--Instructor:BriefEthics&ProfessionalSS2-tativeSS4-SS7-FinancialReportingandSS13-EquitySS15- AlternativeBriefBrief?StudySession1:EthicalandProfessionalReading1:EthicsandTrustintheInvestmentReading2:CodeofEthicsandStandardsofProfessionalReading3:GuidanceforStandardsⅠ-Reading4:IntroductiontotheGlobalInvestmentPerformanceStandards(GIPS)Reading5:TheGIPSBriefBrief?Reading3:GuidanceforStandardsⅠ-?Reading5:TheGIPS?Reading1:EthicsandTrustintheInvestment?Reading2:CodeofEthicsandStandardsofProfessional?Reading4:IntroductiontotheGlobalInvestmentPerformanceStandards(GIPS)BriefBriefBrief??區(qū) ??最好閱讀CFAProgram ?考點比較固定 ?一定要多做題，推 BriefBrief鍥而不舍，金石可鏤EthicsandTrustintheInvestment?Explainethicsanddescribetheroleofethicsindefiningaprofession?Identifychallengestoethical?Describetheneedforhighethicalstandardsintheinvestmentindustry?Distinguishbetweenethicalandlegal?DescribeandapplyaframeworkforethicaldecisionmakingDefinitionof?Ourdecisionandbehaviorcanharmorbenefitavarietyofstakeholders.Examplesofstakeholders:colleagues,clients,employers,thecommunitiesinwhichweliveandwork,theinvestmentprofession。MoralPrinciples(EthicalPrinciples)arebeliefsregardingwhatisgood,acceptable,orobligatorybehaviorandwhatisbad,unacceptable,orforbiddenDefinitionof?Specificcommunitiesorsocietalgroupscodifytheirbeliefsaboutobligatoryandforbiddenconductinawrittensetofprinciples,oftencalledacodeofethics.?Standardsofconductserveas arksforminimallyacceptablebehaviorofcommunitymembersandcanhelpclarifythecodeofethics.Ethicsand?Aprofessionhasseveralcharacteristicsthatdistinguishitfromordinaryoccupations.Aprofessionisbasedonspecializedknowledgeandbasedonservicetopracticedbymemberswhoshareandagreetoadheretoacommoncodeofethics.Ethicsand?Thecodeofethicscommunicatesthesharedprinciplesandexpectedbehaviorsofitsmembers.?Thecodeofethicsinformsandprovidessomeassurancetothepublicthattheprofession'smemberswillusetheirspecializedskillsandknowledgeinserviceofChallengestoEthical?Severalchallengespeopletendtobelievethattheyareethicalpeopleandthattheirethicalstandardsarehigherthanaverage.Overconfidencebiasleadsustoplacetoomuchimportanceoninternaltraitsandintrinsicmotivations.decisionmakersoftenfailtorecognizeand/orsignificantlyunderestimatetheeffectofsituationalChallengestoEthicalSituationalinfluencesareexternalfactors(environmentalorculturalelements),thatshapeourthinking,decisionmakingandbehavior.ThebystanderLargefinancialrewardsandprestige(short-termself-interestsvs.long-termrisks)Astrongcomplianceculturecan eanothersituationalinfluencethatblindsemployeestootherimportantconsiderations.TheImportanceOfEthicalConductInTheInvestmentIndustry?Theinvestmentindustryservessocietybymatchingthosewhosupplycapital,ormoney,withthosewhoseekcapitaltofinance,orfund,theiractivities.?TrustisespeciallyimportantintheinvestmentforseveralthenatureoftheclientspecializedknowledgeandaccesstothenatureofinvestmentproductsandTheImportanceOfEthicalConductInTheInvestmentIndustry?Ethicalbehaviorbuildsandfosters?Ethicalbehaviorbyallmarketparticipantscanleadbroaderparticipationintheprotectionofclients’moreopportunitiesforinvestmentprofessionalsandtheirfirms.EthicalVS.Legal?LegalandethicalconductareNOTalwaystheEthicalVS.Legal?Thelawisnotalwaysthebestmechanismtoreduceunethicalbehavior:lawstypicallyfollowmarketanewlawmayreduceexistingactivitywhilesimultaneouslycreatinganopportunityforadifferent,butsimilarlyproblematic,activity.lawsvaryacrosscountriesorLawsarealsosubjecttointerpretationandcompliancebymarketparticipants.?Ethicalconduct