It's certainly minutia, but it's bothering me since it's so early in the readings. I see what appears to be an inconsistency between the answers for what appears to be the same question in Schweser and the Standards of Practice handbook. Either that or its ambiguous language.
The Schweser question (pg. 38) states:
___________
"A CFA Institute member resides in Country A, where securities laws are MORE strict than the CFA Institute Standards of Professional Conduct, and does all of his business in Country B, where securities laws are LESS strict than the CFA Institute Standards. The laws of Country A state that professional conduct is governed by the laws of the locality in which business is conducted. According the CFA Institute Standards of Practice Handbook, the member has a duty to adhere to:
A. the laws of Country A.
B. the laws of Country B.
C. CFA Institute Standards of Professional Conduct.
D. a basic standard of competence and diligence.
___________
The Handbook addresses this scenario on page 10:
___________
"Applicable law: Member resides in MORE strict country, does business in LESS strict country; MORE strict law applies, but it states that law of locality where business is conducted governs.
Duties: Member must adhere to the Code and Standards.
Explanation: Because applicable law states that the law of the locality where the business is conducted governs and local law is less strict than the Code and Standards, the member must adhere to the Code and Standards."
___________
So, given what the Handbook states, my answer is (C) CFA Institute Standards of Professional Conduct.
But the correct Schweser answer is (A) the laws of Country A; explanation: "Members must abide by the strictest requirement."
This doesn't make sense to me, as the strictest requirements state to adhere to the requirements where business is conducted (i.e. less strict), thus defaulting up to the Standards in practice.
Thoughts?
The Schweser question (pg. 38) states:
___________
"A CFA Institute member resides in Country A, where securities laws are MORE strict than the CFA Institute Standards of Professional Conduct, and does all of his business in Country B, where securities laws are LESS strict than the CFA Institute Standards. The laws of Country A state that professional conduct is governed by the laws of the locality in which business is conducted. According the CFA Institute Standards of Practice Handbook, the member has a duty to adhere to:
A. the laws of Country A.
B. the laws of Country B.
C. CFA Institute Standards of Professional Conduct.
D. a basic standard of competence and diligence.
___________
The Handbook addresses this scenario on page 10:
___________
"Applicable law: Member resides in MORE strict country, does business in LESS strict country; MORE strict law applies, but it states that law of locality where business is conducted governs.
Duties: Member must adhere to the Code and Standards.
Explanation: Because applicable law states that the law of the locality where the business is conducted governs and local law is less strict than the Code and Standards, the member must adhere to the Code and Standards."
___________
So, given what the Handbook states, my answer is (C) CFA Institute Standards of Professional Conduct.
But the correct Schweser answer is (A) the laws of Country A; explanation: "Members must abide by the strictest requirement."
This doesn't make sense to me, as the strictest requirements state to adhere to the requirements where business is conducted (i.e. less strict), thus defaulting up to the Standards in practice.
Thoughts?