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Study Session 1: Ethical and Professional Standards

Level I Topics by CFAI Study Session

One of my favorite features of the new site is the ability to “tag” topics using one of the CFAI study sessions. For example, if you post a topic on ethics you can select Study Session 1: Ethical and Professional Standards so that your topic will show up in the filter for that study session. This will allow you and other members of AF to quickly access posts for a specific study session. To tag a new topic with a study session, simply choose that study session from the Filed Under categories above the Save button on the new forum topic page.

Major confusion - Ethics "Additional Compensation Arrangements"

When is it ok to accept additional compensation? 

In some practice questions the answer is “reject the compensation”, in others it is ” not violation so long as you disclose in writing and get permission from employer”

Are there an key things i should be looking out for? like when it involves a client compensation for their own portfolio, then it’s ok?? Because either way I feel any additional compensation arrangement will bring into question your “independence and objectivity, or fairness to other clients” even if that is not the case.

Someone help please.  

For those who struggle with Ethics

Would it be helpful if there’s a video that walks you through actual ethics questions, going through the thought process and how to separate the right answer from those that only look like the right answer?

The #1 struggle I have heard in my 5 years here is inability to tell what’s a violation, what isn’t.

I mean, all of you can read through the text on your own, but so far no prep material has effectively put words to describe what’s goes on in your brain as you read through the question and answer choices.

Is this something people would pay for?

GIPS: Third-party Verifiers

1. Can more than one third-party-verifier verify the GIPS compliance of a firm or is only one verifier permissible for the entire firm?

2. If a GIPS-compliant firm owns <50% of a non-GIPS-compliant firm, does the non-GIPS-compliant firm’s financial statements have to be transformed into compliant data for the GIPS-compliant firm to claim compliance? (Assume this event is any time after 1 January, 2000)

Ethics final review

As a final review, would you reread the ethics handbook, or resolve the CFAI & Kaplan Qbanks, given that you already solved them twice before?

Ethics violation question - professionalism, diligence

 A central bank fines a commercial bank it supervises for not following statutory regulations regarding non-performing loan provisions on three large loans as a result of the bank’s loan provisioning policy. Louis Marie Buffet, CFA, sits on the Board of Directors of the commercial bank as a non-executive director, representing minority shareholders. He also chairs the internal audit committee of the bank that determines the loan provisioning policy of the bank.

Soft Commissions situation - need help

When it comes to brokerage, I understand that an advisor needs to direct that brokerage to the benefit of the client when best execution is not obtained. However, the CFAI books do not clarify, and seem to even somewhat dodge, the question “If a client is getting best execution already, but the advisor is still receiving soft dollars, do the soft dollars need to be used in the best interest of that specific client? Or can they be used for the benefit of a different client?”

Ethics: duty to employer

Hi there

Help me understand this.

I came across this question.

William Conrad, CFA is due to leave his current employment as a stockbroker in order to set up his own business. Whenever he talks to clients he signs off by telling them that he will shortly be leaving the firm, and that he will be unable to talk about his new venture until after his resignation becomes effective. Has William violated the Code and Standards?

The answer is

No, as he has done nothing to induce the clients

Curriculum - Standard II A examples 2 and 7

Looking at the outcome of example 2 under Standard IIA in the curriculum, should the outcome of example 7 not specify that Roger failed to prevent the transfer of material non-public information and hence is in violation of Standard IIA?

Ethics Audio Book


Can any one please guide if I can get the audio book version of the CFA Standards of Practice Handbook? Since anyways it is just textual I am thinking of using my commute time to listen to it so that I dont have to utilize my normal reading time.