Code of Conduct & Ethical Standards for Members
Preamble
Maintaining high ethical standards is crucial for public trust in financial markets and the investment profession. This Code, based on standards established the CFA Institute Code of Ethics and Standards of Professional Conduct, serves as a model for ethical conduct for all CFA Society San Francisco members, regardless of their professional role or local regulations. Violations of this code of conduct and ethics may result in disciplinary action, including loss of membership or the right to use the CFA designation. All members bear the personal responsibility to embrace and uphold these provisions.
All CFA Society San Francisco members must:
- Act with integrity, competence, diligence, respect, and in an ethical manner with the public, clients, employers, colleagues, and all capital market participants.
- Prioritize the integrity of the profession and the interests of clients over personal gain.
- Use sound judgment and reasonable care in all professional activities and decisions.
- Conduct themselves and encourage others to act in a way that brings credit to the investment profession.
- Support the health and transparency of global capital markets to benefit society.
- Continuously strive to enhance their own and others’ professional competence.
Professionalism
Knowledge of the Law
All members must understand and comply with all applicable laws, rules, and regulations, including this Code and the CFA Institute Standards of Professional Conduct. In cases of conflict, members must adhere to the stricter law, rule, or regulation. Members must not knowingly participate in or assist any violation of such laws and must dissociate themselves from any such activity.
Independence and Objectivity
All members must exercise reasonable care and judgment to achieve and maintain independence and objectivity in all professional activities. Members must not offer, solicit, or accept any gifts, benefits, compensation, or considerations that could reasonably be expected to compromise their own or another's independence and objectivity.
Misrepresentation
All members must not knowingly make any misrepresentations related to investment analysis, recommendations, actions, or other professional activities. This includes misrepresenting one's abilities, expertise, or the extent of their work in a way that could mislead clients. When distributing third-party or outsourced research, members must not claim authorship and should disclose the source of the research to clients.
Misconduct
All members must not engage in any professional conduct involving dishonesty, fraud, or deceit, or commit any act that adversely reflects on their professional reputation, integrity, or competence. This standard applies to any professional activity, including interactions in the workplace or academia, participation in the investment profession, and activities where a member represents themselves as a CFA charterholder or CFA Society San Francisco member.
It also extends to conduct at CFA Society San Francisco, CFA Institute, or other CFA Society events and online communications. Members are expected to maintain professionalism, integrity, and competence in these settings, ensuring that their actions do not reflect adversely on their reputation or the Society. Any behavior that undermines trust or disrespects other members, whether in-person or online, is a violation.
Unethical behavior that damages trustworthiness or competence, even if not illegal, falls under this standard. This includes disruptive behavior at events or any actions that undermine trust and respect within the professional community.
Competence
All members must act with and maintain the competence necessary to fulfill their professional responsibilities. The required knowledge, skills, and abilities vary with the nature and complexity of professional duties. Members are expected to continuously develop and refine their skills throughout their careers to provide high-standard service.
Integrity of Capital Markets
Material Nonpublic Information
All members who possess material nonpublic information that could affect an investment's value must not act on it or cause others to act on it. Material information is that which would likely affect the price of a security or be considered important by an investor in making an investment decision. Nonpublic information is information not generally available to the market.
Market Manipulation
All members must not engage in practices that distort prices or artificially inflate trading volume with the intent to mislead market participants. This includes practices such as spreading false rumors to influence prices or executing trades to create a misleading appearance of activity.
Duties to Clients
Loyalty, Prudence, and Care
All members have a duty of loyalty to their clients and must act with reasonable care and prudent judgment. Members must always act for the benefit of their clients, placing client interests before their own or their employer's interests. Prudence requires caution and discretion, exercising the same level of care, skill, and diligence a reasonable person would use in similar circumstances for their own interests.
Fair Dealing
All members must deal fairly and objectively with all clients when providing investment analysis, making recommendations, taking investment action, or engaging in other professional activities. This requires treating all clients equitably, especially in the dissemination of investment opportunities and information.
Suitability
When in an advisory relationship, members must reasonably inquire into a client's investment experience, objectives, and financial constraints before making recommendations, and regularly update this information. Members must ensure investments are suitable for the client's financial situation and consistent with their stated objectives, judging suitability within the context of the client's total portfolio. For portfolios managed to a specific mandate, members must make recommendations consistent with those objectives and constraints.
Performance Presentation
When communicating investment performance information, all members must make reasonable efforts to ensure it is fair, accurate, and complete. This includes avoiding misrepresentations or misleading statements about past performance.
