Folder:
115 CFA
File:
115.010.30.130 Reading 3 - Duties to Employers - IV(A) Loyalty

Duties to Employers - IV(A) Loyalty

LOS

What is the primary directive of Standard IV(A)?
In materials related to their employment, Members and Candidates must act for the benefit of their employer and not deprive their employer of the advantage of their skills and abilities, divulge confidential information, or otherwise cause harm to their employer.

a. demonstrate the application of the Code of Ethics and Standards of Professional Conduct to situations of issues involving issues of personal integrity

Flash cards

What does the word "practice" mean in the phrase: "Members shall not undertake any independent practice that could result in compensation or other benefit in competition with their employer"?
"Practice" is any service the employer currently makes available for payment

What does the word "undertake" mean in the phrase: "Members shall not undertake any independent practice that could result in compensation or other benefit in competition with their employer"?
"Undertake" is to actively participate in an activity.

If you do work outside of your job that is competitive to the services your firm offers, but you don't get paid a dime for it, are you in violation of Standard IV(A)?
Yes, you are in violation if you participate in the activities. You do not actually have to receive any remuneration for this standard to apply.

Can you encourage other employees of your current firm to leave and join your new company?
No

b. distinguish between conduct that conforms to the Code and Standards and conduct that violates the Code and Standards

Flash cards

While employed, can you do work outside of the company that would possibly be in competition with your employer?
No, unless you receive written permission from your employer

If you're planning to leave your current employer to take another job, what activities can you do and what activities can't you do?
You must continue to operate for your employers best interest for as long as you're employed and not engage in any conflicting activities. You can make preparations for departure but not undertake competitive business.

If you're an independent contractor, does Standard IV(A) still apply?
Possibly not

If you get a new job and before leaving your current employer, you contact all your existing clients and solicit them. Is this a violation of Standard IV(A)?
Yes, you must wait until after leaving the previous employer before soliciting your old clients, and you have to look them up via publicly available information because you also can't take their contact information with you.

When you leave a job, can you take home client lists, investment statements, marketing presentations, or buy lists?
No

While employed, can you provide consulting services on your own time?
Yes, if you get written consent from your employer.

c. recommend practices and procedures designed to prevent violations of the Code of Ethics and Standards of Professional Conduct

Flash cards

If you plan to engage in independent business while still employed, what do you need to do?
If you plan to engage in independent business while still employed, provide a written statement to your employer describing the types of services, the expected duration, and the compensation.


Source:
  • CFA