Qbank Question- Ethics

Can someone comment on this question? I chose C . Thanks

Nicholas Brynne, CFA, is a fixed-income analyst who trades in mortgage-backed securities (MBS). The MBS industry has seen sweeping regulatory changes since Brynne took his current position, and he now feels his understanding of applicable laws and regulatory standards is dated. Brynne must: A) update his understanding of applicable laws and regulatory standards relating to his position. B) rely on his firm’s policies and procedures for guidance on legal and regulatory standards. C) have all trades reviewed by his compliance department until he has obtained an expert level of knowledge in compliance.

Option A seems to be the correct answer. you have to keeo yourself updated of the applicable laws of the country you trade in.

The regulatory and applicable laws also apply to the firm as a whole, so option C to be seems inappropriate.

Option B is also not correct, because the candidate cannot just rely on the firm’s policies and procedure when the regulatory requirement of the country has changed against the company’s policy. The analyst can inform his firm of this change in laws and regulation and insist the firm adopt them before relying on the firm’s policy for trading.



Under CFA code of standards you are not required nor obliged to be an expert on current laws applicable to your profession/job. However, you must be accurately informed about them and comply with the more strict of both the CFA code and the applicable laws. So option C would not be correct.

As said above, you cannot just rely on the firm’s policies and procedures of compliance, they could be wrong. So B is not right at all.

In conclusion, the candidate must be informed and updated about the applicable laws related to his position. Correct answer A.

Thank you all!