Standard V (C) - Record Retention
Members and Candidates must develop and maintain appropriate records to support their investment analysis, recommendations, actions, and other investment-related communications with clients and prospective clients.
- The records are a property of the firm and members cannot take them while leaving without the consent of the firm.
- If there are no regulatory requirement, CFA Institute recommends retention period of 7 years for such records.
One of the clients of an investment management firm is upset due to the negative returns by their portfolio over the past one year. In the portfolio about 40% of funds are allocated to automobile stocks and these are the stocks that suffered major losses during the year. The client’s complain is that the investment manager should not have allocated so much money to the automobile sector. The investment manager however has records to show the reason for allocate these funds to the automobile sector and even the investor policy statement which has been updated regularly mentions this clearly. The records also indicate that asset allocation strategy was clearly explained to the client. This is not a violation of the Code and Standards.
- 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