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CFA Level I · CFA Level I Exam · Application of the Code and Standards: Level I

Dara, a CFA candidate, works in a country with no law on disclosing referral fees. Her employer says disclosure is unnecessary because nothing legally requires it. Dara's most appropriate action is to:

Dara should disclose the referral fees. Applicable law does not require disclosure, but the Code and Standards impose that obligation, and where they impose a higher degree of responsibility than law, members and candidates must adhere to the Code and Standards.

  1. Adisclose the referral fees, because the Code and Standards impose that obligationCorrect
  2. Bskip disclosure, because compliance with applicable law is sufficient
  3. Cdisclose only if a client asks, because the employer's policy overrides the Code

Explanation

Where law is silent or less demanding, the Code and Standards apply. The Code requires disclosure of referral fees even if law does not. Employer preference cannot lower this obligation, so answers B and C are wrong.

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