False Compliance Procedures for Standard III (E)

D

The compliance officer should be designated from within the firm.

The correct answer is D. "Designate a team of outside colleagues to form a review board" is false regarding compliance procedures for complying with Standard III (E).

Standard III (E) of the CFA Institute's Code of Ethics and Standards of Professional Conduct pertains to compliance procedures, which are designed to ensure that members and candidates comply with the Code and Standards. Compliance procedures help firms establish and maintain a culture of integrity and compliance within their organizations.

Let's go through each option and explain why it is true or false:

A. "None of these answers" - This answer implies that all of the given options are true, which is incorrect. Therefore, option A is false.

B. "Outline permissible conduct" - This statement is true. Compliance procedures should clearly outline the acceptable conduct for members and candidates, providing guidance on how to comply with the Code and Standards.

C. "Delineate procedures for reporting violations and sanctions" - This statement is true. Compliance procedures should establish clear procedures for reporting any violations of the Code and Standards, as well as the associated sanctions for non-compliance.

D. "Designate a team of outside colleagues to form a review board" - This statement is false. Compliance procedures typically involve an internal process within the organization, such as a compliance department or committee, responsible for monitoring and enforcing compliance with the Code and Standards. It does not require the formation of an external review board consisting of outside colleagues.

E. "Outline the scope of the procedures" - This statement is true. Compliance procedures should clearly define the scope and applicability of the procedures, ensuring that all relevant areas of the Code and Standards are covered.

F. "Be easy to understand" - This statement is true. Compliance procedures should be written in a clear and understandable manner, facilitating comprehension and implementation by all members and candidates.

In summary, the false statement is D. Compliance procedures do not require designating a team of outside colleagues to form a review board.