Page 14 - FINAL CFA II SLIDES JUNE 2019 DAY 1

READINGS 1 AND 2: CFA INSTITUTE CODE OF ETHICS AND STANDARDS OF
MODULE 2.1: STANDARDS I(A) AND I(B) PROFESSIONAL CONDUCT GUIDANCE FOR STANDARDS I–VII

LOS 2.a: Demonstrate a thorough knowledge of the CFA Institute Code of Ethics and Standards of Professional Conduct by applying the Code
and Standards to specific situations.
LOS 2.b: Recommend practices and procedures designed to prevent violations of the Code of Ethics and Standards of Professional Conduct.

I. PROFESSIONALISM

A. Knowledge of the Law (and regulations, including the Code of Ethics and Standards of Professional Conduct).

• Code and Standards vs. Local Law: Don’t violate even if legal, and follow stricter of the two!

• Participation or Association With Violations by Others: Dissociate yourself, e.g. resign (an extreme case). You may confront the
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person first, but approach your supervisor or compliance unit (no sitting on the fence).

Member Actions:
• Have procedures to keep up with changes in applicable laws, rules, and regulations.
• Maintain current reference materials for employees to access in order to keep up to date on laws, rules, and regulations.
• Seek advice of counsel from compliance department when in doubt.
• Document any violations when you disassociate yourself and encourage employers to bring an end to such activity.
• No reporting violations requirement to governmental authorities, but this may be advisable (check local law)
• You are strongly encouraged to report other members’ violations of the Code and Standards.

Firm Actions (encourage your firms to):
• Develop and/or adopt a code of ethics.
• Make available to employees information that highlights applicable laws and regulations.
• Establish written procedures for reporting suspected violation of laws, regulations, or company policies.
• If you supervise the creation and maintenance of investment services and products, be aware of and comply with the regulations and
laws regarding such services and products both in their country of origin and the countries where they will be sold.