Ethics Merged PDF

Level I – Ethics
Ethics and Trust in the Investment Profession
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Graphs, charts, tables, examples, and figures are copyright 2022, CFA Institute.
Reproduced and republished with permission from CFA Institute. All rights reserved.
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Contents
1. Introduction
2. Ethics
3. Ethics and Professionalism
4. Challenges to Ethical Conduct
5. Ethical vs. Legal Standards
6. Ethical Decision-Making Frameworks
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1. Introduction
• Ethical behavior is extremely important
• Trust: strong belief in the reliability of a person or institution
• Top two attributes of an investment management firm

 Has transparent and open business practices
 Has ethical business practices
• Ethical behavior goes well beyond following the law
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2. Ethics
The word “ethics” comes from the Greek word “ethos”: character, guiding beliefs or ideals
Ethical principles or moral principles are beliefs that provide

guidance for our behavior. Stakeholders: Groups of
people or individuals
• Honesty, transparency, fairness or justice, diligence, and respect impacted by our decisions
for the rights of others.
• Colleagues
• Being considerate of the consequences one’s actions on others • Clients
• Employers
“Ethical conduct is behavior that follows moral principles and balances self-
• Communities
interest with both the direct and the indirect consequences of the behavior
on others.” • Investment profession
• Trade associations
Laws and regulations • Regulators
• Other FMPs
Code of ethics and standards of conduct
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3. Ethics and Professionalism
A profession is an occupational community
Professionals
• have specialized knowledge and skills
• have a mission to serve society
• uphold high ethical standards
• are subject to a combination of professional conduct rules and licensed status
Professions establish trust by

a) normalizing practitioner behavior
b) providing a service to society
c) maintaining high entry standards
d) possessing a body of expert knowledge
e) encouraging and facilitating continuing education
f) monitoring professional conduct
g) promoting collegiality
h) being oversight bodies
i) encouraging the engagement of members
Professions evolve over time as the requirements, technology, and standards change.
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Professionalism in Investment Management
Trust is key in investment management
Trust is established through professionalism and ethical conduct To promote professionalism in investment
management, many countries require
investment professionals to have some
Trust in the investment management profession leads to: form of certification or license
• Efficient capital markets
• Efficient flow of funds
• Broader participation
• Overall benefit to the economy
CFA charterholders and CFA Program candidates are
required to “adhere to the Code and Standards and to
sign annually a statement attesting to that continued
adherence”.
CFA Institute is the largest body for investment management
professionals and aims at promoting the highest standards of ethics, Charterholders and candidates must “maintain and
education, and professional excellence. improve their professional competence and strive to
maintain and improve the competence of other
investment professionals”.
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4. Challenges to Ethical Conduct
Behaving in an ethical manner is not always easy. The major challenges:
• People believe they are more ethical than they actually are
• Decision makers often fail to recognize and/or significantly underestimate the effect of
situational influences
Situational influences are external factors that shape our thinking, decision making and
behavior
• Money and prestige
• Loyalty to employer, employees, or colleagues
• Compliance culture
Failure to recognize challenges can lead to unethical behavior
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5. Ethical vs. Legal Standards
Laws and regulations Better outcomes for
attempt to codify ethical society or specific
behavior and actions stakeholders
Acting in accordance with the Not legal but ethical Not legal and not ethical
law and acting ethically are not
necessary the same. Legal and ethical Legal but not necessary ethical
• A new law might address an existing Ethical conduct encourages us to:

ethical problem but create an opportunity • Go beyond what is legally required
for other unethical behavior. • Consider the impact on stakeholders
• Laws can interpreted differently. • Make good choices even in the absence of
• Laws can vary across jurisdictions. clear laws and regulations
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6. Ethical Decision-Making Frameworks
Organizations should develop a strong ethical culture
Encourage an investment professional’s natural desire to “do the right thing”
Develop an ethical framework which guides an investment manager’s thought process

• Examine choices from multiple perspectives
• Justify actions to stakeholders
Identify Consider Decide and Act Reflect
• Relevant facts • Situational influences

• Opinion, judgements, and • Additional guidance
biases • Alternative actions
• Stakeholders and duties
owed
• Ethical principles
• Conflicts of interest
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Summary
• What is ethics?
• Role of ethics in defining a profession
• Professionalism in investment management
• Need for high ethical standards in the investment management
• Challenges to ethical behavior
• Ethical versus legal standards
• Framework for ethical decision making
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Lecture 1 Summary (1)
LO.a: Explain ethics.
The word ethics is derived from the Greek word ‘ethos,’ which means character. Ethics means making
good choices. Ethics includes a set of moral principles and rules of conduct that help us in our
behavior.
LO.b: Describe the role of a code of ethics in defining a profession.
A profession is an occupational community having specialized knowledge and skills; which adheres to
ethical behavior; and is subject to some combination of licensed status and technical standards
A profession is different from craft guilds and trade bodies in two ways, i.e. unlike trade bodies,
members of professions are required to uphold high ethical standards and their mission is to serve
society.
LO.c: Describe professions and how they establish trust;
LO.e: explain professionalism in investment management;
The common characteristics that help establishing the confidence and credibility in professionals and their
organizations include the following:
a) Professions normalize practitioner behavior;
b) Professions provide a service to society;
c) Professions have high entry standards;
d) All members of a profession possess a body of expert knowledge;
e) Professions encourage and facilitate continuing education;
f) Professions monitor professional conduct to maintain integrity and reputation of an industry;
g) Professions are collegial and respect the rights, dignity, and autonomy of others;
h)Professions are recognized oversight bodies;
i)Professions encourage the engagement of members;
Professions evolve over time as the requirements, technology, and standards change. Trust is the key in
investment management and the trust is established by acting with care, due diligence, and judgment for
clients. Investment management profession combined with ethical corporate governance plays a vital role
in the growth and development of the capital market.
LO.d: Describe the need for high ethical standards in investment management.
Investment management profession combined with ethical corporate governance plays a vital role in the growth and
development of the capital market. When market participants have trust in the investment management professionals, it
leads to efficient capital market and smooth functioning which in turn helps in the development of the economy.
LO.f: identify challenges to ethical behavior;

Some of the challenges to ethical conduct include the following:
Overestimating one’s morality: People believe they are more ethical than they actually are. This overconfidence in
themselves can sometimes lead to faulty decision-making.
Situational influences: These are external factors such as cultural, social, and environmental factors that influence one’s
thinking, behavior, and decision-making. Some of the common situational influences are:
• Money and prestige:
• Loyalty to employer, employee, and colleagues:
• Compliance culture:
LO.g: Compare and contrast ethical standards with legal standards.
Legal and ethical conduct is not always the same.
Laws are not always the best mechanism to reduce unethical behavior because:
• Legal standards are often created to address past ethical failings. They do not provide direction for an ever changing and
increasingly complex world.
• Laws are often rule-based.
• Laws will vary across countries.
Ethical conduct goes beyond legal standards.
LO.h: Describe and apply a framework for ethical decision-making.
A framework for ethical decision-making can help people look at and assess a decision from different perspectives. This
enables them to make good decisions, and to limit unplanned consequences.
A general ethical decision-making framework has the following four steps.
1. Identify: Relevant facts, stakeholders and duties owed, ethical principles, conflicts of interest.
2. Consider: Situational influences, additional guidance, alternative actions.
3. Decide and act.
4. Reflect: Was the outcome as anticipated? Why or why not?
Level I - Ethical and Professional Standards
Code of Ethics and

Standards of Professional Conduct
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Contents
• CFA Institute Professional Conduct Program
• Code of Ethics
• Standards of Professional Conduct
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CFA Institute Professional Conduct Program
• All CFA Institute members and candidates enrolled in the CFA Program are required
to comply with the Code and Standards.
• Professional Conduct Program (PCP), in conjunction with the Disciplinary Review

Committee (DRC), is responsible for enforcement of the Code and Standards.
• The DRC is a volunteer committee of CFA charterholders who serve on panels to

