CFA

ETHICS
 Standards of
Professional Conduct

Required Recommended

Must Should

(Compulsory) (Guidance)
Seven Standards :
I : Professionalism

II : Integrity of Capital Markets

III : Duties to Clients

IV : Duties to Employers

V : Investment Analysis, Recommendations, and Actions

VI : Conflict of Interest

VII : Responsibilities as a CFA Institute Member or CFA

Candidate
I : Professionalism
I A : Knowledge of the law

I B : Independence & Objectivity

I C : Misrepresentation

I D : Misconduct
 I A : Knowledge of the law

Required : Recommended :
• Understand & comply with all • Know laws & regulations related to their professional
applicable laws, rules & regulations activity in all countries where they work/ conduct
pertaining to any govt, regulatory business
organization, licensing agency or
• Never violate code & standards even if activity is
professional association governing
otherwise legal
their professional activities
• Dissociate or separate from any ongoing client or
• Comply with more strict law, rule or
employee activity if it’s illegal or unethical - in
regulation in case of conflict
extreme case they may have to leave the employer

• Must not knowingly participate or • Confront the individual involved > Approach the
assist & must dissociate from any supervisor or compliance department
violation of laws, rules or regulations
• Inaction with continued association may be
construed as knowing participation

• Have procedures to keep up with changes in laws

• Compliance procedures- review on ongoing basis

 I A : Knowledge of the law (Cont..)

Required : Recommended :
• Maintain current reference material for employees

• In doubt > seek advice of counsel or compliance department

• Document any violation when disassociating

• Report other members’ violations also

• No requirement to report violations to governmental

authorities except where required by law

• Encourage their firms to develop and/or adopt a code of

ethics, provide information to employees which highlights
applicable laws and regulations, establish written procedures
for reporting suspected violation of laws, regulations or
company policies

• Incharge of supervision/ investment services- comply with

regulations and laws in their country of origin and where
products/services will be sold
 I B : Independence & Objectivity
Required :
• Use reasonable care & judgment to
achieve & maintain independence &
objectivity in professional activities
• Not to offer, solicit or accept any
gift, benefit, compensation or any
type of consideration that
compromises their own or another’s
independence & objectivity
Recommended :
• Investment process must not be influenced by any
external sources
• Modest gifts are permitted
• Allocation of shares in oversubscribed IPO to personal
accounts not permitted
• Distinguish gifts from clients & entities seeking influence
to the detriment of the client
• Gifts must be disclosed to the member’s employer in
any case either prior to acceptance or subsequently
• Don’t get pressurized from sell-side analyst to issue
favorable research on current or prospective investment-
banking client in “road shows”
• Effective “firewalls” between research/ investment
management & investment banking activities
 I B : Independence & Objectivity (Cont..)

Required : Recommended :
• Analyst should not be pressured to issue favorable research by
the companies they follow

• Do not limit research to discussions with company management.

Use sources like suppliers, customers, competitors

• Portfolio managers should not pressure sell side analysts > may
have large positions in particular securities > rating downgrade
may adversely affect portfolio performance. Their responsibility to
respect and foster intellectual honesty of sell side research

• Members responsible for selecting outside managers should not

accept gifts, entertainment or travel that might be perceived as
impairing independence and/or objectivity

• Members employed by credit rating agencies should make sure

they prevent undue influence by security issuing firms, be aware of
potential conflict of interest & consider whether independent
analysis is warranted
 I B : Independence & Objectivity (Cont..)

Required : Recommended :
• Create a restricted list

• Analyst’s compensation for such research should be limited >

preference is a flat fee without regard to conclusions or the
report’s recommendation

• Best practice > analysts pay their own commercial travel while
attending informative events or tours sponsored by the firm
being analyzed

• Protect the integrity of opinions & design proper compensation

systems

• Restrict special cost arrangements > Pay for commercial

transportations & hotel charges

• Limit the acceptance of gratuities and/or gifts to token items

• Develop formal policies related to employee purchases of

equity, IPOs & private placements
 I B : Independence & Objectivity (Cont..)

