Ethical & Professional StandardsModule 2 of 5

Code of Ethics and Standards of Professional Conduct

Concepts

Formulas

Decisions

Quiz Questions

Key Concepts

6 concepts covered in this module.

Code of Ethics (6 Components)

1) Act with integrity, competence, diligence, respect. 2) Place client interests above own. 3) Use reasonable care, independent judgment. 4) Practice and encourage ethical behavior. 5) Promote integrity of capital markets. 6) Maintain and improve professional competence.

Standard I: Professionalism

I(A) Knowledge of the Law, I(B) Independence & Objectivity, I(C) Misrepresentation, I(D) Misconduct, I(E) Competence.

Standard II: Integrity of Capital Markets

II(A) Material Nonpublic Information (MNPI), II(B) Market Manipulation. Protect market fairness.

Standard III: Duties to Clients

III(A) Loyalty, Prudence, Care. III(B) Fair Dealing. III(C) Suitability. III(D) Performance Presentation. III(E) Preservation of Confidentiality.

Standard IV: Duties to Employers

IV(A) Loyalty. IV(B) Additional Compensation Arrangements. IV(C) Responsibilities of Supervisors.

Standards V-VII

V: Investment Analysis (diligence, communication, record retention). VI: Conflicts of Interest (disclosure, priority of transactions, referral fees). VII: Responsibilities as CFA Member (conduct, reference to CFA Institute).

Decision Frameworks

1 decision frameworks to guide your analysis.

When laws conflict with the Code and Standards?

Follow the STRICTER of the law or the Code and Standards
If local law is stricter, follow local law
If the Code is stricter, follow the Code

Mind Map

Visual overview of how concepts connect in this module.

Code & Standards

Code of Ethics

Integrity & competence

Client interests first

Independent judgment

Promote market integrity

Std I: Professionalism

Knowledge of Law

Independence & Objectivity

Misrepresentation

Misconduct

Competence

Std II: Capital Markets

Material Nonpublic Info

Market Manipulation

Std III-VII

Duties to Clients

Duties to Employers

Investment Analysis

Conflicts of Interest

CFA Member Conduct

Study Code of Ethics and Standards of Professional Conduct

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Ethics and Trust in the Investment Profession

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Guidance for Standards I–VII