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No. When a member or candidate relies on others within the firm to
determine whether a model is sound, it can be used in good faith unless
the member or candidate has reason to question its validity.
Aggregate of the market value of all discretionary and
non-discretionary assets under management within the defined firm. This
includes both fee-paying and non-fee paying assets
5 years after discontinuation
They allow firms to elaborate on raw numbers. Provide context. Some
are required, others are recommendations. "Negative assurance" language
is not needed. Should be considered static information.
requirements and recommendations
January 1, 2006
lagiarism encompasses using someone else's work (reports, forecasts,
charts, graphs, and spreadsheet models) without giving them credit. The
prohibition against plagiarism applies to written materials, oral
communications, and telecommunications.
Seven-year holding period.
The Standards require members to acknowledge the author of a model,
but members are not required to acknowledge information from a
recognized statistical and reporting service.
Yes, the key is whether or not the trip is "strictly business." While
Standard I(B) Independence and Objectivity recommends that members pay
their own room costs, it is not required and it is not unusual for
members to accept accommodation. Charter flights are OK as well given
certain circumstances.
Members and candidates shall not knowingly participate or assist in
any violation of laws, rules, regulations, or the Code and Standards.
Standard I(A) says that when a member feels a law has been broken, the
member should seek advice from the firm's counsel. If the member feels
the advice is unbiased and competent, the member should follow it. If
the member knows a law has been violated, the member should contact a
supervisor.
1. Self-disclosure by members or candidates on their annual
Professional Conduct Statements of involvement in civil litigation or a
criminal investigation, or that the member or candidate is the subject
of a written complaint. 2. Written complaints about a member or
candidate's professional conduct that are received by the Professional
Conduct staff. 3. Evidence of misconduct by a member or candidate that
the Professional Conduct staff received through public sources, such as a
media article or broadcast. 4
In order to initially claim compliance with GIPS, a firm must have a
minimum of five years (or since firm inception) of GIPS-compliant data.
After the first compliant presentation, another year of compliant
performance must be added each year until the compliant performance
history reaches at least ten years.
Members and Candidates must always act for the benefit of clients and
place clients' interests before their employer's or their own interests.
Members and Candidates must be loyal to clients, use reasonable care,
exercise prudent judgment, and determine and comply with their
applicable fiduciary duty to clients. Client interests always come
first: Exercise the prudence, care, skill, and diligence under the
circumstances that a person acting in a like capacity and familiar with
such matters would use. Manag
Standard VI(C) Referral Fees states that members and candidates must
disclose to employers and to affected clients, before entering into any
formal agreement for services, any benefits received for the
recommendation of services provided by the member.
fair dealing - having well defined guidelines for pre-dissemination,
limiting the number of employees privy to recommendations and changes
CFA Institute's Code and Standards dictate a minimum level of conduct,
that a minimum level of professional responsibility and conduct
dictates that members be aware of and comply with laws, rules, and
regulations governing their conduct. Standards should not be based on
ethics of upper management and the board of directors of a company.
Firms must comply with the strictest applicable standards, whether they
be foreign or domestic laws and regulations
The analyst is covered by the strictest of the following laws and
rules: his own country's, the foreign country's or CFA Institute's Code
and Standards.
The statement is not a violation because it is a fact. However, the member must not go on to claim superior performance.
he GIPS were designed to become "the" worldwide standard for all
investment firms seeking to present historical investment performance.
Key here is "worldwide," not just contributors from 21 countries.
Communication With Clients and Prospective Clients. Disclose to
clients and prospective clients the basic format and general principles
of the investment processes used to analyze investments
Members and Candidates must make full and fair disclosure of all
matters which may impair their independence and objectivity or interfere
with respective duties to their employer, clients, or prospective
clients.
January 1, 2000
Referral Fees, consideration includes all fees that are paid in cash,
soft dollars, and in kind.Referral fees must be disclosed to the client
or employer whether the consideration is received by or paid to others
for the recommendation.
establishes the boundaries for what constitutes firm assets, and the
set of portfolios that must be included in at least one composite
CFA Institute does not impose fines. It may sanction a private
censure, or refuse to allow a candidate to participate further in the
program (among other sanctions possible).
suitability - time horizon, return objectives, tax considerations, and
liquidity needs of a client before changing investment policy.
Private equity.
Members and Candidates must ensure that such disclosures are
prominent, are delivered in plain language, and communicate the relevant
information effectively.
earnings; mergers, acquisitions, tender offers, or joint ventures;
changes in assets; innovative products, processes, or discoveries; new
licenses, patents, registered trademarks, or regulatory
approval/regulation of a product; developments regarding customers or
suppliers; changes in management; change in auditor notification or
reliance on auditor; events regarding issuer's securities i.e. defaults,
calls, repurchases, splits, dividends, rights of holders, ratings,
additional sales of securities; bankrupt
Standard III(A) loyalty, prudence, and care. Client must be put first,
and benefits must be channeled back to the client. Members are required
to act in the interest of their clients.
Recognizing the need for one globally accepted set of investment
performance presentation standards, CFA Institute sponsored and funded
the Global Investment Performance Standards Committee to develop and
publish a single global standard by which all firms in all countries
calculate and present performance to clients and prospective clients.
Yes, as long as the information is not material. Standard II(A),
Material Nonpublic Information, states "a member cannot trade or cause
others to trade in a security while the member possesses material
nonpublic information" A reasonable investor would need to know more to
determine if the information was material.
Members may not use material nonpublic information for trading
purposes unless, the information was developed under the Mosaic Theory.
Members communicate performance in a fair, accurate, and complete
fashion, and covers both written and oral communication. Asking someone
to advertise only one year's performance is unlikely to be
representative since this constitutes a timeframe that is too short.
1. 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. 2. Place the integrity of
the investment profession and the 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 in
Fundamentals of Compliance, Input Data, Calculation Methodology,
Composite Construction, Disclosures, Presentation and Reporting, Real
Estate, and Private Equity.
supervisors must make reasonable efforts to detect and precent
violations of laws, rules, regulations, and the code and standards by
anyone under their authority
To ensure compliance with the Standard, members should seek to
communicate investment recommendations to all clients who have indicated
an interest and also those for whom the securities are suitable. There
is no need to communicate recommendations to clients for whom the
securities are deemed unsuitable. The standard does not prohibit a firm
from offering various levels of service.
Compliance requires that the firm follow local law and disclose the conflict between local law and GIPS.
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