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CFA Level I Exam · Guidance for Standard IV: Duties to Employers

Standard VI(A) Disclosure of Conflicts to Employers

Updated 7 October 2026 · Fact-checked

Standard VI(A), Disclosure of Conflicts, requires members and candidates to make full and fair disclosure of all matters that could reasonably be expected to impair their independence and objectivity or interfere with their duties to clients, prospective clients and their employer. Disclosures must be prominent, in plain language and communicate the information effectively.

Understand Conflicts and Disclosure to Employers (Standard VI(A))

A conflict of interest arises when your personal interests, or those of another party, could pull against your duty to clients or your employer. Examples are owning shares in a company you cover, sitting on a board, running an outside business, or having a close relationship with an issuer.

Standard VI(A) is about disclosure. The official wording says members and candidates must make full and fair disclosure of all matters that could reasonably be expected to impair their independence and objectivity or interfere with respective duties to their clients, prospective clients, and employer. They must ensure that such disclosures are prominent, are delivered in plain language, and communicate the relevant information effectively.

Note who receives the disclosure. It goes to clients, prospective clients and your employer. The standard is not limited to employers, and it is not only about outside work. Ownership of stock, board seats, family ties and compensation arrangements can all be conflicts.

Standard IV(A) Loyalty is different. It says you must act for the benefit of your employer and not deprive it of your skills and abilities, divulge confidential information, or harm its interests. Outside activity can touch both standards. IV(A) asks whether you are harming or competing with your employer. VI(A) asks whether you have disclosed anything that could compromise your independence and objectivity.

The guidance says disclosure to the employer should be in writing and should be specific enough for the employer to judge the situation. Disclosure does not fix every conflict. Some conflicts are so serious that avoiding them is the right answer, and when in doubt, disclose.

Key formulas to remember

Standard VI(A) core duty
Full and fair disclosure of all matters that could reasonably be expected to impair independence and objectivity or interfere with duties
Disclosure goes to clients, prospective clients and the employer.
Quality of disclosure
Prominent + plain language + communicates information effectively
A vague or buried disclosure does not satisfy the standard.
Test for what to disclose
Could the matter reasonably be expected to impair independence, objectivity or duties?
If yes, disclose. If unsure, disclose.
IV(A) versus VI(A)
IV(A): do not harm or compete with the employer. VI(A): disclose conflicts to all affected parties.
Same facts can trigger both standards.

How to solve Conflicts and Disclosure to Employers (Standard VI(A)) questions

Use this sequence for any question about conflicts, outside activity or disclosure to an employer.

  1. 1Identify the facts: ownership, board seat, outside job, compensation or relationship.
  2. 2Ask whether it could reasonably be expected to impair independence, objectivity or duties to clients or employer. If yes, VI(A) applies.
  3. 3Check who needs to know: the employer, clients and prospective clients as relevant.
  4. 4Check IV(A): is the member competing with, or harming, the employer, or using its resources? Also consider IV(B) for extra compensation.
  5. 5Check whether disclosure was made, and if so whether it was prominent, plain and effective, and in writing for the employer.
  6. 6Decide the fix: disclose, get consent where needed, or avoid the conflict.
  7. 7Match the option that names the right action and eliminate the two that ignore disclosure or over-react.

Quickest way: Disclose-First Filter

When to use it: Use it on three-option questions where a member has an interest that might affect their work.

  1. Look for the conflict trigger: stock, board seat, outside business, gift or relationship.
  2. Ask: was it disclosed to the right parties? If not, the member is likely in violation.
  3. Prefer the option that discloses in writing to the employer and clients over one that stays silent.
  4. Reject options that say the member did nothing wrong only because the activity was legal or unpaid.

Common mistakes in Conflicts and Disclosure to Employers (Standard VI(A))

  • Thinking VI(A) only covers disclosure to employers.

    The topic is studied under duties to employers.

    Fix: Remember it covers clients, prospective clients and the employer.

  • Treating IV(A) and VI(A) as the same standard.

    Both can apply to outside business activity.

    Fix: IV(A) is loyalty: do not harm the employer. VI(A) is disclosure of conflicts to affected parties.

  • Assuming an unpaid or legal activity needs no disclosure.

    Candidates equate conflicts with money or illegality.

    Fix: The test is whether it could reasonably impair independence, objectivity or duties.

  • Accepting a vague or verbal disclosure as enough.

    Disclosure is seen as a box to tick.

    Fix: It must be prominent, in plain language and effective. Written disclosure to the employer is the safer answer.

  • Believing disclosure always cures the conflict.

    Candidates overlook that some conflicts must be avoided.

    Fix: Disclosure is the minimum. Where independence cannot be preserved, avoid or remove the conflict.

Worked examples

Example 1

An analyst at a global asset manager owns shares in a company she is about to initiate coverage on. She has told no one. Which action is most consistent with Standard VI(A)? A. Say nothing because the holding is small. B. Disclose the ownership to her employer and, in the research, to clients. C. Sell the shares after publishing the report and disclose nothing.

Show the solution
  1. The ownership could reasonably be expected to impair her objectivity, so VI(A) applies.
  2. VI(A) requires disclosure to clients, prospective clients and the employer.
  3. A is wrong because size does not remove the duty. C is wrong because selling later does not cure the missing disclosure.
  4. B fits the standard.

Answer: B

Example 2

A portfolio manager plans to serve on the board of a private company that his firm does not do business with. He wants to know what to do first. A. Disclose it in writing to his employer before accepting. B. Accept and tell the employer only if a client asks. C. Accept because the firm has no dealings with the company.

Show the solution
  1. A board seat can reasonably be expected to affect independence, time and duties, so it is a potential conflict.
  2. VI(A) and IV(A) both point to informing the employer so it can judge the situation.
  3. B delays disclosure until asked, which is not full and fair disclosure. C relies on his own judgment that no conflict exists.
  4. A is the correct step.

Answer: A

Exam tips

  • Look for the trigger: ownership, board seat, outside business or relationship. Then ask who was told.
  • When two options differ only on disclosure versus silence, disclosure is usually correct.
  • Use the official wording: full and fair disclosure, prominent, plain language, communicate effectively.
  • If a question is about harming or competing with the employer, think IV(A). If it is about independence or objectivity, think VI(A).
  • Written disclosure to the employer is the best-practice answer.

Practice questions from Guidance for Standard IV: Duties to Employers

Conflicts and Disclosure to Employers (Standard VI(A)) in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Conflicts and Disclosure to Employers (Standard VI(A)): frequently asked questions

What is the difference between Standard IV(A) and VI(A)?

IV(A) Loyalty requires you to act for your employer's benefit and not harm it or deprive it of your skills. VI(A) requires full and fair disclosure of matters that could impair independence and objectivity. A single outside activity can raise both.

Who must receive a Standard VI(A) disclosure?

Clients, prospective clients and the employer. The disclosure must be prominent, in plain language and effective.

Must I disclose a conflict if it is unpaid?

Yes, if it could reasonably be expected to impair your independence, objectivity or duties. Payment is not the test.

Is disclosure always enough to resolve a conflict?

No. Disclosure is the minimum requirement. If a conflict cannot be managed so that independence is preserved, avoid it.