CFA Ethics and Standards - Notes

Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 CFA Ethics and Standards — Notes CFA Ethical and Professional Standards — Study Notes Code of Ethics, Standards, and the Professional Conduct Program Purpose of ethics in investment management Ethics consists of moral principles or rules of conduct that guide behavior when that behavior affects other people. In investment management, ethical conduct is especially important because investment professionals manage information, recommendations, and assets that can materially affect clients, employers, markets, and society. Ethical behavior helps protect the integrity of: Clients, by placing their interests ahead of personal interests. Employers and firms, by promoting trustworthy professional conduct. The investment profession, by maintaining public confidence. Capital markets, by supporting fair and efficient price discovery. Society, through the responsible operation of global financial markets. Ethical decisions often involve a conflict between an investment professional’s selfinterest and the consequences of an action for clients, colleagues, employers, or market participants. The Code and Standards provide a framework for resolving those conflicts. Page 1 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 All CFA Institute members and CFA Program candidates are required to comply with the CFA Institute Code of Ethics and Standards of Professional Conduct. The Professional Conduct Program is overseen by the CFA Institute Board of Governors and administered through the Professional Conduct staff and the Professional Conduct Program Committee. Disciplinary matters may ultimately be reviewed by the Disciplinary Review Committee. Sources of conduct inquiries An inquiry may originate from: 1. Self-disclosure by a member or candidate on the annual Professional Conduct Statement. Civil litigation Criminal investigations Being the subject of a written complaint 2. Written complaints submitted to Professional Conduct staff. 3. CFA Institute staff discoveries based on: Media reports Regulatory notices Other relevant information 4. Exam proctors. 5. Post-exam conduct, including online disclosure of confidential exam information. Investigation process A conduct inquiry may include: 1. Initiating an inquiry. 2. Requesting a written explanation from the member or candidate. Page 2 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 3. Interviewing: The member or candidate The complaining party Other relevant third parties 4. Collecting relevant documents and records. 5. Determining an outcome. Possible outcomes include: No action. Issuance of a cautionary letter. Continued disciplinary proceedings. Referral to the Disciplinary Review Committee if the member or candidate rejects the proposed result. Possible sanctions Sanctions may include: Public censure Suspension of membership and suspension of the right to use the CFA designation Revocation of the CFA charter For candidates, suspension or prohibition from further participation in the CFA Program Adoption by firms The Code and Standards apply directly to individual CFA Institute members and candidates. Firms are encouraged to adopt the Code and Standards, including firms whose employees are not CFA Institute members. A firm may state that it claims compliance with the CFA Institute Code and Standards, but it must also make clear that: The firm’s claim of compliance has not been verified by CFA Institute. Page 3 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 The Code and Standards are designed primarily for individual investment professionals. The Asset Manager Code of Professional Conduct is designed especially for investment management firms. The Code of Ethics The Code of Ethics contains six broad principles. It describes the ethical responsibilities expected of CFA Institute members and candidates. 1. Act with integrity, competence, diligence, respect, and in an ethical manner Members and candidates must act ethically when dealing with: The public Current and prospective clients Employers Employees Colleagues Other participants in the investment profession This principle requires more than technical competence. It also requires professional respect, honest behavior, careful work, and consideration of the effect of conduct on others. 2. Place the integrity of the investment profession and clients’ interests above personal interests Members and candidates must prioritize: 1. The integrity of the investment profession. 2. The interests of clients. Page 4 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 3. Their own personal interests. Personal financial gain, career advancement, relationships, gifts, and other benefits must not override professional responsibilities. 3. Use reasonable care and independent professional judgment Members and candidates must use reasonable care and independent judgment when: Conducting investment analysis Making investment recommendations Taking investment actions Investment decisions should be based on appropriate analysis rather than pressure, incentives, personal relationships, or the influence of issuers, employers, clients, or colleagues. 4. Practice and encourage ethical conduct Members and candidates should conduct themselves in a way that reflects positively on: Themselves Their employers The CFA designation The investment profession They should also encourage colleagues and other investment professionals to act ethically. 5. Promote the integrity and viability of global capital markets Members and candidates should promote markets that are: Fair Transparent Page 5 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 Efficient Trustworthy Beneficial to society This responsibility includes avoiding conduct that manipulates markets, misuses information, or undermines public confidence. 6. Maintain and improve professional competence Members and candidates must maintain their own competence and strive to improve the competence of other investment professionals. Competence requires continuing education and ongoing development of: Knowledge Skills Abilities Professional judgment Standards of Professional Conduct The seven Standards of Professional Conduct provide specific rules implementing the Code of Ethics. Standard I: Professionalism A. Knowledge of the Law Members and candidates must: Comply with all applicable laws, rules, and regulations. Comply with the requirements of governments, regulators, licensing agencies, and professional associations governing their professional activities. Page 6 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 Follow the strictest applicable requirement when laws, regulations, or the Code and Standards impose different obligations. Avoid knowingly participating in or assisting violations. Dissociate from violations when they have reasonable grounds to believe that violations have occurred or will occur. The Code and Standards apply even when no local law addresses the conduct. If an applicable law is stricter than the Code and Standards, the law controls. If the Code and Standards are stricter than local law, the member or candidate must follow the Code and Standards. Understanding applicable law Members and candidates should understand the laws and regulations applicable in every jurisdiction where they conduct business or provide professional services. This includes laws governing: Their professional activities The investment products they create, recommend, or distribute The jurisdictions where products originate The jurisdictions where products are expected to be sold Members and candidates should also understand their firm’s compliance policies and procedures. Because laws and regulations change, members and candidates should: Stay informed about current requirements. Review compliance procedures regularly. Maintain current files containing relevant laws, rules, statutes, and regulations. Seek advice from legal or compliance professionals when uncertain. Violations by others A member or candidate who has reasonable grounds to believe that a violation has occurred or will occur must take reasonable steps to dissociate from the activity. Appropriate actions may include: 2026/08/14, 10:32 1. Reporting the conduct to a supervisor or compliance department. 