IFIC - UNIT 2 QUESTIONS AND ANSWERS
What is ethics? - Answers -The principles of conduct governing an individual or a
group.
Under Companion Policy (CP) 31-103, Part 1.3 (Fitness for Registration (b) Integrity) it
states: - Answers -"Registered individuals must conduct themselves with integrity and
have an honest character."
Further in CP 31-103, under Part 11.1 (Compliance System (a) Day-to-Day Monitoring)
it states: - Answers -"Anyone who supervises registered individuals has a responsibility
on behalf of the firm to take all reasonable measures to ensure that each of these
individuals:
• deals fairly, honestly and in good faith with their clients
• addresses conflicts of interest in the best interest of their clients
• puts the client's interests first when making suitability determinations for their clients
• complies with securities legislation
• complies with the firm's policies and procedures, and
• maintains an appropriate level of proficiency.
What standard of conducts are outlined in MFDA Rule 2.1.1 for ethical behavior for you,
as a Dealing Representative? - Answers -• deal fairly, honestly, and in good faith with
clients
• observe high standards of ethics and conduct in the transaction of business
• not engage in any business conduct or practice which is unbecoming
• not engage in any business conduct or practice which is detrimental to the public
interest
• be of proper character and have proper business repute
• have appropriate experience and training
What standards of conduct should be adopted in the absence of rules, mutual fund
dealers and dealing representatives? - Answers -• Protect their reputation and that of
the industry as a whole.
• Attract and retain clients.
• Be successful in the long as well as the short term.
What are best practices for proper conduct? - Answers -• Understanding the client's
financial circumstances.
• Presenting all investment recommendations fairly and without false or misleading
statements.
• Always making recommendations in the best interests of the client.
• Clearly distinguishing fact from opinion when making recommendations.
• Protecting the confidentiality of client information.
What is ethics? - Answers -The principles of conduct governing an individual or a
group.
Under Companion Policy (CP) 31-103, Part 1.3 (Fitness for Registration (b) Integrity) it
states: - Answers -"Registered individuals must conduct themselves with integrity and
have an honest character."
Further in CP 31-103, under Part 11.1 (Compliance System (a) Day-to-Day Monitoring)
it states: - Answers -"Anyone who supervises registered individuals has a responsibility
on behalf of the firm to take all reasonable measures to ensure that each of these
individuals:
• deals fairly, honestly and in good faith with their clients
• addresses conflicts of interest in the best interest of their clients
• puts the client's interests first when making suitability determinations for their clients
• complies with securities legislation
• complies with the firm's policies and procedures, and
• maintains an appropriate level of proficiency.
What standard of conducts are outlined in MFDA Rule 2.1.1 for ethical behavior for you,
as a Dealing Representative? - Answers -• deal fairly, honestly, and in good faith with
clients
• observe high standards of ethics and conduct in the transaction of business
• not engage in any business conduct or practice which is unbecoming
• not engage in any business conduct or practice which is detrimental to the public
interest
• be of proper character and have proper business repute
• have appropriate experience and training
What standards of conduct should be adopted in the absence of rules, mutual fund
dealers and dealing representatives? - Answers -• Protect their reputation and that of
the industry as a whole.
• Attract and retain clients.
• Be successful in the long as well as the short term.
What are best practices for proper conduct? - Answers -• Understanding the client's
financial circumstances.
• Presenting all investment recommendations fairly and without false or misleading
statements.
• Always making recommendations in the best interests of the client.
• Clearly distinguishing fact from opinion when making recommendations.
• Protecting the confidentiality of client information.
