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CFA Level I · CFA Level I Exam · Guidance for Standard IV: Duties to Employers

An analyst at an asset manager owns shares in a company she covers. Her employer has no written policy on personal holdings. According to the Standards, the analyst's most appropriate action is to:

The analyst should promptly report the ownership to her employer. Standard VI(A) treats ownership of stocks analyzed or recommended as a reportable conflict, so the employer can assess its impact and decide how to resolve it. A missing written policy does not remove the duty.

  1. Asell the shares only if the company's rating is changed
  2. Bpromptly report the ownership to her employer so the impact can be assessedCorrect
  3. Ckeep the holding private because no policy requires disclosure

Explanation

Standard VI(A) guidance lists ownership of stocks analyzed or recommended as a matter to be promptly reported to the employer so its impact can be assessed and a resolution decided. The absence of a written policy does not remove the duty, so staying silent is wrong. Selling only after a rating change is not required and ignores prompt reporting.

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