Reading 6: Asset Manager Code of Professional Conduct －LOS required

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CFA Institute Area 1-2: Ethical and Professional Standards
Session 2: Ethical and Professional Standards in Practice
Reading 6: Asset Manager Code of Professional Conduct
LOS a: Summarize the ethical responsibilities required by the six components of the Asset Manager Code.

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Which of the following is NOT part of the ethical responsibilities related to the Asset Manager Code of Professional Conduct?

A) Maintain the confidentiality of client information.

B) Always act in a professional manner.

C) Act in the best interest of the client.

D) Maintain your independence.

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Answer and Explanation

The ethical responsibilities related to the Code are:

• Always act ethically and professionally;
• Act in the best interest of the client;
• Act in an objective and independent manner;
• Communicate accurately with clients on a regular basis; and
• Comply with all legal and regulatory requirements.

Maintaining the confidentiality of client information is part of the section of the Code dealing with Loyalty and is not considered one of the ethical responsibilities.

The ethical responsibilities related to the Code are:

• Always act ethically and professionally;
• Act in the best interest of the client;
• Act in an objective and independent manner;
• Communicate accurately with clients on a regular basis; and
• Comply with all legal and regulatory requirements.

Maintaining the confidentiality of client information is part of the section of the Code dealing with Loyalty and is not considered one of the ethical responsibilities.

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Which of the following is part of the ethical responsibilities related to the Code?

A) Appointing a compliance officer.

B) Communicating with clients on a regular basis.

C) Employing qualified staff.

D) Having a contingency plan in place.

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Answer and Explanation

The ethical responsibilities related to the Code are:

• Always act ethically and professionally;
• Act in the best interest of the client;
• Act in an objective and independent manner;
• Communicate accurately with clients on a regular basis; and
• Comply with all legal and regulatory requirements.

The other answer choices listed relate to the specific section of the Code dealing with Compliance and Support.

The ethical responsibilities related to the Code are:

• Always act ethically and professionally;
• Act in the best interest of the client;
• Act in an objective and independent manner;
• Communicate accurately with clients on a regular basis; and
• Comply with all legal and regulatory requirements.

The other answer choices listed relate to the specific section of the Code dealing with Compliance and Support.

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Which of the following is NOT part of the ethical responsibilities related to the Asset Manager Code of Professional Conduct?

A) Do not engage in market manipulation of security prices.

B) Communicate with clients in an accurate manner.

C) Comply with all legal requirements.

D) Act in an objective manner.

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Answer and Explanation

The ethical responsibilities related to the Code are:

• Always act ethically and professionally;
• Act in the best interest of the client;
• Act in an objective and independent manner;
• Communicate accurately with clients on a regular basis; and
• Comply with all legal and regulatory requirements.

Not engaging in market manipulation of security prices is part of the Investment Process and Actions section of the Code and is not considered one of the ethical responsibilities.

The ethical responsibilities related to the Code are:

• Always act ethically and professionally;
• Act in the best interest of the client;
• Act in an objective and independent manner;
• Communicate accurately with clients on a regular basis; and
• Comply with all legal and regulatory requirements.

Not engaging in market manipulation of security prices is part of the Investment Process and Actions section of the Code and is not considered one of the ethical responsibilities.

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Which of the following is NOT part of the ethical responsibilities related to the Asset Manager Code of Professional Conduct?

A) Communicating with clients on a regular basis.

B) Complying with all regulatory requirements.

C) Acting in an independent manner.

D) Trading regarding insider information, priority of transactions, soft dollars, and best execution.

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Answer and Explanation

The ethical responsibilities related to the Code are:

• Always act ethically and professionally;
• Act in the best interest of the client;
• Act in an objective and independent manner;
• Communicate accurately with clients on a regular basis; and
• Comply with all legal and regulatory requirements.

Trading is not specifically mentioned in the ethical responsibilities section of the Asset Manager Code and is instead one of the six components of the Asset Manager Code specifically regarding trading which deals with insider information, fair dealing, soft dollars, best execution, and the allocation of shares.

The ethical responsibilities related to the Code are:

• Always act ethically and professionally;
• Act in the best interest of the client;
• Act in an objective and independent manner;
• Communicate accurately with clients on a regular basis; and
• Comply with all legal and regulatory requirements.

Trading is not specifically mentioned in the ethical responsibilities section of the Asset Manager Code and is instead one of the six components of the Asset Manager Code specifically regarding trading which deals with insider information, fair dealing, soft dollars, best execution, and the allocation of shares.

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All of the following are NOT part of the ethical responsibilities related to the Code EXCEPT:

A) communicating with clients in an accurate manner.

B) reporting investment results in an accurate manner.

C) disclosing conflicts of interest.

D) seeking best execution.

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Answer and Explanation

The ethical responsibilities related to the Code are:

• Always act ethically and professionally;
• Act in the best interest of the client;
• Act in an objective and independent manner;
• Communicate accurately with clients on a regular basis; and
• Comply with all legal and regulatory requirements.

The other answer choices deal with specific sections of the Code and are not considered ethical responsibilities.

The ethical responsibilities related to the Code are:

• Always act ethically and professionally;
• Act in the best interest of the client;
• Act in an objective and independent manner;
• Communicate accurately with clients on a regular basis; and
• Comply with all legal and regulatory requirements.

The other answer choices deal with specific sections of the Code and are not considered ethical responsibilities.

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