LM03 Guidance for Standards I-VII

Part 10

Standard VII: Responsibilities as a CFA Institute Member or CFA Candidate

Standard VII (A) 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.

Interpretation:

• This standard covers the conduct of CFA Institute and Members involved with the CFA Program.
• CFA Institute programs include the CFA program, certificate in investment performance measurement (CIPM), and the Claritas® Investment Certificate.
• The standard covers many aspects such as cheating on any CFA Institute examinations, violating the testing policies, disclosing confidential exam information to the public, and improperly using any association with the CFA Institute to further personal or professional goals.

Guidance:

• Confidential program information: Candidates may discuss non-confidential information and curriculum material with others while preparing for the exam. Examples of information that cannot be disclosed include:
  • Specific details of questions appearing in the exam.
  • Discussing what areas or formulas were tested on the exam.
• Additional CFA program restrictions:
  • There are additional policies that define allowed and disallowed actions during the exam. Testing policies include calculator policy (only two calculators are allowed) and the personal belongings policy.
  • Members may participate as volunteers in various aspects of the CFA program such as grading, administering, or developing the exam. But they are not allowed to:
    • Disclose any material appearing on the exam.
    • How questions are scored.
    • Any information on the exam process.
  • Expressing an opinion: Members are free to express their opinion or discontent with CFA Institute regarding its policies and procedures. For example, if you say the exam was not a good representation of the curriculum, then it is not a violation of the standard. However, if you discuss specific topics or questions, then it is a violation.

Standard VII (B) Reference to CFA Institute, CFA Designation, and CFA Program

When referring to CFA Institute, CFA Institute membership, the CFA designation, or candidacy in the CFA program, Members and Candidates must not misrepresent or exaggerate the meaning of or implications of membership in CFA Institute, holding the CFA designation, or candidacy in the CFA program.

Interpretation:

• It is not intended to prohibit factual statements related to the benefits of earning the CFA designation.
• However, the merits of CFA Institute, the CFA Program, and the Code and Standards must be expressed as the opinion of the speaker.
• This standard applies to all forms of communication.
• It is not allowed to state that someone with a CFA designation will exhibit superior performance.

Guidance:

• CFA Institute membership: CFA Institute member refers to regular/affiliate members of the CFA Institute who have fulfilled the following membership requirements:
  • Remit annually to CFA Institute a completed Professional Conduct Statement.
  • Annually pay CFA Institute membership dues.
• Using the CFA designation: Once you have earned the right to use the CFA designation, you must follow the rules associated with the usage of the designation. CFA charterholders are individuals who have earned this right by completing the CFA program and have the required years of work experience. They must also satisfy the membership requirements in order to use the designation.
• Referring to candidacy in the CFA program: Candidates may refer to their participation in the CFA program. A person is a candidate if the person appears for a specified examination after completing the registration process or the person has appeared for a specified examination, but the results are yet to be announced.
• Members and candidates must encourage their firms to create templates consistent with standard VII(B).

Instructor’s Note: This is the most important reading in Ethics and will represent a major percentage of the Ethics questions on the Exam.  To do well on this topic you should carefully study all the examples (Applications of the Standard) in the curriculum and also do as many practice questions as possible.

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