Guidance for Standard I: Professionalism

Standard I is the foundation of professional behaviour: know and follow the law, keep your judgment independent, tell the truth about your work and yourself, behave with integrity, and be competent for the job. Level II item sets test these duties in realistic settings such as cross-border businesses, issuer-paid trips, banking pressure on research and new mandates outside a member's experience. This module explains each sub-standard, including the Competence standard added in 2024, shows how to resolve typical cases, and sets out the controls firms use to prevent violations.

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What you will learn

1. Apply the knowledge-of-the-law requirement, including what to do when local law and the Code and Standards differ.

Know and comply with every law, rule and regulation that governs your work, plus the Code and Standards.
Where the applicable law and the Standards differ, follow whichever is stricter.
Work out which jurisdictions' laws apply (residence, place of business, or both) before comparing them with the Standards.
Dissociate from violations: escalate, refuse to participate, remove your name, document, and resign if necessary.
The Standards do not require reporting to regulators or CFA Institute, but law or firm policy may.

2. Judge whether gifts, issuer-paid travel or business pressure threaten independence and objectivity.

The test is whether a benefit could reasonably be expected to compromise objectivity, not whether it actually did.
Client gifts are less of a threat but must be disclosed to the employer; gifts from people seeking business need the most care.
Pay for your own commercial travel and lodging; accept issuer transport only where no commercial option exists, and keep it modest.
Pressure from bankers, portfolio managers, issuers and clients must never change a research conclusion.
Issuer-paid research needs a flat fee fixed in advance, independent conclusions and disclosure.

3. Recognise misrepresentation, including plagiarism and overstated qualifications, and conduct that reflects badly on professional integrity.

Misrepresentation covers false statements, misleading omissions, guaranteed returns on risky assets and overstated credentials or resources.
Plagiarism includes copying, closely paraphrasing or quoting others' work without credit; recognised statistical data may be used without attribution.
Members must check third-party information before using it and keep websites and profiles accurate.
Misconduct is dishonesty, fraud, deceit or acts that reflect on professional integrity, not private matters such as personal bankruptcy alone.
Lying, falsified expenses or crimes of dishonesty breach I(D) even when they occur outside client work.

4. Assess whether a member has the competence needed for a task.

Standard I(E) Competence took effect on 1 January 2024 and reinforces the Code's competence principle.
Required competence depends on the specific role and task, not on credentials alone.
Competence must be maintained as products, rules and technology evolve, including understanding tools such as quantitative and AI models.
If a task is beyond your competence: learn, partner, supervise, use vetted experts, or decline.
Honest mistakes are not violations; knowingly taking on work you cannot do properly is.

5. Recommend policies and procedures that help prevent violations of Standard I.

Maintain a current library of applicable laws by jurisdiction and train staff on changes.
Gift policies need a value limit, pre-approval above it, a log and compliance review.
Firms, not issuers, should pay for analysts' travel; research needs barriers from investment banking.
Keep approved descriptions of qualifications and services, and require sources to be cited.
Check competence before assigning new work and support continuing education; monitor every policy in practice.

Module at a glance

Follow the strictest applicable rule: the law if stricter than the Standards, the Standards if the law is weaker or silent.
Dissociate from violations: escalate, refuse to participate, remove your name, document, resign if needed; reporting to regulators is not required by the Standards.
Judge gifts by whether they could reasonably compromise objectivity; client gifts mainly need disclosure, gifts from those seeking business need scrutiny.
Pay your own commercial travel; issuer transport is acceptable only where no commercial option exists.
Plagiarism includes uncredited paraphrase; factual data from recognised statistical sources needs no attribution.
Misconduct is about dishonesty and professional integrity, not private misfortune or lawful personal activity.
Standard I(E) requires competence for the role: build it, borrow it from vetted experts, or decline the work.

This free module has 5 lessons, 16 practice questions with full explanations.

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