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Steps to Comply
The CFA Institute Asset Manager Code of Professional Conduct is the global standard of conduct for investment managers to affirm their commitment to ethical principles that put client interests first.
Plan Sponsors and other investors can easily identify asset managers that uphold an ethical foundation that resolves conflicts of interest in favor of investors. Asset Management firms signal their commitment to commonly held ethical principles.
What does the Code cover?
The Asset Manager Code of Professional Conduct (PDF) outlines the ethical and professional responsibilities of firms that manage assets on behalf of clients. It provides standards and supportive guidance based on general principles of conduct. The Code states that managers have these responsibilities to their clients:
- To act in a professional and ethical manner at all times
- To act for the benefit of clients
- To act with independence and objectivity
- To act with skill, competence, and diligence
- To communicate with clients in a timely and accurate manner
- To uphold the rules governing capital markets
Why is the Code needed?
The Asset Manager Code offers the universal standard of conduct for investment management firms that affirms client interests. Rather than evaluating each firm’s code of conduct separately, clients can quickly identify firms that commit to a common foundation of ethical principles.
What’s required to claim compliance with the Code?
Asset manager firms confirm their ability to comply with the principles of the Asset Manager Code, using the Guidance to assess how procedures and processes accomplish that. They then notify CFA Institute of their claim of compliance. Some firms may wish to prepare documentation supporting their claim of compliance for their clients’ information.
Who verifies compliance?
Asset management firms may choose to engage third-party auditors to verify their compliance. Many firms will choose simply to claim compliance, knowing that making a false claim would be viewed harshly by regulators.
How is CFA Institute involved?
CFA Institute developed the Asset Manager Code in consultation with investors and asset managers, consistent with the CFA Institute mission to offer best practices and advocate for market integrity. CFA Institute sponsors an advisory committee of practitioners (the Asset Manager Code Advisory Committee
) to review the Asset Manager Code and help promote its adoption.
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