Answer: No.

## Explanation **Correct Answer: A (No)** **Key Principles:** 1. **CFA Institute Standards vs. Local Laws:** CFA Institute Standards of Professional Conduct apply to all CFA charterholders and candidates regardless of local laws. The Standards require members to adhere to the highest ethical standards, which often exceed minimum legal requirements. 2. **Standard II(A) - Material Nonpublic Information:** This standard prohibits trading or causing others to trade on material nonpublic information. The information about the acquisition negotiations is clearly: - **Material:** A significant premium acquisition would likely affect the stock price - **Nonpublic:** Not yet disclosed to the general public - **Specific:** Received directly from the CEO 3. **Standard I(A) - Knowledge of the Law:** While this standard requires members to understand and comply with applicable laws, it also states that members must not knowingly participate in or assist in violations. More importantly, Standard I(A) states that when laws and regulations conflict with the CFA Institute Standards, members must follow the more strict requirement. 4. **Jurisdictional Issues:** Even though Kim works in a jurisdiction that allows insider trading, as a CFA charterholder, she is bound by the CFA Institute Standards, which prohibit such trading. **Why the Other Options are Incorrect:** - **Option B:** Incorrect because local laws permitting insider trading do not override CFA Institute Standards. The Standards require adherence to the highest ethical standards, not just minimum legal requirements. - **Option C:** Incorrect because permission from compliance does not make trading on material nonpublic information acceptable under CFA Institute Standards. The prohibition is absolute and cannot be waived by compliance approval. **Additional Considerations:** - Kim should maintain the confidentiality of the information - She should not trade for herself, her clients, or recommend trading based on this information - She should consider whether she needs to report this information to her firm's compliance department - The fact that she is a US citizen working for a US firm's subsidiary adds additional layers of potential regulatory jurisdiction, but the CFA Standards apply regardless

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