research

Answer 26

Question 27

Indendence and objectivity: Travel funding, Performance measurement, Influence during manager selection process

Answer 27

Question 28

Independence and objectivty: Recommended procedures for compliance

Answer 28

Question 29

Professionalism: Misrepresentation and guidance for impact on investment practice

Answer 29

Question 30

Misrepresentation: Guidance on performance reporting, omissions, social media and plagiarism

Answer 30

Question 31

Misrepresentation: Guidance on plagiarism (cont), work completed for employer

Answer 31

Question 32

Misrepresentation: Recommended procedures for compliance

Answer 32

Question 33

Professionalism: Misconduct , guidance and recommended procedures for compliance

Answer 33

Question 34

Integrity of capital markets: Material non-public information, material definition, test, non-public definition

Answer 34

Question 35

Material non-public information: Mosiac theory, Social media, Using industry experts, Investment research reports

Answer 35

Question 36

Material non-public information: recommended procedures for compliance

Answer 36

Question 37

Material non-public information: recommended procedures for compliance (cont)

Answer 37

Question 38

Integrity of capital markets: Market manipulation, what does it include and information-based and transaction-based manipulation?

Answer 38

Question 39

Duties to clients: Loyalty, prudence and cares

Answer 39

Question 40

Loyalty, prudence and care: Identifying the actual investment client, developing the clients portfolio, Soft commission policies

Answer 40

Question 41

Loyalty, prudence and care: Recommended procedures for compliance (client approval and firm policies)

Answer 41

Question 42

Duties to clients: Fair dealing

Answer 42

Question 43

Fair dealing: investment recommendations and investment action

Answer 43

Question 44

Fair dealing: Investment action (cont) and recommended procedures for compliance

Answer 44

Question 45

Fair dealing: Recommended procedures for compliance (Allocations)

Answer 45

Question 46

Duties to clients: Suitability

Answer 46

Question 47

Suitability: Guidance and recommended procedures for compliance

Answer 47

Question 48

Duties to clients: Performance presentation and guidance for compliance

Answer 48

Question 49

Duties to clients: Preservation of confidentiality

Answer 49

Question 50

Preservation of confidentiality: procedures for compliance

Answer 50

Question 51

Duties to employers: Loyalty

Answer 51

Question 52

Loyalty: employer responsibilities and independent practice, leaving an employer

Answer 52

Question 53

Loyalty: Leaving an employer cont, whistle blowing and procedures for guidance

Answer 53

Question 54

Duties to employer: Additional compensation agreements

Answer 54

Question 55

Duties to employers: Responsibilities of supervisors

Answer 55

Question 56

Responsibilities of supervisors: Compliance procedures and Inadequate procedures

Answer 56

Question 57

Responsibilities of supervisors: Recomended procedures for compliance cont

Answer 57

Question 58

Investment A, R and A: Diligence and reasonable basis, defining diligence and reasonable basis,

Answer 58

Question 59

Diligence and reasonable basis: Quant orientated research, developing quant orientated techniques and selecting external advisors

Answer 59

Question 60

Diligence and reasonable basis: Group research and procedures for compliance

Answer 60

Question 61

Investment A, R and A: Communication with clients and prospective clients

Answer 61

Question 62

Communication with clients and prospective clients: Different forms of communication, Identifying limitations of analysis, distinction between fact and opinion

Answer 62

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

Question 63

Investment A, R and A: Record retention

Answer 63

Question 64

Record retention: Records are firm property, Local requirements, recommended procedures for compliance

Answer 64

Question 65

Conflicts of Interest: Disclosure of conflicts

Answer 65

Question 66

Disclosure of conflicts: To employers, to clients

Answer 66

Question 67

Disclosure of conflicts: To clients, Conflicts with stock ownership and as director

Answer 67

Question 68

Disclosure of conflicts: Procedures for compliance

Answer 68

Question 69

Conflicts of interest: Priority of transactions

Answer 69

Question 70

Priority of transactions: Impact on all beneficial accounts and recommended procedures for compliance (IPO, private placements, trade restriction, porting reqs)

Answer 70

Question 71

Priority of transactions: Recomenned procedures for compliance, reporting reqs cont

Answer 71

Question 72

Conflicts of interest: Referral fees

Answer 72

Question 73

Responsibilities as a CFA Institute M/C: Conduct as a M/C in the CFA programme, Confidential info, additional restrictions and expressing opinions

Answer 73

Question 74

Responsibilities as a CFA Institute M/C: Reference to CFA programme and CFA Membership requirements

Answer 74

Question 75

Reference to CFA Institute, the CFA designation, and the CFA Program: Using CFA designation, Referring to candidacy

Answer 75

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

Question 76

Mission of GIPS and what 3 things is it meant to overcome

Answer 76

Question 77

What is GIPS and its objectives

Answer 77

Question 78

Who can claim compliance and who benefits

Answer 78

Question 79

What are composites and definition of the firm?

Answer 79

Question 80

Definition of discretion and Verification

Answer 80