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

A member resides in a country with less strict securities law than the Code and Standards and does business in a country with no securities law. The local law of the residence country says the law of the locality where business is conducted governs. The member should most likely:

The member should follow the Code and Standards. The residence country's law defers to the business locality, which has no securities law, so no applicable law exists, and in that absence the Code and Standards govern.

  1. Afollow the law of the residence country, which defers to a locality with no law.
  2. Bfollow the Code and Standards, because no law applies to the conduct and the Code and Standards impose a higher responsibility.Correct
  3. Cfollow whichever of the two countries' practices is more convenient.

Explanation

The residence country's law points to the locality of business, which has no law, so no law restricts the member. In the absence of applicable law, members must adhere to the Code and Standards. Convenience is not a criterion.

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