bmaggie

A CFA Institute member works for Secure Securities, Inc., and plays rugby on the firm’s rugby team. Secure Securities’ team recently played the team of a rival firm. During the game, a fight broke out and the CFA Institute member was the instigator, but no one was seriously hurt. Is this a violation of I(A) concerning maintaining knowledge and complying with laws, rules, and regulations?

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

B) Yes, because the member could have hurt someone in the fight.

C) No, because a fight at a rugby game is not a professional activity.

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Standard I(A) covers members' professional activity only. Violations outside professional activity that involve fraud, theft or deceit would potentially be violations.

bmaggie

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

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

B) 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.

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.

bmaggie

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

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

B) 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.

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.

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

bmaggie

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, because the member is bound by the Code of Ethics.

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

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

bmaggie

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.

bmaggie

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.

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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.

bmaggie

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

bmaggie

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

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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.

bmaggie

Benito Salvatore, CFA, is licensed in the established country of Oldworld but has clients and makes investments in the emerging county of Newworld. The regulations of Oldworld prohibit licensed investment professionals from taking gifts or gratuities in any amount from vendors or persons connected with potential investments. The laws of Newworld are silent on this issue. Unsolicited, Salvatore is offered a vase worth US $75 by a Newworld trust company and a bronze statue worth US $200 by a Newworld company that Salvatore is considering as a potential investment.

Salvatore is:

A) not permitted to accept either gift.

B) permitted to accept both gifts.

C) permitted to accept the vase but not the statue.

bmaggie

Benito Salvatore, CFA, is licensed in the established country of Oldworld but has clients and makes investments in the emerging county of Newworld. The regulations of Oldworld prohibit licensed investment professionals from taking gifts or gratuities in any amount from vendors or persons connected with potential investments. The laws of Newworld are silent on this issue. Unsolicited, Salvatore is offered a vase worth US $75 by a Newworld trust company and a bronze statue worth US $200 by a Newworld company that Salvatore is considering as a potential investment.

Salvatore is:

A) not permitted to accept either gift.

B) permitted to accept both gifts.

C) permitted to accept the vase but not the statue.

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Under Standard I(A), Salvatore must, as a CFA charterholder, apply the CFA Institute Code and Standards or the controlling law, whichever is stricter. In this instance the stricter laws of Oldworld, where Salvatore is licensed, apply to prohibit the gifts, even though the gifts are offered in Newworld.