legal?EthicalDecision-MakingIdentify:Relevantfacts,stakeholdersanddutiesowed,ethicalprinciples, sofinterest.Consider:Situationalinfluences,additionalguidance,alternativeactions.DecideandReflect:Was easanticipated?Whyorwhy?Importance:?EthicsandChallengestoethicalImportanceofethicalconductininvestmentEthicalVS.LegalEthicaldecision-making?Exam ?DescribethestructureoftheCFAInstituteProfessionalConductandtheprocessfortheenforcementoftheCodeandStandards.?StatethesixcomponentsoftheCodeofEthicsthesevenStandardsofProfessionalTheStructureoftheProfessionalConduct?TheCFAInstituteBoardof ernors(CFA maintainsoversightandresponsibilityfortheProfessionalConductProgram(PCP)(職業(yè)行為計劃).?TheDisciplinaryReviewCommittee(紀(jì) )responsibleforenforcementoftheCodeand?ProfessionalConductStaff(職業(yè)行為工作人員)conductprofessionalconductinquiriesunderthedirectionoftheCFAInstituteDesignatedOfficer(CFA指定).TheEnforcementoftheCodeandCircumstancesthatcanpromptan?Selfdisclosure(自我披露)bymembersandcandidatesontheannualProfessionalConductStatement(PCS)(職業(yè)行為陳述表?Writtencomplaints( )receivedbyProfessionalConductStaff?Evidenceofquestionableconduct(不當(dāng)行為 )mediaoranotherpublicTheEnforcementoftheCodeandCircumstancesthatcanpromptaninquiry?Aviolationreport( 考試規(guī)定報告byaCFAexaminationproctorforbreachingtheexaminationrules ysisofscoresandexammaterials(分析試卷)aftertheexam,andmonitorsocialmedia(監(jiān)測社交 )todetectdisclosureof examinformationTheEnforcementoftheCodeand?Nodisciplinesanction(無紀(jì)律處分)?Issueacautionaryletter(警告信)?Adisciplinarysanction(紀(jì)律處分)PubliccensureSuspensionofmembershipandtheuseoftheCFARevocationoftheCFAcharter(收回 SuspensionfromfurtherparticipationintheCFATheEnforcementoftheCodeand?Ifthememberorcandidatedoesnotaccepttheproposedsanctionthematterisreferredtoahearingpanel(聽證陪審團)composedofDRCmembersandCFAInstitutemember?Thehearingpanel’sconclusionisFINAL!(必須接受聽證陪審CodeofEthics道德規(guī)范?Actwithintegrity,competence,diligence,respect,andinanethicalmannerwiththepublic,clients,prospectiveclients,employers,employees,colleaguesintheinvestmentprofession,andotherparticipantsintheglobalcapitalmarkets.CodeofEthics道德規(guī)范?Placetheintegrityoftheinvestmentprofessionandtheinterestsofclientsabovetheirown alinterests.將投資行業(yè)的誠信和客戶利益置于個人利益之上?Usereasonablecareandexerciseindependentprofessionaljudgmentwhenconductingysis,makinginvestment mendations,takinginvestmentactions,andengaginginotherprofessional時，應(yīng)保持合理的謹(jǐn)慎，做出獨立的專業(yè)判斷CodeofEthics道德規(guī)范?Practiceandencourageotherstopracticeinaprofessionalandethicalmannerthatwillreflectcreditonthemselvesandtheprofession.的信譽?Promotetheintegrityandviabilityoftheglobalmarketsfortheultimatebenefitofsociety.提升資本市場誠信 ，實現(xiàn)社會終極利益CodeofEthics道德規(guī)范?Maintainandimprovetheirprofessionalcompetenceandstrivetomaintainandimprovethecompetenceofotherinvestmentprofessionals.專 的勝任能力IntegrityofCapitalDutiestoDutiesto mendations,andsofResponsibilitiesasaCFAInstituteMemberorCFA?Importance:?ThestructureoftheCFAInstituteProfessionalConductTheenforcementoftheCodeandThesixcomponentsoftheCodeofEthicsandthesevenStandardsofProfessionalConduct?Exam熟悉六大道德規(guī)范(CodeofEthics)

