A firm uses the CFA designation in marketing materials to imply endorsement by CFA Institute. Violation?

• A. Standard VII.B Reference to CFA Institute
• B. Standard I.D Misconduct
• C. Standard III.B Additional Compensation Arrangements
• D. Standard II.A Material Nonpublic Information

Answer: (A)

Using the CFA designation in marketing to imply endorsement by CFA Institute can mislead clients and undermine trust in the designation. The rule that covers this is Standard VII.B Reference to CFA Institute. It says you must not present marketing or promotional materials in a way that suggests CFA Institute sponsorship or endorsement when there is none. You can accurately note that individuals hold the CFA designation or are CFA charterholders, but you cannot imply that the Institute endorses your firm, products, or services.

So the conduct described fits this standard because it creates the impression of CFA Institute endorsement. Other standards address different issues—misconduct concerns professional behavior, compensation arrangements relate to pay practices, and material nonpublic information deals with insider information—none of which turn on marketing claims about CFA Institute endorsement.