Code of Ethics and Standards of Professional Conduct

The Handbook provides ethical guidance for investment professionals, addressing real ethical dilemmas and bridging the gap between theoretical ethics and practical application. It is designed for a global audience including CFA Institute members, candidates, and financial market supervisors.

The Code contains aspirational ethical principles, while the Standards provide practical ethical principles of conduct. Both are regularly reviewed and updated to ensure they represent the highest ethical standards in the global investment industry.

Significant updates include the introduction of a new standard under Professionalism to maintain competence, revisions to the Communication with Clients standard to include service nature and cost disclosures, and changes to the Conflicts of Interest standard to emphasize avoiding or disclosing conflicts.

This program enforces the Code and Standards through the Disciplinary Review Committee (DRC) and involves processes like self-disclosure by members, investigations of misconduct, and potential disciplinary actions including suspension or revocation of the CFA charter.

While primarily applicable to CFA Institute members and candidates, firms and regulatory authorities are encouraged to adopt these standards. Compliance claims by nonmembers should clearly state that they are not verified by CFA Institute.

The Code of Ethics sets broad ethical principles for professional conduct, such as acting with integrity, placing clients' interests above personal interests, and promoting the integrity of global capital markets.

The Standards provide detailed requirements for ethical behavior across various areas of professional activity, including professionalism, integrity of capital markets, duties to clients and employers, investment analysis and actions, and conflicts of interest.

This framework helps investment professionals analyze ethical dilemmas and make decisions that align with both the Code of Ethics and the Standards of Professional Conduct.

Ethical behavior is crucial for the efficiency and trustworthiness of capital markets, which in turn benefits society by ensuring fair and transparent financial transactions.

Ethical behavior extends beyond mere compliance with laws and regulations, encompassing a commitment to act in morally correct ways that serve the best interests of clients and the public.

The Code of Ethics mandates CFA Institute members and candidates to act with integrity, competence, diligence, and respect. It emphasizes placing the interests of clients above personal interests and maintaining professional competence.

The Standards of Professional Conduct are detailed guidelines divided into several areas including professionalism, integrity of capital markets, duties to clients and employers, investment analysis and actions, conflicts of interest, and responsibilities as a CFA Institute member or candidate. Each area addresses specific ethical and professional responsibilities that members must adhere to.

Under professionalism, members are required to have knowledge of the law, maintain independence and objectivity, avoid misrepresentation and misconduct, and act competently in their professional duties.

This standard emphasizes loyalty, prudence, and care. Members must act in the best interests of their clients, ensuring fair dealing and suitability of investments, maintaining confidentiality, and accurately presenting performance information.

Members must avoid or disclose conflicts of interest to ensure their independence and objectivity are not compromised. They must prioritize client transactions over personal transactions and disclose any referral fees.