Required : Recommended :
• Effective supervisory & review procedures

• Formal written policies on independence and

objectivity

• Appoint a compliance officer, have clear procedures

for employee for reporting the unethical behaviour and
violation of regulations
 I C : Misrepresentation

Required : Recommended :
• Do not give false impressions in writing, oral or
• Must not knowingly make any
electronic communication
misrepresentations relating to investment
analysis, recommendation, actions or • Misrepresentation includes guaranteeing investment
other professional activities compromises performance and plagiarism
their own or another’s independence &
• Plagiarism > using someone else’s work without giving
objectivity
him credit

• To avoid plagiarism firm should keep record of all

sources and cite them

• Deliberately omitting information that could affect

investment decision

• Models and analysis developed by others at firm >

property of firm > can be used with attribution

• A report written by another analyst employed by the

firm cannot be released as another analyst’s work
 I C : Misrepresentation (Cont..)

Required : Recommended :
• Provide employees a written list of firm’s available
services and description of the firm’s qualifications

• Employees’ qualification should be accurately

presented

• Information from recognized financial and statistical

reporting services need not be cited (Eg Fred, S&P)

• Establish procedures for verifying marketing claims of

third parties whose information the firm provides to
clients
 I D : Misconduct

Required : Recommended :
• Must not involve in any professional • Unethical behavior in all aspects of M&C’s lives is
misconduct, dishonesty, fraud, deceit or discouraged
commit any act that reflects adversely
• Do not abuse CFA Institute’s Professional Conduct
on their professional reputations,
Program by seeking enforcement of this Standard to
integrity or competence
settle personal, political, or other disputes that are not
related to professional ethics

• 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

(Background check)
II : Integrity of Capital Markets

II A : Material Non-Public Information

II B : Market Manipulations
 II A : Material Non-Public Information

Required : Recommended :

• Members and Candidates who • Material information > if disclosure would impact price of

possess material nonpublic security or if reasonable investor would want the

information that could affect the information before making an investment decision

value of an investment must not • Nonpublic information > not available to the marketplace
act or cause others to act on the
• Analysts’ conference call is not public disclosure
information

• Selective disclosure causes insider trading

• Prohibition against acting on material nonpublic

information extends to securities, swaps, option contracts
and mutual funds

• Material nonpublic information received while being

involved in transactions like investment banking, can be
used for its intended purpose, but must not use the
information for any other purpose unless it becomes public
information
 II A : Material Non-Public Information (Cont..)

Required : Recommended :
• Mosaic Theory > No prohibition on reaching an investment
decision through public and non-material nonpublic information

• Information from internet or social media sources > not all of it

is considered public information > confirm if it is also available
from public sources, such as company press releases or
regulatory filings.

• Seeking insight from individuals who have specialized

expertise in an industry > not act or cause others to act on any
material nonpublic information obtained from these experts
until that information has been publicly

• Make reasonable efforts to achieve public dissemination of

information

• Encourage firms to adopt procedures to prevent misuse of

material nonpublic information
 II A : Material Non-Public Information (Cont..)

Required : Recommended :
• Use a “firewall” within the firm

• Substantial control of relevant interdepartmental

communication through a clearance area like
compliance/ legal department

• Review employee trades > maintain watch, rumor, and

restricted lists

• Monitor & prohibit proprietary trading > if a firm

possesses material non-public information

• Prohibiting all proprietary trading may send a signal to

the market > firm should take the contra side of
unsolicited customer trades
 II B : Market Manipulations
Required :
• Members and Candidates must not
engage in practices that distort
prices or artificially inflate trading
volume with the intent to mislead
market participants
Recommended :
• Spreading false rumors is prohibited
• Standard applies to transactions that :
- deceive the market by distorting the price setting
mechanism of financial instruments or
- by securing a controlling position to manipulate
the price of a related derivative and/or the asset
itself
III : Duties to Clients
III A : Loyalty, Prudence, and Care

III B : Fair Dealing

III C : Suitability

III D : Performance Presentation

III E : Preservation of Confidentiality

 III A : Loyalty, Prudence, and Care
Required :
• Duty of loyalty to clients & must act with
reasonable care & exercise prudent
judgment.
• Must act for the benefits of clients &
place their client’s interests before their
employer’s & their own interests
Recommended :
• Client interest comes first (but no imposition of
fiduciary duty)
• Exercise same level of prudence, judgment & care
as in management & disposition of their own
interests in similar circumstances
• Manage pool of assets in accordance with the terms
of governing documents (e.g. trust documents)
• Determine the identity of “client’” to whom duty of
loyalty is owed (may be individual or beneficiaries in
case of pension plan or trust)
• Follow any guidelines set by their clients for the
management of their assets
• Investment decisions are judged in context of total
portfolio rather individual investments
 III A : Loyalty, Prudence, and Care (Cont..)

