Ethics violation - Standard III E

Hello everyone,

I have an ethics question that I have been grappling with for a few months at work. It concerns Standard III-E: Preservation Of Confidentiality regarding client information. Here’s the story:

I am pursuing the CFA designation (obviously) and currently work in a firm that - among other things - does FX risk management. Without divulging too much, our firm deals with international customers that have to convert currencies to pay operating costs, repatriate profits, etc. We do this through basic spot transactions to more complex forward contracts, swaps options and structured products.

We also send money (once a client converts it) to their international suppliers. Payments are sent either via wire transfers (SWIFT) or ACH, SEPA, etc. depending on where the client is located in the world and the currency being sent. We use our own bank accounts to send the money in these cases. As a result, there is no way to trace the payment back to the actual company it was billed to unless our client specifies that we attach a reference in the transfer such as “Payment for invoice 123 from company ABC” in which case company ABC is our client.

Oftentimes, the companies that we pay for our clients call our office, saying that they received a payment from our firm, but that since there was no reference attached to it, they do no know what invoice from which customer to apply this payment to. The only information that they have is that there was a payment from our company for a certain amount that was deposited into their bank account. On my end, I can easily determine who sent this money to the company in question by searching our records. However, this would obviously mean divulging client information (transaction details) to a third party - even though they are likely a beneficiary of our customer and the intended recipient of the payment(s) in question. Up until now, I have cited the CFA standards and never divulged any payment details in these cases. Sometimes these payments are for large international shipping orders and millions of dollars worth of products could be held if the beneficiary does not apply the payment to the right customer account on their end, which they cannot do unless they know who we are sending money on behalf of - obviously something that could harm my firms client that sent the payment.

My question is: Is it a violation of Standard of Conduct III E: preservation of confidentiality to divulge client payment history to a third party, even if the party that the information is being given to is the intended recipient of the aforementioned money?

Thanks for your assistance in advance. If anyone needs further clarification, please let me know…


I think anti money laundering legislation would take priority here. You surely have to disclose who the payment is from. Been a while since I looked at this stuff but the payment is not from your company it is from a 3rd party, you are only acting as an intermediary.

In the EU you must provide this information…

I think breaking the code of ethics might be the smaller issue here…