Ethical Practices and Fiduciary Obligations
Exam Weight: ~7 questions (11% of exam)
Understanding ethical practices and fiduciary obligations is essential for every securities professional. This unit covers compensation rules, custody requirements, prohibited activities, privacy regulations, and business continuity planning.
What You'll Learn
- How investment advisers are compensated, including performance fees, soft dollars, and pay-to-play rules
- Custody requirements, discretionary authority, the prudent investor standard, and anti-money laundering obligations
- Surprise examination details, related person custodian rules, and direct fee deduction safeguards
- Conflicts of interest, insider trading, market manipulation, churning, code of ethics, and protection of vulnerable adults
- Regulation S-P privacy notices, opt-out rights, breach notification, and cybersecurity program requirements
- Business continuity plan requirements and succession planning for sole-proprietor advisers