review conduct and partner with Professional Conduct staff to establish and review
professional conduct policies.
• The CFA Institute Bylaws and Rules of Procedure for Professional Conduct (Rules of
Procedure) form the basic structure for enforcing the Code and Standards.
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CFA Institute Professional Conduct Program
Inquiry can be prompted by: 1) self-disclosure, 2) written complaints, 3) evidence of misconduct, 4)
report by a CFA exam proctor. CFA Institute may conduct analyses of scores and exam materials after
the exam, as well as monitor online and social media to detect disclosure of confidential exam
information.
Investigation: If the Professional Conduct staff believes a violation of the Code and Standards or
testing policies has occurred, the member or candidate has the opportunity to reject or accept any
charges and the proposed sanctions.
Member/candidate does not accept Member/candidate accepts
Matter referred to DRC which review materials and Sanctions include: public censure,
presentations from Professional Conduct staff and suspension of membership and use of
from the member or candidate. The panel’s task is to Violation the CFA designation, and revocation of
determine whether a violation of the Code and the CFA charter. Candidates may be
Standards or testing policies occurred and, if so, what suspended or prohibited from further
sanction should be imposed. participation in the CFA Program.
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Code of Ethics
Members of CFA Institute (including CFA charterholders) and candidates for the CFA designation
(“Members and Candidates”) must:
• Act with integrity, competence, diligence, and 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.
• Place the integrity of the investment profession and the interests of clients above their own
personal interests.
• Use reasonable care and exercise independent professional judgment when conducting investment
analysis, making investment recommendations, taking investment actions, and engaging in other
professional activities.
• Practice and encourage others to practice in a professional and ethical manner that will reflect
credit on themselves and the profession.
• Promote the integrity and viability of the global capital markets for the ultimate benefit of society.
• Maintain and improve their professional competence and strive to maintain and improve the
competence of other investment professionals.
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Standards of Professional Conduct
I. Professionalism
II. Integrity of Capital Markets
III. Duties to Clients
IV. Duties to Employers
V. Investment Analysis, Recommendations and Actions
VI. Conflicts of Interest
VII. Responsibilities as a CFA Institute Member or CFA Candidate
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I. PROFESSIONALISM
A. Knowledge of the Law
B. Independence and Objectivity
C. Misrepresentation
D. Misconduct
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II. INTEGRITY OF CAPITAL MARKETS
A. Material Nonpublic Information
B. Market Manipulation
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III. DUTIES TO CLIENTS
A. Loyalty, Prudence, and Care
B. Fair Dealing
C. Suitability
D. Performance Presentation
E. Preservation of Confidentiality
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IV. DUTIES TO EMPLOYERS
A. Loyalty
B. Additional Compensation Arrangements
C. Responsibilities of Supervisors
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V. INVESTMENT ANALYSIS,
RECOMMENDATIONS, AND ACTIONS
A. Diligence and Reasonable Basis
B. Communication with Clients and Prospective Clients
C. Record Retention
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VI. CONFLICTS OF INTEREST
A. Disclosure of Conflicts
B. Priority of Transactions
C. Referral Fees
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VII. RESPONSIBILITIES AS A CFA INSTITUTE
MEMBER OR CFA CANDIDATE
A. Conduct as Participants in CFA Institute Programs
B. Reference to CFA Institute, the CFA Designation, and the CFA Program
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LO.a: Describe the structure of the CFA Institute Professional Conduct Program and the process for the
enforcement of the Code and Standards.
The Professional Conduct Program (PCP), in conjunction with the Disciplinary Review Committee (DRC), is
responsible for enforcement of the Code and Standards. The CFA Institute Bylaws and Rules of Procedure for
Professional Conduct form the basic structure for enforcing the Code and Standards. Professional Conduct
inquiries can be prompted by: self-disclosure, written complaints and evidence of misconduct, and report by a
CFA exam proctor.
If the professional conduct staff believes a violation of the Code and Standards has occurred, sanctions are
proposed. If the member/candidate does not accept the charges or the sanctions, the matter is referred to the
DRC, which reviews materials and presentations from professional conduct staff and from the member or
candidate. The DRC makes a final decision on whether there was a violation and if so what sanctions must be
imposed.
LO.b: Identify the six components of the Code of Ethics and the seven Standards of Professional Conduct.
Members of the CFA Institute (including CFA charterholders) and candidates for the CFA designation (“Members
and candidates”) must:
1. Act with integrity, competence, diligence, and 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.
2. Place the integrity of the investment profession and interests of clients above their own personal interests.
3. Use reasonable care and exercise independent professional judgment when conducting investment analysis,
making investment recommendations, taking investment actions, and engaging in other professional
activities.
4. Practice and encourage others to practice in a professional and ethical manner that will reflect credit on
themselves and the profession.
5. Promote the integrity and viability of the global capital markets for the ultimate benefit of society.
6. Maintain and improve their professional competence and strive to maintain and improve the competence of
other investment professionals.
Guidance for Standards I-VII
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General Advice
• Read from the curriculum
• CFA Institute Online Course
• Standard
 Guidance
 Recommended Procedures for Compliance
 Application of the Standard
• “Listen” to the lectures
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I. PROFESSIONALISM
D. Misconduct
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I(A) Knowledge of the Law
Members and Candidates must understand and comply with all applicable laws, rules, and regulations of any
government, regulatory organization, licensing agency, or professional association governing their professional
activities. In the event of conflict, Members and Candidates must comply with the more strict law, rule, or regulation.
Members and Candidates must not knowingly participate or assist in and must dissociate from any violation of such
laws, rules, or regulations.
Guidance Recommended Procedures for Compliance
• Relationship between the Code and • Stay informed

Standards and Applicable Law • Review procedures
• Maintain current files
• Investment Products and Applicable Laws • Legal counsel
• Dissociation
• Participation in or Association with • Advise/encourage your firm to:
Violations by Others • Develop and/or adopt a code of ethics
• Provide information on applicable laws
• Establish procedures for reporting violations
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I(B) 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.
• Buy-Side Clients • Protect the integrity of opinions

• Investment Banking Relationships • Create a restricted list
• Public Companies • Restrict special cost arrangements
• Issuer-Paid Research • Limit gifts
• Travel Funding • Restrict investments
• Credit Rating Agency Opinions • Review procedures
• Influence during the Manager • Independence policy
Selection/Procurement Process • Appointed officer
• Brokerage Houses
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I(C) Misrepresentation
Members and Candidates must not knowingly make any misrepresentations relating to investment
analysis, recommendations, actions, or other professional activities.
A misrepresentation is any untrue statement or omission of fact or any statement that is otherwise
false or misleading.
Impact on Investment Practice • Factual Presentations

Performance Reporting • Qualification Summary
Social Media • Verify Outside Information
Omissions • Maintain Webpages
Plagiarism • Plagiarism Policy
Work Completed for Employer • Maintain copies
• Attribute quotations
• Attribute summaries
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I(D) 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.
Guidance
Recommended Procedures for Compliance
Any act that involves lying, cheating, stealing,
or other dishonest conduct is a violation of this • Code of ethics
standard if the offense reflects adversely on a • List of violations
member’s or candidate’s professional activities. • Employee references
Although CFA Institute discourages any sort of
unethical behavior by members and
candidates, the Code and Standards are
primarily aimed at conduct and actions related
to a member’s or candidate’s professional life.
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II(A) 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.

• Achieve Public Dissemination
• Adopt Compliance Procedures
Guidance • Adopt Disclosure Procedures
• Issue Press Releases
• What Is “Material” Information? • Firewall Elements
• What Constitutes “Nonpublic” Information? • Appropriate Interdepartmental Communications
• Mosaic Theory • Physical Separation of Departments
• Social Media • Prevention of Personnel Overlap
• Using Industry Experts • A Reporting System
• Investment Research Reports • Personal Trading Limitations
• Record Maintenance
• Proprietary Trading Procedures
• Communication to All Employees
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II(B) 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.
Guidance
• Information-Based Manipulation
• Transaction-Based Manipulation
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B. Fair Dealing
C. Suitability
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III(A) Loyalty, Prudence, and Care
Members and Candidates have a duty of loyalty to their clients and must act with reasonable care and exercise
prudent judgment. Members and Candidates must act for the benefit of their clients and place their clients’ interests
before their employer’s or their own interests.
• Understanding the Application of Loyalty, • Regular Account Information

Prudence, and Care • Client Approval
• Identifying the Actual Investment Client • Firm Policies
• Developing the Client’s Portfolio • Follow all applicable rules and laws
• Soft Commission Policies • Establish the investment objectives of the client
• Consider all the information when taking actions
• Proxy Voting Policies
• Diversify
• Carry out regular reviews
• Deal fairly with all clients with respect to
investment actions
• Disclose conflicts of interest
• Disclose compensation arrangements
• Maintain confidentiality
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III(B) Fair Dealing
Members and Candidates must deal fairly and objectively with all clients when providing investment analysis, making
investment recommendations, taking investment action, or engaging in other professional activities.
• Investment Recommendations • Develop Firm Policies

• Limit the number of people involved
• Investment Action • Shorten the time frame between decision and
dissemination
• Publish guidelines for pre-dissemination behavior
• Simultaneous dissemination
• Maintain a list of clients and their holdings
• Develop and document trade allocation
procedures
• Disclose Trade Allocation Procedures
• Establish Systematic Account Review
• Disclose Levels of Service
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III(C) Suitability
1. When Members and Candidates are in an advisory relationship with a client, they must:
a. Make a reasonable inquiry into a client’s or prospective client’s 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 investments in the context of the client’s total portfolio.
2. 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 only investment actions that are consistent with the
stated objectives and constraints of the portfolio.
Guidance Guidance (Cont…)

• Developing an Investment Policy • The Need for Diversification
• Understanding the Client’s Risk Profile • Addressing Unsolicited Trading Requests
• Updating an Investment Policy • Managing to an Index or Mandate
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III(C) Suitability
1. When Members and Candidates are in an advisory relationship with a client, they must:
a. Make a reasonable inquiry into a client’s or prospective client’s 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 investments in the context of the client’s total portfolio.
2. 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 only investment actions that are consistent with the
stated objectives and constraints of the portfolio.

