The Asset Manager Code of Conduct

The Asset Manager Code of Conduct (AMCC) is an extension of the Code of Ethics and Standards of Professional Conduct, but it applies to entire asset management firms rather than individuals. It’s relevant to asset managers overseeing client funds through separate accounts or pooled funds, including mutual funds and fund-of-funds organizations.

The AMCC is designed to be adaptable to various asset management firms. By adopting it, firms convey a strong commitment to ethical conduct, building trust within the finance industry. Firms are encouraged to complement AMCC adoption with a compliance department and effective compliance procedures.

The CFA Institute Mission:

The CFA Institute’s mission is to set the highest standards of ethics, education, and professional excellence globally. Adopting the AMCC aligns with this mission, reinforcing ethical behavior in the investment profession.

Adopting the Code and Claiming Compliance

The AMCC is a guiding set of principles rather than a strict set of rules to be followed to the letter. Still, if the Manager has not complied with each of the principles of conduct and provisions of the Code, the Manager cannot represent that it complies with the Code.

Partial Compliance is Prohibited

Any statement that refers to partial or incomplete compliance (e.g., “the firm complies with the Asset Manager Code except for . . .” or “the firm complies with parts A, B, and C of the Asset Manager Code”) is not allowed.

Appropriate Claim of Compliance

When a Manager has met each of the requirements of the Code, the firm must state the following whenever the firm claims compliance with the Code:

“[Insert the name of Firm] claims compliance with the CFA Institute Asset Manager Code of Professional Conduct. This claim has not been verified by CFA Institute.”

Acknowledgment of Claim of Compliance to CFA Institute

In order to claim compliance with the AMCC, managers must use the CFAI online notification form at:

www.cfainstitute.org/assetcode

CFAI does not engage in any quality control for an organization’s claim of compliance by using this acknowledgment form for communication and information-gathering purposes only.

 

Question

Andrew Yong works at CoreVentures Capital, LLC., a venture capital firm that is pursuing the adoption of the Asset Manager Code of Professional Conduct. Which of the following is the most appropriate adoption statement for the firm to use on its website?

1. CoreVentures Capital, LLC is fully compliant with the CFAI Asset Manager Code of Professional Conduct. This claim has not been verified by CFA Institute.”
2. CoreVentures Capital, LLC claims compliance with the CFA Institute Asset Manager Code of Professional Conduct and the principles set forth therein. This claim has been verified by CFA Institute.”
3. CoreVentures Capital, LLC claims compliance with the CFA Institute Asset Manager Code of Professional Conduct. This claim has not been verified by CFA Institute.”

Solution

The correct answer is B.

It accurately states that the firm claims compliance with the Code and its principles, and it explicitly mentions that this claim has been verified by CFA Institute. This transparency and verification provide credibility to the claim.

A is incorrect. It implies that the firm is fully compliant with the Code, but it also states that the claim has not been verified by CFA Institute. This could mislead the audience into thinking that the compliance has been independently verified when it has not.

C is incorrect. While it is transparent about the claim not being verified by CFA Institute, it could create doubt in the minds of the readers regarding the legitimacy of the firm’s compliance.

Ethical and Professional Standards: Learning Module 4: Asset Manager Code of Professional Conduct; Los 4(a) Explain the purpose of the Asset Manager Code and the benefits that may accrue to a firm that adopts the Code