?DemonstratetheapplicationoftheCodeand?Distinguishbetweenconformitiesand mendpracticesandproceduresdesignedtopreventviolationsStandardI(A)Knowledgeofthe?MembersandCandidatesmustunderstandandcomplywithallapplicablelaws,rules,andregulations(includingtheCFAInstituteCodeofEthicsandStandardsofProfessionalConduct)ofany ernment,regulatoryorganization,licensingagency,orprofessionalassociationerningtheirprofessionalStandardI(A)Knowledgeofthe?Intheeventof ,MembersandCandidatesmustcomplywiththemorestrictlaw,rule,orregulation.?MembersandCandidatesmustnotknowinglyparticipateorassistinandmustdissociatefromanyviolationofsuchlaws,rules,orregulation.StandardI(A)Knowledgeofthe?RelationshipbetweentheCodeandStandardsandApplicableLawApplicablelawisthelaw ernsthemember’sMustfollowthemorestrictoftheapplicablelawortheCodeandStandards.StandardI(A)KnowledgeoftheGuidance?AssociationwithViolationsbyConfronttheReporttosupervisororcomplianceMustdissociatefromtheillegal/unethicalactivity:removingmember’sorcandidate’snamefromresearchreport,askingforadifferentassignment,etc.Inextremecase,dissociationmayrequireStandardI(A)Knowledgeofthe?AssociationwithViolationsbyothersInactionmaybeconstruedasItisencouraged(notrequired)toreportviolationsbyfellowmembersandcandidatestoCFAInstituteNorequirementtoreportviolationsto ShouldconsultlegalandcomplianceadviserswhenthereisdoubtwhetheraviolationoccurredStandardI(A)KnowledgeoftheGuidance?InvestmentProductsandApplicableUnderstandandcomplywiththelawsandregulationsofthecountriesoforiginationandexpectedsaleReviewwhetherchannelfirmsresponsiblefordistributingproductsalsoabidebythelawsandStandardI(A)KnowledgeoftheGuidance?NorequirementtobeexpertsonalltheapplicableStandardI(A)Knowledgeofthe?MembersandStayinformedaboutchangesinapplicableRegularlyreviewfirm’scomplianceMaintainfilesofapplicablelawsandimportant?Developand/oradoptacodeofProvideinformationonapplicableEstablishproceduresforreportingStandardI(A)KnowledgeoftheMichaelAllenworksforabrokeragefirmandisresponsibleforanunderwritingofsecurities.AcompanyofficialgivesAlleninformationindicatingthatthefinancialstatementsAllenfiledwiththeregulatoroverstatetheissuer'searnings.Allenseekstheadviceofthebrokeragefirm'sgeneralcounsel,whostatesthatitwouldbedifficultfortheregulatortoprovethatAllenhasbeeninvolvedinany StandardI(A)KnowledgeoftheAlthoughitis mendedthatmembersandcandidatesseektheadviceoflegalcounsel,therelianceonsuchadvicedoesnotabsolveamemberorcandidatefromtherequirementtocomplywiththelaworregulation.Allenshouldreportthissituationtohissupervisor,seekanindependentlegalopinion,anddeterminewhethertheregulatorshouldbenotifiedoftheerror.MaryKim,CFA,practicesintheestablishedcountryofOldasiaandintheemergingcountryofNewasia.Byregulation,Oldasiaprohibitslicensedinvestmentadvisorsfromtradinginsecuritiesaheadoftheirclients.Newasiahasnolawsorregulationsinthisarea.MaryKimmay:tradeaheadofherclientsinNewasianottradeaheadofherclientsineithertradeaheadofherclientsinNewasiaonly,aslongasshehasmadefulldisclosuretoherclientsthatshereservestherighttodothis.BisUnderStandardI(A),MaryKim,asaCFAcharterholder,mustapplytheCFAInstituteCodeandStandardsorthecontrollinglaw,whicheverisstricter.BecauseStandardVI(B)requiresmemberstoputclienttradesaheadoftheirowntransactions,MaryKimmustfollowthestandardintheabsenceof