• Investment Policy Statement
• Regular Updates
• Suitability Test Policies
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III(D) Performance Presentation
When communicating investment performance information, Members and Candidates must make reasonable efforts
to ensure that it is fair, accurate, and complete.
• Provide credible performance • Apply the GIPS Standards

information to clients and • Compliance without Applying GIPS Standards
prospective clients • consider the knowledge and sophistication of the audience
• present the performance of the weighted composite of similar
• Avoid misstating performance or
portfolios rather than using a single representative account
misleading clients • include terminated accounts as part of performance history
• If the presentation is brief make • include disclosures that fully explain the performance results
available to clients and prospects, on being reported
request, detailed supporting • maintain the data and records used to calculate the
information performance being presented
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III(E) Preservation of Confidentiality
Members and Candidates must keep information about current, former, and prospective clients confidential unless:
1. The information concerns illegal activities on the part of the client;
2. Disclosure is required by law; or
3. The client or prospective client permits disclosure of the information.
• Status of Client • The simplest, most conservative, and most effective way to comply
with Standard III(E) is to avoid disclosing any information received
• Compliance with Laws
from a client except to authorized fellow employees who are also
• Electronic Information and Security working for the client.
• Professional Conduct Investigations
by CFA Institute
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A. Loyalty
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IV(A) Loyalty
In matters related to their employment, Members and Candidates 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.
• Employer Responsibilities • Competition Policy

• Independent Practice • Termination Policy
• Leaving an Employer • Incident-Reporting Procedures
• Use of Social Media • Employee Classification
• Whistleblowing
• Nature of Employment
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IV(B) 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.
Obtain permission from before accepting Make an immediate written report to supervisor and
compensation that might create a conflict. compliance officer specifying any compensation you
propose to receive.
“Written consent” includes any form of
communication that can be documented. The details of the report should be confirmed by the
party offering the additional compensation,
Discuss possible limitations to their abilities to including performance incentives offered by clients.
provide services that may be competitive with
your employer during the negotiation and hiring This written report should state the terms of any
process. agreement.
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IV(C) Responsibilities of Supervisors
Members and Candidates must make reasonable efforts to ensure that anyone subject to their supervision or
authority complies with applicable laws, rules, regulations, and the Code and Standards.
• System for Supervision • Codes of Ethics or Compliance Procedures
• Supervision Includes Detection • Adequate Compliance Procedures
• Implementation of Compliance Education and

Training
• Establish an Appropriate Incentive Structure
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C. Record Retention
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V(A) Diligence and Reasonable Basis
Members and Candidates must:
1. Exercise diligence, independence, and thoroughness in analyzing investments, making investment
recommendations, and taking investment actions.
2. Have a reasonable and adequate basis, supported by appropriate research and investigation, for any investment
analysis, recommendation, or action.
• Defining Diligence and Reasonable Basis • Establish a policy that research reports must have
• Using Secondary or Third-Party Research reasonable and adequate basis
• Using Quantitatively Oriented Research • Written guidance
• Developing Quantitatively Oriented • Criteria for assessing the quality of research
Techniques • Detailed, written guidance for testing of all computer-
• Selecting External Advisers and Subadvisers based models
• Group Research and Decision Making • Measurable criteria for assessing outside providers
• Criteria for evaluating for evaluating external advisers
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V(B) Communication with Clients and Prospective Clients
Members and Candidates must:
1. Disclose to clients and prospective clients the basic format and general principles of the investment processes they
use to analyze investments, select securities, and construct portfolios and must promptly disclose any changes that
might materially affect those processes.
2. Disclose to clients and prospective clients significant limitations and risks associated with the investment process.
3. 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.
4. Distinguish between fact and opinion in the presentation of investment analyses and recommendations.

• Informing Clients of the Investment Process Depends heavily on case-by-case review rather than
• Different Forms of Communication a specific checklist
• Identifying Risk and Limitations
• Report Presentation
• Distinction between Facts and Opinions in
Reports
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V(C) Record Retention
Members and Candidates must develop and maintain appropriate records to support their investment analyses,
recommendations, actions, and other investment-related communications with clients and prospective clients.
The responsibility to maintain records that support

• New Media Records
investment action generally falls with the firm rather
than individuals.
• Records Are Property of the Firm
You should archive research notes and other
• Local Requirements
documents that support investment-related
communications
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C. Referral Fees
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VI(A) Disclosure of Conflicts
Members and Candidates must make full and fair disclosure of all matters that could reasonably be expected to impair
their independence and objectivity or interfere with respective duties to their clients, prospective clients, and
employer. Members and Candidates must ensure that such disclosures are prominent, are delivered in plain language,
and communicate the relevant information effectively.

Disclose special compensation arrangements with
• Disclosure of Conflicts to Employers the employer that might conflict with client
interests, such as bonuses based on short-term
• Disclosure to Clients performance criteria, commissions, incentive fees,
• Cross-Departmental Conflicts performance fees, and referral fees.
• Conflicts with Stock Ownership If firm does not permit such disclosure you should
• Conflicts as a Director document the request and may consider dissociating
from the activity.
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VI(B) Priority of Transactions
Investment transactions for clients and employers must have priority over investment transactions in which a Member
or Candidate is the beneficial owner.
• Limited participation in equity IPOs

• Avoiding Potential Conflicts
• Restrictions on private placements
• Personal Trading Secondary to Trading for • Establish blackout/restricted periods
Clients • Reporting requirements
• Standards for Nonpublic Information • Disclosure of holdings in which the
• Impact on All Accounts with Beneficial employee has a beneficial interest
Ownership • Providing duplicate confirmations of
transactions
• Preclearance procedures
• Disclosure of policies
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VI(C) Referral Fees
Members and Candidates must disclose to their employer, clients, and prospective clients, as appropriate, any
compensation, consideration, or benefit received from or paid to others for the recommendation of products or
services.
Advise the client or prospective client before Encourage your employer to develop procedures
entry into any formal agreement related to referral fees
Disclose the nature of the consideration or Employers should have investment professionals
benefit provide to the clients notification of approved
referral fee programs and provide the employer
regular (at least quarterly) updates on the amount
and nature of compensation received
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VII(A) Conduct as Participants in CFA Programs
Members and Candidates 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 CFA Institute programs.
Guidance
• Confidential Program Information

• Additional CFA Program Restrictions
• Expressing an Opinion
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VII(B) Reference to CFA Institute, the CFA
Designation, and the CFA Program
When referring to CFA Institute, CFA Institute membership, the CFA designation, or candidacy in the CFA Program,
Members and Candidates must not misrepresent or exaggerate the meaning or implications of membership in CFA
Institute, holding the CFA designation, or candidacy in the CFA Program.
Guidance
• CFA Institute Membership

• Using the CFA Designation
• Referring to Candidacy in the CFA Program
• Proper Usage of the CFA Marks
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Conclusion
I. Professionalism
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LO.a: Demonstrate the application of the Code of Ethics and Standards of Professional Conduct to
situations involving issues of professional integrity.
Read the “Application of the Standard” segment for each standard in the curriculum.
LO.b: Identify conduct that conforms to the Code and Standards and conduct that violates the Code and
Standards.
LO.c: Recommend practices and procedures designed to prevent violations of the Code of Ethics and
Standards of Professional Conduct.
1.A. Knowledge of the law Understand applicable law and rules. Comply with the more strict law.
Do not knowingly participate /disassociate from such activity.
1.B. Independence and Use reasonable care and judgment. Maintain independence and objectivity. Do not
objectivity offer/solicit gifts.
1.C. Misrepresentation Do not misrepresent facts/performance reports. Avoid plagiarism.
Do not omit facts.
1.D. Misconduct Aimed at professional life; acts like lying, cheating, and stealing affect professional
reputation/integrity.
2.A. Material Nonpublic Do not act or cause others to act on material nonpublic information.
Information
Achieve public dissemination. Not a violation: Mosaic Theory = material public information +
nonmaterial nonpublic information.
2.B. Market Manipulation Information-based manipulation: Blogs, other media to inflate stock prices. Transaction-based
manipulation: Make a security to appear more liquid.
3.A. Loyalty, Prudence Use reasonable care and exercise prudent judgment. Place client’s interests before your
and Care employer or your interests. Soft dollars should benefit the client. Strive for best execution.
3.B. Fair Dealing Deal fairly and objectively with all clients. Note: it does not state equally because of different
levels of service. Fee-paying family member should be treated no different than any other client.
Disseminate reports without being partial. Same time is not possible because of different modes
of communication.
3.C. Suitability Develop IPS. Understand client’s risk profile. Update IPS periodically.
3.D. Performance
Do not misstate performance. Ensure performance information is fair, accurate and complete.
Presentation
3.E. Preservation of Maintain confidentiality of current, former and prospective clients unless: a) law mandates
Confidentiality disclosure b) illegal activities by client c) client permits disclosure.
4.A. Loyalty Avoid front running. Get written consent from employer before starting an independent
practice. You cannot take proprietary information, client lists of the previous employer.
4.B. Additional Compensation
Do not accept gifts, benefits, or compensation that will create a conflict of interest.
Arrangements
4.C. Responsibilities of Ensure anyone under your supervision complies with applicable laws, rules, regulations, and
Supervisors Code and Standards.
5.A. Diligence and Reasonable Exercise diligence, independence, and thoroughness in analyzing investments and making
Basis recommendations. Be diligent and have a reasonable basis, even when using secondary or
third-party research.
5.B. Communication with Clients Disclose to clients the investment process. Identify risks and limitations. Distinguish
and Prospective Clients between fact and opinion.
5.C. Record Retention Maintain records that support your analysis and research. Code and Standards recommend
storing records for at least seven years.
6.A. Disclosure of Conflicts Make full and fair disclosure of matters that may impair independence and objectivity.
Disclosure to be made in plain language. Ex of conflicts: stock ownership, director, cross
departmental (IB/research) conflicts.
6.B. Priority of Transactions Any account from which you benefit makes you the beneficial owner. Personal trading
secondary to trading for clients. Establish blackout periods to prevent front running.
Limit participation in IPO.
6.C. Referral Fees Disclose referral fee to clients, prospective clients, and employers.
7.A. Conduct as participants in
CFA Institute Programs Keep questions, exam information confidential. Comply with program restriction. You
may express an opinion on the difficulty of exam, curriculum etc.
7.B. Reference to CFA Institute, Pay annual dues and fill professional conduct statement to claim membership.
the CFA designation, and the References to partial designation not allowed (CFA, Level 1). CFA mark can be used if
CFA program you’ve cleared all three levels and fulfilled the membership requirements.
Standards.
Do not omit facts.
Information
of communication.
3.D. Performance
Presentation
Arrangements
Standards.
Do not omit facts.
Information
of communication.
3.D. Performance
Presentation
Arrangements
Standards.
Do not omit facts.
Information
of communication.
3.D. Performance
Presentation
Arrangements
Standards.
Do not omit facts.
Information
of communication.
3.D. Performance
Presentation
Arrangements
Standards.
Do not omit facts.
Information
of communication.
3.D. Performance
Presentation
Arrangements
Standards.
Do not omit facts.
Information
of communication.
3.D. Performance
Presentation
Arrangements
Standards.
Do not omit facts.
Information
of communication.
3.D. Performance
Presentation
Arrangements
Standards.
Do not omit facts.
Information
of communication.
3.D. Performance
Presentation
Arrangements
Standards.
Do not omit facts.
Information
of communication.
3.D. Performance
Presentation
Arrangements
Introduction to the Global Investment

