B.: Professional Misconduct

II(B.1)

Members shall not engage in any professional conduct involving dishonesty, fraud, deceit, or misrepresentation or commit any act that reflects adversely on their honesty, trustworthiness, or professional competence.

II(B.2)

Members and candidates shall not engage in any conduct or commit any act that compromises the integrity of the CFA designation or the integrity or validity of the examinations leading to the award of the right to use the CFA designation.

Compliance:

Make clear that dishonest personal behavior reflects poorly on the profession.

Adopt a code of ethics to which every employee must subscribe.

Conduct background checks on potential employees to ensure that they are of good character and eligible to work in the investment industry.

C.: Prohibition against Plagiarism

Standard: Members shall not copy or use, in substantially the same form as the original, material prepared by another without acknowledging and identifying the name of the author, publisher, or source of such material. Members may use, without acknowledgment, factual information published by recognized financial and statistical reporting services or similar sources.

Compliance:

Maintain copies of materials that were relied on in preparing the research report.

Attribute quotations (and projections, tables, statistics, models, and methodologies) used other than recognized financial and statistical reporting services.

Attribute paraphrases and summaries of material prepared by others.

2-III.: Standards of Professional Conduct: III. Relationships and Responsibilities to the Employer

A.: Inform your Employer of the Code and Standards

III(A.1)

Members shall inform their employer in writing, through their direct supervisor, that they are obligated to comply with the Code and Standards and are subject to disciplinary sanctions for violations thereof.

III(A.2)

Members shall deliver a copy of the Code and Standards to their employer if the employer does not have a copy.

Compliance: Members should notify their supervisor in writing of the Code and Standards and the member’s responsibility to follow them. The member should also suggest that the employers adopt the Code and Standards and disseminate it throughout the firm. If the employer has publicly acknowledged, in writing, that they have adopted AIMR’s Code and Standards as part of the firm’s policies then the member need not give the formal written notification as required by III(A).

B.: Duty to Employer

Standard: Members shall not undertake any independent practice that could result in compensation or other benefit in competition with their employer unless they obtain written consent from both their employer and the persons or entities for whom they undertake independent practice.

Compliance:

Members who plan to engage in independent practice for compensation should provide written statements to their employer describing the types of services they will perform, the expected duration of the services, and the compensation they will receive.

Members should also disclose to their prospective clients the identity of their employer, the fact that they are performing independently of the employer, and what their employer would charge for similar services.

Members seeking new employment should not contact existing clients or potential clients prior to leaving their employer or take records/files to their new employer without the written permission of the previous employer.

C.: Disclose Conflicts between you and your Employer

III(C.1):

Members shall disclose to their employer all matters, including beneficial ownership of securities or other investments, that reasonably could be expected to interfere with their duty to their employer or ability to make unbiased and objective recommendations.

III(C.2):

Members shall comply with any prohibitions on activities imposed by their employer if a conflict of interest exists.

Compliance: Members should report to their employers any beneficial interest and any special relationships, like corporate directorships, that may reasonably be considered a conflict of interest with their responsibilities. Members should also discuss the situation with their firm’s compliance officer before taking any action that could lead to a conflict of interest.

D.: Disclose Additional Compensation from Outside the Firm to your Employer

Standard: Members shall disclose to their employer in writing all monetary compensation or other benefits that they receive for their services that are in addition to compensation or benefits conferred by a member’s employer.

Compliance: Members should make an immediate written report to their employer specifying any compensation or benefits they receive or propose to receive for services in addition to what their employer is to give them. This written report should state the terms of any oral or written agreement, the amount of compensation, and the duration of the agreement.

E.: Responsibilities of Supervisors

Standard: Members with supervisory responsibilities, authority, or the ability to influence the conduct of others shall exercise reasonable supervision over those subject to their supervision or authority to prevent any violation of applicable statutes, regulation, or provisions of the Code and Standards. In so doing, members are entitled to rely on reasonable procedures designed to detect and prevent such violations.