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Study Session 2: Ethical and Professional Standards in Practice

Incorrect trade execution by PM - Reading 3 Practice Problem 3 - Why is A incorrect?

HI All

I am looking for clarity regarding the below question. What is required from the portfolio manager when a trade has been executed incorrectly. I understand that you would credit the interest but what do you do with the over-allocation of shares e.g. 30000 shares in the case below?

Reference to where this is cover in the material will also be appreciated. Thanks


Execution Responsibility and Fiduciary Duty

Hi all, 

Why the execution-only responsibilities doesnt create fiduciary duty as stated in the following example?

Example 11 (Execution-Only Responsibilities):

When are you a candidate after the exam?

OK so if you don’t sit for the exam (for which you were formerly registered) you are no longer a candidate. This is news to me, I thought you are a candidate until results come out regardless of you sat or not for the exam.

On this line of thinking. What happens if you sit for the AM session, but not for the PM (let’s say you are taken into hospital with severe diarrohea or whatever) - you obviously will fail, but are you still a candidate or not?

Fair dealing and Priority of Transactions

I have in my notes (derived from earlier practice questions) that Fair Dealing concerns transactions among clients, while Priority of Transactions between clients and my company.

Is this correct or not?

Responsibilities of Supervisors

When a violation (of whichever standard) is committed by the assistant, but the question is if his supervisor (CFA member or candidate) violated the Code and Standards.

It was my understanding that the supervisor violates IV C Supervisors responsibility and not the one breached by his assistant. Does the supervisor violate both standards?

Ethics Handbook

Hi colleagues,

Is it expected we know exact titles of standards of ethics?

In answers to cases in Ethics on the exam, should we refer, for example, to CFA Code in general or do we have to make a more specific reference to “Standard III(D)—Performance Presentation, as discussed in the CFA Institute Standards of Practice Handbook”? 

Is this a violation of CFA code of ethics?

Would it be a violation of the code of ethics if a CFA charterholder who is a portfolio manager, decided to show clients a different time period of returns based on the current performance. So if for example the past 6 months was good for a clients account they would show performance for 6 months, but if the past 6 months was poor, but then the past month was good, they would show just one month performance instead? To me this is very unethical but I am wondering what others think.

CFA L3 Ethics

Hi Everyone

I have Cleared my CFA L2 and planning to take L3 next June . I was going through the curriculum and got to know that CFA L3 Ethics Syllabus has been updated and now it has 4 readings. I wanted to know whether these additional readings can be tested or is it going be to be the same old testing in L1 &L2 of Professional Standards 

Asset Manager Code of Conduct


I’ve never been a fun of the topic of Ethics but I put up with it. But now this AMCC! It’s almost the same, but yet not. I’ve just read it, fell asleep on every page and I had practicly no idea when trying to answer the practice questions. How can this be internalized?