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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 laws than the Code and Standards and does business in a country that has no securities laws. Which approach is most appropriate?

The member should apply the Code and Standards. The LS home law applies in this situation, but it is less strict than the Code and Standards, and members must follow the stricter requirement. Having no law in the country of business does not remove the obligation.

  1. AApply the home country law, which is less strict than the Code and Standards
  2. BApply the Code and Standards, because they are stricter than the law that appliesCorrect
  3. CApply no standard, because the country of business has no securities laws

Explanation

Per Exhibit 1, the member's LS law applies when doing business in an NS country. Because that law is less strict than the Code and Standards, the member must adhere to the Code and Standards. Following the weaker law alone would breach Standard I(A).

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