Preservation of Confidentiality
All members must keep information about current, former, and prospective clients confidential. Disclosure is permitted only if the information concerns illegal activities, is required by law, or the client explicitly permits disclosure.
Duties to Employers
Loyalty
In employment-related matters, all members must act for their employer's benefit. This means not depriving the employer of their skills, divulging confidential information, or otherwise causing harm. Members must comply with employer policies and procedures, provided they do not conflict with applicable laws or this Code.
Additional Compensation Arrangements
All members must not accept gifts, benefits, compensation, or consideration that competes with or creates a conflict of interest with their employer's interests. Such arrangements are only permissible with written consent from all involved parties.
Responsibilities of Supervisors
All members with supervisory authority must make reasonable efforts to ensure that anyone under their supervision complies with applicable laws, rules, regulations, and this Code. This includes establishing and implementing written compliance procedures and periodically reviewing their effectiveness. If a violation occurs, supervisors must take immediate steps to prevent recurrence, reporting misconduct to appropriate personnel and placing limits or increasing monitoring of the employee's activities.
Investment Analysis, Recommendations, and Actions
Diligence and Reasonable Basis
All members must exercise diligence, independence, and thoroughness in analyzing investments, making recommendations, and taking investment actions. They must have a reasonable and adequate basis, supported by appropriate research and investigation, for all investment analysis, recommendations, or actions.
Communication with Clients and Prospective Clients
All members must disclose to clients the nature of services provided and their associated costs. They must also disclose the basic format and general principles of their investment processes and promptly communicate any material changes. Significant limitations and risks of the investment process must be disclosed. Members should use reasonable judgment in identifying important factors for their analyses and include them in communications. Finally, members must clearly distinguish between fact and opinion in presentations. While firm-generated disclosures can be used, members are responsible for ensuring they meet Code standards and should supplement insufficient information, documenting any objections if rectification is not possible.
Record Retention
All members must develop and maintain appropriate records to support their investment analyses, recommendations, actions, and other investment-related communications.
Conflicts of Interest
Avoid or Disclose Conflicts
All members must either avoid conflicts of interest or make full and fair disclosure of all matters that could reasonably be expected to impair their independence and objectivity or interfere with their duties to clients, prospective clients, and employers. Disclosures must be prominent, in plain language, and effectively communicate relevant information. While avoidance is preferred, clear and complete disclosure is required when conflicts cannot be reasonably avoided.
Priority of Transactions
Investment transactions for clients and employers must always take priority over investment transactions in which a member is the beneficial owner.
Referral Fees
All members must disclose to their employer, clients, and prospective clients any compensation, consideration, or benefit received from or paid to others for the referral of clients or business.
Responsibilities as a CFA Society San Francisco Member
Conduct as Participants in CFA Institute Programs
All members must not engage in any conduct that compromises the reputation or integrity of CFA Society San Francisco, CFA Institute, or the CFA designation, or the integrity, validity, or security of CFA Institute programs. Prohibited conduct includes, but is not limited to, cheating on exams, violating program rules, disclosing confidential exam information, improper use of CFA designation for personal gain, and misrepresenting information to CFA Institute and CFA Society San Francisco. This also applies to disruptive behavior at test centers. Confidential information includes specific exam questions and broad topical areas tested. Members are encouraged to report suspected violations to CFA Institute.
Reference to CFA Institute, the CFA Designation, and the CFA Program
When referring to CFA Society San Francisco, CFA Institute, CFA Institute membership, the CFA designation, or candidacy in the CFA Program, all members must not misrepresent or exaggerate their meaning or implications. Factual statements about the benefits of earning the CFA designation are permissible. However, statements overstating individual competency or implying superior performance tied to the CFA designation are prohibited. Statements highlighting commitment to ethical conduct or the rigor of CFA exams are appropriate. References should be supported by facts or clearly stated as opinion. This applies to all forms of communication, including professional bios and online profiles.
Trademarking
CFA®, Chartered Financial Analyst®, CIPM®, and GIPS® are trademarks owned by CFA Institute. CFA Society San Francisco acknowledges and respects these trademarks. All CFA Society San Francisco materials and communications will clearly distinguish between the Society and CFA Institute. The use of CFA Institute marks by CFA Society San Francisco members is governed by the CFA Institute Membership Agreement and applicable trademarking guidelines. CFA Society San Francisco may also hold its own trademarks, which must be respected similarly.