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CFA Level I · CFA Level I Exam · Guidance for Standard II: Integrity of Capital Markets

An analyst argues that because his firm complies with every applicable regulation, investor trust is assured. This view is least consistent with the CFA Institute position that:

The view conflicts with the position that compliance alone is insufficient to earn investor trust. Individuals and firms need a culture of integrity, stewardship and acting in clients' best interests that goes above and beyond strict compliance with the law.

  1. Alaws are unnecessary where ethics are strong
  2. Ba culture of integrity must go above and beyond strict compliance with the lawCorrect
  3. Cregulation matters only in countries with developed standards

Explanation

CFA Institute states that compliance with regulation alone is insufficient to fully earn investor trust. Firms must develop a culture of integrity that goes above and beyond strict legal compliance. It does not say laws are unnecessary.

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