The readings in this study session present a framework for ethical conduct in

the investment profession by focusing on the CFA Institute Code of Ethics and

Standards of Professional Conduct as well as the Global Investment Performance

Standards (GIPS®).

The principles and guidance presented in the CFA Institute Standards of

Practice Handbook (SOPH) form the basis for the CFA Institute self-regulatory

program to maintain the highest professional standards among investment

practitioners. "Guidance" in the SOPH addresses the practical application of the

Code of Ethics and Standards of Professional Conduct. The guidance reviews the

purpose and scope of each standard, presents recommended procedures for

compliance, and provides examples of the standard in practice.

The Global Investment Performance Standards (GIPS) facilitate efficient

comparison of investment performance across investment managers and country

borders by prescribing methodology and standards that are consistent with a clear

and honest presentation of returns. Having a global standard for reporting

investment performance minimizes the potential for ambiguous or misleading

presentations.

READING ASSIGNMENTS

Reading 1 Code of Ethics and Standards of Professional Conduct

Standards of Practice Handbook, Ninth Edition

Reading 2 "Guidance" for Standards I-VII

Standards of Practice Handbook, Ninth Edition

Reading 3 Introduction to the Global Investment Performance Standards

(GIPS®)

Reading 4 Global Investment Performance Standards (GIPS®)

LEARNING OUTCOMES

Reading 1: Code of Ethics and Standards of Professional Conduct

The candidate should be able to:

a. describe the structure of the CFA Institute Professional Conduct Program and the

process for the enforcement of the Code and Standards;

b. state the six components of the Code of Ethics and the seven Standards of

Professional Conduct;

c. explain the ethical responsibilities required by the Code and Standards, including

the multiple sub-sections of each Standard.

Reading 2: "Guidance" for Standards I-VII

The candidate should be able to:

a. demonstrate a thorough knowledge of the Code of Ethics and Standards of

Professional Conduct by applying the Code and Standards to situations involving

issues of professional integrity;

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

conduct that violates the Code and Standards;

c. recommend practices and procedures designed to prevent violations of the Code

of Ethics and Standards of Professional Conduct.

Reading 3: Introduction to the Global Investment Performance

Standards (GIPS®)

The candidate should be able to:

a. explain why the GIPS standards were created, what parties the GIPS standards

apply to and who is served by the standards;

b. explain the construction and purpose of composites in performance reporting;

c. explain the requirements for verification of compliance with GIPS standards.

Reading 3: Introduction to the Global Investment Performance

Standards (GIPS®)

The candidate should be able to:

a. explain why the GIPS standards were created, what parties the GIPS standards

apply to and who is served by the standards;

b. explain the construction and purpose of composites in performance reporting;

c. explain the requirements for verification of compliance with GIPS standards.

Reading 4: Global Investment Performance Standards (GIPS®)

The candidate should be able to:

a. describe the key characteristics of the GIPS standards and the fundamentals of

compliance;

b. describe the scope of the GIPS standards with respect to an investment firm's

definition and historical performance record;

c. explain how the GIPS standards are implemented in countries with existing

standards for performance reporting and describe the appropriate response

when the GIPS standards and local regulations conflict;

d. characterize the eight major sections of the GIPS standards.