erninglaw,orwherethelawislessstrictthanthestandard.?Importance:☆☆?RelationshipbetweentheCodeandStandardsandApplicableLawAssociationwithViolationsbyInvestmentproductsandApplicable?Exam

?DemonstratetheapplicationoftheCodeand?Distinguishbetweenconformitiesand mendpracticesandproceduresdesignedtopreventviolations?MembersandCandidatesmustusereasonable.careandjudgmenttoachieveandmaintainindependenceandobjectivityintheirprofessionalactivities.?MembersandCandidatesmustnotoffer,solicit,oracceptanygift,benefit,compensation,orconsiderationthatreasonablycouldbeexpectedtocompromisetheirownoranother'sindependenceandobjectivity.?Buy-sideclientsmayinfluencesell- independencePortfoliomanagershavesignificantpositionsinthesecurityunderreviewAdowngrademayaffectthemanager’sBadperformancemayaffectthemanager’sprofessionalGuidance?SelectionofFundmanagerandMembersandcandidatesresponsibleforhiringandretainingoutsidemanagersandthird-partycustodiansshouldnotacceptbenefitsthatimpairtheirdecisions.Anexampleisthepay-to- 參與)”Guidance?InvestmentBanking ystsmustnotbepressuredtoissuefavorablereportoncurrent/prospectiveclientsbytheirfirms. ystsworkwithinvestmentbankingcolleaguesisappropriateonlywhenthe sare ymanagedanddisclosed. )”areusedtominimize sofGuidance?PerformanceMeasurementand ystsmustnotallowinternalorexternalinfluencetoaffecttheirindependenceandobjectivity.?Public ystsmustnotbepressuredtoissuefavorablereportsbythecompaniestheyfollow.Guidance?CreditRatingAgencyMembers/candidatesmustpreventinfluencesfromthecompanyrequestingtherating.?Issuer-paidystsmustdisclose sofAflatfee(固定費用)thatisnotlinkedtomendationsshouldbedeterminedpriortowritingthereports.GuidanceBestpracticeisformembersandcandidatestopaybyMayacceptmodestlyarrangedtravelwhencommercialtransportationisunavailable(e.g.thedestinationisremote),butdisclosureisneeded.Guidance?ExceptiontoModestgiftsareAgiftfromaclientisacceptable,butmembersandcandidatesshoulddisclosetotheiremployerspriortoacceptingsuchgift/benefit.?Protecttheintegrityof?Createarestrictedlist(限 ?RestrictspecialcostForexample,members/candidatesshouldencourageissuerstolimittheuseofcorporateaircrafttosituationsinwhichcommercialtransportationisnotavailable.?LimitThestandarddoesnotprecludecustomaryandordinarybusiness-relatedentertainmentaslongasitspurposeisnottoinfluencemembers/candidates.?RestrictStrictlimitsshouldbeimposedon nelinvestmentonIPOsorprivateplacement.WalterFritzisan