As you know, CFA members and candidates, must follow the CFA’s Code of Ethics and observe the Standards of Professional Conduct. These rules set a high standard of conduct that sets CFA members apart from other participants in the capital markets. Recent scandals in the financial services industry support the notion that CFA membership reflects a higher calling.

Code of Ethics

Among other things, the Code of Ethics requires that members act with integrity, competence, diligence, and respect,  Members must act ethically to the public, clients, employers, colleagues and other participants in the capital markets.

Standards of Professional Conduct

The Standards of Professional Conduct set specific behavioral requirements on professionalism, integrity, and discharging duties to clients,  employers, and the Institute. Members must comply with laws and regulations, and exercise independence and objectivity. For capital markets, members are of course prohibited from insider trading, tipping and market manipulation. Members must exercise duties of loyalty, fair dealing, and suitability. Members must present performance data accurately and preserve client confidentiality. Members also owe duties of loyalty to employers, and may not accept benefits that might create conflicts of interest. Members must be diligent, independent and thorough in making investment recommendations, and have a reasonable basis for recommendations supported by research. Members owe disclosure duties to clients and must retain records to support investment recommendations. Conflicts of interest must be disclosed fully, fairly, and prominently.  Transactions for clients must take priority over member’s own transactions. Finally, members may not engage in conduct that harms the reputation or integrity of the Institute including avoiding misrepresenting or exaggerating the meaning of membership. Continue reading →