CHARLOTTESVILLE, Va. (HedgeWorld.com)–The CFA Institute hopes its 75,000 members worldwide, including 62,000 Chartered Financial Analysts, will embrace a new code of ethics for asset managers produced by the group’s new research and policy center, the CFA Centre for Financial Market Integrity.
The CFA Centre on Monday [Nov. 8] released a draft of the code of conduct and will accept written public comments on it up until Dec. 31. The proposed code provides what CFA Centre officials described as “specific and practical guidelines” in six key areas: loyalty to clients, the investment process, trading, compliance, performance evaluation and disclosure.
In short, the code is designed to be a sort of checklist of ethical behavior to which asset management firms–including hedge funds and mutual funds–will voluntarily adhere and to which investors should expect adherence.
“Asset managers have a responsibility to assure investors that they will place investor interests in the highest regard,” said John Neff, chairman of the CFA Centre’s Advisory Council. “Adherence to the code demonstrates a commitment to integrity and sound ethics.”
Working with more than two-dozen investment professionals in the United States, Europe and Asia, the CFA Centre derived a 19-page code that lays out both the detailed code of conduct and recommendations and guidance for implementing it. The full code of conduct can be viewed here.
It is designed to apply to all facets of the manager-client relationship, according to a news release from the CFA Institute.
Under “Loyalty to clients,” the code stipulates that asset managers should maintain their independence and objectivity, refusing business relationships or gifts that could affect either.