CFAI Ethics Book 1 page 25

In Exhibit 1, second set from the top, it says LS law applies.

Shouldn’t it be MS law applies because it is more strict?

If you go back to the beginning of exhibit 1 on page 24, the 4th set from the top says MS law applies. These are almost identical questions, but the answers are different.

My copy of the curriculum says that MS law applies in both cases.

Nowhere in my curriculum pages (on psg 24-25) does the LS set of rules apply…this actually made me think or realize that I can’t think of a situation where the LS would apply. Either the Code or something stricter should always apply right? So I can’t think of a scenario off the top of my head where LS would apply…

You are both right that ultimately the MS rule applies. I understand that. But there are 3 columns in the exhibit. I’m talking about the first column before any type of analysis happens.

The first column in that second set, in the middle of the statement, it says

“Member resides in LS country, does business in MS country; LS law applies…”

This seems to imply that before any analysis is done, the applicable law is the law that the member resides in.

But this is not consistent with the other item set that says

“Member resides in LS country, does business in MS country; MS law applies…”

Column 1 is simply giving you a bunch of possible legal scenarios. Put “If” in front of the information in column 1:

_ If member resides in LS country and does business in MS country and MS law applies, then . . . what is the member’s duty?_

_ If member resides in LS country and does business in MS country and MS law applies, but LS law says that law where business is conducted governs, then . . . what is the member’s duty?_

And so on