2024/2025
CFA Ethic and Professional Standards
Type:
Mago-Lego
Delivered by:
HSE Banking Institute
When:
2 module
Online hours:
20
Open to:
students of one campus
Language:
English
ECTS credits:
3
Course Syllabus
Abstract
The financial sector is one of the most regulated industries. In terms of performing transactions, maintaining records or entering into contractual relations, the actions of participants in financial markets are regulated by the requirements of legislation and regulatory bodies. In terms of creating business models, financial institutions rely on the apparatus of economics and mathematics, two sciences with a rich academic heritage. At the same time, despite the high level of regulation, in practice, both companies as a whole and individual representatives regularly encounter situations in which actions are not described, neither in words nor in formulas.Cases in which choosing the right solution is a difficult ethical dilemma are not only issues of disclosing conflicts of interest or expensive gifts. Ethics deals with much deeper topics. How deep is the analysis to be done when valuing securitized instruments? Which reports should not be trusted when analyzing a company's financial situation? Why close the exchange of data between divisions of one investment firm, if this firm manages clients' investments and brings companies to the IPO? Acquaintance with professional and ethical standards will allow listeners not only to find answers to the questions raised above, but also to think about many others.Is it possible that ignorance or misunderstanding of the importance of professional and ethical standards by any financial market participants has any noticeable negative consequences for financial markets as a whole, or are standards nothing more than a set of rules for solving local problems?Imagine any market. Real estate market, used car market, antiques market. When investors are convinced that prices are subject to manipulation and the best lots are distributed without getting to the market, investors lose confidence in the market and exclude objects traded on such a market from the list of investment attractive ones. Whether the decline in investor confidence in the market is distributed over time or like an avalanche, the result invariably is a decrease in market size and, as a result, job losses. As part of the course, students will get acquainted with a number of notorious crashes of recent decades, caused by nothing more than panic and massive outflow of investors.Awareness of the importance of business ethics and standards of professional conduct and the need to regulate them came to the representatives of the US financial sector in the 60s, taking shape in a code that is still used today in a revised form. This course details the interconnected framework of professional conduct standards as reflected in the CFA Institute's Code of Ethics. In the process of studying, all norms and requirements are illustrated with a large number of practical examples, approaches to the analysis of various situations are proposed, as well as typical mistakes in interpreting the applicability of various standards.
Learning Objectives
- The aim is to provide trainees with a holistic picture of the interconnected system of standards and rules, as well as the practice of their application.
Expected Learning Outcomes
- After completing the course, students will be able to: Interpret specific actions (or omissions) of financial professionals as ethical or unethical
- Indicate the standard or standards related to certain actions or omissions of financial professionals
- Recommend behavior compliant with the code of ethics and standards of professional conduct, as well as contribute to resolving of conflicts in various practical cases
- Plan their professional activities in the financial market in such a way as to meet high ethical standards, as well as to promote their dissemination in the professional environment, strengthening the investment attractiveness of the financial market and their personal professional reputation
Course Contents
- Introduction. Review of professional standards of work in financial markets.
- Six principles of the code of ethics. Standards of professional conduct.
- Professionalism.
- Integrity of capital markets.
- Duties to clients
- Duties to employers.
- Investment analysis, recommendations, and actions
- Conflicts of interest
- Responsibilities as a CFA Institute Member or CFA Candidate
Assessment Elements
- Final Exam (test)The Test is presented in electronic form on the LMS platform. The test includes 24 questions. The questions are similar to those questions that we studied in course video lectures available at LMS. The Test Rules: • 60 minutes are allotted for the test. • Test questions are displayed one by one. In order to move on to the next question, you must answer the current one. Once you have given an answer, you cannot go back. • During the test, it is not allowed to use additional materials or consult with anyone. • One point is awarded for a correct answer. Points are not deducted for an incorrect answer. • There is only one correct answer for each question.
- Project “Ethical codes analysis and presentation”To perform project work, each group has to complete three tasks. To complete the tasks, you can work independently or as a part of a group (note, that all students in the same group share the same grade). The Project is completed at home. The project opens on the second week of the course and remains open till the last class. At the last class date individuals and groups are invited to present their works. The Project closes for submission on a day of the last class. Each individual or group has to familiarize with a Corporate Code of a selected company and an offense (links to materials will be provided). Project topics will be announced at the class.
Interim Assessment
- 2024/2025 2nd module0.5 * Final Exam (test) + 0.5 * Project “Ethical codes analysis and presentation”
Bibliography
Recommended Core Bibliography
- David M. Wasieleski, & James Weber. (2019). Business Ethics: Vol. First edition. Emerald Publishing Limited.
- Sison, A. G., Ferrero Muñoz, I., & Guitián, G. (2018). Business Ethics : A Virtue Ethics and Common Good Approach. New York: Routledge. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=1729153
Recommended Additional Bibliography
- Beer, L. A. (2015). A Strategic and Tactical Approach to Global Business Ethics, Second Edition (Vol. Second edition). New York: Business Expert Press. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=939533