You are reading the 2026 curriculum (exams up to November 2026). Sitting in February 2027 or later? Go to the 2027 Ethical and Professional Standards guide.

Learning Module 2 of Ethical and Professional Standards 15–20% of the exam

Code of Ethics and Standards of Professional Conduct

3 lessons. About 20 minutes in cram mode, 90 minutes in full.

Start with lesson 1 Learn with Sensei Read the module summary

Lessons

1
How the Code and Standards are enforced: the Professional Conduct Program
describe 4 min cram, 20 min full
2
The six principles of the Code of Ethics
identify 6 min cram, 24 min full
3
The seven Standards of Professional Conduct at a glance
explain 10 min cram, 46 min full

What the exam expects you to do

Describe the structure of the CFA Institute Professional Conduct Program and the process for the enforcement of the Code and Standards.How the Code and Standards are enforced: the Professional Conduct Program
Identify the six components of the Code of Ethics and the seven Standards of Professional Conduct.The six principles of the Code of Ethics
Explain the ethical responsibilities required by the Code and Standards, including the sub-sections of each Standard.The seven Standards of Professional Conduct at a glance

Module summary

The whole module on one sheet, organised by lesson: what to memorize, how the ideas fit together, the formulas and the key terms. No paragraphs, just what you need to revise.

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How deeply to learn each part

Know the idea: Understand it in general. It frames other topics, but you will not calculate with it.
Use it: Understand it well enough to solve a question with it. Recognize when it applies.
Memorize: Learn it by heart. The exam will not give it to you.

How the Code and Standards are enforced: the Professional Conduct Program

Known

MemorizeFive sources of a Professional Conduct inquiry

Source	What it looks like
Self-disclosure	Annual Professional Conduct Statement: litigation, a criminal investigation, a written complaint
Written complaint	Sent to Professional Conduct staff
Public information	Media reports, regulatory notices
Proctor report	Exam-day suspected rule breaches (candidates)
Post-exam analysis	Score and material analysis, social media monitoring

Memory hook S-C-P-P-P: Self, Complaint, Public, Proctor, Post-exam. Nothing on the list is poor investment performance.

Know it cold Poor investment performance, or a client grumble that never becomes a written complaint, is not a listed source.

MemorizeProcess, outcomes and sanctions

Stage	What happens
1. Inquiry	Opens from one of the five sources
2. Investigation	Staff: written explanation, interviews, documents
3. Staff decision	No sanction, cautionary letter, or proceed to discipline
4. Charges	Member or candidate accepts or rejects charges and proposed sanction
5. If rejected	DRC panel decides whether there was a violation and the sanction
Sanctions	Public censure, suspension of membership and designation use, revocation of the charter; candidates: suspended or barred from the program

Memory hook Count down 3-2-1: staff have 3 outcomes, the accused has 2 choices, and 1 panel sits only after a rejection. Sanctions climb C-S-R: censure, suspension, revocation.

Know it cold Panels are for contested cases only. Firms and non-members cannot be sanctioned; they may "claim compliance".

Key terms

Professional Conduct Program Memorize
Board of Governors Know the idea
Disciplinary Review Committee Memorize
Rules of Procedure for Professional Conduct Know the idea
Professional Conduct Statement Memorize
cautionary letter Memorize
public censure Memorize
suspension Memorize
revocation Memorize
claiming compliance Use it

Who is who in enforcement

Enforcing the Code and Standards

Board of Governors Know the idea oversight and ultimate responsibility
Professional Conduct Program (PCP) Memorize staff who investigate and propose outcomes
Disciplinary Review Committee (DRC) Memorize volunteer charterholders; hearing panels; help set conduct policy

Outcomes and sanctions

After an investigation

Close the inquiry Memorize no sanction
Cautionary letter Memorize a warning, not a sanction
Continue to discipline Memorize accepted, or decided by a DRC panel if rejected
- Public censure Memorize a public rebuke
- Suspension Memorize of membership and use of the designation
- Revocation Memorize of the charter
- Candidates only Use it suspended or barred from the program

The six principles of the Code of Ethics

Known

MemorizeThe six principles of the Code of Ethics

#	Principle	In plain words
1	Integrity and respect	Act with integrity, competence, diligence and respect, and ethically, toward everyone in the markets
2	Others first	Put the integrity of the profession and clients' interests above your own
3	Care and independence	Use reasonable care and independent professional judgment
4	Professional practice	Practice, and encourage others to practice, professionally and ethically
5	Market integrity	Promote the integrity and viability of global capital markets for the benefit of society
6	Competence	Maintain and improve your competence; help others improve theirs

Memory hook I Owe Clients Proper Market Competence: Integrity, Others first, Care, Practice, Markets, Competence.

Know it cold The Code is principles. Anything with a detailed condition ("must not accept gifts that...") is a Standard. The employer is never on the "above my own interests" list.

