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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) Use reasonable judgment in identifying which factors are
important to their investment analyses, recommendations, or actions and
include those facto
A) Knowledge of the law-Members and Candidates must understand and
comply with all applicable laws, rules, and regulations (including the
CFA Institute Code of Ethics and Standards of Professional Conduct) 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
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
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.B) Priority of Transactions. - Investment transactions for
clients and employers
- If the member or candidate does not accept the proposed sanction,
the matter is referred to a hearing panel composed of DRC members and
CFA Institute member volunteers affiliated with the DRC. - The hearing
panel reviews materials and presentations from the Designated Officer
and from the member or candidate. - The hearing panel's task is to
determine whether a violation of the Code and Standards occurred and, if
so, what sanction should be imposed.
A) Conduct as Members and Candidates in the CFA Program- 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 the CFA examinations. 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 me
D) Performance Presentation. - When communicating investment
performance information, Members and Candidates must make reasonable
efforts to ensure that it is fair, accurate, and complete.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 or prospective client,2) Disclosure is required by law, or3) The
client or prospective client permits
1) Professionalism2) Integrity of Capital Markets3) Duties to
Clients4) Duties to Employers5) Investment analysis, recommendations and
actions 6) Conflicts of Interest7) Responsibilities as a CFA institute
member and CFA candidate.
- First, members and candidates must self-disclose on the annual
Professional Conduct Statement all matters that question their
professional conduct, such as involvement in civil litigation or a
criminal investigation or being the subject of a written complaint. -
Second, written complaints received by Professional Conduct staff can
bring about an investigation. -Third, CFA Institute staff may become
aware of questionable conduct by a member or candidate through the media
or another public source. - Fourth,
The Designated Officer, upon reviewing the material obtained during
the investigation, may conclude the inquiry with- no disciplinary
sanction, - issue a cautionary letter, - or continue proceedings to
discipline the member or candidate. If the Designated Officer finds that
a violation of the Code and Standards occurred, the Designated Officer
proposes a disciplinary sanction, which may be rejected or accepted by
the member or candidate.
C) Misrepresentation. - Members and Candidates must not knowingly make
any misrepresentations relating to investment analysis,
recommendations, actions, or other professional activities.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.
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.
Sanctions imposed by CFA Institute may have significant consequences;
they include - public censure, - suspension of membership and use of the
CFA designation, and - revocation of the CFA charter. - Candidates
enrolled in the CFA Program who have violated the Code and Standards may
be suspended from further participation in the CFA Program.
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.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 i
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.B) Fair Dealing. - Members and Candidates must
deal fairly and objectivelywith all clients when providing investment
analysis, makinginvestment recommendations, taking investment action, or
engaging in o
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.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.
When an inquiry is initiated, the Professional Conduct staff conducts
an investigation that may include - requesting a written explanation
from the member or candidate; - interviewing the member or candidate,
complaining parties, and third parties; - and collecting documents and
records in support of its investigation.
C) Suitability- 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, ma
- The CFA Institute Board of Governors maintains oversight and
responsibility for the Professional Conduct Program (PCP), which, 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 Proceedings Related to Professional Conduct
(Rules of Procedure) form the basic structure for enforcing the Code and
Standards.- The Rules of Procedure are based on two primary principles:
1) fair process to the
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