2. Requesting that the conduct stop. 3. Seeking legal or compliance advice. 4. Removing oneself from the activity. 5. Resigning if necessary. 6. Reporting the matter to CFA Institute when appropriate. Simply remaining silent while knowingly assisting a violation is not sufficient. Dissociation may require refusing to participate, ending involvement, or resigning. Investment products and applicable laws Members and candidates involved in creating investment products or services should understand the legal and regulatory requirements of: The country where the product or service is created. The countries where the product or service is expected to be sold. They should also take reasonable steps to ensure that distributors comply with applicable laws and regulations. Recommended compliance procedures Firms should: Develop and adopt a code of ethics. Provide employees with information about applicable laws and regulations. Establish procedures for reporting suspected violations. Provide compliance training. Update compliance resources as laws change. B. Independence and Objectivity Members and candidates must use reasonable care and judgment to maintain independence and objectivity in professional activities. 2026/08/14, 10:32 They must not offer, solicit, or accept any gift, benefit, compensation, or consideration that could reasonably be expected to compromise their own or another person’s independence and objectivity. The key question is whether the benefit could influence, or appear to influence, professional judgment. Gifts and entertainment Modest gifts and ordinary business entertainment may be acceptable if they do not compromise independence or objectivity. Gifts from clients should generally be disclosed to the employer because they may represent supplementary compensation. Members and candidates remain personally responsible for ensuring that their opinions and decisions are free from bias. Common threats to independence and objectivity Investment banking relationships Investment banking departments may pressure analysts to issue favorable research reports on current or prospective investment banking clients. Research analysts must not be coerced or enticed into issuing research that does not reflect their true opinions. Firms should maintain effective firewalls between investment banking and research, including: Separate reporting structures. Restrictions on interdepartmental communications. Compensation systems that reward objectivity and accuracy. Independent review of research. Public company pressure Companies covered by an analyst may pressure the analyst to issue favorable reports. Analysts may fear losing access to: Company management Conference calls 2026/08/14, 10:32 Investor presentations Other corporate information Access concerns must not influence the analyst’s objective conclusions. Buy-side client pressure Portfolio managers or institutional clients may pressure research analysts not to release negative opinions. Portfolio managers must not interfere directly or indirectly with research objectivity. Fund manager and custodian selection Members and candidates involved in selecting investment managers or custodians must appear independent. They must not accept gifts, favors, or benefits from managers or custodians seeking selection. Credit rating agencies Analysts at credit rating agencies must report opinions without undue influence from the company paying for the rating. Investors who use credit ratings should understand the potential conflict created by issuer-paid ratings. Issuer-paid research Members and candidates involved in issuer-paid research must disclose: That the research is issuer-paid. The nature of the compensation. Whether compensation is a flat fee, options, warrants, or another arrangement. Any other relevant conflicts. Travel funding https://www.studley.ai/study-sets/6a7ed15c0ac566386ff2581a/notes Page 10 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 Travel paid for by an issuer or other interested party can create a conflict or the appearance of a conflict. Analysts should generally use commercial transportation paid for by themselves or their firms when commercially reasonable. The context of travel matters. Ordinary business travel may be less problematic than luxurious or unusual travel provided by a company being analyzed. Performance measurement and attribution Professionals responsible for measuring or attributing investment performance must remain objective when reporting on funds managed by their own firm. They must not alter performance analysis to favor the firm or its investment managers. Manager selection and procurement A member or candidate involved in selecting managers, vendors, or service providers must not: Solicit gifts, favors, or donations from potential hires. Accept benefits that could influence the selection decision. Use gifts or favors to influence decision-makers when seeking selection. Standard I(B) covers both avoiding improper influence and avoiding attempts to improperly influence others. Recommended procedures Firms should consider the following controls: 1. Protect the integrity of opinions Ensure research reports reflect the unbiased opinion of the author. https://www.studley.ai/study-sets/6a7ed15c0ac566386ff2581a/notes Page 11 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 2. Create a restricted list Stop or limit coverage when an adverse opinion is not welcomed or when conflicts cannot be managed. 3. Restrict special cost arrangements Issuers should not pay for or reimburse research-related costs in a way that compromises independence. 4. Limit gifts Permit only token gifts and reasonable business entertainment. 5. Restrict personal investments Limit investments in initial public offerings and private placements. 6. Review personal investment procedures Establish supervisory review of personal investments. 7. Adopt a written independence policy Research analysts should not report to departments that could influence their conclusions. C. Misrepresentation Members and candidates must not knowingly make misrepresentations relating to: Investment analysis Investment recommendations Investment actions Professional activities Credentials and qualifications Experience Performance records https://www.studley.ai/study-sets/6a7ed15c0ac566386ff2581a/notes Page 12 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 Services offered A misrepresentation may involve: A false statement. A misleading statement. An omission of a material fact. An oral, written, electronic, or social media communication. Members and candidates should not guarantee investment performance unless the guarantee is an actual feature of the investment product. Representing professional practice Members and candidates must not misrepresent: Their investment process. Their qualifications. Their academic or professional credentials. Their professional experience. Their performance history. Their role in producing investment results. When using external managers, members and candidates must disclose the intended use of those managers and must not claim the external managers’ performance as their own. Performance reporting Performance presentations should: Use appropriate benchmarks where a benchmark is relevant. Use accurate and reliable security pricing. Avoid noncomparable benchmarks. Avoid presenting a firm’s or manager’s success in a misleading way. Clearly explain changes in models, assumptions, composites, or calculation methods. https://www.studley.ai/study-sets/6a7ed15c0ac566386ff2581a/notes Page 13 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 Standard I(C) does not always require a benchmark to be provided, but any benchmark used must be appropriate and not misleading. Plagiarism Plagiarism is the practice of copying or using material prepared by others in substantially the same form without proper acknowledgment. Plagiarism includes: Claiming another analyst’s research as one’s own. Using quotations without specific attribution. Presenting another person’s forecasts or statistical estimates without proper acknowledgment and