Skip to content

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

A risk manager at a bank is given confidential information about a corporate client's undisclosed restructuring. A friend at an asset manager asks the risk manager for general market color. Under the GARP Code of Conduct, what should the risk manager do?

The risk manager must not disclose the confidential restructuring information, unless disclosure is legally required or properly authorized. The GARP Code requires confidentiality of information gained through professional work. A friend's promise, shared profession, or anonymizing the client does not remove the duty.

  1. AShare the information only if the friend promises not to trade on it
  2. BShare the information because the friend is also a risk professional
  3. CShare only the figures but withhold the client's name
  4. DNot disclose confidential information obtained in the course of work, except where required by law or authorizedCorrect

Explanation

The Code requires members to hold confidential information in confidence and not use or disclose it, except as required by law or with proper authorization. A promise not to trade, or removing the client's name, does not create authorization to disclose.

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.

Practise GARP Code of ConductFree diagnostic mock

More GARP Code of Conduct questions