Follow along with the video below to see how to install our site as a web app on your home screen.
Note: This feature may not be available in some browsers.
+1GothamSenator wrote:
Look no further than the Standards of Practice Handbook, Eleventh Edition itself (http://www.cfapubs.org/doi/pdf/10.2469/ccb.v2014.n4.1). Pages vii through ix provide a comprehensive overview of what’s changed. For convenience, I’ve pasted the pages below.
The changes look fairly benign, I think the largest difference in prepping for ethics at level three is the addition of the Asset Manager Code of Professional Conduct.
Summary of Changes in the Eleventh Edition
The comprehensive review of the Code and Standards in 2005 resulted in principle
requirements that remain applicable today. The review carried out for the
eleventh edition focused on market practices that have evolved since the tenth edition.
Along with updates to the guidance and examples within the Handbook, the
eleventh edition includes an update to the Code of Ethics that embraces the members’
role of maintaining the social contract between the industry and investors.
Additionally, there are three changes to the Standards of Professional Conduct,
which recognize the importance of proper supervision, clear communications
with clients, and the expanding educational programs of CFA Institute.
Inclusion of Updated CFA Institute Mission
The CFA Institute Board of Governors approved an updated mission for the organization
that is included in the Preamble to the Code and Standards. The new
mission conveys the organization’s conviction in the investment industry’s role in
the betterment of society at large.
Mission:
To lead the investment profession globally by promoting the highest standards
of ethics, education, and professional excellence for the ultimate
benefit of society.
Updated Code of Ethics Principle
One of the bullets in the Code of Ethics was updated to reflect the role that the
capital markets have in the greater society. As members work to promote and
maintain the integrity of the markets, their actions should also help maintain the
social contract with investors.
Old:
Promote the integrity of and uphold the rules governing capital markets.
New:
Promote the integrity and viability of the global capital markets for the
ultimate benefit of society.
New Standard Regarding Responsibilities of Supervisors [IV(C)]
The standard for members and candidates with supervision or authority over
others within their firms was updated to bring about improvements in preventing
illegal and unethical actions from occurring. The prior version of Standard
IV(C) focused on the detection and prevention of violations. The updated version
stresses broader compliance expectations, which include the detection and prevention
aspects of the original version.
Old:
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.
New:
Members and Candidates must make reasonable efforts to ensure that
anyone subject to their supervision or authority complies with applicable
laws, rules, regulations, and the Code and Standards.
Additional Requirement under the Standard for Communication with Clients and
Prospective Clients [V(B)]
Given the constant development of new and exotic financial instruments and
strategies, the standard regarding communicating with clients now includes an
implicit requirement to discuss the risks and limitations of recommendations
being made to clients. The new principle and related guidance take into account
the fact that levels of disclosure will differ between products and services.
Members and candidates, along with their firms, must determine the specific disclosures
their clients should receive while ensuring appropriate transparency of
the individual firms’ investment processes.
Addition:
Disclose to clients and prospective clients significant limitations and
risks associated with the investment process.
Modification to Standard VII(A)
Since this standard was developed, CFA Institute has launched additional educational
programs. The updated standard not only maintains the integrity of the
CFA Program but also expands the same ethical considerations when members or
candidates participate in such programs as the CIPM Program and the Claritas
Investment Certificate. Whether participating as a member assisting with the curriculum
or an examination or as a sitting candidate within a program, we expect
them to engage in these programs as they would participate in the CFA Program.
Old:
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 examinations.
New:
Conduct as Participants in CFA Institute Programs
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 CFA Institute programs.
General Guidance and Example Revision
The guidance and examples were updated to reflect practices and scenarios applicable
to today’s investment industry. Two concepts that appear frequently in the
updates in this edition relate to the increased use of social media for business
communications and the use of and reliance on the output of quantitative models.
The use of social media platforms has increased significantly since the publication
of the tenth edition. And although financial modeling is not new to the industry,
this update reflects upon actions that are viewed as possible contributing factors
to the financial crises of the past decade.