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44 Cards in this Set

  • Front
  • Back
Standard I - A ?
Professionalism - Knowledge of the Law
Standard I - B ?
Professionalism - Independence and Objectivity
Standard I - C ?
Professionalism - Misrepresentation
Standard I - D ?
Professionalism - Misconduct
Standard II - A ?
Integrity of Capital Markets - Material Nonpublic Information
Standard II - B ?
Integrity of Capital Markets - Market Manipulation
Standard III - A ?
Duties to Clients and Prospective Clients - Loyalty, Prudence, and Care
Standard III - B ?
Duties to Clients and Prospective Clients - Fair Dealing
Standard III - C ?
Duties to Clients and Prospective Clients - Suitability
Standard III - D ?
Duties to Clients and Prospective Clients - Performance Presentation
Standard III - E ?
Duties to Clients and Prospective Clients - Preservation of Confidentiality
Standard IV - A ?
Duties to Employers - Loyalty
Standard IV - B ?
Duties to Employers - Additional Compensation Arrangements
Standard IV - C ?
Duties to Employers - Responsibilities of Supervisors
Standard V - A ?
Investment Analysis, Recommendations, and Action - Diligence and Reasonable Basis
Standard V - B ?
Investment Analysis, Recommendations, and Action - Communication with Clients and Prospective Clients
Standard V - C ?
Investment Analysis, Recommendations, and Action - Record Retention
Standard VI - A ?
Conflicts of Interest - Disclosure of Conflicts
Standard VI - B ?
Conflicts of Interest - Priority of Transactions
Standard VI - C ?
Conflicts of Interest - Referral Fees
Standard VII - ?
Responsibilities as a CFA Institute Member or CFA Candidate - Conduct as Members and Candidates in the CFA Program
Standard VII - ?
Responsibilities as a CFA Institute Member or CFA Candidate - Reference to CFA Institute, the CFA Designation, and the CFA Program
I - A Professionalism - Knowledge of the Law
Members must understand and comply with laws, rules, regulations, and Code and Standards of any authority governing their activities. In the event of a conflict, follow the more strict law, rule, or regulation. Do not knowingly participate or assist in violations, and disassociate from any known violation
I - B Professionalism - Independence and Objectivity
Members and Candidates must use reasonable care and judgment to achieve 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 independence and objectivity
I - C Professionalism - Misrepresentation
Trust is a foundation in the investment profession. Do not make any misrepresentations or give false impressions. This includes oral and electronic communications. Misrepresentations include guaranteeing investment performance and plagiarism. Plagiarism encompasses using someone else’s work (reports, forecasts, charts, graphs, and spreadsheet models) without giving them credit
I - D Professionalism - Misconduct
Members and Candidates must not engage in any professional conduct involving dishonesty, fraud, or deceit or commit any act that reflects adversely on their professional reputation, integrity, or competence.CFA Institute discourages unethical behavior in all aspects of members’ and candidates’ lives. Do not abuse CFA Institute’s Professional Conduct Program by seeking enforcement of this Standard to settle personal, political, or other disputes that are not related to professional ethics
II - A Integrity of Capital Markets- Material Nonpublic Information
Members and Candidates who possess material nonpublic information that could affect the value of an investment must not act or cause others to act on the information.Information is "material" if its disclosure would impact the price of a security or if reasonable investors would want the information before making an investment decision. Ambiguous information, as far as its likely effect on price, may not be considered material. Information is "non-public" until it has been made available to the marketplace. An analyst conference call is not public disclosure. Selectively disclosing information by corporations creates the potential for insider-trading violations
II - B Integrity of Capital Markets- Market Manipulation
Members and Candidates must not engage in practices that distort prices or artificially inflate trading volume with the intent to mislead market participants.This Standard applies to transactions that deceive the market by distorting the price-setting mechanism of financial instruments or by securing a controlling position to manipulate the price of a related derivative and/or the asset itself. Spreading false rumors is also prohibited
III - A Duties to Clients and Prospective Clients- Loyalty, Prudence, and Care
Exercise the prudence, care, skill, and diligence under the circumstances that a person acting in a like capacity and familiar with such matters would use.Manage pools of client assets in accordance with the terms of the governing documents, such as trust documents or investment management agreements. Make investment decisions in the context of the total portfolio. Vote proxies in an informed and responsible manner. Due to cost benefit considerations, it may not be necessary to vote all proxies.Client brokerage, or "soft dollars" or "soft commissions" must be used to benefit the client.
