2025 CFA© Program Curriculum Level 3 Core Volume 5 - ETHICAL AND PROFESSIONAL STANDARDS

How to Use the CFA Program Curriculum
	CFA Institute Learning Ecosystem (LES)
		Designing Your Personal Study Program
		Errata
		Other Feedback
Ethical and Professional Standards
	Learning Module 1	Code of Ethics and Standards of Professional Conduct
		Preface
			Evolution of the CFA Institute Code of Ethics and Standards of Professional Conduct
			Standards of Practice Handbook
			Summary of the 2023 Revisions to the Code and Standards
			New and Revised Standards of Professional Conduct
			CFA Institute Professional Conduct Program
			Adoption of the Code and Standards
			Acknowledgments
		Ethics and the Investment Industry
			Why Ethics Matters
		CFA Institute Code of Ethics and Standards of Professional Conduct
			Preamble
			The Code of Ethics
			Standards of Professional Conduct
		Practice Problems
		Solutions
	Learning Module 2	Guidance for Standards I–VII
		Standard I: Professionalism
			Standard I(A) Knowledge of the Law
			Guidance
		Standard I(A): Recommended Procedures
			Members and Candidates
			Distribution Area Laws
			Legal Counsel
			Dissociation
			Firms
		Standard I(A): Application of the Standard
			Example 1 (Notification of Known Violations):
			Example 2 (Dissociating from a Violation):
			Example 3 (Dissociating from a Violation):
			Example 4 (Following the Highest Requirements):
			Example 5 (Following the Highest Requirements):
			Example 6 (Laws and Regulations Based on Religious Tenets):
			Example 7 (Reporting Potential Unethical Actions):
			Example 8 (Failure to Maintain Knowledge of the Law):
		Standard I(B) Independence and Objectivity
			Guidance
		Standard I(B): Recommended Procedures
		Standard I(B): Application of the Standard
			Example 1 (Travel Expenses):
			Example 2 (Research Independence):
			Example 3 (Research Independence and Intrafirm Pressure):
			Example 4 (Research Independence and Issuer Relationship Pressure):
			Example 5 (Research Independence and Sales Pressure):
			Example 6 (Research Independence and Prior Coverage):
			Example 7 (Gifts and Entertainment from Related Party):
			Example 8 (Gifts and Entertainment from Client):
			Example 9 (Travel Expenses from External Manager):
			Example 10 (Research Independence and Compensation Arrangements):
			Example 11 (Recommendation Objectivity and Service Fees):
			Example 12 (Recommendation Objectivity):
			Example 13 (Influencing Manager Selection Decisions):
			Example 14 (Influencing Manager Selection Decisions):
			Example 15 (Fund Manager Relationships):
			Example 16 (Intrafirm Pressure):
		Standard I(C) Misrepresentation
			Guidance
		Standard I(C): Recommended Procedures
			Factual Presentations
			Qualification Summary
			Verify Outside Information
			Maintain Webpages
			Plagiarism Policy
		Standard I(C): Application of the Standard
			Example 1 (Disclosure of Issuer-Paid Research):
			Example 2 (Correction of Unintentional Errors):
			Example 3 (Noncorrection of Known Errors):
			Example 4 (Plagiarism):
			Example 5 (Misrepresentation of Information):
			Example 6 (Potential Information Misrepresentation):
			Example 7 (Plagiarism):
			Example 8 (Plagiarism):
			Example 9 (Plagiarism):
			Example 10 (Plagiarism):
			Example 11 (Misrepresentation of Information):
			Example 12 (Misrepresentation of Information):
			Example 13 (Avoiding a Misrepresentation):
			Example 14 (Misrepresenting Composite Construction):
			Example 15 (Presenting Out-of-Date Information):
			Example 16 (Overemphasis of Firm Results):
		Standard I(D) Misconduct
			Guidance
		Standard I(D): Recommended Procedures
		Standard I(D): Application of the Standard
			Example 1 (Professionalism and Competence):
			Example 2 (Fraud and Deceit):
			Example 3 (Fraud and Deceit):
			Example 4 (Personal Actions and Integrity):
			Example 5 (Professional Misconduct):
		Standard I(E) Competence
			Guidance
		Standard I(E): Recommended Procedures
		Standard I(E): Application of the Standard
			Example 1 (Maintaining Competence):
			Example 2 (Improving Competence):
			Example 3 (Change in Role):
			Example 4 (Supervisory Responsibility):
			Example 5 (Choosing Investments):
			Example 6 (Understanding New Investment Products):
		Standard II: Integrity of Capital Markets
			Standard II(A) Material Nonpublic Information
			Guidance
