Is this an ethical violation?

CFA Level III
#1

Do the following come under Additional Compensation Arrangement under Duties to Employer?

  1. Teaching people guitar.

  2. Tutoring finance lessions

  3. Teaching Yoga?

  4. Teaching in an MBA institute.

All activities are done in free time (out of office/ business hours)

#2

I think yes , unless the amounts earned are insignificant . The firm may have a policy on these things.

Of course the presumption is you earn something in these activities and do not do it pro bono.

#3

The key phrase you are looking for is "in competition with their employer "

#4

so…

1.‘in competition’ but allowed by employer = no breach?

2.‘not in competition’ but not approved= no breach?

#5

Not necessarily . Since the employer pays you compensation and incentive , they want to know where and how you earn outside-the-job income as well. Just so they can align incentives correctly . If you earn more outside-the-job than working on the job , how motivated will you be?

#6

cool i seem to be the only idiot using smileys here

#7

add in the list “part time hooker” too

#8

With Additional Compensation Arrangement, the employee should get the written agreement from the employer and other relevant parties…

What about the client? Should the arrangement be disclosed to the clients?

#9

I struggled with this for Level 2. Here was the conclusion I came to - please correct if wrong:

If you are engaging in an activity that is finance related (competitive practice), you need written approval all around.

If you are engaging in a non-finance related job (i.e. bar tending), no approval is needed.

But! If the bar-tending job is taking up so much of your time / energy that it detracts from your performance at your primary, finance related job, you have to quit the bar-tending job beacuse you are depriving your employer of your skills and abilities and violating the general loyalty standard.

#10

That’s exactly what i thought when I posted the question . Hence mentioned " out of office hours" … A similar question popped up one of the exams and I remember answering it as not a violation. M @ftwcfa … With ur answer I am back to the confused state… Anyone , Please help. Thanks