Performance Standards (GIPS)
1
Introduction
https://www.cfainstitute.org/ethics-standards/codes/gips-standards/
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Contents
I. Why Were the GIPS Standards Created?

I. Who Can Claim Compliance?
II. Who Benefits from Compliance?
II. Composites
III. Fundamentals of Compliance
IV. Verification
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I. Why Were the GIPS Standards Created?
The GIPS standards:
• are a practitioner-driven set of ethical principles that establish a standardized, industry-wide approach for
investment firms to follow in calculating and presenting their historical investment results to prospective clients
• ensure fair representation and full disclosure of investment performance
• lead investment management firms to avoid misrepresentations of performance and to communicate all relevant
information that prospective clients should know in order to evaluate past results
• GIPS standards were created to make it easier to compare different investment management firms
• Without a standard, different firms would select the method which would make them look good
• Common misleading practices:
 Representative accounts
 Survivorship bias
 Varying time periods
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Objectives of the GIPS standards
• Promote investor interests and instill investor confidence.

• Ensure accurate and consistent data.
• Obtain worldwide acceptance of a single standard for calculating and presenting
performance.
• Promote fair, global competition among investment firms.
• Promote industry self-regulation on a global basis.
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I.I Who Can Claim Compliance?
Who can claim compliance
• Firms that actually manage assets can claim compliance
• Consultants that actually manage assets can claim compliance
• Asset owners can claim compliance in the same way as firms if
they compete for business
• Asset owners who do not compete for business can choose to
comply with GIPS standards for asset owners
• Software firms cannot claim compliance
How to claim compliance

• Compliance is a firm-wide process that cannot be achieved on a
single product or composite.
• Compliance is ‘all or none’
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I.II Who Benefits from Compliance?
Asset management firms
• Assurance for prospective clients
• Participation in competitive bids
• Strengthening of internal controls
Investors (prospective client)

• Confidence in the integrity of performance presentations of a GIPS-compliant firm
• Compare performance presentation from different investment management firms
Asset owners
• Performance information to oversight bodies
• Evaluate performance of funds under management
• If external managers are also being used it helpful if the asset owner and external mangers use the
same performance reporting standards
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GIPS® Standards for Firms
https://www.cfainstitute.org/en/ethics-standards/codes/gips-standards/firms
“Please read the Preface and the Introduction to the Global Investment
Performance
Standards for Firms for additional insight into the history, purpose, and key
concepts
of the GIPS standards.”
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Key concepts of the GIPS standards that apply to firms
• The GIPS standards are ethical standards for investment performance presentation to ensure
fair representation and full disclosure of investment performance.
• Meeting the objectives of fair representation and full disclosure is likely to require more than
simply adhering to the minimum requirements of the GIPS standards. Firms should also
adhere to the recommendations to achieve best practice in the calculation and presentation
of performance.
• Firms must comply with all applicable requirements of the GIPS standards, including any
Guidance Statements, interpretations, and Questions & Answers (Q&As) published by CFA
Institute and the GIPS standards governing bodies.
• The GIPS standards do not address every aspect of performance measurement and will
continue to evolve over time to address additional areas of investment performance.
• The GIPS standards require firms to create and maintain composites for all strategies for which
the firm manages segregated accounts or markets to segregated accounts.
• The GIPS standards rely on the integrity of input data, the quality of which is critical to
creating accurate performance presentations. The underlying valuations of portfolio holdings
drive performance. It is essential for these and other inputs to be accurate. The GIPS
standards require firms to adhere to certain calculation methodologies to allow for
comparability across firms.
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II. Composites
• A composite is an aggregation of one or more portfolios managed
according to a similar investment mandate, objective, or strategy.
• Composites are designed to prevent firms from cherry-picking.
• A composite must include all actual, fee-paying, discretionary portfolios

managed in accordance with the same investment mandate, objective, or
strategy.
• The determination of which portfolios to include in the composite should

be done according to pre-established criteria (i.e., on an ex-ante basis), not
after the fact.
• A claim of compliance requires that all fee-paying discretionary accounts

managed by the firm be included in at least one composite.
Please read Section 3.A. of the Global Investment

Performance Standards for Firms on composites.
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III. Fundamentals of Compliance
Definition of the firm: adopt the broadest, most meaningful definition of the firm. The
scope of this definition should include all geographical (country, regional, etc.) offices
operating under the same brand name, regardless of the actual name of the individual
investment management company.
Definition of discretion: establish criteria to judge which portfolios must be included in a

composite and is based on the firm’s ability to implement its investment strategies.
If client-imposed restrictions interfere with the implementation of intended strategy 
Portfolio is non-discretionary and must not be included in a firm’s composite.
Section 1 of the 2020 GIPS Standards for Firms addresses the fundamentals of compliance in more
detail.
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And a lot more…
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IV. Verification
• Firms that claim compliance with the GIPS standards are responsible for their claim of compliance
and for maintaining that compliance.
• Once a firm claims compliance with the Standards, they may voluntarily hire an independent third
party to perform a verification.
• Verification provides assurance on whether the firm’s policies and procedures related to composite
and pooled fund maintenance, as well as the calculation, presentation, and distribution of
performance, have been designed in compliance with the GIPS standards and have been
implemented on a firm-wide basis.
• Verification is performed with respect to an entire firm, not on specific composites.
• Verification must be performed by an independent third party. A firm cannot perform its own
verification.
• Third-party verification brings additional credibility to a firm’s claim of compliance.
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Summary
• Why GIPS standards were created
• Parties that GIPS standards apply to
• Beneficiaries of GIPS standards
• Purpose of composites
• Fundamentals of compliance
 Definition of firm
 Definition of discretion
• Independent verification
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LO.a: Explain why the GIPS standards were created, what parties the GIPS standards apply to, and who is
benefitted by the standards.
The GIPS standards were created to avoid misrepresentation of performance and to make it easier to compare
different investment management firms.
Any firm that actually manages assets can claim compliance once it has satisfied all requirements of the
standards. Asset owners can make a claim of compliance if they compete for business. If they do not compete for
business but report their performance to an oversight body, they may choose to comply with the GIPS standards
for asset owners.
The GIPS standards benefit:
• asset managers and their prospective clients
• asset owners and their oversight bodies
LO.b: Describe the key concepts of the GIPS standards for firms.
Firms that compete for business must comply with the GIPS Standards for firms. Compliance is a firm-wide
process that cannot be achieved on a single product or composite. A firm has only two options with regard to
compliance with the GIPS standards:
• Fully comply with all requirements of the GIPS standards and claim compliance through the use of the GIPS
Compliance Statement; or
• Not comply with all requirements of the GIPS standards and not claim compliance with, or make any
reference to, the GIPS standards.
Complying with the GIPS standards is voluntary. It is not typically required by legal or regulatory authorities.
LO.c: Explain the purpose of composites in performance reporting.
A composite is an aggregation of one or more portfolios managed according to a similar investment mandate,
objective, or strategy. Composites prevent firms from cherry picking only the best performing accounts while
reporting performance. When used in performance reporting, composites help clients evaluate how well a
company has performed with different investment styles.
LO.d: Describe the fundamentals of compliance, including the recommendations of the GIPS Standards
with respect to the definition of the firm and the firm’s definition of discretion.
Several core principles create the foundation for the GIPS standards, including properly defining the firm,
providing compliant presentations to all prospective clients, adhering to applicable laws and regulations, and
ensuring that information presented is not false or misleading.
Definition of the firm: The GIPS standards state “The firm should adopt the broadest, most meaningful
definition of the firm. The scope of this definition should include all geographical (country, regional, etc.) offices
operating under the same brand name, regardless of the actual name of the individual investment management
company.”
Definition of discretion: The firm’s definition of discretion establishes criteria to judge which portfolios must be
included in a composite and is based on the firm’s ability to implement its investment strategy.
LO.e: Describe the concept of independent verification.
Verification is a process by which an independent verification firm (verifier) conducts testing of a firm on a
firm-wide basis in accordance with the required verification procedures of the GIPS standards. Verification
provides assurance on whether the firm’s policies and procedures related to composite and pooled fund
maintenance, as well as the calculation, presentation, and distribution of performance, have been designed in
compliance with the GIPS standards and have been implemented on a firm-wide basis.
Verification is performed with respect to an entire firm. It is not done on composites, or individual
departments.
Verification must be performed by an independent third-party. A firm cannot perform its own verification.
Ethics Application
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1
Tips on this ‘reading’
• What is this?
 Organized question bank rather than a reading
 Detailed explanations
• How to deal with it?

