CFA Institute
Code of Ethics & Standards of Professional Conduct
Members of CFA Institute (including CFA charterholders) and candidates for the CFA designation must:
1
Integrity & Respect
Act with integrity, competence, diligence, respect and in an ethical manner with the public, clients, prospective clients, employers, employees, colleagues, and other market participants.
2
Client First
Place the integrity of the investment profession and the interests of clients above their own personal interests.
3
Reasonable Care
Use reasonable care and exercise independent professional judgment when conducting investment analysis, making recommendations, taking actions.
4
Professionalism
Practice and encourage others to practice in a professional and ethical manner that will reflect credit on themselves and the profession.
5
Market Integrity
Promote the integrity and viability of the global capital markets for the ultimate benefit of society.
6
Maintain Competence
Maintain and improve professional competence and strive to maintain and improve the competence of other investment professionals.
💡 Mnemonic 6 Codes: I-C-R-P-M-C · Integrity → Client first → Reasonable care → Professionalism → Market integrity → Competence
⚖️ STANDARDS OF PROFESSIONAL CONDUCT — 7 Standards
A.Knowledge of the Law
Comply with all applicable laws, rules & regulations. If conflict → follow the stricter one. Must dissociate from violations.
B.Independence & Objectivity
Maintain independence & objectivity. Don't offer/accept gifts, benefits, or compensation that could compromise judgment.
C.Misrepresentation
No misrepresentation in investment analysis, recommendations, actions, or any professional activities.
D.Misconduct
No dishonesty, fraud, or deceit. No acts that reflect adversely on professional reputation, integrity, or competence.
A.Material Nonpublic Information
If you possess MNPI that could affect investment value → do not act on it, nor cause others to act.
B.Market Manipulation
Do not engage in practices that distort prices or artificially inflate trading volume to mislead market participants.
A.Loyalty, Prudence & Care
Duty of loyalty. Act for clients' benefit; place client interests before employer's or your own.
B.Fair Dealing
Deal fairly and objectively with all clients when providing analysis, recommendations, or actions.
C.Suitability
Inquire into client's objectives, risk & constraints. Ensure investment is suitable in context of total portfolio. For mandates → follow stated objectives.
D.Performance Presentation
Performance info must be fair, accurate, and complete.
E.Preservation of Confidentiality
Keep client info confidential — unless: (1) illegal activity, (2) required by law, or (3) client permits disclosure.
A.Loyalty
Act for employer's benefit. Don't deprive employer of your skills, divulge confidential info, or cause harm.
B.Additional Compensation Arrangements
Don't accept gifts/compensation creating conflict with employer's interest — unless written consent from all parties.
C.Responsibilities of Supervisors
Make reasonable efforts to ensure subordinates comply with laws, rules, regulations, and the Code & Standards.
A.Diligence & Reasonable Basis
Exercise diligence, independence, thoroughness. Have reasonable and adequate basis for any analysis or recommendation.
B.Communication with Clients
Disclose investment process, limitations & risks. Identify key factors. Distinguish fact from opinion.
C.Record Retention
Develop & maintain appropriate records to support analyses, recommendations, actions, and communications.
A.Disclosure of Conflicts
Make full and fair disclosure of conflicts. Disclosures must be prominent, in plain language, communicate info effectively.
B.Priority of Transactions
Client & employer transactions have priority over transactions where you are the beneficial owner.
C.Referral Fees
Disclose any compensation/benefit received from or paid to others for recommending products or services.
A.Conduct as Participants in CFA Programs
No conduct that compromises the reputation/integrity of CFA Institute, the CFA designation, or the validity/security of CFA programs (e.g. cheating on exams).
B.Reference to CFA Institute, Designation & Program
Don't misrepresent or exaggerate the meaning/implications of CFA membership, the CFA designation, or candidacy in the CFA Program.
💡 Mnemonic 7 Standards: "Please Inform Clients Especially In Cases Regarding"
Professionalism · Integrity of capital markets · Clients (duties to) · Employers (duties to) · Investment analysis · Conflicts of interest · Responsibilities as CFA member