CFA Code of Ethics And Standards of Professional Conduct
The CFA Institute Code of Ethics and Standards of Professional Conduct are fundamental to the values of CFA Institute and essential to
achieving its mission to lead the investment profession globally by setting high standards of education, integrity, and professional excellence.
High ethical standards are critical to maintaining the public’s trust in financial markets and in the investment profession. Since their
creation in the 1960s, the Code and Standards have promoted the integrity of CFA Institute members and served as a model for measuring
the ethics of investment professionals globally, regardless of job function, cultural differences, or local laws and regulations. All CFA
Institute members (including holders of the Chartered Financial Analyst® [CFA®] designation) and CFA candidates must abide by the Code
and Standards and are encouraged to notify their employer of this responsibility. Violations may result in disciplinary sanctions by CFA Institute.
Sanctions can include revocation of membership, revocation of candidacy in the CFA Program, and revocation of the right to use the CFA designation.
THE CODE OF ETHICS
Members of CFA Institute (including CFA charterholders) and candidates for the CFA designation ("Members and Candidates") must:
- Act with integrity, competence, diligence, respect, and in an ethical manner with the public, clients, prospective clients, employers,
employees, colleagues in the investment profession, and other participants in the global capital markets.
- Place the integrity of the investment profession and the interests of clients above their own personal interests.
- Use reasonable care and exercise independent professional judgment when conducting investment analysis, making investment
recommendations, taking investment actions, and engaging in other professional activities.
- Practice and encourage others to practice in a professional and ethical manner that will reflect credit on themselves and the profession.
- Promote the integrity of and uphold the rules governing capital markets.
- Maintain and improve their professional competence and strive to maintain and improve the competence of other investment professionals.
STANDARDS OF PROFESSIONAL CONDUCT
A. Knowledge of the Law.
Members and Candidates must
understand and comply with all applicable laws, rules, and
regulations (including the CFA Institute Code of Ethics and
Standards of Professional Conduct) of any government, regulatory
organization, licensing agency, or professional association
governing their professional activities. In the event of conflict,
Members and Candidates must comply with the more strict
law, rule, or regulation. Members and Candidates must not
knowingly participate or assist in and must dissociate from any
violation of such laws, rules, or regulations.
B. Independence and Objectivity.
Members and Candidates
must use reasonable care and judgment to achieve and maintain
independence and objectivity in their professional activities.
Members and Candidates must not offer, solicit, or accept
any gift, benefit, compensation, or consideration that reasonably
could be expected to compromise their own or another’s
independence and objectivity.
Members and Candidates must not
knowingly make any misrepresentations relating to investment
analysis, recommendations, actions, or other professional
Members and Candidates must not engage in
any professional conduct involving dishonesty, fraud, or deceit
or commit any act that reflects adversely on their professional
reputation, integrity, or competence.
II. INTEGRITY OF CAPITAL MARKETS
A. Material Nonpublic Information. Members and Candidates
who possess material nonpublic information that could affect
the value of an investment must not act or cause others to act
on the information.
B. Market Manipulation. Members and Candidates must not engage
in practices that distort prices or artificially inflate trading
volume with the intent to mislead market participants.
II. DUTIES TO CLIENTS
A. Loyalty, Prudence, and Care.
Members and Candidates have
a duty of loyalty to their clients and must act with reasonable
care and exercise prudent judgment. Members and Candidates
must act for the benefit of their clients and place their clients’
interests before their employer’s or their own interests.
B. Fair Dealing.
Members and Candidates must deal fairly and
objectively with all clients when providing investment analysis,
making investment recommendations, taking investment action,
or engaging in other professional activities.
- When Members and Candidates are in an advisory relationship
with a client, they must:
- Make a reasonable inquiry into a client’s or
prospective client’s investment experience, risk and
return objectives, and financial constraints prior
to making any investment recommendation or taking
investment action and must reassess and update this
- Determine that an investment is suitable to the client’s
financial situation and consistent with the client’s written
objectives, mandates, and constraints before making an
investment recommendation or taking investment action.