 Treat it like a question bank (know your standards before you start)
 IFT Study Notes will help
• How does this video lecture add value?
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I. PROFESSIONALISM
D. Misconduct
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I(A) Knowledge of the Law (1/3)
Mandracken
SBS Bank (SBS) acts as a custody bank for a wide range of clients. It charges its clients an asset-based fee for the services
it provides. According to the bank’s client agreement, custody clients agree to reimburse the bank for out-of-pocket
expenses for items paid by SBS on their behalf. Most of these expenses are for messages sent via SWIFT, a secure
messaging network used by banks and other financial institutions.
While SBS charges a fixed rate for SWIFT messages, the rate is higher than the actual cost of providing this service.
Mandracken, CFA, a vice president at SBS notices this discrepancy and brings it to the attention of his supervisor.
Mandracken’s supervisor tells him to reduce the SWIFT fee rate for new clients and to revisit the rate for existing clients
when their contracts are renewed.
To meet his obligations under the CFA Institute Code and Standards, Mandracken should:
A. implement the corrective procedures as directed by his supervisor.
B. implement the corrective procedures as directed by his supervisor but report his objections to the bank’s board of
directors.
C. refuse to participate in any client interactions using the fee schedule until the bank revises the SWIFT rate to reflect
the actual cost of the service.
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Pellie
Pellie, CFA, is CEO of Kwaume Investment Group (KIG), an investment adviser that is a wholly owned subsidiary of
Kwaume Bank. A longtime bank customer that Pellie knows personally recently opened an investment account at KIG
with a stated investment objective of earning income. Over the next year, the client made a few investments, but a
majority of activity in the account involved several hundred bank transactions to and from individuals and entities
located in bank secrecy havens and countries identified by the government as at risk for money-laundering activity.
Given the client’s longstanding relationship, Pellie assumes the transactions have a legitimate business purpose and
accepts vague descriptions, such as “for services provided,” “consulting fees,” and “commissions. He also approves the
daily anti-money-laundering (AML) reports without further inquiry.
Pellie’s actions are:
A. a violation of the CFA Institute Code and Standards.
B. appropriate because Pellie is protecting the confidentiality of client information.
C. appropriate because Pellie can rely on the account’s clearing firm to report suspicious activity for the account.
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Mwangi
Mwangi, CFA, works for a firm that sells insurance products. Three of Mwangi’s clients purchase one type of product
(Class A). But they later change their minds and ask to switch to another, lower priced product (Class B). For this switch
to happen, the law requires that her clients sign new sale and purchase documents for the Class B product.
When the Class B documents are ready, Mwangi tries to reach her clients for their signatures but is unable to do so.
Because of the missing signatures, Mwangi’s manager threatens to cancel the exchange. To prevent this from happening,
Mwangi signs the necessary documents on behalf of her clients.
Mwangi’s actions are:
B. acceptable because her clients had already given their permission for the exchange to be made.
C. acceptable if the clients gave Mwangi explicit permission to sign the documents on their behalf.
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I(B) Independence and Objectivity
Myers
Myers, CFA, is a partner at Corboba, a hedge fund that focuses on ESG investments. To support upcoming public office
elections, Myers wants to personally donate $10,000 to one of the candidates, DeFrietas. Myers is a passionate climate
advocate and supports DeFrietas’s backing of environmental policies to reduce air pollution and mitigate the effects of
climate change.
Myers believes his political contribution may also be beneficial for Corboba because DeFrietas is running for a position
that can influence which hedge funds receive investments from the state’s pension plans.
Myers’s best course of action is to
A. refrain from donating to DeFrietas.
B. donate to DeFrietas because he is using personal funds in an amount that is insignificant relative to the size of the
hedge fund.
C. donate to DeFrietas because he will be supporting a candidate whose environmental policies align with his beliefs.
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I(C) Misrepresentation (1/3)
Lee
Lee, CFA, is a financial planner for AKC. AKC compensates its planners based on the number of AKC products they sell.
Lee advises a married couple to transfer their retirement funds totaling $125,000 into a single AKC investment fund that
follows a large-cap equity strategy. Lee discloses to the couple that they will have to pay a penalty totaling $30,000 for
closing their retirement accounts but claims they will make up the loss with better investment returns from the AKC
product.
Lee’s actions are:
A. acceptable if the AKC product is suitable for the couple.
B. a violation of the CFA Institute Code and Standards because she is promising a specific rate of return.
C. acceptable because she fully discloses the negative consequences of closing their retirement accounts.
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Andersen
Andersen, CFA, is the CEO of an asset management firm. He makes an in-person proposal to manage the investments of a
large pension plan. In response to a request from the pension plan, Andersen provides a list of the key personnel who
would manage the account. While waiting for the outcome of the evaluation, one of the key personnel that Andersen
identified and who was part of the team that made the in-person presentation leaves the firm.
Andersen should:
A. do nothing because the pension plan is hiring the firm, not an individual.
B. immediately inform the pension plan that one of the key personnel has left the firm.
C. hire a competent replacement for the person who left and then inform the pension plan of the change.
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Brodeur
Brodeur, CFA, is CEO of LeTour, a global company that makes electric cars. Recent media reports mention that the
company is having difficulty in producing and delivering its cars to buyers. In response to these reports, Brodeur posts
on his social media that the company is “considering taking LeTour private at $420 a share. Funding is secure.”
Previously, Brodeur had met with a large SWF that expressed interest in investing in the company and taking it private.
But they had not reached any agreement or determined a share purchase price.
After the post, LeTour’s stock price increased more than 6% and closed at $380 per share. When asked about the
specific stock price in the post, Brodeur acknowledged that he had not discussed pricing with any potential investor but
chose the price as a joke.
Brodeur’s actions are:
A. inappropriate because the post was a misrepresentation of the facts.
B. inappropriate because not all investors use social media, so Brodeur is selectively disclosing information and
putting some investors at a disadvantage.
C. appropriate because his post said only that he was “considering” taking the company private and thus contained
only speculative, nonmaterial information.
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I(D) Misconduct (1/2)
Hanse
Hanse, CFA, is a portfolio manager employed by a global investment bank. She manages an ESG investment fund. In her
free time, Hanse participates in civil disobedience demonstrations to protest climate breakdown, biodiversity loss, and
ecological collapse. At several demonstrations held in the financial district, Hanse is arrested on charges of unlawful
assembly, obstructing public transit, and disorderly conduct. She is ultimately convicted of several minor criminal
offenses. Hanse has signed a standard employment contract with the bank that allows it to terminate any employee who
is convicted of a criminal offense.
Under the CFA Institute Code and Standards, Hanse’s actions:
A. do not violate the Code and Standards.
B. violate the Code and Standards because she has violated her employment contract with the bank.
C. violate the Code and Standards because she is arrested for misconduct in the financial district.
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I(D) Misconduct (2/2)
Mang
Mang, CFA, is an investment adviser for a regional bank that serves many high-net-worth individuals. As per the bank’s
policies if an advisor forgets to send an order to the trading desk, a 30 days error correction period is permitted. To
rectify the error, the adviser is allowed to buy or sell a security at the current market price. The price differential is
charged to the adviser personally through an internal error account.
Mang frequently uses the trade error correction policy to benefit clients who are unhappy with their account’s
performance. He identifies a security whose price has increased in the past 30 days and tells the trade desk he
mistakenly failed to buy that particular security. Once the request is approved, the trade desk purchases the security and
charges the price differential to Mang personally through the error account. Shortly after that trade, Mang sells the
security.
Mang’s actions:
A. violate the CFA Institute Code and Standards.
B. are appropriate because Mang is acting for the benefit of the client.
C. are appropriate because the bank is not harmed by Mang’s actions.
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II(A) Material Nonpublic Information (1/2)
Khatri
Khatri, a candidate in the CFA Program, plays on a local cricket team. Patel an attorney and Khatri’s brother-in-law, and
Ahuja, an owner of a software development company called ZeroPower (ZP) also play on the same team. Patel handles
the legal work for ZP.
Recently, a large global information technology company (GIT) made an offer to buy ZP at a substantial premium over
the company’s current share price. Patel is working with lawyers from GIT to assist in their due diligence.
One weekend, between matches, Khatri overhears Patel speaking with representatives of GIT on his cell phone.
Although mention of a ZP acquisition is not made, Khatri hears Patel repeatedly reference the name “GIT”. Khatri also
sees Patel and Ahuja huddled in private conversation several times over the course of the weekend. Based on this he
guesses that ZP is being acquired. On Monday, Khatri purchases 5,000 shares of ZP. One week later, ZP announces its
acquisition by GIT and its share price increases 30%.
Khatri’s actions are:
B. acceptable because Khatri’s investment was based on his own speculation.
C. acceptable because Khatri received the information in a public environment.
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II(A) Material Nonpublic Information (2/2)
Kwame
Kwame, CFA, is the chief financial officer of PH3D, a biotech firm that researches, develops, and commercializes
pharmaceutical drugs. PH3D submits a drug application to the government regulator for a promising new drug.
When the meeting between the regulator and PH3D takes place, PH3D presents unpublished preliminary test data with
favorable indicators for the drug. The regulator reacts positively and gives PH3D provisional regulatory approval,
contingent on further studies.
Later, some research analysts covering PH3D ask Kwame about the meeting. Kwame responds by email, mentioning that
the meeting with the regulator was “very positive and productive” and that the company was “pleasantly surprised” by
the regulator’s reaction. Kwame does not share the favorable preliminary test data. After Kwame’s emails to the analysts,
the company’s stock price increases 19%.
Kwame’s actions:
B. are appropriate because he does not share the unpublished preliminary test data with the analysts and restricts his
comments to the general tenor of the meeting.
C. are appropriate because he responds to questions from research analysts covering the company.
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II(B) Market Manipulation
Abbha
Abbha, CFA, is a securities contractor. She is helping Superior Energy (SE) list its shares on the Regional Security
Exchange (RSX). RSX’s current listing rule states that entities seeking admission must meet a “minimum spread
requirement” of at least 300 shareholders with a minimum holding value to qualify for listing.
SE already has some shareholders. Abbha arranges an additional 31 shareholders which enables SE to meet the
minimum spread requirement of 300 shareholders in its listing application. However, none of the 31 shareholders are
actual buyers of SE securities. Abbha provides false names and addresses for these shareholders.
Eventually, the SE listing is successful, and the stock is admitted to the official list of the RSX. Over time, SE’s share price
steadily increases, the company attracts many new investors and the original early investors get an excellent return on
their investment.
Abbha’s actions:
B. are acceptable because SE proved to be a strong company with excellent performance.
C. are acceptable because no investors were harmed by the technical violation of RSX rules.
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B. Fair Dealing
C. Suitability
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III(A) Loyalty, Prudence, and Care (1/3)
Maste
Maste, CFA, is the sole director of Dov Services (Dov), a firm that sells financial products and advice. Maste asks Dov’s
authorized representatives to incorporate the Dov Client Protection Policy into their contracts with clients.
The protection policy’s terms (1) excuse Dov and its authorized representatives from various liabilities arising from
their failure to act in a client’s best interest, (2) relieve Dov and its authorized representatives of their duty to conduct
