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The Code and Standards are mandatory for all CFA Institute members and CFA Program candidates. The Professional Conduct Program (PCP) is overseen by the CFA Institute Board of Governors, and it, along with the Disciplinary Review Committee (DRC), ensures compliance with the Code and Standards.
The DRC comprises volunteer CFA charter holders who form panels to assess conduct cases and collaborate with Professional Conduct staff to develop and review conduct-related policies. The enforcement framework for the Code and Standards is outlined in the CFA Institute Bylaws and Rules of Procedure for Professional Conduct. Additionally, the Professional Conduct division is responsible for upholding testing policies for other CFA Institute education programs.
Professional Conduct inquiries arise from five primary sources:
When an inquiry is initiated, the PC staff may investigate by:
After examining the gathered information, PC staff may reach several conclusions:
If the member or candidate rejects the charges and sanctions:
CFA Institute sanctions for violations can result in severe outcomes, including:
For candidates in the CFA Program:
Question
When an inquiry is initiated, the PC staff may investigate via all but which of the following?
- Requesting a self-disclosure statement from the member or candidate.
- Interviewing the member or candidate, complaining parties, and third parties.
- Collecting documents and records relevant to the investigation.
Solution
The correct answer is C.
Following an inquiry, PC staff might investigate further by seeking a written explanation from the member or candidate. This explanation may or may not relate to the initial inquiry.
A and B are incorrect. Members and candidates must annually disclose any issues that raise concerns about their professional conduct, like civil litigation, criminal investigations, or written complaints. This disclosure is part of the Professional Conduct (“PC”) Statement and is not triggered by an inquiry.
Reading 29: Code of Ethics and Standards of Professional Conduct
Los 29 (a) Describe the structure of the CFA Institute Professional Conduct Program and the disciplinary review process for the enforcement of the CFA Institute Code of Ethics and Standards of Professional Conduct