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35 Cards in this Set

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What is the first (of 6) components of the Code of Ethics?
Act with integrity, competence, diligence, respect, and in an ethical manner with the public, clients, prospective clients, employers, employees, colleagues in the investment profession, and other participants in the global capital markets.
What is the second (of 6) components of the Code of Ethics?
Place the integrity of the investment profession and the interests of clients above their own personal interests.
What is the third(of 6) components of the Code of Ethics?
Use reasonable care and exercise independent professional judgement when conducting investment analysis, making investment recommendations, taking investment actions, and engagin in other professional activities.
What is the fourth (of 6) components of the Code of Ethics?
Practice and encourage others to practie in a professional and ethical manner that will reflect credit on themselves and the profession.
What is the fifth (of 6) components of the Code of Ethics?
Promote the i ntegrity of, and uphold the rules governing, capital markets.
What is the sixth (of 6) components of the Code of Ethics?
Maintain and improve their professional competence and strive to maintain and improve the competence of other investment professionals.
What is the first Standard of Professional Conduct? What does it include?
Professionalism
A. Knowledge of the Law
B. Indepence and Objectivity
C. Misrepresentation
D. Misconduct
Knowledge of the Law
Memebers and Candidatesmust understand and comply with all laws rules and regulations of any government, regulatory organizxation, licensing agency or professional association governing their professional activities. In the event of conflict, Members and Candidates must complay with the more strict law, rule or regulation. They must also not knowingly participate or assitin in any violation of laws, rules, or regulations, and must disassociate themselves from any such violation.
Independence and Objectivity
Must use reasonable care and judgement to ahcieve and maintain independence and objectivity in their professional activities. Members and Candidates must not offer, solicit, or accept any gift, benefit, compensation, or consideration that reasonably could be expected to compromise their own or another's indepence and objectivity.
Misrepresentation
Members and Candidates must not knowingly make any misrepresentation relating to investment analysis, recommendations, actions, or other professional activities.
Misconduct
MaC must not engage in any professional conduct involving dishonesty, fraud, or deceit or commit any act that refelcts adversely on their professional reputation, integrity, or competence.
What is the second Standard of Professional Conduct? What does it include?
Integrity of Capital Markets
A. Material Nonpbulic Information
B. Market Manipulation
Material Nonpublic Information
MaC who possess material non public information that could affect the value of an investment must not act or cause others to act on the information.
Market Manipulation
MaC must not engage in practices that distort prices or artifically inflate trading volume with the intent to mislead market participants.
What is the third Standard of Professional Conduct? What does it include?
Duties to Clients
A. Loyalty, Prudence, and Care
B. Fair Dealing
C. Suitability
Loyalty Prudence, and Care
MaC have a duty of loyalty to their clients and must act with reasonable care and exercise prudent judgement. MaC must act for the benefit of their clients and place their clients' interests before their employer's or their own interests. In relationships with clients, MaC must determine applicable fiduciary duty and must comply with such duty to persons and interests to whom it is owed.
Fair Dealing
MaC must deal fairly and objectivly with all clients when providing investment analysis, making investment recommendations, taking investment action, or engaging in other professional activities.
Suitability
1. When MaC are in an advisory relationship with a client, they must:
a) Make a reasonalbe inquiry into a client's or prospective clients' investment experience, risk and return objectives, and financial constraints prior to making any investment recommendation or taking investment action and must reassess and update this information regularly.
b)Determine that an investment is suitable to the client's financial situation and consistent with the client's written objectives, mandates, and constraints before making an investment recommendation or taking investment action.
c) Judge the suitability of investmens in the context of the client's total portfolio.
2. When MaC are responsible for portfolio management to a specific mandate, strategy, or style, they must make only investment recommendations or take investment action that are consistent with the stated objectives and constraints of the portfolio.
Performance Presentation
When communicating investment performance information, MaC must make reasonable efforts to ensure that it is fair, accurate, and complete.
Preservation of Confidentiality
MaC must keep information about current, former, and prospective clients confidential unless:
1. The info concerns illegal activities on the part of the cvlient or prospective client
2. Disclosure is required by law
3. The client/prospective client permits disclosure of the info.
What is the fourth Standard of Professional Conduct? What does it include?
Duties to Employers
A. Loyalty
B. Additional Compensation Arrangements
C Responsibilities of Supervisors
Loyalty
in matters related to employment, MaC must act for the benefit of their employer and not deprive their employer of the advantage of their skills and abilities, divulge confidential information, or otherwise cause harm to their employer.
Additional Compensation Agreement
MaC must not accpet gifts, benefits, compensation, or consideration that competes with, or might reasonably be expected to create a conflict of interest with, their employer's interest unless they obtain written consent from all parties involved.
Responsibilities of Supervisors
MaC must make reasonable efforts to detect and prevent violations of applicable laws, rules, and regulations, and the Code and Standards by anyone subject to their supervision or authority.
What is the fifth Standard of Professional Conduct? What does it include?
Investment Analysis, Recommendations, and Action
A. Diligence and Reasonable Basis
B. Communcation with Clients and Prospective Clients
C. Record Retention
Diligence and Reasonable Basis
Mac must:
1. Exercise diligence, independence, and thoroughness in analyzing investments, making investment recommendations, and taking investment action.
2. Have a reasonable and adequate basis, supported by appropriate research and investigation, for any investment anlysis, recommendation, or action.
communcation with clients and prospective clients
MaC must:
1. Disclose to clients and prospective clients the basic format and general principles of th einvestment processes used to analyze investments, select securities, and construct portfolios and must promplty disclose any changes that might materially affect those processes.
2. Use reasonable judgement indentifying which factors are important to their investment analyses, recommendations, or actions that include those factors in communications with clients and prospective clients.
3. Distinguish between fact and opinion in the presentation of investment analysis and recommendations
Record Retention
MaC must develop and aintain appropriate records to support their investment analysis, recommendations, actions, and other investment-related communcations with clients and prospective clients.
What is the sixth Standard of Professional Conduct? What does it include?
Conflicts of Interest
A. Disclosure of Conflicts
B. Priority of Transactions
C. Referral Fees
Disclosure of Conflicts
MaC must make full and fair disclosure of all matters that could reasonably be expected to impair their indpendence and objectivity or interfere with repsective duites to clients, prospective clients, and employer. MaC must ensure that such disclosures are prominent, are delivered in plain language, and communicate the releveant information effectively.
Priority of Transactions
Investment transactions for clients and employers must have priority over investment transactions in which M or C is the benefical owner.
Referral Fees
M and C must disclose to their employer, clients, and prospective clients, as approrpriate, any compensation, consideratin, or benefit received by, or paid to, others for the recommendation of products or services.
What is the seventh Standard of Professional Conduct? What does it include?
Responsibilities as a CFA Institute Member or a CFA Candidate
A. Conduct as Members or Candidates in the CFA Program
B. Reference to CFA Institute, the CFA designation, and the CFA Program
Conduct as Members and Candidates in the CFA Program
M and C must not engage in any conduct that compromises the reputation or integrity of CFA Institute or the CFA designation or the integrity, validity, or security of the CFA examinations.
Reference to CFA Institute, the CFA designation, adn the CFA program
When referring to CFA Institute, CFA institute membership, the CFA designation, or candidacy in the CFA program, M and C must not misrepresent or exaggerate the meaning or implications of membership in CFA institute, holding the CFA designation, or candidacy in the CFA program.