(As usual, “MS” means laws are more strict than CFAI standards, “LS” is less strict) This should be an easy one - but I’m finding a conflict between the CFAI curriculum and the Schweser answer. CFAI member resides in MS Country A but does business only in LS Country B. The laws of country A state that professional conduct is governed by the laws of the locality in which business is conducted. The member has a duty to adhere to: A. Laws of Country A B. Laws of Country B C. CFAI Standards of Professional Conduct D. Obviously wrong answer Schweser says that the correct answer is A. However, this seems to conflict with page 21 of the actual 2007 CFAI curriculum which states: “Member resides in MS country, does business in LS country; MS law applies, but it states that law of locality where business is conducted governs. DUTY: Member must adhere to the Code and Standards.” So, the correct answer should be C, right? wrong? any thoughts?
I came across a simmilar question, and answer for that was C
Every practice question I have done, the answer has always been the more strict policy.
That’s what I thought at first but then missed a problem on a CFA sample. We should be careful as, in this case, it’s the Code that applies - Again, from the CFAI 2007: “Member resides in MS country, does business in LS country; MS law applies, but it states that law of locality where business is conducted governs. DUTY: Member must adhere to the Code and Standards.”
The answer should be C. Btw what is the question number from Schweser?
Exam Flashback#2 of the 2006 Edition (page 38, book 1) This is a rather big miss - and it’s not just a letter answer but a short explanation saying the member must “abide by the strictest requirement” is it possible the CFAI Code changed on this from '06 to '07?
Im looking at the CFAI '07 book right now. It clearly says on page 21: Because applicable law states that the law of the locality where the business is conducted governs and local law is less strict than the Code and Standards, the member must adhere to the Code and Standards. Answer should be C.
CFAI member resides in MS Country A but does business only in LS Country B. The laws of country A state that professional conduct is governed by the laws of the locality in which business is conducted. The member has a duty to adhere to: A. Laws of Country A B. Laws of Country B C. CFAI Standards of Professional Conduct Am I reading something wrong here? He is in Country A. Country A’s law says ABIDE BY LOCAL LAW… Since it is the MS Country TOO - there is no conflict between the LOCAL LAW and the STRICTER OF COUNTRY"S LAW OR CODE OF CONDUCT that the ESOP talks about. So A is the right answer, whichever way you look at it.
The law says to obey the law in which the business is conducted (in this case, that’s Country B which is less strict). Since the Country A law defers to Country B law and Country B law is less strict, he must obey the stricter CFAI Code. Follow? Agree?
oops missed that. yes you’re right. it should be C.
hmmm… I thot it would be A… you obey whichever has the stricter rules, the MS or CFAI… this problem doesn’t state which one is more strict…
actually i just read the manual again. It says that when LS law applies, adhere to Code of ethics. C is right then
r is zero, or not statistically significant.