Ethics - Key list

So I thought it would be a good idea to capture all “grey areas” of the Ethics portion that are likely to be tested in the exam. Please make this thread a compilation of Ethics rules and not a discussion so everyone can learn from it.

I’ll post mine once I’m at home


Checklists and templates created at prior firm are IP of the firm - Written consent to use them

Roadshows - Participacion is accepted as long as disclosed.

Show past performance - OK to show, but disclose where it took place and the role performed

Lobbying is OK as long as nothing illegal is done.

Conflicts of interest like business has to be disclosed in first place (rather than full separation), so that clients can also benefit when appropriate

Changes in key personnel or regulatory sanctions - Disclose! (not necessary for bonuses and termination packages though)

ACA are only related to competition against employer! If preliminary school teacher in free-time, that would not need to be disclosed (unless its 30 hours per week, cause it could harm employer)

Regular account information should be submitted to the client at least quarterly.

Pay everything if possible** :** accommodation, airplane tickets, etc.

Leaving an employer : Don’t take client info (unless accepted by employer), even if the client has left the firm. Preparatory activities (admin, legal paperwork, etc.) are OK.

High commissions : if service is worth it and there is no other alternative, is OK but disclose it

Course of action hierarchy if suspect of performance misrepresentation (when you hire an investment manager): 1) Consult supervisor, 2) See whistleblowing policies, 3) Discontinue the arrangement (extreme)

Restricted securities on a watch list : every employer should get written and prior approval (no specification of dollar amount)

Disaster recovery system is mandatory, but size, nature, and complexity depends on organization. Off-site back-up records are preferable, but on-line accepted as well if out-of-budget.

Storing account information in electronic form is accepted.

Fees disclosures : required to disclose both gross and net. Procedure to calculate contingent fees has to be disclosed regardless of client request.

Material changes in investment strategy : Managers must provide adequate information to clients before any material change. If the Manager makes a material change in investment strategy or style, clients should be given enough time to consider the proposed changes.

Cash gifts are prohibited! Gifts or entertainment that could impair independence must be refused.

Wrong use of CFA designation (like highlighted in a business card) is OK if the material is never distributed

Most meaningful differences between AM Code and COE are in the Risk Management, Compliance and Support section.

Business continuity plan: includes plans for contacting and communicating with clients during a period of extended disruption.

Firm’s mistake : accounts should be made whole with lost interest as well. Nothing is said in respect to the interest earned by accounts that did not receive shares and asked for them, but normal practice is to do nothing to avoid upsetting clients

Wrong use of CFA designation (like highlighted in a business card) is OK if the material is never distributed


Good to know list between REQUIRED and RECOMMENED

If you agree, write nothing. If you don’t, say why not but please understand I’m trying to make this a useful thread for the benefit of everyone, so flooding comments are not welcome…

BTW I took this one from somewhere, where there was a supervisor that prepared business cards for John Martins, CFA. The guy was still a candidate but since the cards were kept in a closed box there was no breach.


Was this an ethics question in the curriculum? Where on earth did you find this question?

Are you allowed to say that the CFA designation enhances your investment management skills?


It’s allowed if factualized. (Is this even a word?)

I’ve seen it somewhere cause I wrote it down… I’ve used CFAI, Schweser and Finquiz. I agree is too extreme, so let’s just skip it and keep compiling conflictive situations.


External advisers: provide enough information to the clients to understand investment methodologies or strategies employed

Performance Presentation requires firms to provide credible performance information to clients and prospective clients. A single composite that includes all client portfolios, regardless of investment objectives (which would likely be different for the retail and institutional clients) could be considered to be misleading.

Record retention** :** I’ve seen different things from AMC, GIPS and Standards. Can anyone elaborate?

Preservation of confidentiality and disclosure if required by law applies to all clients (former, current, prospective)

can you quote an example?


If you beat your peer’s return over certain time period, you can say you were the better investor for that time period but you can’t credit it to you being a CFA charterholder

Schweser Volume 1 Exam 1

@Sharky I’m not mistaken, some of the stuff that you’ve put up are from GIPS as well

also, in the case of cash gifts, if the firm has an upper limit for a cash gift, say 50 USD, would it be alright to accept a cash gift of say 40 USD?

“I have completed all three levels of the CFA program in the fastest time possible. The program allows me to obtain the highest set of credentials in the global investment industry, and has enhanced my portfolio managment skills. The skills that the CFA program cultivates are key assets for my career,”

^ I would have thought the ‘enhanced my portolio management skills’ bit is a breach of ethic guidelines but if you’re saying CFAI says it’s allowed, it must be.

thank goodness I don’t have to worry about ethics ever again lol