Chartered Financial Analyst Level 1
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According to the CFA Institute Standards of Professional Conduct, which of the following statements is accurate? Statement 1: A member may contact potential clients before leaving their current employer to solicit business for a new employer. Statement 2: A member, while still employed, can make arrangements outside normal working hours to apply for a license to establish a competing business.
Explanation:
Explanation:
Statement 1 is incorrect under Standard IV(A) - Loyalty. A member or candidate must not contact existing or potential clients before leaving their employer to solicit business for a new employer. This violates the duty of loyalty to the current employer.
Statement 2 is correct. According to Standard IV(A), a departing employee is generally allowed to make preparations for a competitive business, such as applying for a license, as long as these actions do not breach the duty of loyalty. This includes performing such activities outside normal working hours and not soliciting clients until after leaving the current employer.
Option C is incorrect because only Statement 2 aligns with the Standards. Statement 1 violates the duty of loyalty, as explained.