Reading 2-I: Standards of Professional Conduct & Guidanc country, black, white, class, emerging

mayanfang1

Q16.Mary Kim, CFA, practices in the established country of Oldasia as well as in the emerging country of Newasia. By regulation, Oldasia prohibits licensed investment advisors from trading in securities ahead of their clients. Newasia has no laws or regulations in this area. Mary Kim may:

A)  not trade ahead of her clients in either country.

B)  trade ahead of her clients in Newasia only.

C)  trade ahead of her clients in Newasia only, as long as she has made full disclosure to her clients that she reserves the right to do this.

 

Q17.Janet Green, CFA, provides investment advice and other services to clients in several countries. She resides in Country A whose securities laws and regulations are less strict than the Code and Standards. She also conducts business with clients in Country B, which has no securities laws or regulations, and in Country C, which has securities laws and regulations that are stricter than the Code and Standards. Which of the following statements is TRUE? According to CFA Institute Standards of Professional Conduct, Green must adhere to the Code and Standards in:

A)  Country A, Country B, and Country C.

B)  Country A but the law in Country B and Country C.

C)  Country A and Country B but the law in Country C.

 

Q18.Which of the following statements about the responsibilities of CFA charterholders is TRUE? CFA charterholders:

A)  are only obligated to comply with securities laws in the U.S.

B)  must comply with the laws and rules governing their profession and must not engage in any individual behavior that reflects adversely on the entire profession.

C)  must comply with the laws and rules governing their profession or must not engage in any individual behavior that reflects adversely on the entire profession.

 

Q19. Which of the following is a CORRECT statement of a member's duty under the Code and Standards?

A)  A member who trades securities in a country with less strict laws, rules, regulations, or customs may follow those laws if he discloses this information to his client.

B)  In the absence of specific applicable law or other regulatory requirements, the Code and Standards govern the member's actions.

C)  A member is required to comply only with applicable local laws, rules, regulations, or customs even though the CFA Institute code and Standards may impose a higher degree of responsibility or a higher duty on the member.

 

Q20.A CFA Institute member conscientiously maintains records of changes in security regulations. The member notices that his colleagues do NOT, and does NOT say anything. Is this a violation of Standard I(A)?

A)  Yes, and the member should disassociate from these colleagues.

B)  Yes, because the member is bound by the Code of Ethics.

C)  No, as long as the colleagues do not violate the new rules.

mayanfang1

答案和详解如下：

Q16.Mary Kim, CFA, practices in the established country of Oldasia as well as in the emerging country of Newasia. By regulation, Oldasia prohibits licensed investment advisors from trading in securities ahead of their clients. Newasia has no laws or regulations in this area. Mary Kim may:

A)  not trade ahead of her clients in either country.

B)  trade ahead of her clients in Newasia only.

C)  trade ahead of her clients in Newasia only, as long as she has made full disclosure to her clients that she reserves the right to do this.

 Correct answer is A)

Under Standard I(A), Mary Kim, as a CFA charterholder, must apply the CFA Institute Code and Standards or the controlling law, whichever is stricter. Because Standard VI(B) requires members to put client trades ahead of their own transactions, Mary Kim must follow the standard in the absence of governing law, or where the law is less strict than the standard.

Q17.Janet Green, CFA, provides investment advice and other services to clients in several countries. She resides in Country A whose securities laws and regulations are less strict than the Code and Standards. She also conducts business with clients in Country B, which has no securities laws or regulations, and in Country C, which has securities laws and regulations that are stricter than the Code and Standards. Which of the following statements is TRUE? According to CFA Institute Standards of Professional Conduct, Green must adhere to the Code and Standards in:

A)  Country A, Country B, and Country C.

B)  Country A but the law in Country B and Country C.

C)  Country A and Country B but the law in Country C.

 Correct answer is C)

Green needs to follow Standard I(A) -- Knowledge of the law. In Country A, Green must adhere to the Code and Standards because Country A’s laws are less strict. In Country B, Green must also adheres to the Code and Standards because Country B has no securities laws. Because Country C’s applicable law is stricter than the requirements of the Code and Standards, Green must adhere to the laws of Country C.

mayanfang1

答案和详解如下：

Q18.Which of the following statements about the responsibilities of CFA charterholders is TRUE? CFA charterholders:

A)  are only obligated to comply with securities laws in the U.S.

B)  must comply with the laws and rules governing their profession and must not engage in any individual behavior that reflects adversely on the entire profession.

C)  must comply with the laws and rules governing their profession or must not engage in any individual behavior that reflects adversely on the entire profession.

 Correct answer is B)

CFA charterholders must comply with the laws and rules governing their profession and must not engage in any individual behavior that reflects adversely on the entire profession. While they should act honorably and follow U.S. securities laws, they are obligated to more than that, as set forth in the Code and Standards.

Q19. Which of the following is a CORRECT statement of a member's duty under the Code and Standards?

A)  A member who trades securities in a country with less strict laws, rules, regulations, or customs may follow those laws if he discloses this information to his client.

B)  In the absence of specific applicable law or other regulatory requirements, the Code and Standards govern the member's actions.

C)  A member is required to comply only with applicable local laws, rules, regulations, or customs even though the CFA Institute code and Standards may impose a higher degree of responsibility or a higher duty on the member.

 Correct answer is B)

Members are always, at a minimum, subject to the Code and Standards.

Q20.A CFA Institute member conscientiously maintains records of changes in security regulations. The member notices that his colleagues do NOT, and does NOT say anything. Is this a violation of Standard I(A)?

A)  Yes, and the member should disassociate from these colleagues.

B)  Yes, because the member is bound by the Code of Ethics.

C)  No, as long as the colleagues do not violate the new rules.

 Correct answer is B)

The last bullet point of the Code says that a member shall “Maintain and improve their professional competence and strive to maintain and improve the competence of other investment professionals.” Ignoring the neglect of rule changes of others would clearly be incongruent with this component. As long as the colleagues do not violate the laws, the member does not have to disassociate himself from the colleagues.

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