Ethical and professional standards cfa level 1 pdf

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This committee is authorized to conduct investigations and impose penalties. Within the PSPC there are two subcommittees. Sanction or injunction imposed by a government or judicial agency, or public or private self-regulatory organization with jurisdiction over investment-related activities. Conviction of a felony, or if the jurisdiction does not define a felony any crime punishable by more than one year in prison. If found to be in violation of codes and standards, members are subject to censure, suspension, or revocation of membership.

Candidates can also be penalized through revocation of the right to sit for CFA examinations, thereby becoming ineligible for membership. Members of the CFA Institute must:.

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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 investment actions, and engaging in other professional activities. Practice and encourage others to practice in a professional and ethical manner that will reflect credit on themselves and the profession.

Maintain and improve their professional competence and strive to maintain and improve the competence of other investment professionals. With regard to Standards of Conductthere are seven areas by which one must be held accountable.

They are as follows:. Standard I is broad in scope and directed toward competence within a small business environment. It specifies that investment professionals must have a working knowledge of laws, as well as a framework for resolving ethical dilemmas. Standard II discusses sharing of material information qualified as non-public, as well as the intent to manipulate markets.

It prohibits CFA members from acting in a way to distort market value through manipulation.

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Standard III addresses issues of client loyalty, discretion, and care; fair dealing; suitability; performance presentation; and maintaining confidentiality. Investment professionals are obligated to put the interests of their clients before that of their organization or their personal interests.

Standard IV outlines basic responsibilities by investment professionals for their employers. There are also specific instances outlined in which an investment professional may be considered in violation of duties to employers, including unfair competition and sharing of confidential information.

Whistleblowing, or reporting unethical employers, is also addressed in this section. Standard V outlines the responsibility of investment professionals regarding due diligence prior to making recommendations to clients. Within any business organization, there are bound to be conflicts of interest and loyalty leading to an ethical dilemma. Standard VI specifies that CFA members and candidates must disclose any potential conflicts between clients and employers, individual interests, and the like.

The purpose of this is to protect employers from an unknown clash of concerns that may promote unethical decisions. This standard also addresses cheating on CFA exams. Ethics and Professional Standards — Learning Sessions. Investment management is an upcoming profession.If you use the site without changing settings, you are agreeing to our use of cookies. Learn more in our Privacy Policy. Privacy Settings.

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Read the Privacy Policy to learn how this information is used. The Standards of Practice Handbook Handbook provides guidance to the people who grapple with real ethical dilemmas in the investment profession on a daily basis; the Handbook addresses the professional intersection where theory meets practice and where the concept of ethical behavior crosses from the abstract to the concrete.

Recent events in the global financial markets have tested the ethical mettle of financial market participants, including CFA Institute members. The standards taught in the CFA Program and by which CFA Institute members and candidates must abide represent timeless ethical principles and professional conduct for all market conditions.

Through adherence to these standards, which continue to serve as the model for ethical behavior in the investment professional globally, each market participant does his or her part to improve the integrity and efficient operations of the financial markets. The Handbook provides guidance in understanding the interconnectedness of the aspirational and practical principles and provisions of the Code of Ethics and Standards of Professional Conduct Code and Standards.

The Standards contain practical ethical principles of conduct that members and candidates must follow to achieve the broader industry expectations.

However, applying the principles individually may not capture the complexity of ethical requirements related to the investment industry. The Code and Standards should be viewed and interpreted as an interwoven tapestry of ethical requirements. Describe the structure of the CFA Institute Professional Conduct Program and the process for the enforcement of the Code and Standards State the six components of the Code of Ethics and the seven Standards of Professional Conduct Explain the ethical responsibilities required by the Code and Standards, including the sub-sections of each Standard.

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Manage your Professional Learning credits. Standards, Ethics, and Regulations. Privacy Settings Functional cookieswhich are necessary for basic site functionality like keeping you logged in, are always enabled. Save Settings.Before you order, simply sign up for a free user account and in seconds you'll be experiencing the best in CFA exam preparation.

Ethical and Professional Standards Reading 1.

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Ethics and Trust in the Investment Profession. Seeing is believing! Find out more. Ethics a. Ethics and Professionalism b. Challenges to Ethical Conduct c. Ethical vs. Legal Standards e. Ethical Decision-Making Frameworks f. You have a wonderful website and definitely should take some credit for your members' outstanding grades. Colin Sampaleanu. My Own Flashcard No flashcard found. Add a private flashcard for the reading.

Reading marked as incomplete. Download study notes in a PDF file immediately. Over 5, practice questions that cover the entire CFA curriculum. Global CFA ranking: Know where you stand at all times vs. Why wait? Everything you need to pass your exam is included. Join now and your account will be upgraded immediately!

Click here for details. Register a user account to print out study notes and all practice questions. My Flashcard:.Ethical and Professional Standards is a major part of the CFA Program curriculum at all three levels, so it is very important to learn this material well.

CFA Institute places a high value on ethics, and even uses scores on this section to determine if someone passes or fails when their overall exam result is right at the edge of the Minimum Passing Score. Be ready to spend a good amount of time learning all the ethics materials. Since the questions only have 3 answer choices, you will only be expected to look for a small range of potential violations in an individual question.

