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- 2011-7-2
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发表于 2011-7-11 19:09
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Summary of ethics examples
I am really tired of having to search every schweser book (volume 1, exam vol 1, exam vol 2) or cfa book, or cfa samples, etc, every time I need to have a look at a particular example regarding ethics... I guess you have the same problem.
I just did this, hope you find useful. Please add any other tricky example you know:
+ Wait to buy/sell until public media = OK
+ Market impact selling/buying something illiquid without bad intention = OK
+ Not attributing original author (even with his approval= VIOLATION
+ Legal does not imply ethical
+ Gifts from clients should be disclosed to the employer, which will determine if affects independence and objectivity
+ IV B = additional compensation agreements = written consent from all parties involved + nature, amount, duration
+ Guarantee something (wrong) = VIOLATION
+ IPS = at least annually and prior to material changes
+ Compliance officer reports to CEO or Board of Directors
+ Info de clients to fellow employees involved = OK
+ If beneficial owner, act only AFTER clients and employers
+ Disclosure in research report of being beneficial owner = OK
+ Not enrolled = not a candidate
+ Small fee for something not related to professional activities without conflict = No disclosure necessary
+ But if the situation creates a conflict, written consent necessary
+ AMC = disclose fees and other costs, management fee, incentive fee, commissions
+ Disclosure of using simulated data = OK
+ AMC = disclose proxy voting policy
+ Pro rata = on the basis of order size
+ AMC = disclose regulatory actions
+ AMC = disclose significant changes in organization
+ Intern = employee (for IV A)
+ Creating new company during your free time (while employed) = OK
+ Supervisors: investigation first
+ Compliance approval of something bad does not mean you are free to do it
+ Discovering that some report has an error and is going to be public = tell supervisor (and eventually dissociate + legal advice)
+ Law Vs CFA: follow the stricter one
+ Trips: don′t accept payments (except when really necessary). Use judgement
+ Don′t accept pressure from IB
+ Disclosure of client gifts
+ Don′t write issuer paid research if compensation includes bonus for new investors buying the underlying
+ Don′t exaggerate what you / your firm can do
+ Research: if you receive compensation, disclosure necessary (you would not be independent)
+ Typo = OK, but if discovered you must take necessary steps
+ Acknowledgement when quoting other people′s work
+ Testing and modifying a model = still not yours, credit the original author
+ Copying plain language, basics = VIOLATION
+ Quote original source or second + original source
+ Civil disobedience = ok
+ If source = unreliable, info is not material
+ Mosaic theory = OK
+ Liquidity pumping = OK if disclosed
+ If client = pension, client = workers, not management
+ Client brokerage that does not benefit the client + not getting best execution = VIOLATION
+ Tell change of recommendation to ALL clients
+ Disclose trade allocation policy to clients and prospects
+ Disclosure of wrong practice does not mean you can do it
+ Sharing your view (more positive or negative) with only a few clients = VIOLATION
+ Suitability depends on portfolio, not a single asset
+ If using performance from previous job, disclosure necessary
+ Client doing something illegal = supervisor, legal counsel to check if notification to regulator is required
+ Employee-led buyout = OK
+ Don′t take with you software, even if you created it
+ Contacting public clients = OK
+ Time consuming second job = permission from employer
+ Bonus from clients = disclosure to employer
+ “Based on the fact…” = usually a violation
+ Group research: document the difference of opinion and request to remove his name
+ Notify change in investment process
+ 7yr records RECOMMENDED
+ Your family = any other client
+ Disclosure of referral fees to employer, clients and prospects
+ You change recommendation but receive a order (contrary) = advise the customer before accepting the order
+ IB client = put the stock on restricted list and give only factual info
+ Written consent from employer if independent practice that competes
+ Don′t contact clients before leaving for new firm or start independent practice
+ AMC specific for companies, CFA code can be part of a company′s code of ethics
+ Disclosure of ALL conflicts, not only those related to CURRENT portfolio holdings
+ Receiving an order contrary to IPS = inform investor that you can not do it
+ If compliance system is wrong, decline supervisor responsibilities
+ Historical data that actually happened = fact
+ Personal trade 1 week after report = acceptable
+ Sharing equity and bond research = ok
+ s&p = public info you can use without quoting
+ Ultimate responsibility for compliance = compliance officer
+ Current viable PROSPECTS = current clients, don′t contact them
+ Rejected PROSPECTS = you can call them, ok
+ Little details of models, algorithms = proprietary details, not disclosure necessary
+ Somebody accidentally tells inside info = try to convince him to make it public
+ “a Chartered Financial Analyst” = VIOLATION
+ Tell personal details to the client′s family = VIOLATION
+ Missing important news about a company you research = VIOLATION
+ No limit to value of gift received from a client if you have permission
+ Internal meetings: talk about clients WITHOUT saying names, for confidentiality |
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