limitations. Using charts or graphs without identifying the source. Copying proprietary spreadsheets, algorithms, or models without authorization. Reproducing written, oral, electronic, audio, or video material without attribution. Presenting a summary or paraphrase without crediting the original source. Members and candidates may distribute or summarize third-party reports if the source is properly identified. They must not imply that the third-party work is their own. When using third-party estimates, members and candidates should identify relevant limitations, assumptions, and the source of the information. Work created for an employer Research produced while employed generally belongs to the firm. A member or candidate may use prior knowledge and experience gained from employment, but may not take or reuse: The firm’s confidential information. Original work files. Proprietary models. Codified research. Internal research records. https://www.studley.ai/study-sets/6a7ed15c0ac566386ff2581a/notes Page 14 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 A member or candidate may not simply reissue a report previously released by the firm solely under the member’s own name. Social media All communication through social media must comply with the Code and Standards. Social media does not eliminate professional obligations. Members and candidates must: Avoid false or misleading statements. Attribute third-party material. Preserve confidentiality. Distinguish facts from opinions. Avoid misrepresenting credentials or performance. Ensure that information distributed to clients is accurate and reliable. Anonymity does not release a member or candidate from the Code and Standards. Recommended procedures Firms should establish: Factual presentation guidelines. Rules identifying who may speak on behalf of the firm. Qualification summaries for presentations. Procedures for verifying external information. Website and social media monitoring. A plagiarism policy. Requirements to retain source materials. Attribution rules for quotations, projections, tables, statistics, paraphrases, and summaries. D. Misconduct https://www.studley.ai/study-sets/6a7ed15c0ac566386ff2581a/notes Page 15 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 Members and candidates must not engage in professional conduct involving: Dishonesty Fraud Deceit They must also not commit any act that reflects adversely on their: Professional reputation Integrity Competence Standard I(D) is broader than conduct violating a specific law or regulation. Standard I(A) focuses primarily on legal and regulatory compliance, while I(D) covers conduct that damages trustworthiness, professional reputation, integrity, or competence. Examples may include: Fraudulent or deceitful business conduct. Abusing alcohol or drugs during business activities when it impairs professional conduct. Behavior demonstrating a serious lack of competence or effort. Relying on another person without performing necessary professional work. A member or candidate may violate this Standard through a failure to act or a lack of sufficient effort, not only through an affirmative dishonest act. Recommended procedures Firms should: Adopt a code of ethics to which every employee subscribes. Maintain a list of violations and related disciplinary actions. Check references from former employers and other relevant sources. Establish procedures for investigating misconduct. https://www.studley.ai/study-sets/6a7ed15c0ac566386ff2581a/notes Page 16 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 Standard 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 on the information. Cause others to act on the information. Communicate the information improperly. Material information Information is material if its disclosure would likely affect the market price of a security or if a reasonable investor would want to know the information before making an investment decision. Examples include: Earnings results. Mergers and acquisitions. Changes in assets. New inventions, innovations, or discoveries. Major customer or supplier changes. Changes in senior management. Changes in an auditor’s opinion. Defaults or bankruptcy. Significant legal disputes. Large block orders. Other events likely to affect security value. https://www.studley.ai/study-sets/6a7ed15c0ac566386ff2581a/notes Page 17 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 Materiality depends on the likely effect of the information and the reliability of its source. If the effect on price is unclear or the information is highly ambiguous, it may be less likely to be considered material. Nonpublic information Information remains nonpublic until it has been made broadly available to the public. Information is still nonpublic when it has been selectively disclosed to: A small group of investors. A few analysts. Preferred clients. Selected market participants. It is permissible to receive selectively disclosed information, but a member or candidate must not trade or cause others to trade on it if it is material and nonpublic. Mosaic theory The mosaic theory permits an analyst to reach an investment conclusion by combining: Public information. Nonmaterial nonpublic information. Publicly observable facts. Industry knowledge. Independent analysis. The conclusion may ultimately be material, but the analyst has not violated Standard II(A) if the underlying information was not itself material and nonpublic. Analysts should retain and document their research and analytical process to demonstrate how conclusions were reached. Social media Information found on social media should be verified through another public source where possible. If information is distributed through social media, members and candidates should confirm that relevant regulatory filings or public disclosures have been made. https://www.studley.ai/study-sets/6a7ed15c0ac566386ff2581a/notes Page 18 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 Industry experts Members and candidates may pay industry experts for insight, but they must not seek or accept confidential information to which the expert is subject through: Employment. Consulting arrangements. Confidentiality agreements. Fiduciary duties. Other obligations. Investment research reports An analyst’s research report may move the market even when the analyst is not a company insider and did not use material nonpublic information. A report based on the analyst’s independent analysis does not generally have to be made public before being shared with clients. Recommended procedures Firms should: 1. Encourage issuers to disseminate material information publicly. 2. Establish employee and proprietary trading review procedures. 3. Create disclosure procedures to ensure equitable distribution of information. 4. Issue press releases when appropriate. 5. Maintain information barriers or firewalls. 6. Monitor interdepartmental communications. 7. Review employee and related-account trading. 8. Physically separate departments and files where appropriate. 9. Prevent personnel overlap between potentially conflicting departments. 10. Establish reporting systems for possible information leakage. 11. Restrict personal trading, including trading for family members. 12. Maintain written records of communications between departments. https://www.studley.ai/study-sets/6a7ed15c0ac566386ff2581a/notes Page 19 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 13. Establish proprietary trading restrictions appropriate to the trading activity. 14. Communicate compliance policies to all employees. 