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CFA Level I · CFA Level I Exam · Guidance for Standard VI: Conflicts of Interest

A candidate participates in a referral fee program that her employer has approved. Which action is most consistent with the compliance practices for Standard VI(C)?

She should give her employer regular updates, at least quarterly, on the amount and nature of compensation received. The compliance practices for Standard VI(C) call for ongoing reporting even when the employer has already approved the referral fee program.

  1. AGiving the employer regular updates, at least quarterly, on the amount and nature of the compensation receivedCorrect
  2. BGiving the employer a single disclosure when the program begins, with no later updates
  3. CDisclosing to clients only, since employer approval already covers the employer

Explanation

Members who participate in approved referral fee programs should give their employer regular (at least quarterly) updates on the amount and nature of compensation received. Approval does not end the ongoing duty, and clients must be informed as well.

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