Level III Core · Guidance for Standard I: Professionalism

Summary of Changes in the 12th Edition Code and Standards

Updated 9 October 2026

The 12th edition Standards of Practice Handbook updates guidance and examples throughout. Check the preface in your curriculum for the exact list of changes. You do not calculate anything. You identify which Standard applies to a case, apply the official guidance, and name the required action. Know Standard I as four parts, I(A) to I(D).

Understand Summary of 2023 Changes to the Code and Standards

The Code of Ethics and Standards of Professional Conduct are the rules every CFA charterholder and candidate must follow. The Standards of Practice Handbook explains them with guidance and application examples. CFA Institute revises the Handbook from time to time. The 12th edition is the one covered in this curriculum.

Standard I: Professionalism has four parts: I(A) Knowledge of the Law, I(B) Independence and Objectivity, I(C) Misrepresentation and I(D) Misconduct. For the exact list of what changed in this edition, read the preface of your curriculum. This page does not list the changes for you.

The edition also refreshes the guidance and the application examples. The Standards still sit in the same seven groups (I to VII), and the core duties are the same. Many examples are updated to reflect how investment work is done now, so expect modern settings in vignettes.

For the exam, the edition changes are not tested as a list of facts to recite. A case may point to a Standard in group I, and you must be able to pick the right part. Treat each Standard like any other. Know what it requires, know how it differs from its neighbours, and apply it to the facts.

A good way to separate the parts of Standard I: I(A) asks about the law, I(B) about bias, I(C) about false statements, and I(D) about dishonest or damaging conduct. Problems with preparation, research quality or having a reasonable basis for a recommendation belong to Standard V(A) Diligence and Reasonable Basis. Always use the wording and guidance in the official Handbook text supplied in your curriculum, since this page is a study aid and not a substitute for it. If you are unsure whether a Standard exists or how it is titled, confirm it in that text.

Key rules to remember

Standard I structure: I(A) Knowledge of the Law | I(B) Independence and Objectivity | I(C) Misrepresentation | I(D) Misconduct; Learn the four titles in order. Check your curriculum preface for which parts changed in this edition.
Core idea of V(A): Diligence and Reasonable Basis = exercise diligence, independence and thoroughness in analysis, and have a reasonable and adequate basis, supported by research and investigation, for recommendations and actions; Put in your own words. Use the exact wording from your curriculum text when you quote it.
What did not change: Seven Standards groups, I to VII, remain; Changes sit inside the existing groups and in updated guidance and examples, not in a new Roman-numeral group. Check the curriculum preface for details.

How to solve Summary of 2023 Changes to the Code and Standards questions

Use this method for any question that asks which Standard applies or whether the Standards were violated.

1Read the facts and list what the person did or failed to do.
2Match each fact to a Standard group (I to VII). Ask first: is this about professionalism, markets, clients, employer, analysis, conflicts, or CFA program conduct?
3If it is Standard I, pick the part: law, independence, false statements, or misconduct. Gaps in preparation, research or knowledge of the work usually point to V(A) Diligence and Reasonable Basis, as the facts allow.
4Recall the requirement of that Standard from the Handbook, using the exact conditions.
5Decide whether the facts meet the requirement. Name a violation only if the facts show one.
6State the action the member should take now. Examples: get training, decline or limit the task, seek supervision, or disclose.
7Write the answer using the command word. Give the Standard, the reason, and the action in as few words as earn the points.

Quickest way: Trigger-word matching for Standard I

When to use it: Use when time is short and you need to classify a Standard I case in under a minute.

Scan for the trigger: law or regulation points to I(A); pressure, gifts or bias to I(B); false or misleading statements or plagiarism to I(C); dishonesty or conduct hurting reputation to I(D). If the issue is poor preparation or no reasonable basis for a recommendation, think V(A) instead.
Check the answer options for one that fixes the root problem, not just the symptom.
Eliminate options that overstate the rule or add duties the Standard does not impose.
Choose the option that follows the Handbook guidance and keeps clients protected.

