Lvl2: Ethics

Firm unwilling to issue adverse opinion

• Standard I(B), Independence and Objectivity

• encourage the firm to remove the controversial company from the research universe and put it on a restricted list

• disseminates only factual information about the company

Manager restricts employee from changing the buy recommendation

• Standard I(B), Independence and Objectivity

• tell her boss that she cannot cover the company under these constraints

• reach her own independent conclusions, and if they conflict with her boss’s opinion, share the conclusions with her boss or other supervisors

rely solely on another member’s due diligence

• Standard I(D), Misconduct

• expected to conduct the necessary due diligence

provide consulting advice in free time

• Standard IV(B), Additional Compensation Arrangements

• obtain written consent from all parties involved - client + firm

learns one of his employees may have violated the Standards

• Standard IV(C), Responsibilities of Supervisors

• reporting the misconduct up the chain of command

• take steps to ensure that the violation will not be repeated

use of model - former employee

• Standard V(A), Diligence and Reasonable Basis

• understand the statistical significance of the results of the models

manager selection policy for his firm

• Standard V(A), Diligence and Reasonable Basis

• encourage their firms to consider adopting a standardized set of criteria

• how often and on what basis the allocation of funds to the adviser will be reviewed

state opinion as fact

• Standard V(B): Communication with Clients and Prospective Clients

limit scope of report

• Standard V(B), Communication with Clients and Prospective Clients

• permitted to limit the scope of the report as long as he clearly stipulates such limits

maintain records

• Standard V(C), Record Retention

• at least seven years - in the absence of regulatory guidance or firm policies

issue reports - former employee

• Standard I(C), Misrepresentation

• firm may issue future reports without providing attribution to the prior analysts

• cannot reissue a previously released report solely under his or her name

disclose referral fees

• Standard VI(C), Referral Fees

• disclose to their employer, clients, and prospective clients

• before entry into any formal agreement for services

changing jobs

• Standard IV(A) Loyalty

• cannot inform their old employer’s clients of their new role

• cannot share policies and processes used at the old employers

accepting gifts

• Standard I(B), Independence and Objectivity

• gifts, invitations to lavish functions, tickets, favors, or job referrals

• must reject

malign the reputation of another member

• Standard I(A): Misconduct

contacting clients after leaving

• allowed