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CFA Level I · CFA Level I Exam · Application of the Code and Standards: Level I

A CFA charterholder lives in a country whose securities law is less strict than the CFA Institute Code and Standards. She does business with clients in a country whose securities law is more strict than the Code and Standards. Which requirements are most likely to govern her conduct?

The more strict law of the country where she does business governs. Members must follow applicable law when it is stricter than the Code and Standards, and Exhibit 1 confirms that a more strict law of the business location applies even for a member residing in a less strict country.

  1. AThe Code and Standards, because they are a global model
  2. BThe less strict law of her country of residence
  3. CThe more strict law of the country where she does businessCorrect

Explanation

The Handbook's Exhibit 1 states that when a member resides in a less strict country and does business in a more strict country, the more strict law applies. Applicable law that is stricter than the Code and Standards must be followed. The Code and Standards alone would be too lenient here, and her home law is weaker still.

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