Lesson 4 of 5 · All lessons in this module
  1. Why ethics matters in investing
  2. Who maintains and enforces the Code and Standards
  3. The six components of the Code of EthicsVideo lesson
  4. Standards I–III: professionalism, markets, clients
  5. Standards IV–VII: employers, analysis, conflicts, CFA

Lesson 4 of 5 · 14 min

Standards I–III: professionalism, markets, clients

Standards I to III ask you to be a competent and honest professional, to keep markets fair, and to put clients first while treating them fairly and suitably.

In short

  • I Professionalism: know and follow the stricter of law and the Code; stay independent (no compromising gifts); no misrepresentation; no dishonest conduct; keep up your competence.
  • II Integrity of Capital Markets: do not trade on or pass on material nonpublic information; do not manipulate prices or volume to mislead.
  • III Duties to Clients: loyalty, prudence and care (clients before employer and self), fair dealing across clients, suitability, fair and complete performance presentation, and confidentiality with three exceptions.
  • Suitability has two parts: an advisory relationship (know the client, judge suitability, total portfolio) and managing to a mandate (stay consistent with the mandate).
  • Confidentiality exceptions: illegal activity by the client, disclosure required by law, or the client permits it.

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