15. Provide regular training. Information barriers may include watch lists, restricted lists, rumor lists, trading reviews, and limitations on communications between investment banking, research, sales, and corporate finance departments. B. Market Manipulation Members and candidates must not engage in practices intended to: Distort prices. Artificially inflate trading volume. Mislead market participants. Disrupt the information content of prices. Undermine investor confidence. Market manipulation includes both information-based and transaction-based conduct. Information-based manipulation This involves disseminating false or misleading information to induce others to trade. Example: Spreading false rumors to increase demand for a security and then selling at the artificially inflated price, commonly called a “pump-and-dump” scheme. Transaction-based manipulation This involves transactions designed to distort the price-setting mechanism or create a misleading appearance of market activity. Examples include: Wash trades, in which there is no genuine change in beneficial ownership but the transactions create the appearance of trading activity. https://www.studley.ai/study-sets/6a7ed15c0ac566386ff2581a/notes Page 20 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 Cornering, in which a person obtains a dominant position in an asset and uses that position to manipulate the price of a related derivative. Transactions designed to artificially increase volume or move prices. Legitimate trading strategies Standard II(B) does not prohibit legitimate trading strategies merely because they affect prices. The central issue is intent. A trade may be problematic when its purpose is to create an artificial price, mislead market participants, or exploit a distorted market. The analysis should consider whether the conduct is deceitful, dishonest, or designed to interfere with normal price discovery. Standard III: Duties to Clients A. Loyalty, Prudence, and Care Members and candidates owe clients a duty of loyalty. They must: Act for the benefit of clients. Place client interests before their own interests and their employer’s interests. Exercise reasonable care. Use prudent judgment. Comply with applicable legal duties, including fiduciary duties where required. Standard III(A) does not replace a stricter legal obligation. If local law imposes a higher duty, the higher duty applies. Custody of client assets Members and candidates who have direct or indirect access to client funds or securities have a heightened level of responsibility. They must establish appropriate controls for: Safeguarding assets. Separating client assets from firm assets. Reporting account activity. https://www.studley.ai/study-sets/6a7ed15c0ac566386ff2581a/notes Page 21 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 Preventing misuse or unauthorized transfers. Identifying the actual investment client The actual client is generally the beneficiary, not necessarily the person or organization that hires the investment manager. Examples: For a pension plan, the beneficiaries may be the employees or retirees. For a trust, the beneficiaries may be different from the trustee who appoints the manager. For an index fund with no identifiable beneficiary, decisions should follow the fund’s stated mandate. Investment decisions should be made according to the client’s mandate and objectives. Developing a client portfolio When developing a portfolio, members and candidates should: Establish the client’s investment objectives. Consider risk tolerance and return objectives. Account for financial constraints. Follow client guidelines and the investment policy statement. Consider investments in the context of the total portfolio. Diversify when appropriate. Disclose potential conflicts. Review the portfolio regularly. Ensure investments remain consistent with the client’s objectives. A particular investment may be appropriate when viewed in the context of the total portfolio even if it would be unsuitable in isolation. Soft commissions and directed brokerage A soft commission arrangement involves using client brokerage commissions to obtain research, products, or services. https://www.studley.ai/study-sets/6a7ed15c0ac566386ff2581a/notes Page 22 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 Members and candidates must ensure that brokerage arrangements benefit the client and comply with disclosure and best-execution obligations. Paying higher commissions for goods or services that do not benefit the client may violate the duty of loyalty. In a directed brokerage arrangement, the client directs the manager to use brokerage commissions to purchase goods or services for the client. This is not automatically a violation, but the manager must still seek best execution and a reasonable price. Proxy voting Members and candidates should establish and disclose proxy voting policies, including: When proxies are voted. How voting decisions are made. How conflicts are managed. How voting activity is communicated to clients. Recommended procedures Firms should: Provide regular account information, such as quarterly reporting of funds, securities, and transactions. Disclose custody arrangements. Segregate client assets. Seek client approval when the appropriate action is uncertain. Establish investment objectives through an investment policy statement. Consider all relevant client information. Diversify portfolios where appropriate. Review investments regularly against objectives. Allocate investment opportunities fairly. Disclose conflicts and compensation arrangements. Maintain client confidentiality. Seek best execution. https://www.studley.ai/study-sets/6a7ed15c0ac566386ff2581a/notes Page 23 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 Place client interests first. Establish proxy voting policies. B. Fair Dealing Members and candidates must deal fairly and objectively with all clients when: Providing investment analysis. Making investment recommendations. Taking investment action. Performing other professional activities. Fair treatment does not necessarily mean identical treatment. Fair means equitable, taking into account differences in client objectives, mandates, service agreements, and fees. Clients may receive different service levels or pay different fees if: The differences are disclosed. The services are available according to clear criteria. The differences do not result in unfair treatment. Investment recommendations Any recommendation to purchase, hold, or sell an investment must be disseminated so that all clients have a fair opportunity to act. Members and candidates should: Avoid selective disclosure. Avoid discriminating among clients. Clearly explain the type of communication each client will receive. Communicate material changes to recommendations promptly. Give particular attention to clients who acted on the earlier recommendation. https://www.studley.ai/study-sets/6a7ed15c0ac566386ff2581a/notes Page 24 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 Warn clients who are placing orders contrary to a changed recommendation before accepting the orders when appropriate. Changes to existing recommendations may be more important than initial recommendations because clients may already have acted on the earlier advice. Investment actions and allocations Investment opportunities, including new issues and secondary offerings, must be allocated fairly. If an issue is oversubscribed, allocation should generally be made on a pro rata or similarly equitable basis. Members and candidates should generally forgo personal allocations of oversubscribed securities. A family member may receive an allocation only if that family member is treated in the same manner as any similarly situated client. Allocated securities must not be used: As rewards. To favor selected clients. To create personal benefits. To compensate influential individuals. Allocation procedures should be disclosed, but disclosure does not excuse an inherently unfair process. Recommended procedures Firms should: Establish a written fair-dealing policy. Limit knowledge of impending recommendations to necessary personnel. Minimize the time between the investment decision and its dissemination. Establish written pre-dissemination conduct rules. Disseminate recommendations simultaneously internally and to clients where practical. Maintain lists of clients and their holdings. Establish documented trade allocation procedures. https://www.studley.ai/study-sets/6a7ed15c0ac566386ff2581a/notes Page 25 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 Use time stamps for orders. Process orders on a first-in, first-out basis where appropriate. Bundle orders when efficient. Use a consistent method to determine execution prices and partial fills. Give grouped orders the same execution price where appropriate. Allocate partial fills pro rata. Allocate trades by client account rather than by portfolio manager preference. Review accounts systematically for suitability and preferential treatment. Disclose service levels and ensure they are not selectively offered. C. Suitability When members and candidates are in an advisory relationship with a client, they must: 1. Make reasonable inquiry into the client’s: Investment experience Financial situation Risk tolerance Return objectives Investment objectives Financial constraints 2. Determine that an investment recommendation or action is suitable. 