Members and Candidates must keep information about current, former, and prospective clients confidential unless:
1 The information concerns illegal activities on the part of the client or
2 Disclosure is required by law, or
3 The client or prospective client permits disclosure of the information.
This standard is applicable when (1) the member or candidate receives information because of his or her special ability to conduct a portion of the client’s business or personal affairs and (2) the member or candidate receives information that arises from or is relevant to that portion of the client’s business that is the subject of the special or confidential relationship. It applies to both current and former clients.
Candidates must also follow the law and with CFA Institute professional conduct investigations. If applicable law requires disclosure of client information, members must comply. Likewise, if applicable law prohibits disclosure of illegal activities, members must comply. Firms should ensure that information stored electronically is protected and that there are appropriate procedures outlining who can access such information.
The best way to comply is to keep information confidential. Protect against accidental disclosure.
The CFA Institute Standards of Practice Handbook provides several examples of potential confidentiality violations, including giving a client’s contact information to a charity.
Other examples included acceptable disclosures of confidential information, such as to report illegal activity. Also acceptable was a client’s accidental disclosure of confidential information on a message board that the advisor quickly deleted.