{"id":864,"date":"2019-07-12T17:36:00","date_gmt":"2019-07-12T17:36:00","guid":{"rendered":"https:\/\/analystprep.com\/cfa-level-1-exam\/?p=864"},"modified":"2025-05-23T12:36:59","modified_gmt":"2025-05-23T12:36:59","slug":"standard-4a-loyalty","status":"publish","type":"post","link":"https:\/\/analystprep.com\/cfa-level-1-exam\/ethical-and-professional-standards\/standard-4a-loyalty\/","title":{"rendered":"Standard IV(A) \u2013 Loyalty"},"content":{"rendered":"\n<script type=\"application\/ld+json\">\n{\n  \"@context\": \"https:\/\/schema.org\",\n  \"@type\": \"VideoObject\",\n  \"name\": \"Standard IV \u2013 Duties to Employers (2024\/2025 Level I CFA\u00ae Exam \u2013 Ethics\u2013Module 3)\",\n  \"description\": \"This CFA Level I Ethics video explains Standard IV \u2013 Duties to Employers. It covers loyalty, confidential information, whistleblowing, additional compensation, and supervisory responsibilities. Key topics include ethical conduct during resignation, avoiding conflicts of interest, documenting disclosures, and maintaining compliance policies, with examples to help candidates prepare for exam questions.\",\n  \"uploadDate\": \"2022-08-25T00:00:00+00:00\",\n  \"thumbnailUrl\": \"https:\/\/img.youtube.com\/vi\/0jsh54Uf78I\/maxresdefault.jpg\",\n  \"contentUrl\": \"https:\/\/www.youtube.com\/watch?v=0jsh54Uf78I\",\n  \"embedUrl\": \"https:\/\/www.youtube.com\/embed\/0jsh54Uf78I\",\n  \"duration\": \"PT17M19S\"\n}\n<\/script>\n\n\n\n<h2>[vsw id=&#8221;0jsh54Uf78I&#8221; source=&#8221;youtube&#8221; width=&#8221;611&#8243; height=&#8221;344&#8243; autoplay=&#8221;no&#8221;]<\/h2>\n<h2>IV. Duties to Employers<\/h2>\n<p>Standard IV outlines basic responsibilities by investment professionals for their employers.<\/p>\n<h2>Standard IV(A) \u2013 Loyalty<\/h2>\n<p>Standard IV(A) \u2013 Loyalty requires CFA members from behaving in a way that would negatively impact their employer\u2019s reputation or deprive it of profit.<\/p>\n<h2>Compliance<\/h2>\n<p>Members must always be loyal to clients first; however, they have a responsibility to act in a way that sustains the integrity of their firm. Members are obligated to comply with employer policies and procedures to the extent that they are lawful. Employers are not obligated to comply with the CFA Institute Code and Standards.\u00a0 However, to the extent that they expect to recruit and retain quality employees, employers should not develop policies that conflict with these codes.<\/p>\n<p>In all cases, CFA members must refrain from independent activity that conflicts with the\u00a0best interest of employers.\u00a0 Should an investment professional wish to engage in an\u00a0independent activity, his\/her employer should be notified and permitted to evaluate potential conflicts.<\/p>\n<p>A special mention related to the separation of employment specifies that some aspects of employment cannot be left behind or forgotten, such as learned skills; simple information that can be recalled from memory; and names of former clients; the departing employee should not exploit confidential documents and intellectual property belonging to an employer.<\/p>\n<p>It may be tempting for departing employees to take clients&#8217; lists, recommended lists of securities, and the like.\u00a0 However, even if a CFA member is very careful not to alert current clients about a separation from the employer before the departure, taking any documents from an employer violates Standard IV(A) \u2013 Loyalty.\u00a0 This extends to documents prepared for an employer by the departing employee.<\/p>\n<h2>Violation<\/h2>\n<p>Activities that could conflict with loyalty to an employer include misuse of proprietary information, sharing of confidential material, behaving in one\u2019s own interest rather than an employer, and misappropriation of client lists.<\/p>\n<p>Related to ethical violations by employers, a CFA member\u2019s loyalty to employers must be secondary to that of protecting the integrity of capital markets and duty to clients.\u00a0 In cases of conflict with laws and the Code of Standards, it may be acceptable for a member to act in a way that is counter to an employer\u2019s policies.\u00a0 Additionally, rather than commit a violation of the Code of Standards, members are encouraged to inquire with the CFA Institute\u2019s Professional Standards and Policy Committee (PSPC).<\/p>\n<blockquote>\n<h2>Question<\/h2>\n<p>Maria Wells resigned from Tru-tech Corporation as a market analyst.\u00a0 She has accepted a position with a company overseas who operates in a different industry, not directly competing with Tru-tech. When packing up her office, she found a bound copy of an analytical sector report that she\u2019s particularly proud of.\u00a0 Wells knows that to take the electronic version of this information would be a violation of Standard IV(A) \u2013 Loyalty since it is proprietary to Tru-tech.\u00a0 However, Wells takes a single hard-copy to satisfy her nostalgia.\u00a0 Wells is:<\/p>\n<ol type=\"A\">\n<li>Not in violation of Standard IV(A) \u2013 Loyalty since she didn\u2019t take the electronic root document, and only a single hard-copy of the completed analysis.<\/li>\n<li>In violation of Standard IV(A) \u2013 Loyalty because taking proprietary documents from an employer is prohibited.<\/li>\n<li>Not in violation of Standard IV(A) \u2013 Loyalty because the work was compiled by her; therefore, it is her property.<\/li>\n<\/ol>\n<h4 data-tadv-p=\"keep\">Solution<\/h4>\n<p>The correct answer is B.<\/p>\n<p>Wells is in violation of Standard IV(A) \u2013 Loyalty, which prohibits CFA members from taking any form of documentation from an employer at time of separation, even when that document has been prepared by the CFA member in question.<\/p><\/blockquote>","protected":false},"excerpt":{"rendered":"<p>[vsw id=&#8221;0jsh54Uf78I&#8221; source=&#8221;youtube&#8221; width=&#8221;611&#8243; height=&#8221;344&#8243; autoplay=&#8221;no&#8221;] IV. Duties to Employers Standard IV outlines basic responsibilities by investment professionals for their employers. Standard IV(A) \u2013 Loyalty Standard IV(A) \u2013 Loyalty requires CFA members from behaving in a way that would negatively&#8230;<\/p>\n","protected":false},"author":18,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[3],"tags":[],"class_list":["post-864","post","type-post","status-publish","format-standard","hentry","category-ethical-and-professional-standards","blog-post","no-post-thumbnail","animate"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.9 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Standard IV(A) \u2013 Loyalty | CFA Level 1 - AnalystPrep<\/title>\n<meta name=\"description\" content=\"Learn about CFA Standard IV(A) \u2013 Loyalty, which requires members to act in their employer\u2019s best interests and avoid conflicts that harm the firm.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/analystprep.com\/cfa-level-1-exam\/ethical-and-professional-standards\/standard-4a-loyalty\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Standard IV(A) \u2013 Loyalty | CFA Level 1 - 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