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FRM Part I · FRM Exam Part I · GARP Code of Conduct

A GARP member working as a risk analyst at an asset manager learns during a vendor review that a client's confidential portfolio holdings are stored on a shared drive accessible to unrelated staff. Under the GARP Code of Conduct, which action is most consistent with the member's duty regarding confidential information?

The member should report the access weakness through proper internal channels. The GARP Code requires members to safeguard confidential information, and escalation lets the firm restrict access without exposing the data further, unlike public posting or copying files to a personal device.

  1. AIgnore the issue because the data belongs to the firm, not the member
  2. BReport the weakness through appropriate internal channels so access can be restrictedCorrect
  3. CPost a warning on a public forum so other firms can learn from it
  4. DCopy the holdings to a personal device to keep them safe

Explanation

The Code requires members to protect confidential information and to use it only for legitimate purposes. Escalating internally lets the firm fix the access control. Public disclosure and copying to personal devices would themselves breach confidentiality, and ignoring it fails the duty to safeguard the information.

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