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Financial Markets, Regulations and Ethics
Ethics Coursework CFA Institute
CASE 1
1. Are excerpts 2 and 3 of Clipper’s compliance procedures consistent with the CFA Standards of Professional Conduct? Why or why not?
Manual excerpt point 2: This is partially consistent with CFA Standards of Professional Conduct because IV.C Duties to employers-responsibilities of supervisors states that 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; not only who is directly supervised.
Manual excerpt point 3: This isn’t consistent with CFA Standards of Professional Conduct because II.A Integrity of capital markets-material non-public information states that “Members and Candidates who possess material non-public information must not act or cause others to act on the information” instead of making reasonable efforts to achieve public dissemination of the information if such actions would not breach a duty. Clipper Company Compliance Manual Excerpts permit public dissemination of the information in certain cases.
2. According to the Standards, must Miller obtain permission from her supervisor before accepting the Spencer gift basket?
IV.B Duties to employers-additional compensation agreement states that Members and Candidates must not accept gifts that competes with or might reasonably be expected to create a conflict of interest with their employer’s interest; but in this case there is no conflict of interest because the gift is from an external figure which not affect other employer’s interests.
3. When making her initial recommendations to purchase Spencer Company shares, which standards is Miller violating?
Miller violate IV.A Duties to employers-Loyalty standard because she divulge confidential information. Even if the information weren’t explicitly provided from the company and they weren’t material,
Ethics Coursework CFA Institute
CASE 1
1. Are excerpts 2 and 3 of Clipper’s compliance procedures consistent with the CFA Standards of Professional Conduct? Why or why not?
Manual excerpt point 2: This is partially consistent with CFA Standards of Professional Conduct because IV.C Duties to employers-responsibilities of supervisors states that 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; not only who is directly supervised.
Manual excerpt point 3: This isn’t consistent with CFA Standards of Professional Conduct because II.A Integrity of capital markets-material non-public information states that “Members and Candidates who possess material non-public information must not act or cause others to act on the information” instead of making reasonable efforts to achieve public dissemination of the information if such actions would not breach a duty. Clipper Company Compliance Manual Excerpts permit public dissemination of the information in certain cases.
2. According to the Standards, must Miller obtain permission from her supervisor before accepting the Spencer gift basket?
IV.B Duties to employers-additional compensation agreement states that Members and Candidates must not accept gifts that competes with or might reasonably be expected to create a conflict of interest with their employer’s interest; but in this case there is no conflict of interest because the gift is from an external figure which not affect other employer’s interests.
3. When making her initial recommendations to purchase Spencer Company shares, which standards is Miller violating?
Miller violate IV.A Duties to employers-Loyalty standard because she divulge confidential information. Even if the information weren’t explicitly provided from the company and they weren’t material,