Page 12 - FINAL CFA II SLIDES JUNE 2019 DAY 1

LOS 1b: Explain the ethical responsibilities READINGS 1 AND 2: CFA INSTITUTE CODE OF ETHICS AND STANDARDS OF
required by the Code and Standards, including the PROFESSIONAL CONDUCT GUIDANCE FOR STANDARDS I–VII
sub-sections of each Standard.

IV. DUTIES TO EMPLOYERS

A. Loyalty: Use your skills and abilities to always act for the benefit of your employer; and do not divulge confidential
information, or otherwise cause harm to your employer.

B. Additional Compensation Arrangements: Do not accept gifts or benefits that competes with, or might reasonably be
expected to create a conflict of interest with employer’s interest unless with written consent from all parties involved.

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C. Responsibilities of Supervisors: Make reasonable efforts to ensure that anyone subject to your supervision or
authority complies with applicable laws, rules, regulations, and the Code and Standards.

V. INVESTMENT ANALYSIS, RECOMMENDATIONS, AND ACTIONS (ARA)

A. Diligence and Reasonable Basis:
1. Exercise diligence, independence, and thoroughness in ARA.
2. Have a reasonable and adequate basis, supported by appropriate research and investigation, for ARA.

B. Communication with Clients and Prospective Clients:
1. Disclose the investment methodology used to ARA and promptly disclose any changes!
2. Disclose significant limitations and risks associated with the investment process.
3. Use reasonable judgment in identifying which factors are important to ARA and include those in all communications.
4. Distinguish between fact and opinion in the presentation ARA.

C. Record Retention: Keep this to support ARA, and other investment-related communications.