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CFA Level I · CFA Level I Exam · Guidance for Standard VI: Conflicts of Interest

An analyst at an investment firm owns shares of a company she covers and recommends to clients. Under Standard VI(A), the analyst is most likely required to:

The analyst must disclose her beneficial ownership interest in the securities she recommends. Standard VI(A) requires avoiding or disclosing conflicts, and a ban on owning such stock is possible but not required because it may be too restrictive and burdensome.

  1. Asell the shares before issuing any recommendation.
  2. Bdisclose her beneficial ownership interest in the recommended securities.Correct
  3. Cobtain written approval from each client before publishing the report.

Explanation

Standard VI(A) guidance states that members must disclose any beneficial ownership interest in securities they recommend. Prohibiting ownership is the simplest method but may be overly burdensome and too restrictive, so it is not required. Client approval of each report is not called for by the guidance.

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