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CFA Level III · Level III Core

Asset Manager Code of Professional Conduct for CFA Level III

The Asset Manager Code of Professional Conduct is a set of ethical standards for firms that manage client assets. It sets general principles and expects firms to adopt compliance procedures and make disclosures. To solve questions, match each fact in the vignette to a principle, then judge whether the firm complied.

What this chapter covers

This chapter covers the Asset Manager Code (AMC). It is a code for investment management firms, not for individual CFA members. A firm that adopts it commits to follow its principles when it manages money for clients. The Code sits inside the Ethical and Professional Standards topic, next to the CFA Institute Code and Standards and GIPS.

The chapter has a clear shape. First you learn who the Code applies to and what it covers. Then you learn the general principles of conduct. Then you learn the recommendations and guidance on how a firm can put those principles into practice, including disclosures. Last, you learn how a firm notifies others that it complies.

In the exam, this material is tested through ethics item sets and essay sets. A vignette describes what a firm did, and you decide whether it met the Code and what it should do instead. The skill is the same as in the Standards of Practice: spot the facts, name the principle, and justify your view briefly. Study this chapter together with the Code and Standards so you keep the two frameworks apart, because the AMC applies to firms and the Code and Standards apply to members and candidates.

Ethical and Professional Standards carries 10-15% of the topic weight, and it is a common-core topic that every candidate faces whichever pathway they choose. The AMC is short and built on principles, so it is a place where careful reading turns directly into points. Ethics questions reward precise use of the official wording, and there is no minimum score per topic, so strong ethics marks can offset weaker areas elsewhere.

Asset Manager Code of Professional Conduct: topics in the order to study them

  1. 1Asset Manager Code: Scope and ApplicabilityYou must know who the Code applies to and to whom the duties are owed before any principle makes sense.
  2. 2General Principles of ConductThese are the core duties that every later recommendation builds on, so learn them next and know them closely.
  3. 3Recommendations and Guidance: IntroductionIt shows how the principles turn into practical firm-level steps and sets up the detailed guidance.
  4. 4Disclosures: Recommendations and GuidanceDisclosure is where the Code gets specific, so study it once you understand the principles it supports.
  5. 5Notification of ComplianceIt closes the chapter by covering how a firm tells clients and others it follows the Code, so it is easiest after the rest.

How to prepare Asset Manager Code of Professional Conduct

Treat this chapter as a short rulebook that you apply to case facts. Aim to know the wording well enough to cite it, then practise applying it.

  1. Read the Code in the official text once, start to finish, to see its structure before memorising anything.
  2. For each general principle, write one line in your own words and one example of a breach.
  3. Make a short list of what the Code says about firm-level procedures and disclosures, and note who each disclosure is for.
  4. Compare the AMC with the CFA Institute Standards of Practice: who is bound, what is required, and where the ideas overlap. Keep a two-column note.
  5. Practise item sets: for each answer option, ask which principle is engaged and whether the firm complied.
  6. Practise essay answers: use the command word, name the principle, state the breach or compliance, and give the corrective action in one or two sentences.
  7. Revise by recalling the principles and disclosure points from memory a day later, then check against the text.

Common mistakes in Asset Manager Code of Professional Conduct

  • Applying the AMC to an individual analyst as if it were the CFA Institute Standards.

    Fix: Ask first who is bound. If the question is about a firm adopting the Code, use the AMC. If it is about a member or candidate, use the Standards.

  • Naming a principle loosely instead of using the Code's own wording.

    Fix: Learn each principle's name and core duty from the official text and use those terms in answers.

  • Treating disclosure guidance as optional detail.

    Fix: Study what must be disclosed and why. Disclosure questions are easy marks if you know the points.

  • Writing long essay answers that restate the vignette.

    Fix: Follow the command word, state the principle and the conclusion, and stop. Only the number of responses asked for is evaluated, in the order given.

  • Memorising the Code without practising on case facts.

    Fix: Do vignette questions. The exam tests whether you can spot the breach in a story, not whether you can recite the text.

Last-day revision: Asset Manager Code of Professional Conduct

  • The AMC applies to firms that manage client assets, not to individual members as such.
  • A firm that adopts the Code commits to follow its principles and procedures.
  • Know each general principle by name and what it requires in practice.
  • Client interests come first in the firm's conduct.
  • The Code expects the firm to have compliance procedures, not just good intentions.
  • Disclosures must be clear and accurate so clients can make informed decisions.
  • Know what the recommendations and guidance add beyond the principles.
  • Know how and to whom a firm notifies that it complies with the Code.
  • The AMC is distinct from the CFA Institute Code and Standards and from GIPS.
  • In essays, answer the command word first, then give the reason in a short sentence.
  • Use the official wording of the Code when naming a principle or a breach.

Asset Manager Code of Professional Conduct: frequently asked questions

What is the Asset Manager Code of Professional Conduct?

It is a code of conduct for firms that manage assets on behalf of clients. A firm adopts it to commit to ethical principles, procedures and disclosures. It is separate from the CFA Institute Code and Standards, which apply to members and candidates.

How is the Asset Manager Code different from the CFA Institute Standards of Practice?

The AMC is aimed at investment management firms, while the Standards bind individual members and candidates. The themes overlap, such as putting clients first and being transparent. In questions, check who is acting before choosing the framework.

How are Asset Manager Code questions tested at Level III?

They appear within Ethical and Professional Standards as item sets and essay sets. A vignette describes a firm's actions and you judge compliance or recommend a fix. Item sets have four multiple-choice questions worth 3 points each.

How much time should I give this chapter?

It is short compared with other ethics material, so a few focused sessions plus practice questions is usually enough. Spend more time on applying the principles to cases than on reading the text again.