suitability analyses of clients and investments, and (3) lead clients to believe that they cannot make claims against Dov
or its representatives for violating securities law.
Maste’s actions:
B. are appropriate because Dov and Maste fully disclose the terms of the Dov Client Protection Policy to clients.
C. are appropriate because Dov and Maste are free to negotiate the terms of advisory agreements with clients.
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Gaini
Gaini, CFA, is a commodities trader with a number of retail clients. Laube, opens a self-directed foreign exchange retail account
for which Gaini does not advise on any trades. Laube signs Gaini’s standard customer agreement which authorizes Gaini, at his
discretion, “to liquidate, without notice, any or all open positions in an account with insufficient margin.”
Laube initially purchases two currency contracts and sets her margin requirement to $4,000. Laube then places two additional
“pending limit” orders that will execute if the contract trading prices reach a specified level. Shortly after placing the orders,
Laube goes on an extended vacation. While she is away, execution on the first limit order occurs, and the margin requirement
increases to $6,000. Then, the next limit price is reached, and the second order executes, increasing the margin requirement to
$8,000. Post trades, while Laube is still on vacation, her account balance drops to $6,900. Without notice, Gaini liquidates all
positions in Laube’s account, realizing a loss of $37,000 from the liquidation.
Gaini’s actions:
A. are appropriate because Gaini followed the policy and procedures set forth in Laube’s client agreement.
B. violate the CFA Institute Code and Standards because Gaini has a duty to act in the best interest of Laube by protecting her
financial position.
C. are inappropriate because Gaini could have met the margin requirement by liquidating only one foreign exchange contract
position.
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Braung
Braung, CFA is hired as a financial adviser by a regional government entity. Braung helps the entity issue bonds, and in
connection with the bond issues, he makes a number of trips to New York City to meet with ratings agencies. The trips are
usually planned for a Monday or Friday because the costs for weekend travel are lower. Braung’s wife accompanies him on the
trips, and they normally spend the weekend in New York City to enjoy sporting events, theater performances, and museums.
Braung also frequently makes a number of train and hotel changes after a trip is booked to accommodate meetings with other
clients.
Braung submits his travel expenses to his supervisor, who deducts costs she believes are unrelated to the business purpose of
the trip and submits the bills to the municipality for reimbursement.
Which of the following expenses can most likely be billed to the government entity issuing the bonds?
A. Braung’s accommodation and meal expenses for the weekend days because the travel rates are less expensive over a
weekend
B. Tickets to the sporting and theater events, as long as they do not exceed a reasonable amount for business entertainment
C. Flight and hotel change fees that result from the regular course of Braung’s business activities
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III(B) Fair Dealing
Scherzer
Scherzer, CFA, is the head of research at a large investment management firm. She publishes monthly “Recommendation
Update Reports” to communicate to clients any investment recommendation changes her firm has made. The reports
are sent to clients via email on the first Friday of the month and posted on the firm’s website the following Monday. The
firm’s internal policy is that a change in recommendation can only be made once a month through this report.
Scherzer also publishes weekly reports that may lead a reader to infer that a recommendation will be changing. The
monthly “Recommendation Update Reports” are sent to all clients. However, clients who wish to receive the weekly
publication must pay an annual fee of $1,000. This option is available to any client and is fully disclosed as part of every
client agreement.
To comply with the CFA Institute Code and Standards, Scherzer is required to:
A. do nothing because her actions comply with the Code and Standards.
B. publish the monthly report on the firm’s website at the same time it is sent to clients.
C. send the weekly reports to all clients at no additional charge.
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III(C) Suitability (1/2)
Marte
Marte, CFA, is an asset manager in Puerto Rico, a US territory. Residents of Puerto Rico receive significant tax advantages
when they invest in local securities. To take advantage of the tax laws, Marte’s firm offers its clients shares in a closed-
end investment fund, organized under Puerto Rico’s financial laws and regulations, that holds at least 67% local
securities and is permitted to borrow against up to 50% of its assets. The fund is usually leveraged to the extent legally
permitted.
Many of Marte’s clients have a modest net worth and conservative or moderate investment objectives. Marte persuades
them to invest 85% or more of their assets in shares of the closed-end fund.
Marte’s actions:
B. are appropriate because they take advantage of the fund’s unique tax benefits for his clients.
C. are appropriate as long as Marte fully discloses the risks and benefits of the fund to his clients.
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III(C) Suitability (2/2)
Duri
Duri, CFA, is a registered financial advisor for retail clients. She is also a principal partner of Tabak Accountants. Duri
helps many advisory clients switch from existing pension accounts to self-managed superannuation funds (SMSFs) that
invest in direct residential property.
When clients express interest in SMSFs, Duri accepts their reasoning and assumes that they have the time and expertise
to manage these funds. She also reclassifies their investment objectives as “growth” to match the new investment
strategy.
Duri charges her clients for establishing the SMSFs and recommends that her firm, Tabak Accountants, prepare the
clients’ annual accounts and tax returns.
Duri’s actions:
B. are acceptable because she is following the directives of her clients.
C. are acceptable if the services provided by Tabak Accountants are reasonable and the costs of services are
competitive.
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III(D) Performance Presentation
Jergenn
Jergenn, CFA, is the portfolio manager for the Volare Investment Management (VIM) fund, a registered collective
investment scheme (CIS) organized under the laws of South Africa. VIM’s 2022 regulatory disclosure and marketing
material for the fund, produced by Jergenn, presents annual investment performance data for the 2014–2020 period
that is accurate and calculated correctly. The performance history is that of a composite of separate accounts that
followed the strategy used by the VIM fund before the assets were moved over to the CIS environment in 2021.
In presenting the fund’s performance history, Jergenn’s actions:
B. are appropriate because the investment performance is accurate.
C. are appropriate as long as the performance calculations are net of fees.
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III(E) Preservation of Confidentiality
Giddings and Marsh
Giddings, CFA, is a compliance officer at GWH, a large broker/dealer and investment advisor. GWH maintains
confidential information of its clients: such as names, addresses, phone numbers, account numbers, balances, and
holdings. Giddings puts a number of policies and restrictions in place to address employee’s access to and handling of
this confidential information.
Marsh, CFA works at GWH as a client services associate. He downloads client data to his personal server at his home to
enable telecommuting. Marsh’s server is hacked, and portions of the personal client information Marsh downloaded are
posted for sale on the internet.
Did either Marsh or Giddings violate the CFA Institute Code and Standards?
A. Marsh violated the Code and Standards.
B. Giddings violated the Code and Standards.
C. Both Marsh and Giddings violated the Code and Standards.
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A. Loyalty
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IV(A) Loyalty (1/3)
Nickoli
Nickoli, CFA, is an investment counselor with HHI Capital Management (HHI). A colleague at her local society encourages
Nickoli to leave HHI and join her at Vesuvius Asset Advisers. Nickoli eventually agrees and decides to leave at the beginning of
the new year.
In the weeks before submitting her resignation, she informs her clients that they will likely be working with a new investment
counselor because she is leaving HHI. Her clients express surprise, and when asked for details about why she is leaving, Nickoli
shares that she is frustrated by the firm’s structure, disagrees with the direction the firm is going, lacks confidence in the
current leadership, doubts the firm will be able to attract and retain good people, and believes other HHI employees have been
mistreated and will also be leaving soon.
Several of Nickoli’s HHI clients indicate that they would like information about Vesuvius and might be interested in switching
their accounts. After submitting her resignation, Nickoli immediately shares the names of the interested clients with Vesuvius,
and after the first of the year, she begins soliciting them to transfer their accounts from HHI to her new firm.
Nickoli’s conduct is:
A. a violation of the Code and Standards.
B. acceptable because she did not solicit clients until after she left HHI.
C. acceptable because she is looking out for her clients’ best interests and believes Vesuvius provides better service.
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IV(A) Loyalty (2/3)
Kuznetsov
Kuznetsov, CFA, is a portfolio manager at an investment firm. Kuznetsov’s firm encourages its employees to sell proprietary
investment products to their clients. Kuznetsov starts selling these products and within a year, he becomes the firm’s top seller.
He also receives a large bonus for his performance.
Later, however, Kuznetsov realizes that the firm’s investment products are underperforming, and are more expensive than other
external investment options that are suitable for his clients. He therefore stops selling the firm’s products.
Kuznetsov’s supervisor puts pressure on him to resume selling, but Kuznetsov refuses. He complains several times to the
management that he is being pressured. He also secretly records several conversations with his supervisor and makes copies of
client records that document what he considers inappropriate conduct by his supervisor. When management ignores his
complaints and his supervisor starts giving him poor performance reviews, he files a complaint with the local regulator against
his supervisor and his firm, providing the recordings and copies of client files as evidence. He is eventually fired from the firm.
Kuznetsov’s actions are:
A. appropriate because he is protecting his clients’ interests.
B. a violation of the CFA Institute Code and Standards because he fails to keep client information confidential.
C. a violation of the CFA Institute Code and Standards because he violates his duty of loyalty to his employer by taking his
dispute with his supervisor to the regulator and exposing the employer to financial and reputational harm.
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IV(A) Loyalty (3/3)
Clemence
Clemence, CFA, is a wealth management adviser for DeLaurier Strategic Advisers. She looks after the financial planning
and wealth management for many retail clients. She met many of her clients through her spouse and sister.
Clemence has decided to leave DeLaurier and join another firm. In her new role, she will take on more research and
investment management responsibilities. She will not be expected to generate new advisory clients.
Clemence leaves DeLaurier on good terms. On her final day, she downloads a spreadsheet of DeLaurier’s clients,
prospects, and former clients and sends it to her personal email. The list includes names, assets under management,
addresses, and phone numbers. Clemence plans to contact her clients as a courtesy to inform them of her new position,
thank them for being clients, and express her confidence that DeLaurier will continue to provide them with competent
and professional service even though she has left the firm.
Clemence’s actions are:
B. appropriate because she is protecting the interests of her clients.
C. appropriate as long as she contacts only those clients who are personal friends to inform them of her new position.
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IV(B) Additional Compensation Arrangements
Estevez
Estevez, CFA, is a senior research analyst with BIR, a boutique investment research firm covering micro- and small-cap
companies. BIR engages in issuer-paid research whereby companies hire BIR to provide research to promote their stock
to investors.
Estevez helps BIR select which companies to cover and also oversees a team of junior research analysts. Some
companies offer Estevez a separate bonus if she selects them for coverage.
Estevez’s actions are:
A. a violation of the CFA Institute Code and Standards because her independence and objectivity in conducting the
research are compromised.
B. acceptable as long as Estevez does not use material nonpublic information from the company.
C. acceptable as long as her company approves in writing the payments offered by covered companies.
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IV(C) Responsibilities of Supervisors (1/2)
Duhih
RC Group (RCG) is a registered futures commission merchant with several branch offices. Duhih, CFA is hired to be the
branch manager at one of RCG’s offices in Memphis, Tennessee (USA). Duhih supervises many employees including
Lewes, CFA. Duhih allows Lewes to work from home and seldom checks in with Lewes regarding work.
