Question #4
Reading: Reading 42.4 Standards of Professional Conduct Guidance for Standards IV
PDF File: Reading 42.4 Standards of Professional Conduct Guidance for Standards IV.pdf
Page: 2
Status: Correct
Correct Answer: B
Question
Which of the following statements is most correct under the Code and Standards?
Answer Choices:
A. CFA Institute members are prohibited from undertaking independent practice in competition with their employer
B. Consent from the employer is necessary to permit independent practice that could result in compensation or other benefits in competition with the member's employer
C. Members are prohibited from making arrangements or preparations to go into competitive business before terminating their relationship with their employer
Explanation
Members are not prohibited from making arrangements or preparations to go into
competitive business before terminating their relationship with their employer. CFA
Institute members are not prohibited from undertaking independent practice in
competition with their employer provided they have consent from their employer.
Members must provide notification to their employer describing the types of services to
be rendered, the expected duration, and compensation for the services.
(Module 42.7, LOS 42: IV(A))