		Standard II(A): Recommended Procedures
			Achieve Public Dissemination
			Adopt Compliance Procedures
			Adopt Disclosure Procedures
			Issue Press Releases
			Firewall Elements
			Personal Trading Limitations
			Record Maintenance
			Proprietary Trading Procedures
			Communication to All Employees
		Standard II(A): Application of the Standard
			Example 1 (Acting on Nonpublic Information):
			Example 2 (Controlling Nonpublic Information):
			Example 3 (Selective Disclosure of Material Information):
			Example 4 (Determining Materiality):
			Example 5 (Applying the Mosaic Theory):
			Example 6 (Applying the Mosaic Theory):
			Example 7 (Analyst Recommendations as Material Nonpublic Information):
			Example 8 (Acting on Nonpublic Information):
			Example 9 (Mosaic Theory):
			Example 10 (Materiality Determination):
			Example 11 (Using an Expert Network):
			Example 12 (Using an Expert Network):
		Standard II(B) Market Manipulation
			Guidance
		Standard II(B): Application of the Standard
			Example 1 (Independent Analysis and Company Promotion):
			Example 2 (Personal Trading Practices and Price):
			Example 3 (Creating Artificial Price Volatility):
			Example 4 (Personal Trading and Volume):
			Example 5 (“Pump-Priming” Strategy):
			Example 6 (Creating Artificial Price Volatility):
			Example 7 (Pump and Dump Strategy):
			Example 8 (Manipulating Model Inputs):
			Example 9 (Information Manipulation):
		Standard III: Duties to Clients
			Standard III(A) Loyalty, Prudence, and Care
			Guidance
		Standard III(A): Recommended Procedures
			Regular Account Information
			Client Approval
			Firm Policies
		Standard III(A): Application of the Standard
			Example 1 (Identifying the Client—Plan Participants):
			Example 2 (Client Commission Practices):
			Example 3 (Brokerage Arrangements):
			Example 4 (Brokerage Arrangements):
			Example 5 (Client Commission Practices):
			Example 6 (Excessive Trading):
			Example 7 (Managing Family Accounts):
			Example 8 (Identifying the Client):
			Example 9 (Identifying the Client):
			Example 10 (Client Loyalty):
			Example 11 (Execution-Only Responsibilities):
		Standard III(B) Fair Dealing
			Guidance
		Standard III(B): Recommended Procedures
			Develop Firm Policies
			Disclose Trade Allocation Procedures
			Establish Systematic Account Review
			Disclose Levels of Service
		Standard III(B): Application of the Standard
			Example 1 (Selective Disclosure):
			Example 2 (Fair Dealing between Funds):
			Example 3 (Fair Dealing and IPO Distribution):
			Example 4 (Fair Dealing and Transaction Allocation):
			Example 5 (Selective Disclosure):
			Example 6 (Additional Services for Select Clients):
			Example 7 (Minimum Lot Allocations):
			Example 8 (Excessive Trading):
			Example 9 (Limited Social Media Disclosures):
			Example 10 (Fair Dealing between Clients):
		Standard III(C) Suitability
			Guidance
		Standard III(C): Recommended Procedures
			Investment Policy Statement
			Regular Updates
			Suitability Test Policies
		Standard III(C): Application of the Standard
			Example 1 (Investment Suitability—Risk Profile):
			Example 2 (Investment Suitability—Entire Portfolio):
			Example 3 (IPS Updating):
			Example 4 (Following an Investment Mandate):
			Example 5 (IPS Requirements and Limitations):
			Example 6 (Submanager and IPS Reviews):
			Example 7 (Investment Suitability—Risk Profile):
			Example 8 (Investment Suitability):
		Standard III(D) Performance Presentation
			Guidance
		Standard III(D): Recommended Procedures
			Apply the GIPS Standards
			Compliance without Applying GIPS Standards
		Standard III(D): Application of the Standard
			Example 1 (Performance Calculation and Length of Time):
			Example 2 (Performance Calculation and Asset Weighting):
			Example 3 (Performance Presentation and Prior Fund/Employer):
			Example 4 (Performance Presentation and Simulated Results):
			Example 5 (Performance Calculation and Selected Accounts Only):
			Example 6 (Performance Attribution Changes):
			Example 7 (Performance Calculation Methodology Disclosure):
			Example 8 (Performance Calculation Methodology Disclosure):
		Standard III(E) Preservation of Confidentiality
			Guidance
		Standard III(E): Recommended Procedures
			Communicating with Clients
		Standard III(E): Application of the Standard
			Example 1 (Possessing Confidential Information):
			Example 2 (Disclosing Confidential Information):
			Example 3 (Disclosing Possible Illegal Activity):
			Example 4 (Disclosing Possible Illegal Activity):
			Example 5 (Accidental Disclosure of Confidential Information):
		Standard IV: Duties to Employers
			Standard IV(A) Loyalty
			Guidance
		Standard IV(A): Recommended Procedures
			Competition Policy
			Termination Policy
			Incident-Reporting Procedures
			Employee Classification
		Standard IV(A): Application of the Standard
			Example 1 (Soliciting Former Clients):
			Example 2 (Former Employer’s Documents and Files):
			Example 3 (Addressing Rumors):
			Example 4 (Ownership of Completed Prior Work):
			Example 5 (Ownership of Completed Prior Work):
			Example 6 (Soliciting Former Clients):
			Example 7 (Starting a New Firm):
			Example 8 (Competing with Current Employer):
			Example 9 (Externally Compensated Assignments):
			Example 10 (Soliciting Former Clients):
			Example 11 (Whistleblowing Actions):
			Example 12 (Soliciting Former Clients):
			Example 13 (Notification of Code and Standards):
			Example 14 (Leaving an Employer):
			Example 15 (Confidential Firm Information):
		Standard IV(B) Additional Compensation Arrangements
			Guidance
		Standard IV(B): Recommended Procedures
		Standard IV(B): Application of the Standard
			Example 1 (Notification of Client Bonus Compensation):
			Example 2 (Notification of Outside Compensation):
			Example 3 (Prior Approval for Outside Compensation):
		Standard IV(C) Responsibilities of Supervisors
			Guidance
		Standard IV(C): Recommended Procedures
			Codes of Ethics or Compliance Procedures
			Adequate Compliance Procedures
			Implementation of Compliance Education and Training
			Establish an Appropriate Incentive Structure
		Standard IV(C): Application of the Standard
			Example 1 (Supervising Research Activities):
			Example 2 (Supervising Research Activities):
			Example 3 (Supervising Trading Activities):
			Example 4 (Supervising Trading Activities and Record Keeping):
			Example 5 (Accepting Responsibility):
			Example 6 (Inadequate Procedures):
			Example 7 (Inadequate Supervision):
			Example 8 (Supervising Research Activities):
			Example 9 (Supervising Research Activities):
		Standard V: Investment Analysis, Recommendations, and Actions
			Standard V(A) Diligence and Reasonable Basis
			Guidance
		Standard V(A): Recommended Procedures
		Standard V(A): Application of the Standard
			Example 1 (Sufficient Due Diligence):
			Example 2 (Sufficient Scenario Testing):
			Example 3 (Developing a Reasonable Basis):
			Example 4 (Timely Client Updates):
			Example 5 (Group Research Opinions):
			Example 6 (Reliance on Third-Party Research):
			Example 7 (Due Diligence in Submanager Selection):
			Example 8 (Sufficient Due Diligence):
			Example 9 (Sufficient Due Diligence):
			Example 10 (Sufficient Due Diligence):
			Example 11 (Use of Quantitatively Oriented Models):
			Example 12 (Successful Due Diligence/Failed Investment):
			Example 13 (Quantitative Model Diligence):
			Example 14 (Selecting a Service Provider):
			Example 15 (Subadviser Selection):
			Example 16 (Manager Selection):
			Example 17 (Technical Model Requirements):
		Standard V(B) Communication with Clients and Prospective Clients
			Guidance
		Standard V(B): Recommended Procedures
		Standard V(B): Application of the Standard
			Example 1 (Costs of Services to Clients):
			Example 2 (Costs of Services to Clients):
			Example 3 (Disclosure of Changed Fee Calculation Methodology):
			Example 4 (Sufficient Disclosure of Investment System):
			Example 5 (Providing Opinions as Facts):
			Example 6 (Proper Description of a Security):
			Example 7 (Notification of Fund Mandate Change):
			Example 8 (Notification of Fund Mandate Change):
			Example 9 (Notification of Changes to the Investment Process):
			Example 10 (Notification of Changes to the Investment Process):
			Example 11 (Notification of Changes to the Investment Process):
			Example 12 (Sufficient Disclosure of Investment System):
			Example 13 (Notification of Changes to the Investment Process):
			Example 14 (Notification of Errors):
			Example 15 (Notification of Risks and Limitations):
			Example 16 (Notification of Risks and Limitations):
			Example 17 (Notification of Risks and Limitations):
		Standard V(C) Record Retention
			Guidance
		Standard V(C): Recommended Procedures
		Standard V(C): Application of the Standard
			Example 1 (Record Retention and IPS Objectives and Recommendations):
			Example 2 (Record Retention and Research Process):
			Example 3 (Records as Firm, Not Employee, Property):
		Standard VI: Conflicts of Interest
			Standard VI(A) Avoid or Disclose Conflicts
			Guidance
		Standard VI(A): Application of the Standard
			Example 1 (Conflict of Interest and Business Relationships):
			Example 2 (Conflict of Interest and Business Stock Ownership):
			Example 3 (Conflict of Interest and Personal Stock Ownership):
			Example 4 (Conflict of Interest and Personal Stock Ownership):
			Example 5 (Conflict of Interest and Compensation Arrangements):
			Example 6 (Conflict of Interest and Compensation Arrangements):
			Example 7 (Conflict of Interest and Requested Favors):
		Standard VI(B) Priority of Transactions
			Guidance
		Standard VI(B): Recommended Procedures
		Standard VI(B): Application of the Standard
			Example 1 (Personal Trading):
			Example 2 (Trading for Family Member Account):
			Example 3 (Family Accounts as Equals):
			Example 4 (Personal Trading and Disclosure):
			Example 5 (Trading Prior to Report Dissemination):
		Standard VI(C) Referral Fees
			Guidance
		Standard VI(C): Recommended Procedures
		Standard VI(C): Application of the Standard
			Example 1 (Disclosure of Referral Arrangements and Outside Parties):
			Example 2 (Disclosure of Interdepartmental Referral Arrangements):
			Example 3 (Disclosure of Referral Arrangements and Informing Firm):
			Example 4 (Disclosure of Referral Arrangements and Outside Organizations):
			Example 5 (Disclosure of Referral Arrangements and Outside Parties):
		Standard VII: Responsibilities as a CFA Institute Member or CFA Candidate
			Standard VII(A) Conduct as Participants in CFA Institute Programs
			Guidance
		Standard VII(A): Application of the Standard
			Example 1 (Sharing Exam Questions):
			Example 2 (Bringing Written Material into Exam Room):
			Example 3 (Writing after Exam Period End):
			Example 4 (Sharing Exam Content):
			Example 5 (Sharing Exam Content):
			Example 6 (Sharing Exam Content):
			Example 7 (Discussion of Exam Grading Guidelines and Results):
			Example 8 (Compromising CFA Institute Integrity as a Volunteer):
			Example 9 (Compromising CFA Institute Integrity as a Volunteer):
		Standard VII(B) Reference to CFA Institute, the CFA Designation, and the CFA Program
			Guidance
		Standard VII(B): Recommended Procedures
		Standard VII(B): Application of the Standard
			Example 1 (Passing Exams in Consecutive Years):
			Example 2 (Right to Use CFA Designation):
			Example 3 (“Retired” CFA Institute Membership Status):
			Example 4 (Stating Facts about CFA Designation and Program):
			Example 5 (Order of Professional and Academic Designations):
			Example 6 (Use of Fictitious Name):
		Practice Problems
		Solutions
	Learning Module 3	Application of the Code and Standards: Level III
		Introduction
		Sovereign Investment Corporation
			Anthony Corrales, CFA, Partner, Hedge Fund Investors
			Ani Mehrotra, CFA, Junior Analyst, National Investments
			Marcia Lopez
			David Hockett and Team
			The Kochanskis
		Castle Biotechnology Case: David Plume, PhD, CFA
			David Plume, PhD, CFA
		Castle Biotechnology Case 2: Sandra Benning, CFA, and Claris Deacon
			Claris Deacon
		Lionsgate Limited & Bank of Australia Case 1
			Tony Hill and Team
		Lionsgate Limited & Bank of Australia Case 2
			Kirk Graeme, CFA
			The Delaneys
			David Milgram
		Gabby Sim
		Practice Problems
		Solutions
	Learning Module 4	Asset Manager Code of Professional Conduct
		Introduction, Adopting the Code and Claiming Compliance
			Adopting the Code and Claiming Compliance
			Acknowledgement of Claim of Compliance to CFA Institute
		General Principles of Conduct and Asset Manager Code of Professional Conduct
			Asset Manager Code of Professional Conduct
		Appendix 6: A. Loyalty to Clients
			Appendix 6—Recommendations and Guidance
			A. Loyalty to Clients
		Appendix 6: B. Investment Process and Actions
			Managers must:
		Appendix 6: C. Trading
			Managers must:
		Appendix 6: D. Risk Management, Compliance and Support
			Managers must:
		Appendix 6: E. Performance and Evaluation
			Managers must:
		Appendix 6: F. Disclosures
			Managers must:
		Practice Problems
		Solutions
	Glossary