3. Reassess suitability regularly. 4. Consider the recommendation in the context of the client’s whole portfolio. Suitability is often documented in an investment policy statement, which records objectives, constraints, risk tolerance, return requirements, liquidity needs, tax considerations, and other relevant factors. https://www.studley.ai/study-sets/6a7ed15c0ac566386ff2581a/notes Page 26 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 Suitability does not eliminate the possibility of losses A suitable investment can lose money. Suitability concerns whether the investment is appropriate in light of the client’s objectives, constraints, risk tolerance, and portfolio— not whether it produces a positive return. Unsolicited orders If no advisory relationship exists, a member or candidate may not have enough information to determine suitability. This may occur with an unsolicited client order. If the member or candidate knows the order is unsuitable, the client should be informed and asked to acknowledge that the client understands the risk before proceeding, where appropriate. Managing to a mandate or index When managing a portfolio according to a particular mandate, index, strategy, or style, members and candidates must act consistently with that mandate. They must understand the mandate, often referred to as “knowing the mandate,” just as they must know the client. Recommended procedures Firms should require: A current investment policy statement. Regular reviews and updates. Periodic suitability testing. Analysis of portfolio diversification. Assessment of fit with the client’s risk tolerance. Assessment of fit with investment objectives. Documentation of client information and decisions. D. Performance Presentation https://www.studley.ai/study-sets/6a7ed15c0ac566386ff2581a/notes Page 27 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 When communicating investment performance, members and candidates must make reasonable efforts to ensure that performance information is: Fair Accurate Complete Credible Presented using appropriate measurement methods They must not: Misstate performance. Use misleading performance calculations. Omit relevant information. Present noncomparable benchmarks. State or imply that clients will experience a historical level of performance. Promote a “hit ratio” without presenting the information accurately and completely. Past performance cannot guarantee or imply future results. Recommended procedures Where applicable, firms should follow the Global Investment Performance Standards. Without relying on a compliant GIPS presentation, performance procedures should generally consider: Including all relevant accounts. Including terminated accounts. Disclosing whether performance is gross or net of fees. Explaining the treatment of taxes and inflation. Maintaining the data and records used to calculate performance. Clearly explaining methodology and assumptions. https://www.studley.ai/study-sets/6a7ed15c0ac566386ff2581a/notes Page 28 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 E. Preservation of Confidentiality Members and candidates must keep information about current, former, and prospective clients confidential. Confidential information may be disclosed only when: 1. The information concerns illegal activities by the client. 2. Disclosure is required by law. 3. The client or prospective client permits disclosure. If applicable law imposes confidentiality requirements stricter than the Code and Standards, the law must be followed. Confidentiality policies should address the storage of client information on: Personal laptops. Portable drives. Cloud systems. Mobile devices. Other non-firm systems. Standard III(E) does not prevent a member or candidate from cooperating with CFA Institute’s Professional Conduct Program when requested to provide client account information. Information outside the scope of the confidential relationship and unrelated to illegal activity may not be protected by this Standard, but professional judgment remains necessary. Standard IV: Duties to Employers A. Loyalty In matters related to employment, members and candidates must act for the benefit of their employer. They must not: https://www.studley.ai/study-sets/6a7ed15c0ac566386ff2581a/notes Page 29 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 1. Deprive the employer of their skills and abilities. 2. Divulge confidential employer information. 3. Cause harm to the employer. Examples of prohibited conduct include: Injuring the firm. Taking or destroying trade secrets. Depriving the employer of profits. Misusing employer resources. Taking confidential client lists. Removing codified research or proprietary work. Employers are not required to follow the Code and Standards. However, firms should not adopt practices that conflict with members’ and candidates’ obligations. Independent practice Members and candidates may engage in independent or competitive activities only after properly disclosing the intended activity to the employer and obtaining permission where required. They must not conduct a competing business while employed if it conflicts with the employer’s interests. Leaving an employer A member or candidate must continue acting in the employer’s best interest until resignation becomes effective. When leaving to compete, the member or candidate must not: Appropriate trade secrets. Misuse confidential information. Solicit clients before departure. Take client lists. Take original records or codified work. https://www.studley.ai/study-sets/6a7ed15c0ac566386ff2581a/notes Page 30 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 Reissue the firm’s research under a personal name. A departing employee may make reasonable preparations while still employed, such as planning a future business, provided the employee does not compete improperly or misuse employer information. Professional experience and general knowledge gained at one employer may be used at another. However, records and work that were codified or created for the former employer remain the former employer’s property. A member or candidate may contact former clients after departure when: The names were not taken from a confidential client list. No agreement prohibits contact. Confidential information is not used. Whistleblowing Violating the duty of loyalty may be justified when reporting misconduct is necessary to protect: Clients. The integrity of capital markets. The public interest. Independent contractors An independent contractor’s duties are generally governed by the agreement with the company. The precise employment relationship and contractual terms should be reviewed. Recommended procedures Firms should establish: Competition and noncompete policies. Termination policies. Incident reporting and whistleblowing procedures. Employee classifications explaining how policies apply to each category of worker. https://www.studley.ai/study-sets/6a7ed15c0ac566386ff2581a/notes Page 31 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 B. Additional Compensation Arrangements Members and candidates must not accept gifts, benefits, compensation, or consideration that competes with or could reasonably be expected to create a conflict with the employer’s interests unless they obtain written consent from all parties involved. This requirement applies to compensation or benefits received from clients or other third parties. Examples include: A client offering a bonus for achieving a target return. Free use of a vacation property. Outside compensation for directing business. Benefits tied to investment