Common mistakes in Summary of 2023 Changes to the Code and Standards

Thinking the 12th edition added a new Standard VIII or restructured all seven groups.
The word 'changes' suggests a whole new section.
Fix: Remember the Standards still sit in seven groups, I to VII. Read the curriculum preface to see what changed inside them.
Using I(D) Misconduct for a preparation or knowledge gap.
Both deal with professional behaviour, and a lack of preparation can feel like misconduct.
Fix: I(D) is about dishonest, fraudulent or deceitful acts. Weak preparation or research with no deceit points to V(A) Diligence and Reasonable Basis, as the facts allow.
Memorising the preface changes as a list and ignoring how to apply them.
The topic looks like pure recall.
Fix: Practise applying the Standards and the updated examples to short cases. Exam sets reward application.
Quoting Standard wording from memory and getting conditions wrong.
Less familiar text gets less practice, so the conditions are easy to misremember.
Fix: Read the text and guidance of each Standard you use in your curriculum several times. In essays, paraphrase the requirement and tie it to the facts.
Declaring a violation when the facts only show risk.
Candidates assume the strictest outcome is the safest.
Fix: Check whether the facts show an actual breach. If not, say what the member should do to stay compliant.

Worked examples

Example 1

Item set question: An analyst is asked by her employer to cover a sector she has never researched. She accepts without preparation and publishes a recommendation with no research behind it. Which Standard is most directly relevant to her failure to prepare? A) Standard I(A) Knowledge of the Law. B) Standard I(D) Misconduct. C) Standard V(A) Diligence and Reasonable Basis. D) Standard III(E) Preservation of Confidentiality.

Show the solution

Facts: a new sector, no preparation, a recommendation published anyway. The issue is whether the recommendation has a reasonable and adequate basis supported by research.
Standard I(A) is about knowing and following applicable law. No legal issue is described.
Standard I(D) needs dishonest or deceitful conduct. Nothing in the facts shows deceit.
Standard III(E) Preservation of Confidentiality concerns keeping client information confidential. No confidentiality issue is described.
Standard V(A) Diligence and Reasonable Basis requires diligence and thoroughness, and a reasonable basis supported by research, for recommendations. This fits.

Answer: C) Standard V(A) Diligence and Reasonable Basis.

Example 2

Essay-style: A candidate says, 'The 12th edition changed the Standards by adding a new group of Standards.' State whether this is correct and describe what changed. (Command word: Describe.)

Show the solution

Check the claim: the seven groups, I to VII, remain.
Identify the real changes: they sit inside the existing groups, in updated guidance and application examples. Take the exact list from the curriculum preface.
Write concisely, stating that the groups are unchanged and naming the updated guidance and examples.

Answer: The claim is not correct. The Standards still have seven groups, I to VII. The changes sit within those groups, mainly in updated guidance and application examples. Use the curriculum preface for the exact list.

Exam tips

Know the four parts of Standard I by title and order. A question may list them and ask which one fits a case.
When a case shows poor preparation or no reasonable basis for a recommendation, and no dishonesty, think V(A) before I(D).
In essays, name the Standard, give one reason from the facts, and state the action. Stop there.
Use the exact Handbook wording from your curriculum for the requirement. Do not paraphrase in a way that adds or drops conditions.
There is no penalty for wrong answers, so never leave a multiple-choice item blank.

Summary of 2023 Changes to the Code and Standards: frequently asked questions

What is the main change in the 12th edition of the Standards of Practice Handbook?

Read the preface of your curriculum for the exact list of changes. The Handbook updates guidance and application examples, and the seven groups of Standards stay in place.

Do I need to memorise a list of changes in the new edition for Level III?

No. Exam questions test whether you can apply the current Standards to cases. Learn what each Standard requires and how I(A) to I(D) differ from one another and from V(A).

How is Standard I(D) different from Standard V(A)?

I(D) deals with dishonest, fraudulent or deceitful conduct. V(A) deals with diligence, thoroughness and having a reasonable basis for recommendations and actions. Poor preparation without deceit points to V(A).

Where do I find the exact wording of the Standards?

Use the Standards of Practice Handbook text in your official Level III curriculum. Quote or paraphrase from that text, since this page is a study aid.