Flashcards in SS1 - Code of Ethics Deck (7)
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1
Q
Professionalism
A
- Knowledge of the Law
- understand and comply
- Independence and Objectivity
- use care and judgement
- careful of gifts
- Misrepresentation
- not knowingly make misrepresetations
- Misconduct
- not engage in professional conduct involving fraud, dishonesty, deceit
2
Q
Integrity of Capital Markets
A
- Material Nonpublic Information
- cannot act on or cause others to act on
- Market Manipulation
- no engaging in practices that distort prices or inflate trading volume
3
Q
Duties to Clients
A
- Loyalty, Prudence, and Care
- act with reasonable care and exercise prudent judgement
- place client interests before employers and own
- Fair Dealing
- deal fairly and objectively with all clients
- Suitability
- inquire into client’s experience
- determine what is suitable given financial situation, mandates, constraints
- assess the suitability of investments in context of *total *portfolio
4
Q
Duties to Employers
A
- Loyalty
- act for benefit of employer
- not divulge confidential information
- Additional Comp Arrangements
- not accept gifts, benefits or comp
- must obtain written consent of all parties involved
- Responsibilities of Supervisors
- make resonable efforts to detect and prevent violations
5
Q
Investment Analysis, Recommendations, and Actions
A
- Diligence and Reasonable Basis
- exercise indepndence and thoroughness in analysis and recommendations
- have reasonable and adequate basis supported by evidence
- Communication wiht Clients and Prospective Clients
- disclose basic format and general principles of investment process; disclose any changes
- use reasonable judgement in identifying factors that are important
- distinguish between fact and opinion
- Record Retentation
- develop and maintain appropriate records for analysis, recommendations, and communication with clients
6
Q
Conflicts of Interest
A
- Disclosure of Conflicts
- make full and fair disclosure of all matters expected to impair indep. and objectivity
- prominent, delivered in plain language
- Priority of Transactions
- transactions for clients must have priority over all others
- Referral Fees
- must disclose any comp, consideration, or benefit received from or paid to others for recommendation of products or services
7
Q
Responsibilities as Member or Candidate
A
- Conduct as Members and Candidates in the CFA Program
- nothing that compromised the reputation or integrity of CFA Institutue or designation
- Reference to CFA Institute, CFA Deisngation, CFA Program
- must not misrepresent or exaggerate meaning of