recommendations. Permission should be obtained before accepting the benefit. After-the-fact disclosure generally is not an adequate substitute for prior written consent. C. Responsibilities of Supervisors Members and candidates with supervisory authority must make reasonable efforts to detect and prevent violations of: Applicable laws. Rules and regulations. The Code and Standards. This duty applies to anyone subject to their supervision, whether or not that person is a CFA Institute member or candidate. Delegating supervisory responsibility does not eliminate the supervisor’s responsibility. Adequate compliance systems Supervisors should: Establish written compliance procedures. https://www.studley.ai/study-sets/6a7ed15c0ac566386ff2581a/notes Page 32 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 Ensure procedures meet industry and regulatory expectations. Identify likely areas of violation. Close gaps between existing procedures and adequate procedures. Monitor and enforce procedures. Conduct periodic reviews. Provide adequate authority and resources to compliance personnel. If a violation is not detected despite reasonable procedures and reasonable efforts, the supervisor is generally not in violation of Standard IV(C). However, simply having procedures is insufficient if the supervisor knows they are not being followed. Responding to violations When a violation arises, the supervisor should: 1. Promptly initiate an investigation. 2. Determine the scope of the violation. 3. Restrict the employee’s access or activities when appropriate. 4. Inform senior management. 5. Recommend corrective action. 6. Monitor compliance going forward. If compliance procedures are inadequate and the supervisor cannot discharge the supervisory responsibility, the supervisor should decline the responsibility or seek authority to correct the deficiencies. Non-investment policies, such as attendance and workplace conduct policies, should also be enforced consistently. Recommended supervisory procedures A strong compliance system should include: A clearly written and accessible code of ethics. Easy-to-understand policies. A designated compliance officer with sufficient authority and resources. https://www.studley.ai/study-sets/6a7ed15c0ac566386ff2581a/notes Page 33 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 A clear hierarchy of supervision. A description of the scope of each procedure. Monitoring and testing procedures. Procedures for reporting violations. Education and training programs. Incentives linked to ethical conduct and compliance. Periodic reviews and updates. Prompt investigation and enforcement of violations. Standard V: Investment Analysis, Recommendations, and Actions A. Diligence and Reasonable Basis Members and candidates must: 1. Exercise diligence, independence, and thoroughness in: Analyzing investments. Making investment recommendations. Taking investment actions. 2. Have a reasonable and adequate basis supported by appropriate research and investigation. The required level of diligence depends on: The type of security or investment product. The complexity of the investment. The facts known at the time. The information available. https://www.studley.ai/study-sets/6a7ed15c0ac566386ff2581a/notes Page 34 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 The resources provided by the employer. The professional role of the member or candidate. The standard of diligence is not identical for every product. A complex derivative, private investment, or structured product generally requires more extensive investigation than a simple, widely followed security. Secondary and third-party research Members and candidates may use research produced outside their firm, but they must make reasonable efforts to determine whether the research is reliable. They should evaluate: The assumptions used. The rigor of the analysis. The date and timeliness of the research. The objectivity and independence of the conclusions. The qualifications of the research provider. The methodology and supporting evidence. Once a research vendor has been appropriately selected, members and candidates may generally use the vendor’s work in good faith, while still exercising reasonable judgment. Quantitative research and models Members and candidates using quantitative models must understand: The model’s parameters. The assumptions. The inputs. The limitations. The circumstances under which the model may fail. They should test model outputs before incorporating them into recommendations. Members and candidates involved in developing models or algorithms must understand the technical aspects sufficiently to assess whether the models operate as intended. https://www.studley.ai/study-sets/6a7ed15c0ac566386ff2581a/notes Page 35 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 Selecting external advisers External managers and advisers should be reviewed as diligently as individual securities. A firm should use standardized criteria, including: Reviewing the adviser’s Code of Ethics. Understanding compliance and internal control procedures. Assessing the quality of the published performance record. Reviewing the investment process. Evaluating whether the adviser follows its stated strategy. Assessing personnel, resources, and risk controls. Group research and decision-making The output of a research group represents the consensus of the group, and all relevant contributors should be identified on the report. A member or candidate who disagrees with the group does not have to dissociate if the group’s opinion has a reasonable basis and the member’s own work remains independent and objective. Recommended procedures Firms should establish: A policy requiring research and recommendations to have a reasonable and adequate basis. Internal review before research is released. Review guidelines for rigor, accuracy, and quality. Model-testing standards. Procedures for evaluating external advisers. Procedures for assessing third-party research providers. Documentation supporting research conclusions. https://www.studley.ai/study-sets/6a7ed15c0ac566386ff2581a/notes Page 36 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 B. Communication with Clients and Prospective Clients Members and candidates must communicate effectively with clients and prospective clients. They must: 1. Disclose the basic format and general principles of the investment process used to: Analyze investments. Select securities. Construct portfolios. 2. Promptly disclose material changes to the investment process. 3. Use reasonable judgment to identify important factors affecting analysis, recommendations, or actions. 4. Include those important factors in communications. 5. Distinguish clearly between facts and opinions. 6. Communicate material risks and limitations. 7. Present information in a clear, accurate, timely, and complete manner. Explaining the investment process Clients should understand: How investment decisions are made. What analytical methods are used. What makes a recommendation suitable. How portfolios are constructed. The general relationship between expected return and risk. The role of external advisers. Any relevant specialization or diversification expertise. Material changes in the process. https://www.studley.ai/study-sets/6a7ed15c0ac566386ff2581a/notes Page 37 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 Forms of communication The Standard applies to: Written reports. Oral presentations. Broadcast media. E-mail. Webinars. Websites. Social media. Other electronic communications. Clients should have fair access to communications. If a communication is presented in a brief or condensed format, clients should be informed that additional analysis or detail is available. Risks and limitations Members and candidates must outline significant risks and limitations known at the time of release. A member or candidate does not violate the Standard merely because an unforeseen risk later causes a loss. The obligation concerns risks and limitations that were reasonably knowable when the communication was prepared. Facts and opinions Communications should distinguish: Historical facts from forecasts. Observed data from