Required : Recommended :
• Conflict arises when client brokerage, “soft dollars” or “soft
commissions” are not used for benefits of clients

• Cost-benefit analysis may show that voting all proxies may

not be a beneficial strategy for clients

• Submit to each client, at least quarterly, a statement

showing funds & securities

• Follow applicable rules and laws

• Establish investment objectives of client

• Consider suitability of portfolio relative to client’s needs and

circumstances, the investment’s basic characteristics, or
the basic characteristics of the total portfolio

• Diversify

• Deal fairly with all clients in regards to investment actions

 III A : Loyalty, Prudence, and Care (Cont..)

Required : Recommended :
• Disclose conflicts

• Disclose compensation arrangements

• Vote proxies in the best interest of clients and ultimate

beneficiaries

• Maintain confidentiality

• Seek best execution

• Place client interests first

 III B : Fair Dealing

Required : Recommended :
• Deal fairly and objectively with all • No discrimination among clients while
clients when providing investment disseminating recommendations or taking
analysis, making investment investment action (growth funds over other funds,
recommendations, taking investment discretionary over non discretionary accounts)
action, or engaging in other
• Fairly does not mean equally > difference in timings
professional activities
of emails & fax received by clients are normal
course of business

• Different services levels are okay as far as these do

not adversely affect any client

• Disclose different levels of services to all clients and

prospects

• Premium services should be available to all those

who are willing to pay for them

• All clients must be given fair opportunity to act upon

every recommendation
 III B : Fair Dealing (Cont..)
Recommended :
Required :
• Clients unaware of change in recommendation > should
be advised before the order is accepted

• Clients must be treated fairly in the light of their

investment objectives and circumstances

• Both institutional and individual clients must be treated in

a fair & impartial manner

• M&C should not take advantage of their position to

disadvantage clients (e.g. in IPOs)

• Firms are encouraged to establish compliance

procedures to treat customers & clients fairly

• Communicate recommendations simultaneously within the

firm & to customers

• Limit the no. of people who are aware that a

recommendation is going to be disseminated
 III B : Fair Dealing (Cont..)

Required : Recommended :
• Shorten the time frame b/w decision & dissemination

• Publish guidelines for pre-dissemination behavior

• Simultaneous dissemination > treat all clients fairly

• Maintain a list of clients & their holdings

• Develop & document trade allocation procedures

• Disclose trade allocation procedures > fair & equitable

• Establish systematic account review > no preferential

treatment to any client or customer

• Disclose level of services > different levels of services

are possible for same or different fees
 III C : Suitability

Required : Recommended :
• In an advisory relationship with a client- • Develop IPS at beginning of the relationship

Ø Make a reasonable inquiry into a client’s • Consider client’s needs, circumstances & risk
or prospective clients’ investment tolerance
experience, risk and return objectives,
• Consider whether the use of leverage is suitable
and financial constraints prior to making
for the client or not
any investment recommendation or
taking investment action and must • Make sure to abide by the stated mandate

reassess and update this information

• Develop written IPS of each client considering
regularly
client identification, investor objectives, investor

Ø Determine that an investment is suitable constraints, performance measurement

to the client’s financial situation and benchmark (Update IPS at least annually )

consistent with the client’s written

• Objectives & constraints should be maintained &
objectives, mandates, and constraints
reviewed periodically to reflect any changes in
before making an investment
clients’ circumstances
recommendation or taking investment
action • Suitability test policies
 III C : Suitability (Cont..)
Required :
Ø Judge the suitability of investments in
the context of the client’s total
portfolio
• 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
Recommended :
• Unsolicited Trade Requests > request to purchase
a security that is unsuitable which may or may not
have a material effect on the risk characteristics of
the client’s total portfolio > discussed with the
client that it’s unsuitable
• If it has minimal impact > after discussing with the
client about unsuitability > follow his firm’s policy
with regard to unsuitable trades
• Material impact on the risk/return profile >
Ø update the IPS
Ø Trade to be made in a separate client-directed
account
Ø In the absence of other options > discontinue
relationship
 III D : Performance Presentation

Required : Recommended :
• When communicating investment • Avoid misstating performance or misleading clients
performance information > make about investment performance of themselves or their
reasonable efforts to ensure that it is firms
fair, accurate, and complete
• Not misrepresent past performance or reasonably
expected performance

• Not state or imply the ability to achieve a rate of

return similar to that achieved in the past

• Provide reference to limited information provided on

brief presentations

• For brief presentations > make detailed information

available on request

• Apply Global Investment Performance Standards

(GIPS)
 III D : Performance Presentation (Cont..)

