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

Okafor, a CFA charterholder, lives in a country with less strict securities laws than the Code and Standards. His home law states that the law of the place where business is conducted governs. He serves clients in a country with no securities laws. Okafor's conduct is most likely required to follow:

Okafor must follow the Code and Standards. His home law defers to the law where business is conducted, but that country has no securities laws, so nothing stricter applies. In the absence of applicable law, members must adhere to the Code and Standards.

  1. Athe Code and Standards, because no law governs where the business is doneCorrect
  2. Bthe less strict home country law, as it points to a place that has no law
  3. Cthe standards of the clients' country, as local custom

Explanation

Exhibit 1 treats this case as one where LS law applies but defers to the law of the locality. Since that locality has no securities laws, no stricter applicable law exists, and the Code and Standards apply. The home law's deferral therefore does not lower the standard.

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