assumptions. Quantitative conclusions from statistical conjecture. Actual results from estimates of future results. Statistical projections are estimates, not facts. Members and candidates may violate the Standard by failing to explain material limitations of statistically generated forecasts. https://www.studley.ai/study-sets/6a7ed15c0ac566386ff2581a/notes Page 38 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 Cost disclosure update When communicating with clients and prospective clients, members and candidates must disclose: The nature of the services provided. Information about the expected costs charged for those services. Costs in a reasonable amount of detail. An exact dollar amount is not always required, and disclosure of the firm’s internal cost of providing a service is not required. The communication should provide enough information for the client to understand the expected charges. Recommended procedures Firms should use: Internal peer review. Research review processes. Written standards for separating fact and opinion. Required risk and limitation disclosures. Procedures for updating clients about material process changes. Standards for clear and understandable communication. A useful test for communication is whether the analysis is defensible. C. Record Retention Members and candidates must develop and maintain appropriate records supporting: Investment analysis. Investment recommendations. Investment actions. Investment-related communications with clients and prospective clients. Records may be maintained in hard-copy or electronic form. https://www.studley.ai/study-sets/6a7ed15c0ac566386ff2581a/notes Page 39 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 Examples include: Personal notes from company meetings. Press releases. Company presentations. Model inputs and outputs. Portfolio risk analysis. Notes from client meetings. Research supporting an investment recommendation. Communications concerning assumptions and decisions. Ownership of records Research and other work produced while employed generally belong to the firm. A departing member or candidate may not take originals or copies without consent. If the new employer wants to use the prior research, the member or candidate generally must recreate the research at the new firm and create supporting records there. Local regulators may impose specific retention periods. CFA Institute guidance commonly refers to retaining records for seven years, but the applicable legal or regulatory requirement must be followed. The firm has primary responsibility for maintaining records, while members and candidates must properly archive their research notes and related materials. Standard VI: Conflicts of Interest A. Disclosure of Conflicts Members and candidates must make full and fair disclosure of matters that could reasonably be expected to: Impair independence or objectivity. Interfere with duties to clients or prospective clients. https://www.studley.ai/study-sets/6a7ed15c0ac566386ff2581a/notes Page 40 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 Conflict with duties to employers. Disclosures must be: Prominent. In plain language. Timely. Effective in communicating the relevant information. The best practice is to avoid real or perceived conflicts. If avoidance is not possible, the conflict must be disclosed effectively. Disclosure to employers Employers need enough information to assess the impact of a conflict. Potential conflicts include: Ownership of securities being analyzed. Serving on an outside board. Directorships. Outside business activities. Special compensation arrangements. Personal relationships. Financial interests. An outside board position may interfere with unbiased advice and may also provide access to material nonpublic information. Some employers may prohibit such positions. If a conflict arises inadvertently, it should be reported promptly. Disclosure to clients Members and candidates should disclose relevant relationships between the member, employer, and issuer, including: Directorships. Beneficial ownership. Broker-dealer relationships. https://www.studley.ai/study-sets/6a7ed15c0ac566386ff2581a/notes Page 41 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 Market-making activities. Subadvisory arrangements. Nonstandard fee structures. Arrangements under which the firm benefits directly from recommendations. Special compensation arrangements. Cross-departmental conflicts may arise between: Marketing and research. Sales and analysts. Investment banking and research. Broker-dealer activities and investment recommendations. Stock ownership Members and candidates may own shares in a company they recommend, but beneficial ownership must be disclosed. A blanket prohibition may be impractical; transparent disclosure allows clients and employers to evaluate the conflict. Director conflicts Serving as a director can create conflicts between: Duties to investment clients. Duties to shareholders. Personal financial incentives, such as options. Access to material nonpublic information. A member or candidate serving as a director should be isolated from those making investment decisions when necessary. Compensation disclosures Firms should disclose special compensation arrangements that could conflict with client interests, including: Bonuses based on short-term performance. https://www.studley.ai/study-sets/6a7ed15c0ac566386ff2581a/notes Page 42 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 Incentives based on sales. Compensation related to recommendations. Compensation packages described in promotional literature. B. Priority of Transactions Investment transactions for clients and employers must have priority over transactions in which the member or candidate is the beneficial owner. The objective is to prevent personal trading from: Disadvantaging clients. Front-running client trades. Using client orders to benefit personally. Creating conflicts with employer transactions. Members and candidates may invest personally as long as: 1. Clients are not disadvantaged. 2. The member or candidate does not personally benefit from client trades. 3. Applicable laws and regulations are followed. The rule also applies to trades that run counter to current client recommendations when the personal position could create a conflict. Personal trading A member or candidate may execute trades in an account in which they have beneficial ownership only after clients and employers have had an adequate opportunity to act on the recommendation. Family accounts are treated as personal accounts unless they are genuine client accounts managed under the same procedures as other client accounts. Members and candidates must not trade on: Pending client or employer transactions. Material nonpublic information. https://www.studley.ai/study-sets/6a7ed15c0ac566386ff2581a/notes Page 43 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 Confidential information about intended recommendations. Recommended procedures Firms should establish: Limits on participation in initial public offerings. Restrictions on private placements. Blackout or restricted periods before and after client trades. Personal trading preclearance. Disclosure of beneficial ownership. Duplicate transaction confirmations. Periodic holdings reports. At least annual reporting of personal investments. Review of planned personal trades. Policies disclosed to clients where appropriate. Procedures to monitor employee and family-account trading. Participation in IPOs and private placements may: Take an opportunity away from clients. Create an incentive to favor the provider of the opportunity. Generate an appearance of impropriety. C. Referral Fees Members and candidates must disclose to employers, clients, and prospective clients, as appropriate, any compensation, consideration, or benefit received from or paid to others for recommending products or services. Disclosure should occur before the client enters into a formal agreement. The disclosure should explain: The existence of the referral arrangement. https://www.studley.ai/study-sets/6a7ed15c0ac566386ff2581a/notes Page 44 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 The parties involved. The