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CPH
®
Study Guide
Chapter 1: Canadian Securities Industry
Registrant Code of Ethics and Standards of Conduct
Designed for use with the money-back-guaranteed
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®
Practice Exams and Flash Cards
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6
Step 2:
Conflict of interest assessment.
Step 3:
Suitability assessments.
Fiduciary Duty
Trust is a belief that those people upon whom we depend (either by choice or by
circumstance) will meet expectations we have placed on them. The fiduciary role carries
with it the highest standard of care. A person who holds a position of trust has a duty to
the people who have placed their trust in them. This is called "fiduciary duty". This
certainly applies to full-service advisors and their clients but would apply to a lesser
degree to an order-taker working at a discount brokerage who is simply responsible for
processing unsolicited trades at a customer's request.
Registrant Code of Ethics
Any code of ethics goes beyond simply following the rules. It also requires that the
spirit
of the law be followed. The Registrant Code of Ethics defines five primary values. As
part of the Code of Ethics, registrants must:
1.
Exercise good professional judgement and care when dealing with their clients.
2.
Act with integrity, fairness, and honesty, and be trustworthy.
3.
Conduct business professionally, and consistently update their knowledge such that
it reflects well on themselves, their firm, and the industry as a whole.
4.
Act in accordance with the Securities Acts.
5.
Maintain complete confidence with respect to their clients' information.
Registrant Standards of Conduct
The standards of conduct build upon the code of ethics by identifying specific courses of
behaviour. Unfortunately, you are not only required to know what the rules are for the
exam but also what codes they fall under. For example, you may see a question on the
exam such as,
"What is Standard C?"
Memory aid:
A code of conduct in any profession is designed to clarify how participants
in the industry should behave. So the question we must ask ourselves is: