Which of the following can be found in Standard III?
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A. B. C. D. E.D
Standard III states: "Members shall comply with any prohibitions on activities imposed by their employer if a conflict of interest exists."
Standard III, also known as the Standard III: Duties to Clients, is a part of the Code of Ethics and Standards of Professional Conduct established by the CFA Institute. This standard outlines the ethical responsibilities that CFA charterholders and candidates have towards their clients.
Let's go through each answer choice and determine which one can be found in Standard III:
A. Members must use the CFA designation in a dignified manner. This statement relates to the proper use of the CFA designation by members. While it is important to use the CFA designation in a dignified manner, this specific requirement is not outlined in Standard III. The appropriate use of the CFA designation is covered under Standard VII: Responsibilities as a CFA Institute Member or CFA Candidate.
B. If members receive material nonpublic information in confidence, they shall not breach that confidence by trading or causing others to trade in securities to which such information relates. This statement is an accurate representation of an important principle in Standard III. It states that if CFA members receive material nonpublic information in confidence, they have an obligation to maintain the confidentiality of that information and should not trade or cause others to trade in securities based on that information. This principle ensures fairness and integrity in the financial markets.
C. Members shall maintain knowledge of AIMR's Code of Ethics. The reference to AIMR's (Association for Investment Management and Research, the former name of the CFA Institute) Code of Ethics is outdated. The current Code of Ethics and Standards of Professional Conduct is applicable, and it is the responsibility of CFA members to maintain knowledge of the updated standards. However, the specific requirement to maintain knowledge of the Code of Ethics is not explicitly mentioned in Standard III.
D. Members shall comply with any prohibitions on activities imposed by their employer if a conflict of interest exists. This statement accurately represents a requirement in Standard III. It states that CFA members must comply with any prohibitions on activities imposed by their employer if a conflict of interest exists. This principle ensures that members prioritize their clients' interests and act in a manner consistent with their fiduciary duties.
E. Members shall make reasonable and diligent efforts to avoid any material misrepresentation in any research report or investment recommendation. This statement accurately represents a requirement in Standard III. It emphasizes the obligation of CFA members to exercise care and diligence in avoiding material misrepresentation in any research report or investment recommendation they provide to clients. This principle promotes honesty and accuracy in communicating information to clients.
In summary, based on the provided answer choices, the statements that can be found in Standard III are:
Please note that the specific language used in the official CFA exam may vary, so it's always essential to refer to the official curriculum and materials provided by CFA Institute for the most accurate and up-to-date information.