Standard Ⅰ: Professionalism
A. Knowledge of the Law
1) Understand and comply with all laws, rules, and regulations (including Code and Standards) of any government, regulatory agency, or association governing professional activities
2) Comply with more strict law, rule, and regulation
3) Do not knowingly assist in violation, otherwise dissociate from activity.
Guidance
1)Most strict
2)First, notify supervisor or compliance
3)May confront wrongdoer directly
4)Dissociate if necessary
5)Inaction may be construed as participation (不行動(dòng)是不對(duì)的)
6)No requirement to report violations to governmental authorities, but this may be appropriate in certain cases
Recommended Procedures
1)Keep informed, regularly review written compliance procedures, maintain files
2)Seek compliance/legal advice as needed
3)Encourage firms to adopt code of ethics
4)Distribute information internally on applicable laws and regulations
5)Have written procedures for reporting suspected violations
6)Members strongly encouraged to report violations by other members 對(duì)其他成員要檢舉揭發(fā)
B. Independence and Objectivity
1) Use reasonable care, judgment to achieve and maintain independence in professional activities
2) Do not offer, solicit, or accept any compensation that could compromise independence or objectivity 旅行，豪華餐飲等
Guidance
1)Modest gifts okay 盡管如此，但大部分也要拒絕
2)Distinguish between gifts from clients and gifts from entities trying to influence a member's behavior
3)May accept gift from clients-disclose to employer-get permission if gift is for future. When possible, prior to accepting “bonuses” or gifts from clients, members should disclose to employers such benefits offered by clients. If notification is not possible prior to acceptance, members must disclose to employers benefits previously accepted from clients.
4)Members responsible for hiring outside managers should not accept travel, gifts, or entertainment that could impair their objectivity
5)Investment banking relationships-do not bow to pressure to issue favorable research 投行部門(mén)壓力
6)For issuer-paid research, flat fee structure is preferred; must disclose
7)Members working for credit rating firms should avoid influence by issuing firms
8)Users of credit ratings should be aware of this potential conflict
9)Best practice is for analysts to pay for their own commercial travel to firms being analyzed or to firm events
Recommended Procedures
1)Protect integrity of options - reports should reflect unbiased opinion
2)Create a restricted list
3)Restrict special cost arrangements
4)Limit gifts; clear value limits by firm (最多能夠接受多少錢(qián)的禮物)
5)Be careful with IPO share allocations
C. Misrepresentation
Do not make misrepresentations relating to investment analysis, recommendations, actions, or other professional activities
A mispresentation is any untrue or omission of a fact or any statement that is otherwise false or misleading.
Guidance
1)Standard covers oral, written, or electronic communications
2)Do not misrepresent qualifications, services of self or firm, or performance record, characteristics of an investment
3)Do not guarantee a certain return
4)No plagiarism-written, oral, or electronic communications
Recommended Procedures
1)Firms can assist employees by providing written list of the firm's available services and a description of the firm's qualifications
2)Maintain records of materials used to prepare research reports, and quote source, except for "recognized financial and statistical reporting services". 比如Bloomberg或者很知名的官網(wǎng),比如US treasury Website.
3)Models and analysis of others at the firm may be used without attribution可以隨便引用公司同事的分析; but the report written by another analysts employed by the firms cannot be used as another analyst’s work.
4)Should encourage firm to establish procedures for verifying marketing claims of third parties recommended to clients
D. Misconduct (Mummy’s rule)
Do not engage in any professional conduct involving dishonesty, fraud, deceit, or commit any act that reflects adversely on professional reputation, integrity, or competence. Fail to act when required by one’s professional obligations, such as neglecting to perform due diligence related to investment recommendations, violates Misconduct.
Guidance
This Standard covers conduct that may not be illegal, but could adversely affect a member's ability to perform duties
Recommended Procedures
1)Adopt a code of ethics to which every employee must adhere
2)Disseminate a list of potential violations and associated disciplinary sanctions
3)Conduct background checks on potential employees -- look for good character and eligibility to work in the investment industry