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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.
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Standard IV (A) - Loyalty

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Standard IV (C) - Responsibilities of Supervisors

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01
Seven Standards of Professional Conduct
02
Standard I (A) Professionalism - Knowledge of the Law
03
Standard I (B) Professionalism - Independence and Objectivity
04
Standard I (C) Professionalism - Misrepresentation
05
Standard I (D) Professionalism - Misconduct
06
Standard II (A) - Material Non-public Information
07
Standard II (B) - Market Manipulation
08
Standard III (A) - Loyalty, Prudence, and Care
09
Standard III (B) - Fair Dealing
10
Standard III (C) - Suitability
11
Standard III (D) - Performance Presentation
12
Standard III (E) - Preservation of Confidentiality
13
Standard IV (A) - Loyalty
14
Standard IV (B) - Additional Compensation Arrangements
15
Standard IV (C) - Responsibilities of Supervisors
16
Standard V (A) - Diligence and Reasonable Basis
17
Standard V (B) - Communication with Clients and Prospective Clients
18
Standard V (C) - Record Retention
19
Standard VI (A) - Disclosure of Conflicts
20
Standard VI (B) - Priority of Transactions
21
Standard VI (C) - Referral Fees
22
Guidance for Standard VII – Responsibilities of a CFA Institute Member or CFA Candidate

Topics

Investment Management

Course Downloads

Resources

Guidance for Standards I – VII

Study Notes for CFA Level I - Guidance for Standards I – VII

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