SS1 - Code of Ethics Flashcards Preview

CFA Level 3 - Ethics > SS1 - Code of Ethics > Flashcards

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