coverstheminingindustry.HehasconcludedthatthestockofMetals&Miningisoverpricedatitscurrentlevel,butheisconcernedthatanegativeresearchreportwillhurtthegoodrelationshipbetweenMetals&Miningandtheinvestmentbankingdivisionofhisfirm.Infact,aseniormanagerofHiltonBrokeragehasjustsenthimacopyofaproposalhisfirmhasmadetoMetals&Miningtounderwriteadebtoffering.Fritzneedstoproduceareportrightawayandisconcernedaboutissuingaless-thanfavorablerating. ysisofMetals&Miningmustbeobjectiveandbasedsolelyonconsiderationofcompanyfundamentals.Anypressurefromotherdivisionsofhisfirmisinappropriate. couldhavebeeneliminatedif,inanticipationoftheoffering,HiltonBrokeragehadplacedMetals&Miningonarestrictedlistforitssalesforce.LuisRodriguez,CFA,isan ystatXYZInvestments.Hecoversacompanythatislocatedinaregionthatisnoteasilyaccessible.Thecompanyinvites ystsfortheirannual ystmeetingandpaysforthetransportationtotheremotelocation.Rodriguezis:allowedtoacceptthepaymentfortransportationbecausethetripwasallbusinessandwasoutoftheway.allowedtoacceptthepaymentfortransportationaslongasitdoesnotexceed$100.notallowedtoacceptthepaymentfortransportationthisisaconsidereda“perk”andmayinfluencehisindependentAisStandardI(B)IndependenceandObjectivity. ystsshouldpayfortheirowntravel modationsifthelocationisaccessiblebynormalmeans.Inthissituationpaymentisacceptablebecausethelocationisoutofthewayandthepurposeofthetripisallbusiness.?Importance:☆☆?InfluencesfrominternalInfluencesfromexternal?Exam

StandardI(C)?DemonstratetheapplicationoftheCodeand?Distinguishbetweenconformitiesand mendpracticesandproceduresdesignedtopreventviolationsStandardI(C)?MembersandCandidatesmustnotknowinglymakeanymisrepresentationsrelatingtoinvestment mendations,actions,orotherprofessionalStandardI(C)Amisrepresentationisanyuntruestatementoromissionofafactoranystatementthatisotherwisefalseormisleading.?ImpactonInvestmentMembers/candidatesmustnotmisrepresentboththeirandtheiremployer’squalifications(資質(zhì))orservicesMisrepresentationresultingfromtheuseofthird- etheresponsibilityoftheStandardI(C)Guidance?PerformanceMembers/candidatesmustensurethatperformanceisaccurateandcomplete,e.g.CherrypickingisnotThestandardprohibitsmembers/candidatesfrommakinganyreturnguaranteeonvolatileinvestmentsWhenperformanceben arkisrequired,selectthemostappropriateben StandardI(C)Guidance?Theomissionofafactor ecanbemisleading,especiallyintheuseofmodelsandtechnical esfrommodelsshallnotbepresentedasOmissionsregardingthetruerelationshipbetweenamember/candidateandothercompaniesconstituteaStandardI(C)Guidance ThestandardsModelsand ysisdevelopedbyothersatamember/candidate’sfirmarethepropertyofthefirmandcanbeusedwithoutattributionInformationfromrecognizedfinancialandstatisticalreportingservicesmaynotbecitedStandardI(C)?Providingawrittenlistofthefirm’savailableservicesandadescriptionofthefirm’squalifications?Verifyoutside ?Maintain?Attributequotations,includingprojections,table,statistics,model/productideas,etc.?AttributesummariesofmaterialpreparedbyStandardI(C)AnthonyMcGuireisanissuer-paid ysthiredbypubliclytradedcompaniestoelectronicallypromotetheirstocks.McGuirecreatesawebsitethatpromoteshisresearcheffortsasaseeminglyindependent yst.McGuirepostsaprofileandastrongbuy