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Develop and adopt a code of ethics and make clear that unethical
behavior will not • be tolerated.Give employees a list of potential
violations and sanctions, including dismissal.•Check references of
potential employees.•
Members should encourage their firms to:Develop and/or adopt a code of
ethics.•Make available to employees information that highlights
applicable laws and • regulations.Establish written procedures for
reporting suspected violation of laws, regulations, or • company
policies.
Written complaints about a member or candidate's professional conduct that are 2. received by the Professional Conduct staff.
Evidence of misconduct by a member or candidate that the Professional
Conduct 3. staff received through public sources, such as a media
article or broadcast.
Substantial control of relevant interdepartmental communications,
through a • clearance area such as the compliance or legal
department.Review employee trades—maintain "watch," "restricted," and
"rumor" lists.•Monitor and restrict proprietary trading while a firm is
in possession of material • nonpublic information.Prohibition of all
proprietary trading while a firm is in possession of material nonpublic
information may be inappropriate because it may send a signal to the
market. In these cases, firms shoul
Act with integrity, competence, diligence, respect, and in an ethical
manner with • the public, clients, prospective clients, employers,
employees, colleagues in the investment profession, and other
participants in the global capital markets.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 investm
(1) that no disciplinary sanctions are appropriate, (2) to issue a
cautionary letter, or (3) to discipline the member or candidate.
may request (in writing) an explanation from the subject member or
candidatemay (1) interview the subject member or candidate,(2) interview
the complainant or other third parties, and/or(3) collect documents and
records relevant to the investigation.
Best practice is for analysts to pay for their own commercial travel
when attending information events or tours sponsored by the firm being
analyzed.
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.
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.
Protect the integrity of opinions—make sure they are unbiased.•Create a
restricted list and distribute only factual information about companies
on • the list.Restrict special cost arrangements—pay for one's own
commercial transportation • and hotel; limit use of corporate aircraft
to cases in which commercial transportation is not available.Limit
gifts—token items only. Customary, business-related entertainment is
okay • as long as its purpose is not to influence a member's
professional independence or obje
Members and Candidates must not knowingly make any misrepresentations
relating to investment analysis, recommendations, actions, or other
professional activities.
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 in an
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.
Misrepresentations include guaranteeing investment performance and plagiarism.
Members and Candidates must not engage in practices that distort
prices or artificially inflate trading volume with the intent to mislead
market participants
Remember that this type of research is fraught with potential
conflicts. Analysts' compensation for preparing such research should be
limited, and the preference is for a flat fee, without regard to
conclusions or the report's recommendations.
Members should have procedures to keep up with changes in applicable
laws, rules, • and regulations.Compliance procedures should be reviewed
on an ongoing basis to assure that they • address current law, CFAI
Standards, and regulations.Members should maintain current reference
materials for employees to access in • order to keep up to date on laws,
rules, and regulations.Members should seek advice of counsel or their
compliance department when in • doubt.Members should document any
violations when they disa
provide employees who deal with clients or prospects a written list of
the firm's available services and a description of the firm's
qualifications. To avoid plagiarism, maintain records of all materials
used to generate reports or other firm products and properly cite
sources (quotes and summaries) in work products. Information from
recognized financial and statistical reporting services need not be
cited.
A report by a CFA exam proctor of a possible violation during the examination
Self-disclosure by members or candidates on their annual Professional
Conduct 1. Statements of involvement in civil litigation or a criminal
investigation, or that the member or candidate is the subject of a
written complaint.
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