FRM Part I · FRM Exam Part I · GARP Code of Conduct
A risk consultant, who is an FRM, is engaged by Client A to assess its derivative counterparty risks. During the work she learns confidential information about Client A's hedging positions. Client B, a competitor, then asks her for a general view on Client A's strategy. Which response is consistent with the GARP Code of Conduct?
She should decline. The GARP Code obliges members to preserve the confidentiality of information from clients and employers and not disclose it without permission, except where law or regulation requires. Fees, perceived harmlessness or removing a name do not justify disclosure.
- AShare only the hedging details that seem commercially harmless
- BShare the information if Client B agrees to pay a higher fee
- CDecline to share, because confidential information must not be disclosed without consent unless legally requiredCorrect
- DShare the information if she removes Client A's name from the discussion
Explanation
Members must keep client information confidential and not use or disclose it except with consent or where required by law or regulation. Judging details as harmless, receiving a fee, or anonymizing still leaves the information identifiable in context. None creates a permitted basis for disclosure.
Did you get it right without looking?
One question tells you little. A timed set on GARP Code of Conduct shows your real accuracy, how long you take and where you lose marks.
More GARP Code of Conduct questions
- A newly registered FRM Part I candidate says the Code does not apply to her until she passes both Parts and earns the certification. Which r…
- A risk manager at an asset manager receives non-public information from a friend at a listed client, indicating that the client will shortly…
- An FRM candidate working as a risk analyst at a bank learns that her manager's brother holds a large personal position in a company whose cr…
- A GARP member is found to have breached the Code of Conduct. Which statement about the consequences described in the Code is most accurate?
- Daniel is an FRM charterholder who learns that a colleague, also a GARP Member, has knowingly breached the Code. Which view of the Code's pu…
- An FRM Candidate is a risk analyst at a bank. During a review she discovers that a senior colleague has been using a valuation model that sh…