Which CFA Institute standard addresses fair dealing and the requirement to provide fair and balanced disclosure of investment risks?

• A. Standard IV.D Performance Presentation.
• B. Standard VI.A Disclosure of Conflicts.
• C. Standard III.C Responsibilities of Supervisors.
• D. Standard IV.B Fair Dealing.

Answer: (D)

Fair Dealing is all about how you treat clients when you communicate investment information. This standard requires you to deal with clients fairly and to present investment information in a balanced, non misleading way, including a clear and complete disclosure of material investment risks. In practice, that means when you recommend a security, prepare client communications, or market an investment, you must not downplay risks or omit important details, and you should present both potential upside and downside so the client can make an informed decision.

The other standards address related but distinct ideas: performance presentation focuses on how performance results are shown and derived; disclosure of conflicts centers on revealing conflicts of interest; and responsibilities of supervisors cover oversight and compliance within a firm. None of those directly mandate fair dealing and balanced risk disclosure in client communications the way this standard does.