mendationforeachcompanyonthewebsiteindicatingthatthestockisexpectedtoincreaseinvalue.Hedoesnotdisclosethecontractualrelationshipswiththecompanieshecoversonhiswebsite,intheresearchreportsheissues,orinthestatementshemakesaboutthecompaniesininternetchatrooms.StandardI(C)McGuirehasviolatedStandardI(C)becausethewebsiteismisleadingtopotentialinvestors.Evenifthemendationsarevalidandsupportedwiththoroughresearch,hisomissionsregardingthetruerelationshipbetweenhimselfandthecompanieshecoversconstituteamisrepresentation.McGuirehasalsoviolatedStandardVI(A)-Disclosureof sbynotdisclosingtheexistenceofanarrangementwiththecompaniesthroughwhichhereceivescompensationinexchangeforhisservices.JamiePyles,aportfoliomanagementtraineeforamoneymanagementfirm,callsprospectiveclients, lingthemthatheonthelastfiveyearsofperformanceofhisfirm,hecanguaranteetheclientatleasta75%return.Heinformsthemthathisfirmcanprovidealloftheservicesthattheywilleverneed.WhatistheminimumnumberofmisrepresentationsJamiehasmadetotheprospectiveclients?AisThereareatleastthreemisrepresentations.First,thatJamieisaportfoliomanager,whenhe'sreallyatrainee.Second,thatthefirmcanprovidealloftheservicestheywilleverneed.Third,thathecanguaranteea75%return.?Importance:☆☆?Impactoninvestment?Exam資質(zhì)或能提供的服務(wù)；3）刪除事實信息；4），等有關(guān)的誤StandardI(D)?DemonstratetheapplicationoftheCodeand?Distinguishbetweenconformitiesand mendpracticesandproceduresdesignedtopreventviolationsStandardStandardI(D)?MembersandCandidatesmustnotengageinanyprofessionalconductinvolvingdishonesty,fraud,ordeceitorcommitanyactthatreflectsadverselyontheirprofessionalreputation,integrity,orcompetence.StandardI(D)?Thestandardareprimarilyaimedatconductrelatedto?Donotseekthestandardsasamethodofsettling political,orotherdisputesunrelatedtoprofessionalethics?Anyactthatinvolveslying,stealing,orotherdishonestconductisaviolationStandardI(D)Guidance?Conductthat,althoughnotillegal,butnegativelyaffectsamember’sorcandidate’strustworthinessorcompetence,isaviolation?Thelackofdiligence(sufficienteffort)inprovidingprofessionalservicesmaybeaviolation albankruptcymayviolatethestandardifitinvolvesfraudulentordeceitfulbusinessconduct.StandardI(D)CarmenGarciamanagesamutualfunddedicatedtosociallyresponsibleinvesting.Sheisalsoanenvironmentalactivist.Astheresultofherparticipationinnonviolent s,Garciahasbeenarrestedonnumerousoccasionsfortrespassingonthepropertyofalargepetrochemicalplantthatisaccusedofdamagingtheenvironment.StandardI(D)Generally,StandardI(D)isnotmeanttocoverlegaltransgressionsresultingfromactsofcivildisobedienceinsupportof albeliefsbecausesuchconductdoesnotreflectpoorlyonthemember'sorcandidate'sprofessionalreputation,integrity,orcompetence.WhichofthefollowingactionsmostlikelyviolatesStandardI(D)Misconduct?Amember’smarketforecastshavebeenwronginthreeconsecutivequarters,promptingaformalcomplaintfromaALevelIcandidateisejectedfromaho forattemptingtopassabadcheck.Amemberpursuesanemploymentopportunitywithacompetingfirm,primarilyasameansofsecuringasalaryincreasefromhercurrentemployer.BisAnyactivitythatreflectsadverselyonamember’sprofessionalreputation,integrity,orcompetenceisaviolationofStandardI(D)Misconduct.Aslongasthememberhasareasonableandadequatebasisfor simplybeingwrongdoesnotcallthemember’sintegrityorcompetenceintoquestion.AmembercanpursueanemploymentopportunitywithacompetitoraslongasthememberabidesbytheStandardsrelatedtoDutiesto?Importance:☆☆?ConductrelatedtoprofessionalConductunrelatedtoprofessional?Exam