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Show firm command of the Code and Standards by applying them to professional integrity cases under Standard III, Duties to Clients

CFA® Level III · Ethical and Professional Standards · Guidance for Standard III: Duties to Clients · L3.ET.4.a

The idea

Duties to clients govern everyday portfolio decisions. Under III(A), a pension manager's loyalty runs to the plan's beneficiaries, not the sponsor's officers; commissions belong to the client, so soft-dollar research must help that client's decisions, and directed brokerage is honoured with a warning if it may cost best execution. Under III(B), a block trade or hot issue is shared at the same price, pro rata on the pre-trade allocation, never assigned after the result is known. Under III(C), each position is judged against the IPS and the whole portfolio, and a pooled fund must be run to its stated mandate, so style drift away from it is a breach. III(D) forbids presenting selected accounts as typical, and III(E) protects client information.

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