Ethical and Professional Standards
Covers the CFA Institute Code of Ethics and Standards of Professional Conduct.
Ethical and Professional Standards form a cornerstone of the CFA Level 1 curriculum, establishing the framework for professional conduct in the investment industry. The CFA Institute's Code of Ethics and Standards of Professional Conduct require members to act with integrity, competence, diligence, respect, and ethics in all professional activities. The Code of Ethics emphasizes placing client interests first, maintaining independence and objectivity, practicing with skill and diligence, upholding market integrity, and maintaining professional competence. Standards of Professional Conduct cover seven key areas: 1. Professionalism - Acting with integrity and competence, avoiding misconduct that reflects poorly on the profession 2. Capital Market Integrity - Promoting fair markets and avoiding manipulation 3. Duties to Clients - Including loyalty, prudence, suitability, fair dealing, and disclosure of conflicts 4. Duties to Employers - Maintaining loyalty while avoiding conflicts of interest 5. Investment Analysis & Recommendations - Using diligence, independence, and reasonable basis for recommendations 6. Conflicts of Interest - Fully disclosing and managing conflicts appropriately 7. Responsibilities as a CFA Institute Member - Adhering to the Code and Standards in all professional activities The curriculum also covers the Global Investment Performance Standards (GIPS), which ensure fair representation and full disclosure of investment performance. Ethical decision-making frameworks help professionals navigate complex situations by identifying relevant facts, stakeholders, duties, and principles before determining appropriate actions. This section typically represents 15-20% of the CFA Level 1 exam, highlighting its importance to the profession. Mastering these standards provides the ethical foundation upon which technical knowledge can be properly applied in investment practice.
Ethical and Professional Standards form a cornerstone of the CFA Level 1 curriculum, establishing the framework for professional conduct in the investment industry. The CFA Institute's Code of Ethics…
Concepts covered: Global Investment Performance Standards, Professional Standards, Code of Ethics, Applications of Ethical and Professional Standards
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