In matters related to their employment, Members and Candidates must
act for the benefit of their employer and not deprive their employer of the
advantage of their skills and abilities, divulge confidential information, or
otherwise cause harm to their employer.
In employment-related matters, members must not engage in conduct that harms their employer’s interests. This includes engaging in independent competitive activity without the employer’s consent. In the case of work as an independent contractor, the terms of the contractual agreement apply rather than Standard IV(A).
When leaving an employer, members must not:
- misappropriate trade secrets
- misuse confidential information
- solicit the employer’s clients prior to leaving the firm
- misappropriate clients or client lists
- engage in self-dealing, such as by appropriating a prospective client
Members may prepare for a competitive business while still employed as long as they do so on their own time and do not violate any of the preceding prohibitions. No records belonging to the previous employer may be used without prior consent.
When using social media, members must abide by any guidelines established by their employer. It is best to keep professional and personal accounts separate. In cases where there is a firm-approved account for client communications, the account is the property of the employer.
Duties to employers are secondary to duties to clients and protecting capital markets. Illegal or unethical activities conducted by the employer may be reported without violating the duty of loyalty to the employer.
Firms should establish clear competition, termination, and whistle-blowing policies. Members should understand their employment status and their duties to the employer.
The CFA Institute Standards of Practice Handbook outlines several examples of potential violations of loyalty to employers.
- Soliciting clients prior to resigning from the firm
- Taking records without the employer’s approval
- Giving a recommendation to the new firm without first giving the original employer the right to act on it
- Taking software that the employee developed
- Responding to an RFP that the employer has also responded to
- Discussing confidential material such as the firm’s recommendations outside of work