Asset Manager Code

Question 1

The Asset Manager Code of Professional Conduct

Answer 1

Is firm-wide set of voluntary professional standards that are aimed at investment firms around the world who manage money for clients.

Question 2

Main Points to Consider

Answer 2

1. There is no partial claim of compliance.
2. A compliant firm must use an exactly worded statement consisting of two sentences whenever it claims compliance: “[Insert name of firm] claims compliance with the CFA Institute Asset Manager Code of Professional Conduct. This claim has not been verified by CFA Institute.”
3. Firms must notify CFA Institute that they are claiming compliance.
4. CFA Institute does not enforce the quality control of firm’s claim of compliance with the AM Code. CFA Institute does not verify the manager’s claim of compliance.

Question 3

General Principles of Conduct

Answer 3

1. Act in a professional and ethical manner at all times.
2. Act for the benefit of clients.
3. Act with independence and objectivity.
4. Act with skill, competence, and diligence.
5. Communicate with clients in a timely and accurate manner.
6. Uphold the applicable rules governing capital markets.

Question 4

Performance Reporting

Answer 4

• Requires disclosing the “performance of clients’ investments on a regular and timely basis.
• Managers should provide clients with gross- and net-of-fees returns.
• Managers should report to clients at least quarterly, and when possible, be provided within 30 days after the end of the quarter.
• Managers may choose to provide more timely performance to clients.
• This concept applies even to investment vehicles with lock-up periods.

Question 5

Changes in the Fund

Answer 5

Calls for complete disclosures regarding:
* Significant changes in personnel
* Any regulatory or disciplinary action taken against the Fund

Question 6

Compliance Officers

Answer 6

AMC §D2:
* Compliance officers and personnel should be independent from the investments and operational personal.
* Compliance officers must directly report to the CEO or broad of directors.

Question 7

Business Continuity Plan

Answer 7

AMC §D6: The level of Complexity regarding the business continuity plan depends on the size , nature and complexity of the organization.

There should be a backup plan for monitoring , analyzing and trading investments.

Question 8

Name the specific practical guidelines for asset managers provided in the Asset Manager Code.

Answer 8

• Loyalty to clients
• The investment process
• Trading
• Compliance
• Performance evaluation
• Disclosure

Question 9

Proxy Voting

Answer 9

Asset managers should have clear processes for managing proxy voting.

These policies include guidelines for instituting regular review for:
* material issues
* methods of reviewing them
* guidance about additional actions required when votes are against management
* a system to delegate share-voting responsibilities.