FRM Exam Part I · GARP Code of Conduct

GARP Code of Conduct: Fundamental Responsibilities and Rules of Conduct

Updated 11 October 2026 · Fact-checked

The GARP Code of Conduct sets ethical standards for FRM candidates and holders. Its fundamental responsibilities and rules of conduct require you to obey laws and regulations, use sound professional judgment, never misrepresent facts or your credentials, and respect GARP exam and certification rules. On exam questions, find the duty breached and pick the answer that follows it.

Understand Fundamental Responsibilities and Rules of Conduct

The GARP Code of Conduct applies to GARP members, including FRM candidates and certificate holders. It exists to protect the integrity of the risk profession and of the FRM designation. Questions on it test whether you can spot which duty a person has broken, not whether you can recite long text.

The Code has principles and rules of conduct. The rules of conduct cover fundamental responsibilities, professional integrity and ethical conduct, conflicts of interest, and confidentiality. This page focuses on the fundamental responsibilities and the related conduct rules. Check GARP's current text for the exact wording and structure.

For study, the fundamental responsibilities and conduct rules can be sorted into four ideas. This grouping is only a study aid, not the Code's own structure. First, comply with laws: follow the laws, rules and regulations that apply to you. Where applicable law and the Code differ, follow the stricter requirement. Check the current Code wording for how it treats this. Second, use professional judgment: act with competence, care and objectivity, and do not let personal gain or outside pressure bend your analysis. Third, do not misrepresent: do not knowingly make false or misleading statements about facts, analysis, your qualifications or your GARP status, and do not overstate what you can deliver. As a general ethical point, leaving out a key fact can also make a message misleading. Check the current Code wording for the exact test. Fourth, respect exam and certification rules: do not cheat, share exam content, or breach the candidate agreement and exam conditions.

Conflicts of interest and confidentiality are also separate rules of conduct, and scenarios may test them directly. Disclose conflicts rather than hide them, and do not misuse or reveal confidential information.

The Code also addresses violations and cooperation with GARP. Check GARP's current text for its exact provision. A breach can lead to disciplinary action. The sanctions GARP may apply can include actions affecting membership or the right to hold the designation. Learn the principle that a breach has consequences, but do not memorise a fixed sanction for each offence, because exam questions test the duty, not a penalty table.

A good way to remember the four ideas: Law, Judgment, Truth, Exam rules. Add conflicts of interest and confidentiality to the list. Every scenario in a question should map to one of these six.

Key formulas to remember

Duty memory aid: Law + Judgment + Truth + Exam rules (+ Conflicts of interest + Confidentiality); A study aid, not the code's own structure. Map each scenario to one of these duties before reading the options.
Stricter requirement: If applicable law and the Code differ, follow the stricter requirement; Check the current Code wording for how it treats this. Never use a weaker rule as an excuse.
Misrepresentation test: Statement is false or misleading → likely breach; A knowingly false statement is the clearest case. A statement that omits a key fact can also mislead. Treat this as a general principle and check the current Code wording.
Exam integrity rule: Candidate must not share, copy or disclose exam content or use unauthorised help; Applies during and after the exam, and to any exam material.
Violations and cooperation: The Code addresses violations and cooperation with GARP; Check GARP's current Code for its exact provision. Do not rely on memorised detail.

How to solve Fundamental Responsibilities and Rules of Conduct questions

Use this method on any scenario question about the code of conduct.

1Read the last line first to see whether the question asks for a violation, the best action, or the correct statement.
2Identify the person's role: candidate, member, risk manager, or FRM holder.
3List the facts that matter, such as a claim made, a rule ignored, or exam content shared.
4Map the facts to one duty: law, judgment, truth, exam rules, conflicts of interest or confidentiality.
5Check whether law and ethical standards differ, and prefer the higher standard.
6Eliminate options that hide the issue, delay action, or favour personal gain.
7Choose the option that follows the duty and is honest and transparent.
8Recheck that the option matches the question's wording, such as violation versus no violation.

Quickest way: Four-duty sort

When to use it: Use when you have under a minute per question and the scenario is short.