Required : Recommended :
• Consider the knowledge of audience to whom
performance presentation is addressed

• Performance of weighted composite of similar

portfolios rather a single account

• Include performance history of terminated accounts

• Disclosures that fully explain the performance results

being reported

• Maintain data & records used to calculate the

performance being presented
 III E : Preservation of Confidentiality

Required : Recommended :
Keep information about current, former, and • If a client is involved in illegal activities > members
prospective clients confidential unless: may have an obligation to report to the authorities

• The information concerns illegal activities • Extends to former clients as well

on the part of the client or prospective
• Not prevent members from cooperating with a CFA
client
PCP investigation
• Disclosure is required by law, or
• Avoid disclosing information received from client
• The client or prospective client permits except to authorized coworkers working for the client
disclosure of the information.
• Follow firm’s procedures for storing electronic data

• Recommend development of such procedures if they

are not in place
IV : Duties to Employers
IV A : Loyalty

IV B : Additional Compensation Arrangements

IV C : Responsibility of Supervisors
 IV A : Loyalty

Required : Recommended :
• In matters related to their employment > • Applicable to employees. Independent contractors >
act for the benefit of their employer and abide by agreement
not deprive their employer of the
• Place client interests above interests of their employer
advantage of their skills and abilities,
but consider the effects of their actions on firm integrity
divulge confidential information, or
and sustainability
otherwise cause harm to their employer
• No requirement that the employee put employer
interests ahead of family and other personal obligations
> balance these obligations with work obligations

• Not have incentive and compensation systems that

encourage unethical behavior

• Independent practice for compensation > prior consent

of employer > describe all aspects of the services,
including compensation, duration and the nature of the
activities
 IV A : Loyalty (Cont..)

Required : Recommended :
• Leaving an Employer > continue to act in their employer’s
best interests until resignation is effective Activities which
may constitute a violation include:

Ø Misappropriation of trade secrets

Ø Misuse of confidential information

Ø Soliciting employer’s clients prior to leaving

Ø Self-dealing

Ø Misappropriation of client lists

• Employer records on any medium (e.g. home computer,

PDA, cell phone) are the property of the firm

• Simple knowledge of names and existence of former clients

is generally not confidential

• Give employer a copy of the Code and Standard

 IV A : Loyalty (Cont..)

Required : Recommended :
• No prohibition on the use of experience or knowledge
gained while with a former employer

• If an agreement exists among employers > permitting

brokers to take certain client information when leaving a
firm > act within the terms of the agreement without
violating the Standard

• Adhere to their employers’ policies concerning social

media > when planning to leave an employer - notifying
clients about employee separations

• Best practice > separate social media accounts for

personal and professional communication

• Whistleblowing > duty to employer violated to protect

clients or the integrity of the market and not for personal
gain
 IV B : Additional Compensation Arrangements

Required : Recommended :
• Not accept gifts, benefits, compensation, • Compensation includes both direct & indirect form
or consideration that competes with or
• Additional benefits are also included
might reasonably be expected to create a
conflict of interest with their employer’s • Written consent from employer includes email

interest unless they obtain written consent communication

from all parties involved
• Hired to work part time > discuss any arrangements
that may compete with their employer’s interest and
abide by any limitations their employer identifies

• Immediately report to employer in written format

detailing any proposed compensation and services

• Performance incentives should be verified by the

offering party

(Bonus depending on ’future’ performance – addn comp.

Reward for ‘past’ performance – gift)

 IV C : Responsibility of Supervisors

Required : Recommended :
• Make reasonable efforts to ensure that • Make reasonable efforts to prevent as well as detect
anyone subject to their supervision or violations of laws, rules, regulations or code &
authority complies with applicable laws, standards by employees
rules, regulations, and the Code and
• Adequate compliance system must meet industry
Standards
standards, regulatory requirements, and the
requirements of the Code and Standards

• Inadequate compliance system > bring to attention of

firm’s management and recommend corrective action

• If violation > respond promptly > conduct investigation

> limit the suspected employee’s activities

• No compliance procedures or inadequate procedures

> decline supervisory responsibility in writing until
adequate procedures are adopted by the firm
 IV C : Responsibility of Supervisors (Cont..)

