What are the ethical standards expected of CFA candidates and charterholders
The CFA Institute sets forth rigorous ethical standards for both CFA candidates and charterholders, reflecting the organization’s commitment to maintaining the highest level of integrity and professionalism within the financial industry. These standards are designed to protect the interests of clients, maintain public trust in financial markets, and ensure that investment professionals conduct themselves in a manner that is both ethical and professional. The ethical standards expected of CFA candidates and charterholdersare embodied in the CFA Institute Code of Ethics and Standards of Professional Conduct. They include, but are not limited to, the following key areas:
1. Professionalism
– Compliance with Laws: Adherence to all applicable laws, rules, and regulations of any government, regulatory organization, licensing agency, or professional association governing their professional activities.
– Integrity and Respect: Conducting themselves with integrity and respect in all professional activities to reflect positively on their professionalism and the CFA designation.
2. Integrity of Capital Markets
– Market Manipulation: Refraining from practices that could affect the integrity of market prices.
– Material Nonpublic Information: Not engaging in investment practices that take advantage of information not available to the public.
3. Duties to Clients
– Loyalty, Prudence, and Care: Placing the clients’ interests before their own and acting with diligence and reasonable care.
– Fair Dealing: Treating all clients fairly, without favoritism or discrimination.
– Confidentiality: Keeping client information confidential unless the law requires disclosure.
4. Duties to Employers
– Loyalty: Acting in the best interest of their employer while still prioritizing the duty to the client when the two are in conflict.
– Responsibilities of Supervisors: Ensuring that those under their supervision adhere to the same ethical standards and compliance procedures.
5. Investment Analysis, Recommendations, and Actions
– Diligence and Reasonable Basis: Exercising diligence, independence, and thoroughness in analyzing investments, making recommendations, and taking investment actions.
– Presentation: Presenting investment analysis and recommendations in a fair, accurate, and thorough manner.
6. Conflicts of Interest
– Disclosure and Priority: Fully disclosing any conflicts of interest to clients and employing all reasonable efforts to ensure that such conflicts do not compromise their independence and objectivity.
7. Responsibilities as a CFA Institute Member or CFA Candidate
– Reference to CFA Institute, the CFA Designation, and the CFA Program: Being honest and accurate in any statements about the CFA Institute, the CFA designation, and the CFA Program.
By adhering to these ethical standards, CFA candidates and charterholders not only demonstrate their commitment to professional excellence but also contribute to the overall trust and integrity of the financial industry. The CFA Institute takes compliance with these standards very seriously and can enforce them through disciplinary sanctions for those who fail to comply. Ultimately, these ethical standards serve to ensure that CFA charterholders and candidates act in an ethical and professional manner that benefits clients, the markets, and society at large.
