FRM Part I · FRM Exam Part I
GARP Code of Conduct for FRM Part I
The GARP Code of Conduct sets the ethical standards every FRM candidate and holder must follow. It covers professional integrity, conflicts of interest, confidentiality and fundamental responsibilities. Exam questions are scenario based: you read a situation, spot the principle at stake, and choose the action the Code requires. Learn the principles, then practise applying them.
What this chapter covers
The GARP Code of Conduct is the ethics framework for FRM candidates and certificate holders. It states what GARP expects of you in your work and in your dealings with the exam and the profession. The chapter is mostly about principles and judgement, not calculation.
The Code is organised around a few themes: professional integrity and ethical conduct, conflicts of interest and confidentiality, and fundamental responsibilities with specific rules of conduct. Questions usually describe a short situation. You decide whether a behaviour is acceptable, which principle it breaches, or what the professional should do next.
This chapter sits apart from the quantitative material in Quantitative Analysis and Valuation and Risk Models. It links to Foundations of Risk Management, where governance, risk culture and past failures show why ethics matters. Check the current GARP Study Guide and Learning Objectives, because GARP revises the curriculum every year and the text of the Code is what you should rely on.
Part I has 100 equally weighted multiple-choice questions in 4 hours, and every question is worth the same. Ethics questions need no formulas and no calculator, so they are among the fastest to answer if you have prepared. Most candidates spend almost all of their time on numbers. A short, focused pass through this chapter turns it into reliable marks that free up time for harder quantitative questions. It also matters beyond the exam, because breaching the Code can put your certification at risk.
GARP Code of Conduct: topics in the order to study them
- 1GARP Code of Conduct Overview and PurposeStart here to learn who the Code applies to and what it is for, so the later rules make sense.
- 2Principles of Professional Integrity and Ethical ConductThese core principles are the base for every scenario, so learn them before the detailed rules.
- 3Conflicts of Interest and ConfidentialityThis is the most scenario-heavy area; it builds on the principles and needs the most practice.
- 4Fundamental Responsibilities and Rules of ConductFinish with the specific rules, which pull the principles together and give you a checklist for applying them.
How to prepare GARP Code of Conduct
This chapter rewards understanding and application over memorisation. Plan short, repeated sessions rather than one long read.
- Read the current GARP Code of Conduct once, straight through, to get the overall shape before studying any detail.
- Write each principle and rule in your own words, one line each. If you cannot explain it simply, you do not yet know it.
- For each rule, think of a workplace example: a gift from a client, a tip about a company, a pressured model result. Decide what the Code would require.
- Practise scenario questions. First name the principle at stake, then eliminate options that break it, then choose the most professional action.
- Look for the answer that is honest, transparent, protects confidential information and discloses conflicts. Extreme or secretive options are usually wrong.
- Revisit the chapter briefly in the last week and again on the final day, using a one-page summary.
Common mistakes in GARP Code of Conduct
Skipping the chapter because it has no calculations
Fix: Give it a fixed, short block in your plan. The marks are equal to any other question and are quick to win.
Answering from personal or workplace habit instead of the Code
Fix: Choose the answer that matches the Code's principles, even if your own firm would act differently.
Choosing the answer that only avoids legal trouble
Fix: Remember the Code can demand more than the minimum legal standard. Look for honesty and transparency, not just legality.
Confusing conflict of interest with confidentiality
Fix: Ask two separate questions: is my judgement compromised, and am I handling protected information properly?
Picking extreme or secretive options
Fix: Prefer measured steps: disclose, escalate through proper channels and protect information.
Relying on old notes
Fix: Work from the current GARP Code of Conduct and Study Guide for your exam window.
Last-day revision: GARP Code of Conduct
- The Code applies to FRM candidates and certificate holders.
- Integrity and honesty come first in every scenario.
- Disclose conflicts of interest rather than hiding them.
- Do not use confidential information for personal gain or share it without proper authority.
- Do not misrepresent your qualifications, work or the exam.
- Comply with applicable laws and regulations, and with the Code.
- Use independent, objective judgement; do not let pressure change your analysis.
- Do not cheat on or compromise the integrity of GARP exams.
- Be accurate and fair when reporting risk and results; do not mislead.
- Maintain and improve your professional competence.
- When unsure, pick the most transparent and cautious action.
- Confirm details against the current GARP Study Guide.
GARP Code of Conduct practice questions
- A risk analyst at a bank is studying the GARP Code of Conduct. Which statement best describes who the Code applies to?
- The GARP Code of Conduct is organized into principles and standards. Which statement about how it relates to local law and regulation is mos…
- A risk manager at a bank receives a request from a journalist for details of a named corporate client's internal risk limits, which the mana…
- A GARP member learns from a client's confidential materials that the client plans a restructuring not yet public. A friend asks the member f…
- An FRM holder is a risk consultant. She is offered a gift of substantial value by a vendor whose software she is evaluating for her employer…
- A newly registered FRM Part I candidate says the Code does not apply to her until she passes both Parts and earns the certification. Which r…
- A risk manager at an asset manager receives non-public information from a friend at a listed client, indicating that the client will shortly…
- An FRM candidate working as a risk analyst at a bank learns that her manager's brother holds a large personal position in a company whose cr…
GARP Code of Conduct in other exams
The same ground in other exams, if you are preparing for more than one or want another angle on it.
GARP Code of Conduct: frequently asked questions
Is the GARP Code of Conduct tested in FRM Part I?
Yes, it is part of the Part I curriculum under Foundations of Risk Management. Check the current GARP Study Guide and Learning Objectives for the exact scope in your exam window.
Are the questions calculation based?
No. They are scenario questions in the same multiple-choice format as the rest of the exam. You apply the principles to a situation and pick the best action.
How long should I spend on this chapter?
Less than on quantitative chapters, but do not skip it. A few focused sessions plus practice scenarios and a last-day review is usually enough.
Does the Code apply after I pass the exam?
Yes. It applies to candidates and to FRM certificate holders, so it governs your conduct in your career as well as during the exam.