CFA Level 1

By Investopedia AAA

Ethics and Standards - The Standards of Professional Conduct

From the CFA Institute's Code of Ethics and Standards of Professional Conduct, candidates are expected to know what is required by the Code and Standards with respect to:

I. Professionalism
II. Integrity of Capital Markets
III. Duties to Clients and Prospective Clients
IV. Duties to Employers
V. Investment Analysis, Recommendations, and Action
VI. Conflicts of Interest
VII. Responsibilities as a CFA Institute Member or CFA Candidate

Reasoning behind Standards I through VII
The Standards of Professional Conduct are a series of guidelines, more specific than the Code of Ethics, intended to focus on a wide variety of issues relating to the investment profession. As the industry evolves, additional Standards are added. For example, the Standards that took effect in 2006 have seven categories rather than five, with the new categories reflecting the complexity of the business as it is today, as opposed to what it was in the 1990s when the most recent revision was enacted. At the same time, the world is evolving faster than the Standards can evolve. Not all situations can be covered in specific detail by the Standards of Professional Conduct.

  • Standard I aims to set out a minimum level of conduct to guide CFA members and candidates in all business situations and is intended to be broad in scope.
  • Standards II through VII are more focused and address specific topics that are critical to the integrity of the investment business.

Standard I, Professionalism, makes it clear that high ethical standards must apply even when an issue hasn't been identified in writing and addressed as an individual Standard, establishing an ethical culture among CFA charterholders and those who aspire to become CFA charterholders.

Standard I-A: Knowledge of the Law

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