Ethics and Professional Standards: Study Session 2
Study Session Materials
Complete List of CFA Program Readings
Topic Overview
Ethical and Professional Standards: Application
This study session uses case studies as an aid to understanding and internalizing the values and standards presented in the CFA Institute Code of Ethics and Standards of Professional Conduct.
The cases present realistic but fictional situations that closely approximate how individuals practicing in the investment industry encounter ethical issues in their day-to-day activities. The discussions following each case identify key violations of the Standards of Professional Conduct, recommend corrective actions, and, when appropriate, formulate policy statements a firm could use in seeking to prevent the violations. The Standards Reporter readings present regulatory actions taken in response to actual occurrences and explain how the violations would be viewed from the perspective of the Code of Ethics and Standards of Professional Conduct.
There is widespread recognition that certain situations create a “fiduciary” relationship in which an elevated level of fidelity, due diligence, and prudence is required of the investment manager. Historically, the term “fiduciary” has been defined in country-specific laws and regulations, making generic definitions difficult. Nonetheless, the underlying principles of the prudent investor rule, presented in “Prudence in Perspective,” capture much of what is expected of investment professionals entrusted with the prudent management of client assets.
View learning outcome statements (LOS) for reading objectives.
Complete list of CFA Program Readings
|
Members may download these designated readings. Log in for access. |
|
“The Glenarm Company” |
|
View LOS |
|
“Preston Partners”
|
|
View LOS |
|
“Super Selection”
|
|
View LOS |
|
“Trade Allocation: Fair Dealing and
Disclosure” Standards Reporter (AIMR, November/December 1996; adapted 2005) Member download (PDF) |
|
View LOS |
|
“Case Study: Changing Investment Objectives” Standards Reporter (AIMR, January/February 1998; adapted 2005) Member download (PDF) |
|
View LOS |
|
“Prudence in Perspective” Ch. 2, including Appendixes 3 and 4, Investing and Managing Trusts under the New Prudent Investor Rule, John Train and Thomas A. Melfe (Harvard Business School Press, 1999) |
View LOS |