Name the duty breached in three words, such as 'false credential claim'.
Reject any option that excuses the act because others do it, the client agreed, or no one was hurt.
Prefer the answer that is honest, discloses facts and follows the higher standard.
If a question asks whether a breach occurred, check for a false statement or a broken rule before anything else.

Common mistakes in Fundamental Responsibilities and Rules of Conduct

Treating local law as the full standard
Candidates assume legal compliance is enough.
Fix: Remember that legal compliance does not automatically make conduct ethical. Where applicable law and the Code differ, follow the stricter requirement, and check the current Code wording.
Thinking intent is always needed for misrepresentation
Candidates equate misrepresentation with deliberate lying.
Fix: Misleading statements can also be a problem under the general principle of honesty, even when not deliberate. Check the current Code wording.
Ignoring omissions
Only false statements feel like violations.
Fix: Ask whether leaving out a key fact makes the overall message misleading.
Believing the code applies only at work
Exam rules seem separate from professional conduct.
Fix: Cheating, sharing exam content or breaching candidate rules is also a code violation.
Memorising a sanction for each breach
Search results make penalties look like a fixed list.
Fix: Know that breaches can lead to disciplinary action, and focus on identifying the duty broken.
Choosing the quiet option when a violation is known
Staying silent feels safer or more loyal.
Fix: Choose the option that acts with integrity and is open with proper inquiries. The Code addresses violations and cooperation with GARP.

Worked examples

Example 1

An FRM candidate posts on social media that he is 'FRM certified' after passing Part I only, while still working toward Part II and the work experience requirement. Which duty is most clearly breached? (A) Compliance with exam rules only (B) Not misrepresenting credentials (C) Confidentiality of client data (D) Conflict of interest disclosure

Show the solution

Facts: Part I passed only. Certification also needs Part II and two years of relevant work experience.
So the claim 'FRM certified' is false.
A false claim about a qualification is a misrepresentation of credentials.
Exam rules, confidentiality and conflicts of interest are separate rules of conduct, but the facts show no exam breach, no client data disclosed and no undisclosed conflict, so options A, C and D do not fit.

Answer: B. He misrepresented his credentials. He could say he passed Part I, which is accurate.

Example 2

A risk analyst works in a country whose law permits a practice that the GARP Code of Conduct prohibits. What is the best course for her? (A) Follow local law because it is legally valid (B) Avoid the practice because the Code prohibits it (C) Follow whichever is cheaper to comply with (D) Ask the client which to follow

Show the solution

The question states that the Code prohibits the practice, so doing it would breach the Code even though the law allows it.
Legal permission does not remove her duty to meet the Code's ethical standards.
Cost and client preference are not valid grounds for choosing a weaker standard.
So the best course is to avoid the practice.

Answer: B. She should avoid the practice because it breaches the Code, even though local law permits it.

Exam tips

Most questions are short scenarios. Name the duty first, then read the options.
Wrong options often excuse the act because it is common, legal, or approved by a client.
The honest, transparent and higher-standard option is usually right.
Do not spend time memorising long wording. Know the four duties and the principle that violations have consequences.
The Code of Conduct is part of the Foundations of Risk Management topic, and questions test whether you can recognise the duty involved. Practise naming the duty quickly.

Practice questions from GARP Code of Conduct

Fundamental Responsibilities and Rules 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.

Fundamental Responsibilities and Rules of Conduct: frequently asked questions

What are the main rules of conduct in the GARP Code of Conduct?

They require you to comply with laws, use professional judgment, avoid misrepresentation, and respect exam and certification rules. They sit alongside the Code's rules on integrity and ethical conduct, conflicts of interest and confidentiality.

What happens if someone violates the GARP Code of Conduct?

GARP can take disciplinary action, which may affect membership or the right to use the designation. For the exam, know that breaches carry consequences and focus on spotting the duty broken.

What counts as exam misconduct for the FRM?

Cheating, using unauthorised help, and sharing or disclosing exam content are examples. These breach exam and certification rules and the code. Always check GARP's current candidate rules for the full list.

How should I practise GARP code of conduct questions?

Write short scenarios and label each with one of the four duties. Then explain why the wrong options fail. This builds the fast pattern recognition the exam rewards.