Ethical and Professional Standards, The Asset Managment Industry and Professionalism, and Behavioral

Code of ethics

The standards of professional conduct

Act with integrity, competence, dilligence, 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 captial markets.

  1. Professionalism

    1. knowledge of the law: with the more strict law...

    2. independence and objectivity: to achieve and maintain independence and objectivity in their professional activities

    3. misrepresentation: must not knowingly make any misrepresentations relating to investment analysis...

    4. misconduct(不端行为)

  2. Integrity of capital markets

    1. material nonpublic information

    2. market manipulation

  3. duties to clients

    1. loyalty, prudence(审慎), and care

    2. fair dealing

    3. suitability

    4. performance presentation

      1. when in an advisory relationship with a client

      2. when repsonsible for managing a portfolio

    5. preservation of confidentiality, unless

      1. information concerns illegal activities

      2. required by law

      3. the client or propective client permits disclosure of the information

  4. duties to employers

    1. loyalty

    2. additional compensation arrangements

    3. responsibilities of supervisors

  5. invesmtne analysis, recommendations, and actions

    1. diligence and reasonable basis

    2. communication with clients and prospective clients

    3. record retention

  6. conflicts of interest

    1. disclosure of conflicts

    2. priority of transactions

    3. referral fees

  7. responsibilites as CFA institute member of CFA candidate

    1. conduct as paritcipants in CFA institute programs

    2. reference to CFA Institute, the CFA designation, and the CFA program

The proceedings

tow principles:

  1. confidentiality of proceedings

  2. fair process to the member and candidate

PCP(Professional Conduct Program) and DRC(Disciplinary Review Commitee, 从属于PCP) are responsible for enforcement of the Code and Standard:

  • PCS(Professional Conduct Statement) self-disclosure(只要透露自己的情况)

  • Written comlaints

  • Evidence of miconduct received through public sources

  • possible violation during the exam

The panel

如果申诉，则成立panel，只能sanction，不能 punishment。Panel composed of DRC members + local society member. sanction包括且仅包括：

  1. public censure

  2. suspension of membership and use of the CFA designation

  3. revocation of the CFA charter

AMC and Code Standards

  • AMC(Asset Manger Code) for firms (自愿的)

  • Code and Standards for individual member of candidates

法律

  • 知法

    • not an expert to all law, but

    • know all directly related to their professional activities in all countries

  • 守法：most strict, 从严

  • 违法

    • know

      • attempt to stop / attention to employer -> dissociate/ quit

    • suspect

      • consult -> judge， 但是不能免责

  • associated firm abide by the laws and regulations

  • cross border business: local law + social culture

  • 公司可以禁止任何礼物/上限金额/no cash or cash equivalent

  • 卖方分析师vs买方经理

  • 招标，第三方

  • Firewall：

    • reporting structure

    • compensation not link analyst remuneration directly to investment in which analyst may participate as a team member

    • location, 完全物理隔离

  • 两个部门可以合作，但需要compliance

Typo error (及时更正)

  • omission

    • Performance -> cherry picking

    • Model: 1) all risks; 2) limitations 3) negative scenario

  • misleading

    1. 自身吹

      • 公司: 1)业绩 2) 服务

      • 个人: 1)学历 2) 资质 3) 经验 4) 业绩 5) 为谁工作

    2. 外部经理->core competence

    3. 三方信息->先审核在使用

    4. benchmark

    5. Valuation model

  • Plagiarism

    1. 常识: P/E, Std:

      • original author 引用

      • own words 不引用

    2. original idea (summary, own words) 引用

    3. data

      • 机构权威：GDP、非农->不引用；二次加工->引用

      • 金融机构：引用

    4. media

      • 引用原著

      • 引用媒体名+原作者名

    5. well-known analyst->具名

    6. research

      • internal：为个人引用；为公司不引用

      • external：引用

Misconduct

Performance presentation

只要违反performance presentation 就一定违反了misrepresentation

  • 不能夸大、虚构composite

  • terminated included

  • weighted average

  • brief+detail

  • simulated 区别展示

Return Calculation - Composite

  1. Beginning-of-period values

  2. A method that reflects both beginning-of-period values and external cash flows

  3. Aggregate

Compliant presentations

  • Return

  • Risk: External/Internal/Benchmark

  • NUmber of portfolio: actual number if actual number > 5 else "<=5"

  • Composite/ firm assets

Real estate provisions

  • PIC multiple = since-inception paid-in capital / committed capital

  • DPI = since-inception distributions / since-inception paid-in capital

  • RVPI = residual value to since-inception paid-in capital

    +

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