III - B Duties to Clients and Prospective Clients- Fair Dealing
Do not discriminate against any clients when disseminating recommendations or taking investment action. Fairly does not mean equally. In the normal course of business, there will be differences in the time emails, faxes, etc. are received by different clients. Different service levels are okay, but they must not negatively affect or disadvantage any clients. Disclose the different service levels to all clients and prospects, and make premium levels of service available to all who wish to pay for them
III - C Duties to Clients and Prospective Clients- Suitability
When Members and Candidates are responsible for managing a portfolio to a specific mandate, strategy, or style, they must make only investment recommendations or take investment actions that are consistent with the stated objectives and constraints of the portfolio
III - D Duties to Clients and Prospective Clients- Performance Presentation
Members must avoid misstating performance or misleading clients/prospects about investment performance of themselves or their firms, should not misrepresent past performance or reasonably expected performance, and should not state or imply the ability to achieve a rate of return similar to that achieved in the past.
III - E Duties to Clients and Prospective Clients- Preservation of Confidentiality
Members and Candidates must keep information about current, former, and prospective clients confidential unless:The information concerns illegal activities on the part of the client or prospective client, Disclosure is required by law, or The client or prospective client permits disclosure of the information. If illegal activities by a client are involved, members may have an obligation to report the activities to authorities. The confidentiality Standard extends to former clients as well.
IV - A Duties to Employers- Loyalty
Members must not engage in any activities which would injure the firm, deprive it of profit, or deprive it of the advantage of employees’ skills and abilities. Always place client interests above interests of employer. There is no requirement that the employee put employer interests ahead of family and other personal obligations
IV - B Duties to Employers- Additional Compensation Arrangements
Members and Candidates must not accept 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.Compensation includes direct and indirect compensation from a client and other benefits received from third parties. Written consent from a member’s employer includes email communication.
IV - C Duties to Employers- Responsibilities of Supervisors
Understand that an adequate compliance system must meet industry standards, regulatory requirements, and the requirements of the Code and Standards. Members with supervisory responsibilities have an obligation to bring an inadequate compliance system to the attention of firm’s management and recommend corrective action. While investigating a possible breach of compliance procedures, it is appropriate to limit the suspected employee’s activities
V - A Investment Analysis, Recommendations, and Action- Diligence and Reasonable Basis
Exercise diligence, independence, and thoroughness in analyzing investments, making investment recommendations, and taking investment actions. Have a reasonable and adequate basis, supported by appropriate research and investigation, for any investment analysis, recommendation, or action.
V - B Investment Analysis, Recommendations, and Action- Communication with Clients and Prospective Clients
Disclose to clients and prospective clients the basic format and general principles of the investment processes used to analyze investments, select securities, and construct portfolios and must promptly disclose any changes that might materially affect those processes.Use reasonable judgment in identifying which factors are important to their investment analyses, recommendations, or actions and include those factors in communications with clients and prospective clients.Distinguish between fact and opinion in the presentation of investment analysis and recommendations.
V - C Investment Analysis, Recommendations, and Action- Record Retention
Members must maintain research records that support the reasons for the analyst’s conclusions and any investment actions taken. Such records are the property of the firm. If no other regulatory standards are in place, CFA Institute recommends at least a 7-year holding period
VI - A Conflicts of Interest- Disclosure of Conflicts
Members must fully disclose to clients, prospects, and their employers all actual and potential conflicts of interest in order to protect investors and employers. These disclosures must be clearly stated.The requirement that all potential areas of conflict be disclosed allows clients and prospects to judge motives and potential biases for themselves. Disclosure of broker/dealer market-making activities would be included here. Board service is another area of potential conflict.
VI - B Conflicts of Interest- Priority of Transactions
Client transactions take priority over personal transactions and over transactions made on behalf of the member’s firm. Personal transactions include situations where the member is a "beneficial owner." Personal transactions may be undertaken only after clients and the member’s employer have had an adequate opportunity to act on a recommendation. Note that family-member accounts that are client accounts should be treated just like any client account
VI - C Conflicts of Interest- Referral Fees
Members must inform employers, clients, and prospects of any benefit received for referrals of customers and clients, allowing them to evaluate the full cost of the service as well as any potential impartiality. All types of consideration must be disclosed
VII - Responsibilities as a CFA Institute Member or CFA Candidate- Conduct as Members and Candidates in the CFA Program
Includes:Cheating on the CFA exam or any exam.Not following rules and policies of the CFA program.Giving confidential information on the CFA program to Candidates or the public.Improperly using the designation to further personal and professional goals.Misrepresenting information on the Professional Conduct Statement (PCS) or the CFA Institute Professional Development Program.
VII - Responsibilities as a CFA Institute Member or CFA Candidate- Reference to CFA Institute, the CFA Designation, and the CFA Program
Do not Over-promise individual competence.Over-promise investment results in the future. Membership contains : Sign PCS annually.Pay CFA Institute membership dues annually.