Study Notes for CFA® Level II – Ethical and Professional Standards – offered by AnalystPrep

Reading 45: Code of Ethics and Standards of Professional Conduct

-a. Describe the six components of the Code of Ethics and the seven Standards of Professional Conduct;

-b. Explain the ethical responsibilities required of CFA Institute members and candidates in the CFA Program by the Code and Standards;

Reading 46: Guidance & Application for The Standards of Professional Conduct (I-VII)

Standard I – Professionalism

• (A) Knowledge of the Law 
• (B) Independence and Objectivity
• (C) Misrepresentation
• (D) Misconduct
• (E) Competence

Standard II – Integrity of Capital Markets

• (A) Material Nonpublic Information
• (B) Market Manipulation

Standard III – Duties to Clients

• (A) Loyalty, Prudence, and Care
• (B) Fair Dealing
• (C) Suitability
• (D) Performance Presentation
• (E) Preservation of Confidentially

Standard IV – Duties to Employers

• (A) Loyalty
• (B) Additional Compensation Arrangements
• (C) Responsibilities of Supervisors

Standard V –  Investment Analysis, Recommendations and Actions

• (A) Diligence and Reasonable Basis
• (B) Communication with Clients and Prospective Clients
• (C) Record Retention

Standard VI – Conflicts of Interests

• (A) Disclosure of Conflicts
• (B) Priority Transactions
• (C) Referral Fees

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

• (A) Conduct as Participants in CFA Institute Programs
• (B) Reference to CFA Institute, the CFA Designation, and the CFA Program