Study Session 1 Ethical and Professional

Standards
Reading 1 - Ethics and Trust in Investment & Finance Profession
1. Intro
2. Intro to Ethics (personal judgement)
3. Ethics and Professionalism
4. Challenges to Ethical Conduct
5. Importance of Ethical Conduct in I & F profession
6. Legal vs Ethical Conduct (Law s& Regulations)
7. Framework of Ethical Decision Making
8. Conclusion

Reading 2 - Code of Ethics and Standards of Professional Conduct

Preface
1. CFA Institute Code of Ethics and Standards of Professional Conduct
- CFA Standards of Practice Handbook
2. CFA Institute Professional Conduct Program (for enforcement of Codes and Standards)
3. Adoption of Codes and Standards

Ethics and the Investment Industry Why ethics (moral principles or rules of
conduct) matter?
1. Ethics, Capital Markets and Society
2. Capital Market Sustainability and the Actions of One Individual (corporate compensation
strategies should not be such as to encourage otherwise sound and ethical individual into
indulging in unethical behaviors)
3. Relationship between ethics and regulations
4. Applying an Ethical Framework
a. (tool for following the principles of the firms code of ethics)
b. (tool for incorporating individual judgment)
5. Commitment to (Code of) Ethics by Firms
6. Ethical Commitment by CFA Institute

CFA Institute Code of Ethics and Standards of Professional Conduct

1. Code of Ethics
2. Standards of Professional Conduct
Reading 3 - Details of all 7 Professional Conducts
1. Professionalism
i. Knowledge of the Law
ii. Independence and Objectivity
iii. Misrepresentation
iv. Misconduct
2. Integrity to Capital Markets
i. Material Non Public Information
ii. Market Manipulation
3. Duty to Clients
i. Fair Dealing
ii. Loyalty Prudence and Care
iii. Suitability
A. For Advisory Relations
1. Assess individuals investment experience, risk and return objectives,
and financial constraints prior to making any advice or action
2. Assess that an investment is suitable to the clients financial situation
and consistent with the clients written objectives, mandates, and
constraints before making any advice or taking action.
3. Assess suitability of investment in context of his total portfolio.
B. For Managing Portfolios
iv. Performance Presentation
v. Preserving Confidentiality
A. Unless Legal
B. Required by Law
C. Permitted by Law
4. Duty to Employers
i. Loyalty
ii. Responsibility
iii. Declining Additional Compensation
5. Investment Analysis, Recommendations and Actions
i. Diligence and Reasonable Basis
ii. Communication with Current and Prospective Clients
iii. Record Retention
6. Conflicts of Interest
i. Disclose any Conflicts of Interest
ii. Priority of Stakeholders of any Transaction
iii. Referral Fees
7. Duty as CFA Institute Member or Candidate
i. Conduct as participants in the CFA Institute Program
ii. Reference to CFA Institute, the CFA Designation, and the CFA Program
Reading 4 - Intro to GIPS

Reading 5 - GIPS Standards