- CFA Exams
- CFA Level I Exam
- Topic 10. Ethical and Professional Standards
- Learning Module 3. Guidance for Standards I-VII
- Subject 12. Standard IV (A) Loyalty
CFA Practice Question
Standard IV (A) precludes a member from entering into an independent business while still employed. True or False?
Correct Answer: False
A member must secure written permission from the employer to undertake independent practice.
User Contributed Comments 5
| User | Comment |
|---|---|
| Chitu | The Standard states that the member is precluded from entering into an independent business while still in employment. However he/she can do so by securing a written permission from the employer to do so. |
| HenryQ | I don't think outside entity need to give permission...out side entity is relevant for additional compensation, not for independent biz. |
| rhardin | Well you would have a new boss in the outside entity that would need to know (and give written permission) for you to practice with your current firm. |
| marianne1 | You need written agreement from your employer |
| gerdvar | Also note, that this permission applies when undertaking the same practice. Eg. if you work for an investment research firm and you want to start an independent investment research firm with your buddy but you don't get consent from your employer, it's a violation even though you haven't been paid for it. However, if you start a Baja style Fish taco food truck with the same buddy, it's not a violation even if you haven't told your employer since both businesses engage in a different practice. |