Required : Recommended :
• Adopt a code of ethics. Don’t commingle
compliance procedures with the firm’s code of
ethics

• Adequate compliance procedures should:

Ø Be clearly written
Ø Be easy to understand

Ø Designate a compliance officer with authority

clearly defined

Ø Have a system of checks and balances

Ø Outline the scope of procedures
Ø Outline what conduct is permitted
Ø Contain procedures for reporting violations and
sanctions
Ø Structure incentives so that unethical behavior is
not rewarded
 IV C : Responsibility of Supervisors (Cont..)

Required : Recommended :
• Once the compliance program is instituted, the
supervisor should:

Ø Distribute it to the proper personnel

Ø Update it as needed
Ø Continually educate staff regarding procedures
Ø Issue reminders as necessary
Ø Require professional conduct evaluations
Ø Review employee actions to monitor compliance
and identify violations
Ø Enforce procedures once a violation occurs
Ø Review procedures and identify any changes
needed to prevent violations in the future
V : Investment Analysis,
Recommendations, and Actions

V A : Diligence and Reasonable Basis

V B : Communication with Clients and Prospective

Clients

V C : Record Retention
 V A : Diligence and Reasonable Basis
Required :
• Exercise diligence, independence, and
thoroughness in analyzing investments,
making investment recommendations,
and taking investment actions
• Have a reasonable and adequate basis,
supported by appropriate research and
investigation, for any investment
analysis, recommendation or action
Recommended :
• Level of research for due diligence depends on
product/service offered
• Prior to making recommendation or investment action
consider:
Ø Global and national economic conditions
Ø Firm’s financial and operating history & business
cycle stage
Ø Mutual fund’s fee & management history
Ø Limitation of any quantitative methods used
Ø Appropriateness of peer group comparisons
• Quantitative Research > consider positive & negative
results, scenarios which are not typically used to assess
downside risk > explain the importance of research and
how results were used in decision making process
 V A : Diligence and Reasonable Basis (Cont..)

Required : Recommended :
• Secondary or Third-Party Research > review it’s quality >
consider following :

Ø Review assumptions

Ø How rigorous is the analysis

Ø How timely the research is

Ø Evaluate objectivity & independence of

recommendations

• Review External Advisers :

Ø Have adequate compliance and internal controls

Ø Review the quality of the published return information

Ø Do not deviate from stated strategies

• Don’t agree with the independent and objective view of the

group > need not decline to be identified with the report, as
long as there is a reasonable and adequate basis
 V A : Diligence and Reasonable Basis (Cont..)

Required : Recommended :
• Policy requiring that research reports, credit ratings &
investment recommendations have a reasonable &
adequate basis

• Develop written guidance for analysts, supervisory analysts

& review committees

• Develop measureable criteria for research report quality

assessment

• Written guidance for computer-based models used in

developing, rating & evaluating financial instruments

• Develop measurable criteria for assessing outside

providers

• Standardized set of criteria for evaluating the adequacy of

external advisers
 V B : Communication with Clients and Prospective Clients

Required : Recommended :
• Disclose to clients and prospective clients • Always include basic characteristics of security
the basic format and general principles of identified
the investment processes they use to
• Illustrate investment decision making process
analyze investments, select securities,
used
and construct portfolios and must
promptly disclose any changes that might • The standard does not confine communication

materially affect those processes to a research report

• Disclose to clients and prospective clients • Communicate any specific risk factors

significant limitations and risks associated associated with securities

with the investment process
• Clearly communicate potential gains & losses in
terms of total return

• Communicate significant changes in the risk

characteristics of an investment/ strategy
 V B : Communication with Clients and Prospective Clients (Cont..)

Required : Recommended :
• Use reasonable judgment in identifying • Update clients regularly about changes in the
which factors are important to their investment process, risks and limitations newly
investment analyses, recommendations, identified
or actions and include those factors in
• Projections from quantitative models and analysis >
communications with clients and
explain the limitations of the model and the
prospective clients
assumptions it uses > this judging the uncertainty
• Distinguish between fact and opinion in regarding the estimated investment result
the presentation of investment analysis
• Inform clients about limitations inherent to an
and recommendations
investment > liquidity & capacity

• Ability to supply additional information if requested >

hence maintain relevant information
 V C : Record Retention

Required : Recommended :
• Develop and maintain appropriate records • Maintain records that support conclusion or any
to support their investment analysis, investment action
recommendations, actions, and other
• Such records are property of the firm
investment-related communications with
clients and prospective clients • If regulatory requirements do not recommend,
maintain records for at least 7 years

