Ethics & professional standards
⏱ ~4-min readAceMark Guide
What this topic is really about
Standard II(A) specifically addresses Material Nonpublic Information to preserve the integrity of capital markets. Trading on such information violates this standard because it compromises market fairness. While client loyalty is vital, trading on inside information is primarily a market integrity violation rather than a failure of client-specific fiduciary duty.
Maintaining independence in both fact and appearance is the core requirement of the Independence and Objectivity standard, ensuring professional judgment is not compromised by gifts or pressure. The standard of Loyalty, while related, specifically focuses on putting client interests ahead of one's own rather than avoiding external bias.
See the mechanism
The CFA Institute Code of Ethics mandates that members must prioritize the client's interests above all else to maintain market integrity and trust. A diagram for this topic isn't available yet — the worked example below walks the same reasoning step by step.
An exam-style question, fully explained
Under CFA Institute Code of Ethics, members must place the interests of which party first?
- Identify what the question tests: Under CFA Institute Code of Ethics, members must place the interests of which party first.
- The CFA Institute Code of Ethics mandates that members must prioritize the client's interests above all else to maintain market integrity and trust.
- Placing the interests of the employer or oneself first violates this core fiduciary duty and professional standard.
Traps the examiner sets
- Standard I(C) requires analysts to maintain independence and avoid conflicts of interest that could bias their research.
Test your recall
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