CFA Level I · CFA Level I Exam · Guidance for Standard II: Integrity of Capital Markets
A candidate discovers that her employer is using material nonpublic information to trade ahead of announcements. She copies the trading records and gives them to the regulator, with no personal gain intended. Under the Standards, her action is most likely:
Her action is most likely justified because the intent is to protect market integrity and not for personal gain. Personal and employer interests are secondary to market integrity, so preserving records by copying them may be permitted in such circumstances.
- Aa violation, because copying employer records always breaches the duty of loyalty
- Bjustified, because the intent is to protect market integrity and not for personal gainCorrect
- Cjustified only if she first obtains her employer's written consent
Explanation
Protecting the integrity of capital markets takes precedence over the employer's interests. Actions such as violating policies or preserving a record by copying employer records may be justified if the intent is clearly aimed at protecting clients or market integrity and not for personal gain. Employer consent is not required.
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