Unknown to either Duhih or RCG, Lewes also works for another futures commission merchant, called AFCM. Working
with another employee at RCG, Lewes arranges swap agreements for AFCM through RCG. The other RCG employee
receives all the commissions for the accounts, but she secretly splits them with Lewes. Duhih is not aware of Lewes’
involvement in this commission sharing arrangement.
Duhih’s actions as a supervisor are:
B. acceptable if the RCG headquarters conducts regular audits of the Memphis branch.
C. acceptable if RCG did not develop adequate policies and procedures for the detection and deterrence of possible
employee misconduct.
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IV(C) Responsibilities of Supervisors (2/2)
Denikin & Denikin
Sasha Denikin, CFA, began his investment career as a research analyst for Galak Investment Partners. Galak was founded and is
controlled by Sasha’s father, Franz Denikin, CFA. After a few years, Sasha becomes a director of the company and Franz transfers
ownership of Galak to him. Franz tells the firm’s clients that he retains management of all client accounts
When the longtime chief compliance officer (CCO) of Galak retires, Sasha is also promoted to CCO. Sasha has no previous
compliance experience. The prior CCO will retain compliance responsibilities as a consultant and mentor and train Sasha.
In spite of his designation, Sasha has no real authority to supervise his father’s conduct and Franz continues to exert absolute
control over Galak. Sasha raises multiple compliance issues to his father regarding his father’s actions, but Sasha is powerless to
enforce company policies and procedures concerning his father’s conduct. After continuing to serve as Galak CCO for some time,
Sasha finally resigns in frustration.
Sasha Denikin’s actions are:
B. acceptable because Franz holds the actual power and client responsibilities at the firm and thus cannot be under the
supervision of a subordinate.
C. acceptable because Sasha resigns as CCO when he is frustrated by his inability to exercise his compliance responsibilities.
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C. Record Retention
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V(A) Diligence and Reasonable Basis
Harrel and Chong
Corix Bioscience is a startup company in the manufacturing and distribution of cannabidiol (CBD) products. Corix hires Harrel,
an independent research analyst and CFA Program candidate, to write a research report on the company.
Corix’s CEO tells Harrel the following: (1) Corix has an agreement with indigenous tribes that allows it to access tribal lands for
commercial hemp and cannabis farming and to sell hemp and cannabis products in retail outlets on tribal lands. (2) Corix has a
certificate of compliance from the national regulator that permits the company to transport, process, and export industrial
hemp products. (3) The prior year’s harvest of hemp exceeded expectations in both quality and quantity, resulting in a
substantial inventory of product.
Harrel includes all this information and writes a positive research report on Corix. However, the information provided by the
CEO is fake.
Chong, a CFA charterholder and research analyst at Nature’s Harvest Investment Management (NHIM), incorporates the
information from Harrel’s research report into his own research on Corix and puts a “buy” recommendation on the company.
Chong’s report is distributed to portfolio managers at NHIM. Corix is eventually shown to be a phony operation and NHIM’s
clients suffer significant losses.
Which individual(s) most likely violated the CFA Institute Code and Standards?
A. Harrel only
B. Chong only
C. Both Harrel and Chong
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V(B) Communication with Clients and Prospective Clients (1/2)
Maalouf
Maalouf, CFA, works for a large wealth management firm. The firm’s fees are calculated as a percentage of the asset
value managed for each client account. The firm has a standard method for valuing assets and calculating fees, which is
disclosed to clients when they open their account.
Over time, the firm shifts to (1) using the market value of client assets at the end of the billing cycle instead of the
average daily balance of the account; (2) including assets that were previously excluded, such as cash or cash
equivalents, in the fee calculation; and (3) charging clients for a full billing period rather than prorating fees for clients
that start or terminate accounts mid-billing period.
Under the CFA Institute Code and Standards, Maalouf
A. must notify clients of the changes in the valuation and fee calculation method.
B. cannot use end-of-cycle valuations, include cash equivalents, or charge fees for a full billing cycle for partial cycle
accounts.
C. can change the valuation and fee calculation methodology as long as actual fees charged to clients are lower.
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V(B) Communication with Clients and Prospective Clients (2/2)
Dukis
Dukis, CFA, is a managing director at a global credit ratings service. Her team assigns new issue and surveillance credit
ratings to commercial mortgage-backed securities (CMBSs). They use the debt service coverage ratio (DSCR) to
determine ratings.
After the global financial crisis, the ratings agency changes its methodology for calculating DSCR so that it more
accurately reflects risk. However, subsequent credit ratings are published without disclosing this change.
Dukis’s actions are:
A. appropriate because the new methodology more accurately reflects risk.
B. a violation of the CFA Institute Code and Standards because she did not disclose the change in methodology to the
investing public.
C. appropriate because no disclosure is necessary, given that calculating DSCR is only one element in determining the
overall rating of the security.
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V(C) Record Retention
Duermott
Duermott, CFA, is president of Enhanced Investment Strategies (EIS), a small investment firm. Duermott has close
personal relationship with his clients and is very familiar with their investment profile, income and retirement
requirements, and risk tolerance. He keeps up with all his clients’ life-changing events—such as health issues, real estate
purchases, children’s university expenses, and retirement—and adjusts the clients’ portfolios accordingly.
Duermott frequently meets with his clients at EIS’s offices, and he also sees them on several occasions outside the office,
which give him additional opportunities to update them on their investments. EIS clients complete a client agreement
and risk profile when opening their account, and those profiles are updated whenever Duermott finds the time to do so.
Duermott’s business practices are:
B. acceptable because he regularly communicates with clients about their investments.
C. acceptable because he adjusts clients’ investments to ensure that they are suitable for the clients’ needs given their
changing income and risk profile.
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C. Referral Fees
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VI(A) Disclosure of Conflicts
Reebh
Reebh, CFA, is the CEO and founding partner of Lux Asset Management (Lux). Lux provides asset management and
allocation services. The services include investing client funds with third-party subadvisers who specialize in a
particular asset class.
Reebh’s clients are aware, and approve, of Lux’s allocation of their assets to subadvisers. The third-party subadvisers
make payments to Lux based on the total value of a client’s assets placed in the subadvisers’ funds.
Reebh’s actions are:
A. appropriate because Reebh has disclosed the use of subadvisers.
B. inappropriate because the payments are an improper referral fee.
C. inappropriate unless Reebh discloses the financial arrangement he has with the subadvisers to his clients
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VI(B) Priority of Transactions (1/3)
Yang
Yang, CFA, is a research analyst at Dacco, a registered broker/dealer and investment adviser. While working at Dacco,
Yang starts Prestige Trade Investments Limited (Prestige) and acts as investment adviser for the firm’s clients. Yang is
responsible for directing all trades on behalf of Prestige.
Over several days, Yang purchases 50,000 shares of Zhongpin stock and 1,978 Zhongpin call options for his personal
account at Dacco. Soon after, Yang purchases more than 3 million shares of Zhongpin stock using $29.8 million of
Prestige’s funds.
Yang’s actions are:
B. acceptable because Yang’s personal investments are not in conflict with the investment advice being given to his
clients at Prestige.
C. acceptable as long as Prestige clients are not negatively affected by Yang’s prior purchase of Zhongpin securities
through his account at Dacco.
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Kapadia
Kapadia, CFA, is a trader for an asset management company that manages several large global mutual funds. Kapadia
executes trade orders for one of the company’s mutual funds. He has the discretion to execute the orders at any time
during the day, depending on market conditions.
Before executing the orders, Kapadia contacts several close friends and relatives and gives them information on which
securities the mutual fund will be trading. In turn, these friends and relatives make trades that mirror the trades to be
executed by Kapadia on behalf of the mutual fund.
Kapadia’s actions are:
B. inappropriate only if the client is harmed financially by the conduct.
C. appropriate because he does not share confidential information about individual clients.
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Perrkins
Perrkins, CFA, is the chief investment officer of GT Financial (GTF). Perrkins’s wife is GTF’s compliance officer. GTF has
several dozen retail clients and total assets under management of $70 million. All client assets are managed on a
discretionary basis.
Perrkins frequently buys and sells securities in a block trade on behalf of multiple clients simultaneously. He allocates
the trades to individual client accounts after the market closes. Over one six-month period, Perrkins allocates 75% of
the profitable trades to nine accounts that Perrkins and his wife own or control. At the same time, he allocates 82% of
the unprofitable trades to the account of the three largest GTF clients.
Perrkins’s actions are:
B. acceptable as long as he discloses the trade allocation practices to his clients.
C. acceptable as long as he reverses his trade allocation practices to favor the larger clients so that they are not harmed
over the long term.
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VI(C) Referral Fees
Kiang
Kiang, CFA, is a successful investment adviser with several high-net-worth clients. Kiang has acquired many clients
through referrals by existing clients.
Each year, Kiang hosts an elaborate party for clients who have referred new clients to his advisory firm. At the party,
Kiang distributes nominal gift cards to attendees. In some cases, Kiang offers discounts on advisory fees to clients who
sent him referrals that were very profitable.
Many of the clients attending these parties were referred to Kiang by other clients, and they, in turn, continue the cycle
of recommending Kiang to a broader circle of friends and family.
Kiang’s actions most likely are:
A. acceptable as a reward for client loyalty.
B. acceptable because he treats all clients fairly.
C. a violation of the CFA Institute Code and Standards.
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VII(A) Conduct as Participants in CFA Programs
Taveras
Taveras, CFA, conducts an exam preparation course sponsored by his local society. The society hosts an event for the
students after the exam is over. During the event, many students describe their experience of taking the exam. Most
express their views on the relative difficulty of the exam compared to their expectations. Some describe their surprise
about areas of the curriculum that were not tested. Taveras asks his students for their thoughts on the most difficult
exam questions.
Under the CFA Institute Code and Standards, Taveras is most likely:
A. prohibited from discussing the exam with students after it is over.
B. free to pass along information about the exam to candidates in future prep courses to help prepare them for the
exam.
C. allowed to share the opinions of his students about the difficulty of the exam with candidates in future prep courses
to emphasize the need to thoroughly prepare.
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VII(B) Reference to CFA Institute, the CFA
Designation, and the CFA Program
Ahmed
Ahmed recently received his CFA designation and joined a medium-sized hedge fund as a senior analyst. His supervisor,
Bennett, the firm’s founder, earned her CFA designation 10 years ago. She proudly uses the CFA designation on her business
card and on all marketing materials for the fund.
Bennett tells Ahmed that she has not paid her CFA Institute membership dues for the past four years and no longer participates
in the organization’s continuing education program. When Ahmed asks Bennett about her use of the designation, she states that
by passing the CFA exam she earned the CFA charter, and that the credential is like a university degree that cannot be taken
away.
Later, during a marketing meeting with a potential investor, the investor mentions that he narrowed his search to only firms
that employ CFA charterholders in senior positions. When he asks Bennett if everyone in the firm on the investment side is a
CFA charterholder, she responds, “Yes, that is correct.” Ahmed does not respond.
Did either Ahmed or Bennett violate the CFA Institute Code and Standards?
A. Ahmed violated the Code and Standards, but Bennett did not.
B. Bennett violated the Code and Standards, but Ahmed did not.
C. Both Ahmed and Bennett violated the Code and Standards.
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Conclusion
I. Professionalism
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Level I – Ethics

