ethics: rules and in practice.

and…in ethics they ve listed a gazillion rules right? so how is it in real life? how different is reality than rules? i mean in pakistan rules are so different than practice. there is so much bribery here in pakistan…so if you dont report it they kick you out of the cfa thingy? i mean they ve said dont even wine and dine (we dont wine any way) at a client’s. right? and in pakistan the client bribes and gives dinners and shite? so if you dont report it or drink some tea at a client…they kick u out of cfa charter? i feel like an idiot asking this. but i am a layman when it comes to the actual thing. i might know fra but know nothing about how things are in practice. how strictly do they apply the ethics rules? cuz in my country they dont give a shite about rules. which is sad. i think it is different in different countries. i think in more developed countries the rules governing financial markets are stricter.

My friend, wine and dine of significant value is not allowed but many times these significant things are overlooked and named as ‘courtesy’, no one in Saudi will complain about your lavish dinner with the clients even though its not right. In Pakistan, even though bribery is common in society but in well educated and ‘informed’ and professional market people ADHERE TO CFA Ethics and YES CFA Rules apply in Pakistan and it is VERY probable that someone (another employee or employer or company will complain about you. So Pakistani finance professionals will surely catch someone who violates standards and expect them to complain about that behavior.

When I look at this exchange, it makes me proud to see that the value of the ethics piece is respected across the world by my other CFA comrades. I truly believe that internal enforcement by each and every candidate, charterholder and member is key to the long-term survival and prospering of this program.

thanks for the replies. here in pakistan corruption is much widespread…and there are no proper rules governing businesses or financial markets…even certain past prime ministers were involved in certain scandals. the majority of the populace knows nothing…dont even know when a breach occurs due to illiteracy.

another q for waleed hussain, do the people who train cfas at work, ingrain these ethics and adherence to the local laws as well. is that knowledge a part of their training?

sorry if those were dumb qs. parents were doctors and no one can tell a cfa from a cpa here…i myself am just an undergrad student. cant tell the tail from the head.

Bear in mind that as a Charterholder and even for a candidate you are bound by the ethical standards of the CFA program regardless of the situation in the jurisdication you’re in. In fact the rule is that you must adhere to whichever is stricter between the local laws and customs or the CFA code of ethics and professional standards.

I’ve always wondered how far the Institute would take this rule. For example, what if I had an obligation to report some kind of unethical practice or violation, but doing so would result in my imprisonment for life (because the boss is tied to the authorities or something in a shady jursidiction)? What if it meant my life would be in jeopardy? Would they care and allow some leeway? Or are we expected to uphold the Code even if we have to die doing it?


Yes, you are expected to give your life to defend the Code. How could you even think otherwise? I have reported your insolence to CFAI.

^ lol

^That’s what they told us at the Jedi Academy. God Force, country, corps, and Code. Against all enemies, foreign and domestic.

Well it would suck to be you. I was in a situation in my country where I was given advance information of the pending intervention of our Central Bank into a local financial institution that was insolvent which could have resulted in my losing half of my life savings. Even though my colleagues at another local financial institution urged me to withdraw the funds immediately I refused on the grounds that because of the code of conduct and standards of ethical practice I could not trade or cause others to trade based on material non-public information. This was when I was just a candidate and not even a Charterholder. So you have to make a choice. Ethics is about doing what’s right in the most inconvenient of situations. Ethics mean you do what’s right even when no one is looking and there is no chance of being caught.

PS. The Central Bank did seize control of the financial institution a few days later but I was able to recover my funds including accrued interest.

When I read this, I immediately thought that either a.) half your life savings isn’t all that much, or b.) you’re full of it.

And I’m not sure if withdrawing funds from a savings account is the same as “trading or causing others to trade”.

First of all, if you don’t know the quantum then you shouldn’t comment. Second, it was not a savings account. The funds were being managed by a professional fund manager who I would have given instructions to liquidate the portfolio. Next time ask a question before jumping to foolish conclusions.

congrats on following the rules. glad things worked out for you

I’m not gonna lie to you, I was scared shitless. It all worked out in the end but it could have all gone horribly wrong.

Let’s see–half my life savings or CFA Charter. Which do I want?

Of course, the question really boils down to “how much is my life savings” and “how much is the CFA Charter worth going forward.” If I had significant money in a portfolio and I thought it was going to be seized by the central bank, I would absolutely, certainly, and without discussion, trade on that insider knowledge. If CFAI investigates me and punishes me, then I’ll just mail them back the charter.

I didn’t think otherwise, that’s why I asked the question. I stand prepared to put my life on the line to uphold financial market integrity. I just want to make sure my dedication is appreciated.

Since this in fact the case, do we get some kind of lightsabre along with our charter scroll? We should be given a fighting chance.


Between your life and your charter, i think it’s very obvious which one you can afford to lose.

But this discussion is very interesting and i am sure these conflicts happen everyday and i always wonder who and how these regulations are being enforced in such places.

I mean, who would stand up and report your wrong doing? if it’s someone you work with they are probably involved themselves, if it’s a counterparty, they have no motivation to report you, since, for the most part, you can’t really claim anything from filing a complaint to CFAI.

If a person had to decide between saving their life savings for retirement and pulling that money out, or risk losing their CFA charter status, I’m going to bet the person will probably decide to save their money.