What is the Asset Manager Code of Professional Conduct, and how do firms adopt it?

Question

AcadiFi · Accepted Answer

The Asset Manager Code (AMC) is a voluntary code of conduct that applies to **firms** (asset management companies), as distinct from the Code of Ethics and Standards of Professional Conduct which apply to **individual** CFA members and candidates.

## Key Distinction

| Feature | Code & Standards | Asset Manager Code |
|---|---|---|
| Applies to | Individual members/candidates | Asset management firms |
| Mandatory? | Yes (for CFA members) | Voluntary |
| Scope | Personal conduct, duties | Firm-wide governance, operations |
| Enforcement | CFA Institute disciplinary | Self-policing + public commitment |

## Six Principles of the AMC

Firms that adopt the AMC commit to:

1. **Act in a professional and ethical manner** at all times
2. **Act for the benefit of clients** (client interests first)
3. **Act with independence and objectivity** in investment decisions
4. **Act with skill, competence, and diligence**
5. **Communicate with clients** in a timely and accurate manner
6. **Uphold the rules governing capital markets**

## What Adoption Looks Like

When a firm adopts the AMC, it must:

1. **Notify CFA Institute** and be listed on the public register of adopting firms
2. **Implement policies and procedures** that comply with each AMC provision
3. **Conduct regular reviews** to ensure ongoing compliance
4. **Disclose adoption** to clients and prospects
5. **Not misrepresent** the nature of adoption (it is voluntary, not a certification)

## Specific Firm-Level Requirements

The AMC addresses areas that individual-level standards do not:
- **Risk management:** Firms must have adequate risk management processes
- **Compliance function:** Must be independent with sufficient authority
- **Business continuity:** Plans for operational disruption
- **Fair dealing:** Policies for fair allocation of investment opportunities
- **Proxy voting:** Must act in clients' best interests when voting proxies

**Exam tip:** The CFA exam tests whether you can distinguish between the individual Code & Standards (mandatory) and the firm-level AMC (voluntary). Know the six principles and that adoption requires public commitment plus internal compliance infrastructure.

For more ethics preparation, explore our CFA course.

What is the Asset Manager Code of Professional Conduct, and how do firms adopt it?

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