Ethics and Trust in the Investment Profession

• Trust: strong belief in the reliability of a person or institution

• Top two attributes of an investment management firm

• Ethical behavior goes well beyond following the law

Ethical principles or moral principles are beliefs that provide

Professions establish trust by

Failure to recognize challenges can lead to unethical behavior

• A new law might address an existing Ethical conduct encourages us to:

Develop an ethical framework which guides an investment manager’s thought process

Identify Consider Decide and Act Reflect

• Relevant facts • Situational influences

• Role of ethics in defining a profession

• Professionalism in investment management

• Need for high ethical standards in the investment management

• Challenges to ethical behavior

• Ethical versus legal standards

• Framework for ethical decision making

LO.f: identify challenges to ethical behavior;

Code of Ethics and

• CFA Institute Professional Conduct Program

• Standards of Professional Conduct

• Professional Conduct Program (PCP), in conjunction with the Disciplinary Review

• The DRC is a volunteer committee of CFA charterholders who serve on panels to

Member/candidate does not accept Member/candidate accepts

A. Knowledge of the Law

B. Independence and Objectivity

A. Material Nonpublic Information

B. Additional Compensation Arrangements

B. Communication with Clients and Prospective Clients

A. Conduct as Participants in CFA Institute Programs

Guidance for Standards I-VII

• CFA Institute Online Course

• “Listen” to the lectures

A. Knowledge of the Law

B. Independence and Objectivity

Guidance Recommended Procedures for Compliance

• Relationship between the Code and • Stay informed

Guidance Recommended Procedures for Compliance

• Buy-Side Clients • Protect the integrity of opinions

Guidance Recommended Procedures for Compliance

Impact on Investment Practice • Factual Presentations

A. Material Nonpublic Information

Recommended Procedures for Compliance

A. Loyalty, Prudence, and Care

Guidance Recommended Procedures for Compliance

• Understanding the Application of Loyalty, • Regular Account Information

Guidance Recommended Procedures for Compliance

• Investment Recommendations • Develop Firm Policies

Guidance Guidance (Cont…)

Recommended Procedures for Compliance

Guidance Recommended Procedures for Compliance

• Provide credible performance • Apply the GIPS Standards

Guidance Recommended Procedures for Compliance

B. Additional Compensation Arrangements

Guidance Recommended Procedures for Compliance

• Employer Responsibilities • Competition Policy

Guidance Recommended Procedures for Compliance

Guidance Recommended Procedures for Compliance

• System for Supervision • Codes of Ethics or Compliance Procedures