Best practice
Conduct the Standards recommend but do not require. Not following a recommended procedure is not itself a violation, though it can make one more likely.
Where you will meet it
Best practice appears in 3 learning outcomes on the CFA syllabus. A few of them:
- Put Standard VI(A), on avoiding or disclosing conflicts, into practice
“Avoiding a conflict, once described only as best practice, is now named in the Standard itself: avoidance is preferred, and members should avoid a conflict whenever that is reasonably possible, such as declining a promoter's payment or asking for a stock the analyst's family owns to be covered by a colleague.”
- Propose practices and procedures that stop breaches of the ethics Code and the Standards of Professional Conduct before they occur
“For performance, composites that include terminated accounts, clear labels on simulated or prior-firm results and a statement of whether returns are gross or net of fees, with GIPS compliance as best practice.”
- Explain whether, and why, given practices, policies, and conduct breach CFA Institute's Code of Ethics and its Standards of Professional Conduct
“Separate requirements from best practice, because avoiding a conflict instead of disclosing it, voting every proxy, reporting to a regulator and, where no rule sets a period, keeping records for seven years are recommendations rather than obligations.”
Practise it
Practise best practice until it is automatic: questions that explain every wrong option.
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