What is the primary purpose of the CFA Institute's Code of Ethics and Standards of Professional Conduct?

The primary purpose of the CFA Institute's Code of Ethics and Standards of Professional Conduct is to promote ethical behavior and professionalism among CFA charterholders and candidates. This framework is essential for maintaining the integrity of the investment profession and ensuring that practitioners adhere to high ethical standards. By encouraging ethical conduct, the Code helps to foster trust and confidence in the financial markets, which is crucial for the overall health of the industry.

The Code outlines principles and specific standards that guide the behavior of investment professionals, establishing a baseline expectation for transactional and client interaction conduct. Copies of the Code are regularly referenced and must be adhered to by all members, emphasizing accountability and ethics in practice.

The other choices, while related to different aspects of finance and investment, do not encapsulate the fundamental role of the Code of Ethics and Standards of Professional Conduct. For instance, providing investment strategies (first choice) or defining financial reporting guidelines (third choice) are specific functions that are not the primary aim of the Code. Establishing regulatory compliance in financial markets (fourth choice) is also an essential activity but operates within a different framework than the ethical standards defined by the CFA Institute, which focuses explicitly on conduct and principles rather than on external regulatory requirements.