Reading 1 is a high-level overview of the importance of ethics for investment professionals. Professions are occupational groups based on unique education, specialist knowledge, and framework of practice and behavior that establishes community trust, recognition, and respect.

The primary takeaway is that ethical guidelines go beyond what is defined by legal statute. Ethics are defined as a standard of conduct that can be expressed by law and by more abstract principles that outline expected behaviors. The Code of Ethics is very straightforward.

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.

ethical and professional standards cfa level 1 pdf

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 investment actions, and engaging in other professional activities.

Practice and encourage others to practice in a professional and ethical manner that will reflect credit on themselves and the profession. Maintain and improve their professional competence and strive to maintain and improve the competence of other investment professionals.

Most of the questions you see will involve the application of one or more parts of the standards applied to various real-world scenarios that a professional analyst might face. It specifies that investment professionals must have a working knowledge of laws, as well as a framework for resolving ethical dilemmas.

Knowledge of the law specifies that investment professionals must have a working knowledge of all applicable laws and regulations that apply where they do business.

In situations where they are subject to different requirements, they are always to adhere to the strictest ones. This standard applies to rules at all levels, including national laws, local regulations, and even the CFA Program Code and Standards. Special note is given to travel considerations. A common example of this is guaranteeing investment results. You cannot use information in a misleading way to influence investment decisions and you absolutely cannot promise specific investment returns or superior results in any form of communication.

Misconduct primarily addresses issues with honesty and professional behavior. This applies to activities as varied as refraining from drinking during business hours to conducting proper due diligence before making investment recommendations.

Standard II prohibits any activities used to manipulate investment markets.

ethical and professional standards cfa level 1 pdf

Maintaining public trust in financial markets is of paramount concern to CFA Institute, and so this standard is very strict on actions that could distort markets through fraudulent or deceitful behavior.Many professions define a code of ethics aimed at outlining cultural values within that profession.

For the investment industry, ethics are defined as a standard of conduct valued by the financial sector. These can be expressed via concrete rules of behavior as defined by law, or through abstract concepts meant to define the spirit of organizational conduct. Members of the CFA Institute must :. 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.

ethical and professional standards cfa level 1 pdf

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 investment actions, and engaging in other professional activities. Practice and encourage others to practice in a professional and ethical manner that will reflect credit on themselves and the profession.

Maintain and improve their professional competence and strive to maintain and improve the competence of other investment professionals. The role of ethics within the investment profession is to promote the integrity and viability of global capital markets for the ultimate benefit of society.

By learning and committing to that a code of ethics, each professional contributes to a universal protocol of acceptable behavior. A profession can be defined as the occupational group that is based on the unique education, specialist knowledge, and framework of practice and behavior that establishes community trust, respect, and recognition.

A large proportion of professions outlines the importance of ethics, excellent service and empathy when dealing with the clients. A credible profession is characterized by the strong trust from both the clients and the society at large.

Profession builds through the following ways:. The provision of community services creates confidence and professional pride and professional acceptance. Consequently, a trustworthy profession is substantially flexible and is independent from the government regulatory bodies when carrying its operations. The trust of a profession is built if it puts its integrity and the interest of clients above their interests.

In summary, a profession gains trust if it shows fiduciary duty- a commitment to high-quality care when acting for the benefit of another party. A profession is trusted if it is grounded on codes and standards recognized by regulators and the government, under which the profession is established. A profession should develop an elaborate entry requirement into a profession since membership in a profession is a sign to the consumers that the professional will deliver high-quality service.

Such requirements include expertise, knowledge, technical skills, and ethics. Experienced and skilled practitioners should make available useful knowledge to its members to work resourcefully and ethically, based on best practice. Having qualified into a profession, there is need for ongoing education to its members to accommodate the ever-changing knowledge and technical skills, technology, standards of ethical behavior, legal and business environment where professional services are needed.Ethics level 1 cfa.

Parent chart. Code and Standards. Duties to. Standard I: Professionalism. Standard II: Integrity of. Capital Markets. Standard III: Duties to. III-C: Suitability. Preservation of Confidentiality. Standard Iv: Duties to.

Ethics Level 1 Cfa PDF

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Allow analytics tracking. Analytics help us understand how the site is used, and which pages are the most popular. Read the Privacy Policy to learn how this information is used. The Code of Ethics and Standards of Professional Conduct Code and Standards are the ethical benchmark for investment professionals around the globe. The Code and Standards have been translated into more than 20 languages. The guidance offers real-world examples of how to apply the Code and Standards to ethical dilemmas that can occur in the day-to-day professional activities of members.

The Standards of Practice Handbook 11th edition contains the Code and Standards effective 1 July and the guidance applicable at publication. As the investment management landscape evolves, we update the guidance to provide for current scenarios. The latest guidance is available below. You can test your application of the Code and Standards with short cases based on real-world scenarios. Members annually commit to uphold the Code and Standards, completing a Professional Conduct Statement as part of their membership renewal process, and disclosing any potential violations of the Code and Standards.

Learn more about the Professional Conduct Program. Italian: Il Codice etico e le Norme di condotta professionale.

Privacy Settings Functional cookieswhich are necessary for basic site functionality like keeping you logged in, are always enabled. Save Settings. Contact the Ethics Helpdesk for assistance. All of the following are PDF documents.