CFA Level I · Cheat Sheet
| Principle | Key Obligation | |
| Act with integrity, competence, diligence, respect | Honesty in all dealings; maintain skills | |
|---|---|---|
| Place client interests first | Fiduciary duty above personal/employer gain | |
| Exercise independent professional judgment | Objective analysis, resist external pressure | |
| Practice ethically; reflect well on profession | Conduct that upholds market confidence | |
| Promote integrity & viability of capital markets | Protect trust that markets depend on | |
| Maintain & improve professional competence | Stay current; active ongoing obligation | |
| Subsection | Rule | Red Flags |
| I(A) Knowledge of Law | Know & comply with law; don't participate in violations | Employer says "it's legal locally" → still check CFA Code |
| I(B) Independence & Objectivity | Refuse gifts/benefits that compromise judgment; disclose conflicts | Token gifts OK; material gifts forbidden |
| I(C) Misrepresentation | No false/misleading statements; no plagiarism (present others' work as own) | Omitting material facts = misrepresentation |
| I(D) Misconduct | No dishonest, fraudulent, or deceitful conduct | Conviction of crime reflects on profession |
| Subsection | Rule | Test Scenario |
| III(A) Loyalty, Prudence, Care | Act in client's best interest; exercise care a prudent investor would | Front-running client trades = violation |
| III(B) Fair Dealing | Disseminate recommendations fairly to all clients; no preferential treatment | Giving VIP clients new research first = violation |
| III(C) Suitability | Recommendations appropriate to client's risk, time horizon, liquidity, goals | Assess suitability on entire portfolio, not single security |
| III(D) Performance Presentation | Present past performance honestly; disclose calculation methodology | Can't cherry-pick best-performing accounts only |
| III(E) Confidentiality | Protect client information except when law requires disclosure | Court order overrides confidentiality duty |
| Issue | Standard | |
| Material nonpublic information (MNPI) | Cannot trade on it; cannot pass it to others | |
| Front-running | Cannot buy/sell ahead of client orders | |
| Market manipulation | Cannot create false impression of supply/demand | |
| Pump-and-dump / painting the tape | Prohibited; fraudulent | |
| Rule | Example | |
| Loyalty to employer (reasonable scope) | Disclose conflicts with outside activities | |
| Do not solicit clients to leave firm | Can take clients after leaving if not contracted otherwise | |
| Preserve confidential employer information | Trade secrets, client lists protected even after departure | |
| Do not disparage employer | Reasonable criticism OK; bad-faith attacks violate | |
| Requirement | Detail | |
| Have reasonable basis | Adequate research; cannot rely solely on others' analysis | |
| Disclose methodology | Explain valuation models, assumptions, sources | |
| Update recommendations | When facts change, update in timely manner | |
| Distinguish fact from opinion | Label opinions; avoid presenting subjective views as fact | |
| Report conflicts in recommendations | If recommending own employer's securities, disclose | |
| Conflict Type | Required Action | |
| Gifts/benefits from company | Disclose to employer; may need to recuse from coverage | |
| Directed brokerage | Client must benefit or pre-approve; can't be pure revenue source | |
| Referral fees | Must disclose to client before engagement | |
| Cross-trading | Can trade between client accounts at fair price, but requires disclosure | |
| Soft dollars | Client must benefit; cannot use for personal research unrelated to client mandate | |
| Obligation | Scope | |
| Uphold CFA designation reputation | Actions reflect on profession globally | |
| Report violations to CFA Institute | Must report known violations; don't ignore them | |
| Cooperate with CFA Institute investigations | Failure to cooperate is separate violation | |
| Cannot misrepresent CFA status | "Passed Level I" ≠ "CFA charterholder"; level passed must be disclosed |
Scenario Type: "Employer says X is legal locally" → Answer: Follow CFA Code if stricter; legality ≠ ethics
Scenario Type: "Should I sign off on this report?" → Answer: No if conclusions unsupported; refuse & escalate; don't sign to preserve relationships
Scenario Type: "Can I give VIP clients early access?" → Answer: No; violates Fair Dealing (III(B))
Scenario Type: "Can I trade on this information?" → Answer: Only if not material nonpublic; if MNPI, forbidden
Scenario Type: "New asset class, unfamiliar area" → Answer: Disclose lack of expertise; develop competence or decline
Scenario Type: "Confidentiality vs. legal demand" → Answer: Legal requirement overrides; disclose per law
---
Aligned to the CFA Institute Level I curriculum.
Personalize this sheet — focus it however you study, or build one from the exact questions you keep getting wrong.