Thursday, June 2, 2011

AIM Student-Managers Will Seek to Adopt the CFA's Asset Manager Code of Professional Conduct

Dr. David Krause, AIM program director said, “An AIM graduate, who is currently studying for Saturday’s CFA exam, e-mailed me to ask if the AIM Funds are covered by the CFA code of ethics or any standards of professional conduct – and if not, why not? This was an excellent question that led me to the CFA Institutes's website."

While the CFA Code of Ethics and Standards of Professional Conduct pertain to individuals, the CFA does provide an Asset Manager Code of Professional Conduct that it encourages investment companies to adopt. The Asset Manager Code of Professional Conduct outlines the ethical and professional responsibilities of organizations that manage assets on behalf of clients. 

Dr. Krause stated, “Because we manage fixed income and equity investments for Marquette University’s endowment funds, it is highly appropriate that the AIM students operate under a code of ethics or professional conduct. We'll address this issue early in the fall semester.”

He continued, “The CFA’s Asset Manager Code of Professional Conduct will provide the student-managers of the AIM Funds with the standards and guidance based on general principles of proper investment conduct. This will be another excellent applied learning experience for our students.” 

Specifically the CFA's Asset Manager Code of Professional Conduct states that investment managers have the following responsibilities to their clients:
  • To act in a professional and ethical manner at all times
  • To act for the benefit of clients
  • To act with independence and objectivity
  • To act with skill, competence, and diligence
  • To communicate with clients in a timely and accurate manner
  • To uphold the rules governing capital markets
“When the students return in the fall they will take into consideration the adoption of the Code,” Krause said. “They need to understand, however, that they cannot selectively adopt only portions of the Asset Manager Code of Professional Conduct – they have to adhere to all of the principles of conduct and provisions set forth in the Code.”

If the students in the AIM program determine that AIM Funds are in compliance with all aspects of the Code, they must notify the CFA Institute by completing a claim of compliance form. In addition, the following statement must be made whenever the AIM Funds state to be in compliance with the Code: “The student-managers of the AIM Funds claim compliance with the CFA Institute Asset Manager Code of Professional Conduct. This claim has not been verified by CFA Institute.”

The CFA Institute reports a growing number of firms claiming compliance with the Asset Manager Code of Professional Conduct. The list can be viewed at:

Krause concluded, "We continue to make improvements to the AIM program each year. The addition of a code of professional conduct will add another important element to the AIM program. Being a CFA program partner continues to pay dividends for Marquette's Applied Investment Management program."

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