Key terms

Code of Ethics Memorize
integrity and respect Memorize
others first Memorize
care and independent professional judgment Memorize
professional practice Memorize
integrity of capital markets Memorize
professional competence Memorize
Preamble Know the idea

The six principles of the Code of Ethics

Code of Ethicsgeneral principles every member and candidate follows

Integrity and respect Memorize integrity, competence, diligence and respect toward all
Others first Memorize profession and clients before yourself
Care and independence Memorize reasonable care, independent professional judgment
Professional practice Memorize and encourage others to do the same
Market integrity Memorize integrity and viability of global capital markets
Competence Memorize improve your own and others'

The seven Standards of Professional Conduct at a glance

Known

MemorizeThe seven Standards and their 23 sub-sections

Standard	Sub-sections
I Professionalism (5)	(A) Knowledge of the Law; (B) Independence and Objectivity; (C) Misrepresentation; (D) Misconduct; (E) Competence (new)
II Integrity of Capital Markets (2)	(A) Material Nonpublic Information; (B) Market Manipulation
III Duties to Clients (5)	(A) Loyalty, Prudence, and Care; (B) Fair Dealing; (C) Suitability; (D) Performance Presentation; (E) Preservation of Confidentiality
IV Duties to Employers (3)	(A) Loyalty; (B) Additional Compensation Arrangements; (C) Responsibilities of Supervisors
V Investment Analysis, Recommendations, and Actions (3)	(A) Diligence and Reasonable Basis; (B) Communication with Clients and Prospective Clients (revised); (C) Record Retention
VI Conflicts of Interest (3)	(A) Avoid or Disclose Conflicts (revised); (B) Priority of Transactions; (C) Referral Fees
VII Responsibilities as a CFA Institute Member or CFA Candidate (2)	(A) Conduct as Participants in CFA Institute Programs; (B) Reference to CFA Institute, the CFA Designation, and the CFA Program

Memory hook Initials P-I-C-E-I-C-R: "Prove Integrity: Clients, Employers, Investments, Conflicts, Responsibility". Counts 5-2-5-3-3-3-2 = 23.

Know it cold Fair Dealing and Suitability sit under Duties to Clients (III), never Employers. Priority of Transactions is Conflicts (VI).

MemorizeWhat the 2023 revision changed

Standard	Change
I(E) Competence	New. Act with and maintain the competence your role needs. No required continuing-education program
V(B) Communication	Revised. Disclose the nature of the services provided and their costs to the client
VI(A) Avoid or Disclose Conflicts	Renamed from "Disclosure of Conflicts". Avoid; if not reasonable to avoid, disclose clearly and prominently in plain language

Memory hook Roman I, V, VI spell the three changes C-C-A: Competence (new), Costs (added to V(B)), Avoid (added to VI(A)).

Know it cold Disclosure alone is not always enough under VI(A): avoiding is preferred; disclosure is the fallback when avoiding is not reasonable.

Key terms

Standards of Professional Conduct Memorize
Professionalism Memorize
Integrity of Capital Markets Memorize
Duties to Clients Memorize
Duties to Employers Memorize
Investment Analysis, Recommendations, and Actions Memorize
Conflicts of Interest Memorize
Responsibilities as a CFA Institute Member or CFA Candidate Memorize
2023 revisions Memorize

The seven Standards and their sub-sections

Standards of Professional Conduct7 Standards, 23 sub-sections

I Professionalism Memorize five sub-sections
- A Knowledge of the Law Memorize follow the stricter of law and Code
- B Independence and Objectivity Memorize nothing that compromises judgment
- C Misrepresentation Memorize no false or misleading statements
- D Misconduct Memorize no dishonesty, fraud or deceit
- E Competence Memorize new in 2023
II Integrity of Capital Markets Memorize two sub-sections
- A Material Nonpublic Information Memorize do not act or cause others to act on it
- B Market Manipulation Memorize no distorting prices or volume
III Duties to Clients Memorize five sub-sections
- A Loyalty, Prudence, and Care Memorize clients first
- B Fair Dealing Memorize treat clients fairly
- C Suitability Memorize fit the client or the mandate
- D Performance Presentation Memorize fair, accurate, complete
- E Preservation of Confidentiality Memorize three exceptions
IV Duties to Employers Memorize three sub-sections
- A Loyalty Memorize act for the employer's benefit
- B Additional Compensation Arrangements Memorize written consent
- C Responsibilities of Supervisors Memorize reasonable efforts to ensure compliance
V Investment Analysis, Recommendations, and Actions Memorize three sub-sections
- A Diligence and Reasonable Basis Memorize thorough work
- B Communication with Clients and Prospective Clients Memorize services and costs now disclosed
- C Record Retention Memorize keep supporting records
VI Conflicts of Interest Memorize three sub-sections
- A Avoid or Disclose Conflicts Memorize renamed in 2023
- B Priority of Transactions Memorize clients and employer before you
- C Referral Fees Memorize disclose pay given or received
VII Responsibilities as a CFA Institute Member or CFA Candidate Memorize two sub-sections
- A Conduct as Participants in CFA Institute Programs Memorize protect the programs' integrity
- B Reference to CFA Institute, the CFA Designation, and the CFA Program Memorize no exaggeration

Cheat sheet · PDF · 3 A4 pages

Code of Ethics and Standards of Professional Conduct on 3 pages

What to memorize, the concept maps, every formula with a worked example and keystrokes for the TI BA II Plus and HP 12C, how each idea is asked, and the traps. Print it, or keep it on your phone.

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