CFA Institute

Mission and Membership

The mission of the CFA Institute is to establish a direction for serving its members and setting a higher standard within the global investment community. CFA Institute has adopted a formal strategic planning process and a set of values around which all its programs, services, and initiatives revolve. It strives to be the organization for investment professionals who are dedicated to meeting the highest standards for ethical behavior, education, and ongoing professional development and excellence of practice in the profession. CFA Institute provides a range of products and [Page 274]services to its members, other investment professionals, and the investing public, and it aims to fulfill its mission and vision through effective use of volunteers, good stewardship of resources, and effective use of technology. Therefore, the core values of excellence, integrity, strength of community and cooperation, and volunteer service have been adopted.

Formerly the Association for Investment Management and Research, CFA Institute offers three membership categories: CFA charterholder, regular, and affiliate. To qualify as a CFA charterholder member, an individual must have satisfied the requirements to become a regular member and the requirements of the CFA program established by the CFA Institute. As a regular member of CFA Institute and a local society, an individual must (1) hold a bachelor's degree from an accredited institution or have equivalent education or work experience, (2) have passed Level I of the CFA exam or the Self-Administered Standards of Professional Practice Examination and have 48 months of acceptable professional work experience in the investment decisionmaking process, and (3) agree to adhere to and sign the Member's Agreement and Professional Conduct Statement. An affiliate membership applicant must adhere to the Member's Agreement and Professional Conduct Statement.

Code of Ethics and Asset Manager Code of Professional Conduct

The CFA Institute code of ethics states that its members shall act with integrity, competence, dignity, and in an ethical manner when dealing with the public, clients, employers, employees, and fellow members. The Code encourages members to practice in a professional and ethical manner that will reflect credit on members and their profession, while striving to maintain and improve their competence and the competence of others in the profession. Moreover, the Code asks members to use reasonable care and to exercise independent professional judgment.

Recently, the Asset Manager Code of Professional Conduct has been revised and new standards are expected to be included in the 2006 exam year. This Code addresses six areas: (1) loyalty to clients, (2) the investment process and actions, (3) trading, (4) compliance and support, (5) performance and evaluation, and (6) disclosures to clients. The Code compels management firms to, among other things, place clients' interests first, have a reasonable basis for investment decisions, and act according to clients' or funds' objectives. Firms must also fairly allocate trades among clients and give priority to client trades over self-interest; appoint a compliance officer to implement policies and investigate complaints; use fair-market prices when necessary; and ensure that performance information is complete, accurate, and timely. Last, the Code calls on companies to make all necessary disclosures to clients in a truthful and timely manner.

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