Learning Sessions – Ethical and Professional Standards

Study Session 1

Reading 1 – Ethics and Trust in the Investment Profession

Read our in-depth summary of Ethics and Trust in the Investment Profession

– LOS 1a: explain ethics
– LOS 1b: describe the role of a code of ethics in defining a profession
– LOS 1c: identify challenges to ethical behavior
– LOS 1d: describe the need for high ethical standards in the investment industry
– LOS 1e: distinguish between ethical and legal standards
– LOS 1f: describe and apply a framework for ethical decision-making

Reading 2 – Code of Ethics and Standards of Professional Conduct

Read our in-depth summary of the Code of Ethics and Standards of Professional Conduct

– LOS 2a: describe the structure of the CFA Institute Professional Conduct Program and the process for the enforcement of the Code and Standards
– LOS 2b: state the six components of the Code of Ethics and the seven Standards of Professional Conduct
– LOS 2c: explain the ethical responsibilities required by the Code and Standards, including the sub-sections of each Standard

Reading 3 – Guidance for Standards I-VII

Standard I – Professionalism

Standard II – Integrity of Capital Markets

Standard III – Duties to Clients and Prospective Clients

Standard IV – Duties to Employers

Standard V – Investment Analysis, Recommendations, and Action

Standard VI – Conflicts of Interest

Standard VII – Responsibilities as a CFA Institute Member or CFA Candidate

– LOS 3a: demonstrate the application of the Code of Ethics and Standards of Professional Conduct to situations involving issues of professional integrity
– LOS 3b: distinguish between conduct that conforms to the Code and Standards and Conduct that violates the Code and Standards
– LOS 3c: recommend practices and procedures designed to prevent violations of the Code of Ethics and Standards of Professional Conduct

Reading 4 – Introduction to
the Global Investment Performance Standards (GIPS)

Read our summary of introduction to the GIPS Standards

– LOS 4a: explain why the GIPS standards were created, what parties the GIPS standards apply to, and who is served by the standards
– LOS 4b: explain the construction and purpose of composites in performance reporting
– LOS 4c: explain the requirements for verification

Reading 5 – The GIPS Standards

Read our in-depth summary of the GIPS Standards

– LOS 5a: describe the key features of the GIPS standards and the fundamentals of compliance
– LOS 5b: describe the scope of the GIPS standards with respect to an investment firm’s definition and historical performance record
– LOS 5c: explain how the GIPS standards are implemented in countries with existing standards for performance reporting and describe the appropriate response when the GIPS standards and local regulations conflict
– LOS 5d: describe the nine major sections of the GIPS standards

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