- Judge the suitability of investments in the context of the
client’s total portfolio.
- When Members and Candidates are responsible for managing
a portfolio to a specific mandate, strategy, or style, they
must make only investment recommendations or take only
investment actions that are consistent with the stated objectives
and constraints of the portfolio.
D. Performance Presentation.
When communicating investment
performance information, Members and Candidates must
make reasonable efforts to ensure that it is fair, accurate, and
E. Preservation of Confidentiality.
Members and Candidates
must keep information about current, former, and prospective
clients confidential unless:
- The information concerns illegal activities on the part of the
client or prospective client,
- Disclosure is required by law, or
- The client or prospective client permits disclosure of the
IV. DUTIES TO EMPLOYERS
In matters related to their employment, Members and
Candidates must act for the benefit of their employer and not
deprive their employer of the advantage of their skills and abilities,
divulge confidential information, or otherwise cause harm
to their employer.
B. Additional Compensation Arrangements. Members and
Candidates must not accept gifts, benefits, compensation,
or consideration that competes with or might reasonably be
expected to create a conflict of interest with their employer’s
interest unless they obtain written consent from all parties
C. Responsibilities of Supervisors. Members and Candidates
must make reasonable efforts to detect and prevent violations
of applicable laws, rules, regulations, and the Code and Standards
by anyone subject to their supervision or authority.
V. INVESTMENT ANALYSIS, RECOMENDA TIONS,
A. Diligence and Reasonable Basis.
Members and Candidates
- Exercise diligence, independence, and thoroughness in analyzing
investments, making investment recommendations,
and taking investment actions.
- Have a reasonable and adequate basis, supported by appropriate
research and investigation, for any investment
analysis, recommendation, or action.
B. Communication with Clients and Prospective Clients.
Members and Candidates must:
- Disclose to clients and prospective clients the basic format
and general principles of the investment processes they use
to analyze investments, select securities, and construct portfolios
and must promptly disclose any changes that might
materially affect those processes.
- Use reasonable judgment in identifying which factors are
important to their investment analyses, recommendations,
or actions and include those factors in communications with
clients and prospective clients.
- Distinguish between fact and opinion in the presentation of
investment analysis and recommendations.
C. Record Retention.
Members and Candidates must develop
and maintain appropriate records to support their investment
analyses, recommendations, actions, and other investment related
communications with clients and prospective clients.
VI. CONFLICTS OF INTEREST
A. Disclosure of Conflicts.
Members and Candidates must make
full and fair disclosure of all matters that could reasonably be
expected to impair their independence and objectivity or interfere
with respective duties to their clients, prospective clients,
and employer. Members and Candidates must ensure that
such disclosures are prominent, are delivered in plain language,
and communicate the relevant information effectively.
B. Priority of Transactions.
Investment transactions for clients
and employers must have priority over investment transactions
in which a Member or Candidate is the beneficial owner.
C. Referral Fees.
Members and Candidates must disclose to their
employer, clients, and prospective clients, as appropriate, any
compensation, consideration, or benefit received from or paid
to others for the recommendation of products or services.
VII. RESPONSIBILITIES AS A CFA INSTITUTE
MEMBER OR CFA CANDIDATE
A. Conduct as Members and Candidates in the CFA Program.
Members and Candidates must not engage in any conduct that
compromises the reputation or integrity of CFA Institute or the
CFA designation or the integrity, validity, or security of the CFA
B. Reference to CFA Institute, the CFA Designation, and the
CFA Program. When referring to CFA Institute, CFA Institute
membership, the CFA designation, or candidacy in the CFA
Program, Members and Candidates must not misrepresent or
exaggerate the meaning or implications of membership in CFA
Institute, holding the CFA designation, or candidacy in the CFA