Mean, Variance, Standard Deviation and CorrelationWhile making an investment decision, it is important to assess the risk/return profile of any invest...
Lessons
- Seven Standards of Professional Conduct
- Standard I (A) Professionalism - Knowledge of the Law
- Standard I (B) Professionalism - Independence and Objectivity
- Standard I (C) Professionalism - Misrepresentation
- Standard I (D) Professionalism - Misconduct
- Standard II (A) - Material Non-public Information
- Standard II (B) - Market Manipulation
- Standard III (A) - Loyalty, Prudence, and Care
- Standard III (B) - Fair Dealing
- Standard III (C) - Suitability
- Standard III (D) - Performance Presentation
- Standard III (E) - Preservation of Confidentiality
- Standard IV (A) - Loyalty
- Standard IV (B) - Additional Compensation Arrangements
- Standard IV (C) - Responsibilities of Supervisors
- Standard V (A) - Diligence and Reasonable Basis
- Standard V (B) - Communication with Clients and Prospective Clients
- Standard V (C) - Record Retention
- Standard VI (A) - Disclosure of Conflicts
- Standard VI (B) - Priority of Transactions
- Standard VI (C) - Referral Fees
- Guidance for Standard VII – Responsibilities of a CFA Institute Member or CFA Candidate
Standard IV (B) - Additional Compensation Arrangements
This standard states that the members must not accept any gift, benefits or compensation in any form that creates a conflict of interest with their own employers, unless they obtain written consent from all parties involved.
Examples of Violation
- Example 1: An investment manager working for a firm manages several clients. The manager is compensated for his job by his employer. One of the clients offers the manager a fancy gift if his portfolio does very well. The manager accepts the offer but does not inform his employer about it. This is a violation of the standard.
- Example 2 (Non-violation): An analyst working with an investment firm recently published a buy recommendation for an airlines company. The CEO of the airlines company, after seeing the report, asks the analyst to meet him for dinner, for further discussion. The analyst gains appropriate approvals, and then meets the CEO. After the meeting the analyst provides full details of the meeting and the dinner to his employer. This is not a violation of the standards.
You may find these interesting
Study Session 1 - Ethical and Professional Standar...The readings in this study session present a framework for ethical conduct in the investment profess...
What You Must Study – Ethical and Professional Sta...**Certification:** [CFA Exam Level 1](https://financetrain.com/certification-guides/cfa-level-1/) **...
Statistical Foundations: Mean and Standard Deviati...Many financial calculations and estimations require a statistical analysis of the variability of pas...
Dodd-Frank Act - Title IV: Regulation of Advisers ...This title is also be known as ‘‘Private Fund Investment Advisers Registration Act of 2010’’. It has...
Introduction to International Financial Reporting ..."The world is coming together in an accounting & finance arena and speaking a similar language" expl...
Preparing Your Clients for Higher IRS Due Diligenc...Under the revised Circular 230 requirements that govern a CPA's and Enrolled Agent's practice before...
Why Issue of Additional Equity Leads to Share Pric...It is generally observed that when a firm issues additional equity, the share prices fall. Why does ...
Types of Credit Events in a Standard ISDA Credit D...The default payment in a credit derivative is triggered by the occurrence of a credit event. We saw ...
CFA Seven Standards of Professional ConductThe CFA members and candidates are expected to know and adhere by the following standards of profess...
Related Downloads
Finance Train Premium
Accelerate your finance career with cutting-edge data skills.
Join Finance Train Premium for unlimited access to a growing library of ebooks, projects and code examples covering financial modeling, data analysis, data science, machine learning, algorithmic trading strategies, and more applied to real-world finance scenarios.
I WANT TO JOINJOIN 30,000 DATA PROFESSIONALS
Free Guides - Getting Started with R and Python
Enter your name and email address below and we will email you the guides for R programming and Python.