nature of the benefit. Whether the payment is cash or a soft-dollar benefit. Whether it is a flat fee or percentage. Whether it is one-time or ongoing. A fee-sharing arrangement is generally also a referral fee if compensation is connected to recommending a product or service. Standard VII: Responsibilities as a CFA Institute Member or Candidate A. Conduct as a Member or Candidate in the CFA Program Members and candidates must not engage in conduct that compromises: The reputation or integrity of CFA Institute. The CFA designation. The integrity, validity, or security of CFA examinations. Confidential CFA Program information Candidates must not disclose confidential information obtained during the exam process, including: Specific exam questions. Specific topics appearing on an exam. Specific topics not appearing on an exam. Formulas tested or not tested. Other content CFA Institute has not publicly released. https://www.studley.ai/study-sets/6a7ed15c0ac566386ff2581a/notes Page 45 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 All aspects of the exam remain confidential until CFA Institute releases them publicly. Violations of testing policies, restrictions concerning calculators or personal belongings, and violations of the candidate pledge may constitute violations of Standard VII(A). Expressing disagreement Members and candidates may disagree publicly with CFA Institute policies, procedures, or decisions. However, they may not disclose content-specific confidential examination information. B. Reference to CFA Institute, the CFA Designation, and the CFA Program Members and candidates must not misrepresent or exaggerate the meaning of: CFA Institute membership. The CFA designation. Candidacy in the CFA Program. They must not make promotional claims suggesting that the designation guarantees: Superior investment performance. Superior investment ability. Certain client outcomes. A guaranteed level of expertise beyond what the designation represents. CFA Institute membership Regular and affiliate members who have met membership requirements must maintain their status by: Submitting the annual Professional Conduct Statement. Paying applicable membership dues. A person who fails to meet membership requirements may no longer represent themselves as an active CFA Institute member. https://www.studley.ai/study-sets/6a7ed15c0ac566386ff2581a/notes Page 46 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 Use of the CFA designation A person who has earned the designation may use the trademarks CFA or Chartered Financial Analyst only while satisfying the continuing membership requirements. If the person fails to satisfy those requirements, the right to use the designation is forfeited, and the person must not present themselves as a CFA charterholder. Candidacy in the CFA Program A person may refer to candidacy only when: 1. Registration has been accepted and the person is enrolled to sit for a specified examination; or 2. The person has sat for an examination and the results have not yet been released. Candidates must: Clearly state that they are candidates. Avoid suggesting that they hold a partial designation. Avoid citing an expected completion date. Avoid implying that passing individual levels creates a partial professional designation. Avoid suggesting that passing levels in consecutive years gives them superior ability. A candidate may state factual information about passing all three levels in consecutive years, but may not imply that this fact guarantees superior competence. Proper use of CFA marks The CFA marks must be used: After a person’s name; or As an adjective describing the person. The marks must not be used: As part of a firm’s name. As a noun. In a way that implies a partial designation. In a way that guarantees superior performance or ability. https://www.studley.ai/study-sets/6a7ed15c0ac566386ff2581a/notes Page 47 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 Important Updates and Clarifications Competence The competence requirement emphasizes that members and candidates must maintain appropriate: Knowledge. Skills. Diligence. Competence includes sufficient: Knowledge: a body of information. Skills: capabilities and attitudes that support performance. Abilities: capabilities and behaviors that produce observable outcomes. Members and candidates should continuously improve their professional competence and apply it appropriately to their responsibilities. Communication with clients and prospective clients The communication requirement now emphasizes disclosing: The nature of services provided. Information about expected costs charged. Costs with a reasonable level of detail. An exact dollar amount is not necessarily required, and the internal cost of providing the service need not be disclosed. Client-facing members and candidates are responsible for the adequacy of their own communications, even if other people are involved in preparing the underlying information. https://www.studley.ai/study-sets/6a7ed15c0ac566386ff2581a/notes Page 48 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 Communications should remain: Appropriate. Timely. Accurate. Complete. Conflicts of interest The conflict language emphasizes that members and candidates should avoid or disclose conflicts. Disclosure is not the first choice when a conflict can reasonably be avoided. If avoidance is not possible, disclosure must be prominent, plain, timely, and effective. Integrated Review of the Standards Professionalism Knowledge of the Law: Follow applicable requirements and the stricter standard when requirements differ. Independence and Objectivity: Do not offer, solicit, or accept benefits that could compromise judgment. Misrepresentation: Do not misstate credentials, qualifications, performance, services, or third-party work. Misconduct: Avoid dishonest, fraudulent, deceitful, or professionally damaging conduct. Integrity of Capital Markets Material Nonpublic Information: Do not act or cause others to act on material nonpublic information. Market Manipulation: Do not distort prices, inflate volume, or mislead market participants. https://www.studley.ai/study-sets/6a7ed15c0ac566386ff2581a/notes Page 49 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 Duties to Clients Loyalty, Prudence, and Care: Put client interests first and exercise reasonable care and prudent judgment. Fair Dealing: Treat clients equitably, not necessarily identically. Suitability: Know the client, understand the portfolio, and follow the mandate. Performance Presentation: Present performance fairly, accurately, and completely. Confidentiality: Protect current, former, and prospective client information except under recognized exceptions. Duties to Employers Loyalty: Act for the employer’s benefit and protect employer property and confidential information. Additional Compensation: Obtain written permission before accepting conflicting outside compensation. Supervision: Make reasonable efforts to detect and prevent violations by supervised personnel. Investment Analysis, Recommendations, and Actions Diligence and Reasonable Basis: Support recommendations with appropriate research and investigation. Communication: Explain the investment process, important factors, risks, limitations, costs, and the difference between facts and opinions. Record Retention: Maintain records supporting investment work and communications. Conflicts of Interest Disclosure: Fully and fairly disclose relevant conflicts. https://www.studley.ai/study-sets/6a7ed15c0ac566386ff2581a/notes Page 50 of 51 Studley AI - CFA Ethics and Standards — Notes 2026/08/14, 10:32 Priority of Transactions: Clients and employers trade before members and candidates trade personally. Referral Fees: Disclose compensation or benefits connected to recommendations before formal agreements are entered. CFA Institute Responsibilities Conduct in the CFA Program: Protect the reputation of CFA Institute and the security and integrity of the examinations. References to CFA Institute and the CFA designation: Do not exaggerate membership, candidacy, or the meaning of the CFA designation. https://www.studley.ai/study-sets/6a7ed15c0ac566386ff2581a/notes Page 51 of 51