• All communications with clients through any

medium, including emails and text messages,
are records that must be retained

• Members who change firms must recreate

analysis documentation > not rely on memory or
material created in previous firms

• Record-keeping is generally firm’s responsibility

VI : Conflict of Interest
VI A : Disclosure of Conflict

VI B : Priority of Transaction

VI C : Referral Fees
 VI A : Disclosure of Conflict

Required : Recommended :
• Make full and fair disclosure of all • Fully disclose to clients, prospects, employers > all actual
matters that could reasonably be and potential conflicts of interest in order to protect investors
expected to impair their and employers > let them judge any potential bias
independence and objectivity or
• Disclosure of :
interfere with respective duties to
their clients, prospective clients, Ø servicing as a board member

and employer Ø broker/dealer market making activities

Ø holdings in companies that member recommends or

• Ensure that such disclosures are
clients hold
prominent, are delivered in plain
Ø fee arrangements including those in which the firm
language, and communicate the
benefits from investment recommendations
relevant information effectively
Ø special compensation arrangements, bonus programs,
commissions, and incentives

• Give employer enough information to judge the impact of

conflict > take reasonable steps to avoid conflict > report
promptly if conflict occurs
 VI B : Priority of Transaction

Required : Recommended :
• Investment transactions for clients • Prioritize client’s transactions over personal transactions &
and employers must have priority transactions made on behalf of the member’s firm
over investment transactions in
• Personal transactions may be undertaken after clients and
which a Member or Candidate is
employer have given adequate opportunity and time to act
the beneficial owner
upon an investment recommendation

• Personal transactions include situations where the member

is a “beneficial owner”

• Regular fee-paying family member accounts should not be

disadvantaged to client accounts

• Information about pending trades should not be acted on

for personal gains

• Limited participation in equity IPOs by investment

personnel
 VI B : Priority of Transaction (Cont..)

Required : Recommended :
• Restrictions on private placements for investment personnel

• Establish blackout/ restricted periods for investment

personnel, no front running

• Reporting requirements for investment personnel:

Ø Disclosure of holdings in which the employee has a

beneficial interest

Ø Provide duplicate confirmations of transactions

Ø Preclearance procedures

• Disclosure of policies regarding personal investing

 VI C : Referral Fees
Required :
• 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
Recommended :
• Inform employers, clients and prospects of benefits
received for referrals of customers and clients >
allowing them to evaluate the full cost of the service as
well as any potential partiality
• All types of consideration must be disclosed
• Encourage firms to adopt procedures regarding
compensation for referrals
• Update firm at least quarterly regarding nature and
value of referral compensation received if firms do not
have clear procedures for approval
VII : Responsibilities as a CFA
Institute Member or CFA Candidate

VII A : Conduct as Participants in CFA Institute

Programs

VII B : Reference to CFA Institute, the CFA

Designation, and the CFA Program
 VII A : Conduct as Participants in CFA Institute Programs
Required :
• 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
Recommended :
• Must not engage in any activity that undermines the
integrity of CFA charter
• Standard applies to:
Ø Cheating in CFA or any CFAI exam
Ø Revealing anything about the contents & topics of
exam
Ø Not following the rules & polices for CFA program
Ø Disclosing confidential information on CFA
program to candidates or to public
Ø Improperly using the designation
Ø Misrepresenting information on PCS or CFAI PDP
 VII A : Conduct as Participants in CFA Institute Programs (Cont..)

Required : Recommended :
• Members can express their opinion on CFA institute or
program

• Members volunteering CFA program must not solicit or reveal

information about :

Ø Exam questions

Ø Deliberation related to exam process

Ø Scoring of question
 VII B : Reference to CFA Institute, the CFA Designation, and the
CFA Program

Required : Recommended :
• Not misrepresent or exaggerate the • Do not over-promise individual competence
meaning or implication of membership
• Do not over promise future investment results
in CFA institute, holding the CFA
designation or candidacy in CFA • Sign PCS annually

program • Pay CFAI membership dues annually

• Do not misrepresent or exaggerate the meaning of the

designation

• No partial designation exists

• Acceptable : candidate has successfully completed

the program in 3 years > claiming superior ability is
not permitted

• In written/ oral communications : usage as adjectives

or after charterholder’s name. Not as nouns