CPH 2016 Demo

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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 Online CPH® Practice Exams and Flash Cards
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7
"Does The Professional Code Clarify?"
Standard A: Duty of care
Standard B: Trustworthiness, honesty, and fairness
Standard C: Professionalism
Standard D: Conduct in accordance with the Securities Acts
Standard E: Confidentiality
For the purpose of the exam, it is also important to know what specifically falls under
each code. For some issues, it is relatively easy to identify which standard it would fall
under. For example, exercising due diligence would logically and correctly fall under
standard A.
However, some issues may fall under a standard that is less obvious. For example, from
your Canadian Securities Course®, you probably already know that it is unethical to
process a trade in a client's account without his or her prior approval unless a
discretionary or managed account agreement is in place. However, which of the above-
mentioned standards does such a rule fall under? While many may think it would fall
under Standard D (Conduct in accordance with the securities acts), it actually falls under
Standard C (Professionalism). For this reason, pay special attention to the rules that fall
under Standard C: Professionalism, as this is where a student is often tricked.
Standard A: Duty of Care
• Knowing your client.
• Exercising due diligence.
• Providing cautionary advice for unsolicited orders.
Standard B: Trustworthiness, Honesty, and Fairness
• Clients' interests must always come first.
• Clients' assets are for their purposes only (you can't borrow from their account).
• Complete and accurate information should be given to the client.
• You must disclose actual or potential conflicts of interests.