StandardII(A)MaterialNonpublic?DemonstratetheapplicationoftheCodeand?Distinguishbetweenconformitiesand mendpracticesandproceduresdesignedtopreventviolationsStandardII(A)MaterialNonpublic?MembersandCandidateswhopossessmaterialnonpublicinformationthatcouldaffectthevalueofaninvestmentmustnotactorcauseotherstoactontheinformation.StandardII(A)MaterialNonpublic?Whatis“Material”Theinformationis“material”if1)itsdisclosurewouldhaveanimpactonthepriceofasecurity;or2)investorswouldwanttoknowtheinformationbeforemakinganinvestmentdecision;3)thesourceoftheinformationisExamples:earnings,merger&acquisition,innovativeproducts,changesinmanagement,legaldisputes,newdebtratings,etc.StandardII(A)MaterialNonpublicGuidance?WhatConstitutes“Nonpublic”Informationis“nonpublic”untilithasbeendisseminatedtothemarketplaceingeneralInformationthatismadeavailabletoaselectgroupofpeopleremainsnonpublicMembers/candidatesmayuseinsiderinformationforthespecificpurposeofconductingduediligenceforsuchactivitiesasmergers,securityunderwriting,creditratings,etc.StandardII(A)MaterialNonpublicGuidance?MosaicTheory(馬賽克理論Members/candidatesdonotviolatethestandardwhentheyreachamaterialconclusionaboutacorporateactionoreventthroughan ysisofpublicinformationandnonmaterialnonpublicinformationStandardII(A)MaterialNonpublicGuidance?SocialInformationfrominternetandsocialmediaplatformsmaynotbeconsideredpublicExample:socialmediathatrequiresmembershipinordertoaccessthepublishedcontentMembers/candidatesshouldverifythatmaterialinformationobtainedfromthesesourcescanalsobeaccessedfromasourcethatisavailabletothepublic(e.g.,w ges,pressreleases)StandardII(A)MaterialNonpublicGuidance?UsingIndustryMembers/candidatesmayspeakwithexpertsregardingeconomicconditions,industrytrends,andtechnicalissuesrelatingtoproductsandservicesMembers/candidatesareprohibitedfromtakinginvestmentactionsbasedonmaterialnonpublicinformationprovidedbyindustryexpertsStandardII(A)MaterialNonpublic?AchievePublicMembers/candidatesshouldmakereasonableeffortstoachievepublicdisseminationofmaterialinformationIfpublicdisseminationisnotavailable,onlytotheirsupervisoryandcompliance neloftheirfirmStandardII(A)MaterialNonpublic?AdoptComplianceandDisclosure?Firewallisusedforpreventingthecommunicationofmaterialnonpublicinformationwithinfirms Aprohibitiononalltypesofproprietaryactivitywhenafirmpossessesmaterialnonpublicinformationisnotappropriate,e.g.marketmaking(造市、做市)StandardII(A)MaterialNonpublicFrankBarnes, andcontrollingshareholdertheSmartTownclothingchain,decidestoacceptatenderofferandsenthefamilybusinessatapricealmostdoublethemarketpriceofitsshares.Hedescribesthisdecisiontohissister(SmartTown'streasurer),whoconveysittoherdaughter(whoownsnostockinthefamilycompanyatpresent),who lsherhusband,Staple.Staple,however, hisstockbroker,AlexHalsey,whoimmedia ySmartTownstockforhimself.StandardII(A)MaterialNonpublicTheinformationregardingthependingsaleisbothmaterialandnonpublic.StaplehasviolatedStandardH(A)bycommunicatingtheinsideinformationtohisbroker.Halseyalsohasviolatedthestandardbybuyingthesharesonthebasisofmaterialnonpublicinformation. ystisallowedtotradeoninformationthathehaspredicted,suchasacorporateactionorevent,usingperceptiveassemblyand ysisofmaterialpublicinformationornonmaterial,non-publicinformation.Thisiscalledthe:assessmentdeductionmosaicCisThisdeductivereasoningislegal(doesnotconstitutetradingwithinsideinformation)andiscalledthemosaictheory.?Importance:☆☆?WhatismaterialandnonpublicMosaicSocialmediaandusingindustry?Exam StandardII(B)Market?DemonstratetheapplicationoftheCodeand?Distinguishbetweenconformitiesand mendpracticesandproceduresdesignedtopreventviolations?MembersandCandidatesmustnotengageinpracticesthatdistortpricesorartificiallyinflatetradingvolumewiththeintenttomisleadmarketparticipants?Information-BasedExample:SpreadingfalserumorstoinducetradingbyExample:SecuringacontrollinganddominantpositioninafinancialinstrumenttomanipulatethepriceofarelatedderivativeortheunderlyingassetTheStandardisnotintendedtoprecludetransactionsundertakenonlegitimatetradingstrategiesStandardII(A)MaterialNonpublicInanefforttopumpupthepriceofhisholdingsinMoosehead&BelfastRailroadCompany,SteveWeinberglogsontoseveralinvestorchatroomsontheinternettostartrumorsthatthecompanyisabouttoexpanditsrailnetworkinanticipationofreceivingalargecontractforshipStandardII(A)MaterialNonpublicWeinberghasviolatedStandardII(B)bydisseminatingfalseinformationaboutMoosehead&Belfastwiththeintenttomisleadmarketparticipants.SteveWaters,aCFAcandidate,hasdecidedtoenterintoalongpositionofFarmcostock.SinceFarmcoisthinlytraded,WatersisconcernedtheorderwilloverwhelmtheliquidityofFarmcoandthepricewillsurge.Watersengagesinaseriesofblocktradesinorderto plishthepurchase.Watershasengagedin:AisWatersisnotinviolationofStandardII(B),MarketManipulation.Transaction-basedmanipulationincludes,butisnotlimitedto,transactionsthatartificiallydistortpricesorvolume.Information-basedmanipulationincludes,butisnotlimitedto,spreadingfalserumorsaboutafirminordertoinduceotherstotrade.?Importance:☆☆??ExamSTANDARDIII:DUTIESTOStandardIII(A)Loyalty,Prudence,and?DemonstratetheapplicationoftheCodeand?Distinguishbetweenconformitiesand mendpracticesandproceduresdesignedtopreventviolationsStandardIII(A)Loyalty,Prudence,and?MembersandCandidateshaveadutyofloyaltytotheirclientsandmustactwithreasonablecareandexerciseprudentjudgment.Membersandcandidatesmustactforthebenefitsoftheirclientsandplacetheirclient’sinterestsbeforetheiremployer’sortheirowninterestsStandardIII(A)Loyalty,Prudence,and?IdentifyingtheActualInvestmentSpecialüForpensionfundortrusts,theclientisnotthe entitywhohiresthemanager,butratherthebeneficiariesoftheplanortrustüWhenmanagingpoolsofclients’assets,theshouldcomplywithterms StandardIII(A)Loyalty,Prudence,andGuidance? theClient’süInvestment mendationsandtransactionsaresuitabletoclients’objectivesandcircumstancesüParticularcaremustbetakenonthepotentialbetweenthemembers/candidatesortheirfirmandclients’interestsüInvestmentdecisionsarejudgedinthecontextoftotalportfolio,ratherthanbyindividualStandardIII(A)Loyalty,Prudence,andGuidance? mission(軟)SoftdollaristhepracticethataninvestmentmanagerusesclientbrokeragetopurchaseresearchservicesSoftdollarisclient’sasset,itsusesmustbene