Standard IV(A) Loyalty

what is Standard IV(A) Loyalty

In matters related to their employment, Members and Candidates must act for the benefit of their employer and not deprive their employer of the advantage of their skills and abilities, divulge confidential information, or otherwise cause harm to their employer.

what should employees do about employer Policies

• Follow employer policies and procedures.

• Comply with workplace rules unless they:

  • Violate laws, or

  • Conflict with the Code and Standards.

guidance around employers making employer policies

• Foster an ethical culture.

• Design compensation systems that discourage unethical behavior.

• Understand CFA Institute ethical obligations.

steps to engage in independent practice?

Step 1: Notify employer.

Step 2 Disclose:

• Nature of services

• Duration

• Compensation

Step 3: Receive employer consent.

• Only after approval may the independent practice begin.

what is allowed when preapring to leave?

1. Update résumé

2. Seek new employment

3. Rent office space

4. Purchase equipment

5. Create a business plan

6. Form a legal entity for a future business

7. Inform clients after resignation (subject to firm policy)

8. Use publicly available contact information

9. Use knowledge and experience gained during employment

what is not allowed when preparing to leave?

• Solicit employer's clients before resignation

• Conduct competing business without employer approval

• Use employer resources for personal business

• Divert business opportunities from employer

• Misappropriate client lists

• Take confidential files or records

what is the whistleblowing exception?

When protecting:

• Clients

• Market integrity

• Public interest

Members may:

• Report illegal activities.

• Preserve evidence.

• Disclose wrongdoing to authorities.

recommendations for members

1. Competition Policy: Understand restrictions on outside work, noncompete agreements, and any required approval procedures for providing services outside the firm.

2. Termination Policy: Know the firm's resignation procedures, communication policies, transfer of responsibilities, and rules regarding client information upon departure.

3. Incident-Reporting Procedures: Be familiar with whistleblowing policies and the confidential channels available for reporting unethical or illegal conduct.

4. Employee Classification: Understand your employment status (e.g., full-time, part-time, contractor) and how firm policies apply to your classification.