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FIN 800 (21)


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FIN 800
Alan Kaplan

April0914940 AMThink about some of the rules and regulations that govern the financial services sectorThink about why those rules often dont workGet you to think about your own ethicsYou can affect others I want to get you to think about how your decisions will impact upon othersNOT ON EXAMDo something that you want to do what does this have to do with ethicsThink twice before getting yourself into a situation where youll be tempted CON Peter Farber case didnt get clients approval but he got spouses approval the spouse then wanted to do something crazy now in a bad positionThink twice before tempting othersSlippery Slope Its a remarkably big dealPeter Farber case again FIN800 Page 1 CFA MODULE 1 April20141215 AMKnowledge of the LawYour conduct is determined by these organizationsGovernment and regulatory agenciesLicensing agenciesProfessional organizationsAs a member of the CFA Institute you mustUnderstand and comply with all applicable lawsNot knowingly participate in any violationDisassociate yourself from any violationApplicable laws Applicable law is the law that governs your conductCode and StandardsIn the absence of laws or regulations governing a particular action follow the Code and StandardsMore Strict LawComply with the code law standard that imposes greater restriction on the action or requires greater effort to protect investor interestsThe code is more strict therefore you should refer to it when there is contradiction between the applicable law and code and standardsAlways choose the option that requires the greatest effect to protect investor interestsYou must be diligently trying to avoid knowing participating in or assisting in such activitiesConsider whether to report a violation toGovernment agency 1Depends whether such disclosure is mandatory under applicable law Recall that applicable law is the law that governs all conduct CFAProfessional Conduct Program2It depends on whether the person is associatedsubjected to the CFA Institute Code of EthicsPoints to rememberFour week blackout period after issuing new or revised investment recommendationsTwo weeks before two weeks afterAnnual disclosure formBroker must supply firms with copies of periodic statements for all securities accountsIndependence and Objectivity You should avoid situations that could cause or be perceived to cause a loss of independence or objectivity in recommending or taking investment action FIN800 Page 2 Maintain you professional integrity by remaining independent and objective at all timesMust not offer solicit or accept any gift benefit compensation or consideration that reasonably could be expected to compromise their own or anothers independence and objectivityAccepting a gift from a client wishing to reward you for good work is different than accepting a gift from an entity wishing to influence youAccepting a paid tour of a companys facilities does compromise your independenceMisrepresentationYou must not knowingly make any misrepresentation relating to investment analysis recommendations actions or other professional activitiesTo avoid misrepresentationBe honest about your professional credentialsExercise care and due diligence when relying on third party informationDisclose the use of external managersBe forthcoming about the risk and unpredictability of investments Acknowledge sources of ideasinformation that is not yoursA misrepresentation is any statement that is untrue by omission or fact that is otherwise false or misleadingMisconductYou should avoid dishonest fraudulent or deceitful conduct that reflects adversely on your professional reputation integrity or competencyTrust is the epicenter of the operations of the financial center as a wholeYour professional reputation integrity and competence are the starting points in trustMisconduct Relates directly to work activities not activities that you do outside of workFalsifying attendance and vacation reportsSubmitting fraudulent business expense reportsUnethical or illegalFalsifying information on your tax returnGetting intoxicated at an office partySTANDARD 1 A KNOWLEDGE OF THE LAWUnderstand all laws rules and regulationsAlways comply with the more strict law with regard to protecting investor rightsDo no knowingly participate in any violation of laws rules and regulationsDisassociate from any violations FIN800 Page 3
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