Module 2 · Ethics & Professional Standards

Code of Ethics and Standards of Professional Conduct

EN: The 6 Code components and 7 Standards (I–VII).
VN: 6 nguyên tắc Code và 7 Standards (I–VII).

1. Code of Ethics — Six Components Core

Members and Candidates must:

  • 1. Act with integrity, competence, diligence, respect, and in an ethical manner with the public, clients, prospective clients, employers, employees, colleagues, and other capital-market participants.
  • 2. Place the integrity of the investment profession and the interests of clients above their own personal interests.
  • 3. Use reasonable care and exercise independent professional judgment.
  • 4. Practice and encourage others to practice in a professional and ethical manner.
  • 5. Promote the integrity and viability of the global capital markets.
  • 6. Maintain and improve their professional competence and strive to improve the competence of other investment professionals.

2. Seven Standards (I–VII) Core

  • I Professionalism — Knowledge of Law, Independence, Misrepresentation, Misconduct.
  • II Integrity of Capital Markets — MNPI, Market Manipulation.
  • III Duties to Clients — Loyalty/Prudence/Care, Fair Dealing, Suitability, Performance Presentation, Confidentiality.
  • IV Duties to Employers — Loyalty, Additional Compensation, Responsibilities of Supervisors.
  • V Investment Analysis — Diligence, Communication, Record Retention.
  • VI Conflicts of Interest — Disclosure, Priority of Transactions, Referral Fees.
  • VII Responsibilities — CFA Institute Conduct, CFA Designation Use.

Practice problem Practice

Practice problem

A CFA charterholder accepts a $20 box of chocolates from a client at year-end thanking her for good service. Violation?

Show solution
Standard I(B): Independence and Objectivity.
Modest, customary gifts from clients (already a client) typically permitted.
From prospective clients or vendors, stricter scrutiny applies.
No violation — modest customary gift from existing client is acceptable.