What must I disclose under Standard VI(A) — Disclosure of Conflicts, and how granular do I need to be?

Standard VI(A) — Disclosure of Conflicts requires full and fair disclosure of all matters that could reasonably be expected to impair a member's independence and objectivity or interfere with their duties to clients, prospective clients, and employers. The goal is to let stakeholders make informed decisions about whether and how much to rely on your advice.

What Must Be Disclosed:

1. Ownership of recommended securities — If you own shares of a stock you rate as Buy, clients need to know. You don't have to disclose the exact number of shares, but you must indicate you have a personal financial interest.

1. Compensation structures that create conflicts — If your bonus is partly based on investment banking revenue, disclose it. If you receive referral fees for directing clients to a particular product, disclose it.

1. Firm-level conflicts — If your firm's investment banking division is advising a company you cover as a research analyst, disclose the relationship.

1. Board memberships and outside business activities — If you sit on the board of a company in your coverage universe, disclose it immediately.

Worked Example — Greystone Capital

Marcos Delgado is a senior analyst at Greystone Capital covering the healthcare sector. Here's his conflict landscape:

How Granular?

You do not need to disclose:

• Your exact salary or bonus amount
• The precise number of shares you own
• Every minor interaction with covered companies

You do need to disclose:

• The existence of a financial interest (long, short, or derivative position)
• The nature of any compensation arrangement that could bias your work
• Any relationship (personal, familial, financial) with covered companies

The "Reasonable Investor" Test:

Ask yourself: "Would a reasonable client, knowing about this conflict, want to factor it into how much weight they give my recommendation?" If yes, disclose.

Exam Tip: Ethics questions on VI(A) typically describe a specific situation and ask whether the analyst has properly disclosed. Look for hidden conflicts: personal holdings, family relationships, firm-level banking ties, or compensation arrangements tied to deal flow. The most common wrong answer is "no disclosure needed because the conflict is small."

Practice more disclosure scenarios in our CFA Level I ethics question bank.