Professional Conduct Program and the Process for Enforcement of Code and Standards

CFA Institute Professional Conduct Program and the Process for Enforcement of Code and Standards

Violations of the CFA codes and standards are reviewed through the CFA Institute’s Professional Standards and Policy Committee (PSPC). This committee is authorized to conduct investigations and impose penalties. Within the PSPC, there are two subcommittees.  First, the Disciplinary Review Committee (DRC) is charged with reviewing potential violations and enforcing the Code of Ethics. Second, the Standards of Practice Council (SPC) is charged with editing, deleting, or adding standards and distributing updated information to CFA members.

Causes for an investigation

CFA Institute members may be investigated based on:

1. Violation of the CFA Institute Articles of Incorporation, Bylaws, Code of Ethics, Standards of Professional Conduct, or Rules of Procedure or other applicable rules

2. Sanction or injunction imposed by a government or judicial agency, or public or private self-regulatory organization with jurisdiction over investment-related activities

3. Conviction of a felony, or (if the jurisdiction does not define a felony) any crime punishable by more than one year in prison

4. Ban or restriction (permanently or indefinitely) from registration under a jurisdiction’s securities laws or any restriction related to any investment-related professional activity

5. Failure to complete, sign and return the Professional Conduct Statement

6. Falsifying information on a candidate or society membership application

7. Failure to cooperate with the CFA Institute’s inquiry and investigation into one’s own conduct or the conduct of another member

8. Any other good cause

Consequences

If found to be in violation of codes and standards, members are subject to censure, suspension, or revocation of membership. Candidates can also be penalized by revoking the right to sit for CFA examinations, thereby becoming ineligible for membership.