The Asset Manager Code, Conduct in Practice & the Advice Perimeter

Learning objectives

You can:

1. State what the Asset Manager Code binds and what the Code and Standards bind, name the subject of each, and explain why a firm's adoption of the one discharges no individual obligation under the other.
2. Recite the six general principles of the Asset Manager Code and state precisely what a claim of compliance commits a firm to: the whole Code rather than a selection, a notification to CFA Institute, and no verification of any kind by anybody.
3. Apply each of the Code's six sections to a firm-level fact pattern, and say for any given failure which section it lands in and what evidence would settle it.
4. Run the four-stage ethical decision framework (identify, consider, decide and act, reflect) on a live situation, name the situational influences at work, quantify the incentive where it can be quantified, and distinguish that framework from the four-step vignette diagnosis it sits beside.
5. Test information against the unpublished price sensitive information definition limb by limb under SEBI's insider-trading regulations, decide whether a person is connected, and compute the trading-window and continual-disclosure consequences from a dated calendar.
6. Work the United States mirror: Rule 10b-5 under the classical and misappropriation theories, tippee liability and the personal-benefit test, Regulation FD's promptness clock, Form 4 timing, and the cooling-off arithmetic of a Rule 10b5-1 plan and its amendment.
7. Place mosaic theory legally beside both regimes, state what an analyst may assemble, quantify an assembled estimate against consensus, and name the one fact that would move the work across the line.
8. List the operative obligations of a person who publishes research for others in India: holdings disclosure on every report, the trading blackout around publication, the prohibition on trading against a live recommendation, certification, and the mandatory disclosure block, and write that block from a blank page.
9. Classify any activity on the advice perimeter for both markets, from a private memo to a discretionary account, and say for each what it triggers under the SEBI research analyst and investment adviser regimes and under the United States Investment Advisers Act, including the publisher's exclusion and where that exclusion stops.
10. Explain the finfluencer regime: what triggers the perimeter, what a SEBI-regulated entity may not do with an unregistered promoter, and the shape enforcement takes when it arrives.

Prerequisites & connections

Builds on. ES1.01 supplies the Code of Ethics, all seven Standards and the four-step vignette method, and is a hard prerequisite rather than a soft one: everything below that says "Standard VI(A)" or "Standard III(D)" assumes you can already state the rule and find the deciding fact. ES1.02 supplies GIPS in full and the three-regulator architecture, including the Investment Advisers Act registration bands, the SEC Marketing Rule, the SEBI Investment Adviser fee-cap machinery and the FCA's Consumer Duty. M0.02 supplies the market structure the conduct rules sit on top of: who the referees are, what a listed company must publish and when. M8.04 supplies the scuttlebutt craft whose legal boundary Section 12 draws. AA1.03 supplies performance measurement and the composite arithmetic, which Section 7 uses without re-deriving.

Feeds forward. PW1.01 owns the private-client investment policy statement, and the instruction there to stage a client's sale around insider-trading-window compliance is the rule Section 10 finally teaches. M10.04 owns the long-run practice audit, and the perimeter tree of Section 14 is what turns its "not investment advice" guardrail into a decision a learner can actually make. The Phase 8 and Phase 10 memos are the raw material for the mini-project. Anyone who goes on to publish anything, for money or otherwise, meets Sections 13 to 15 again the first week they do it.

Six modules own material that borders this one, and none of it is rebuilt here. ES1.01 owns the seven Standards and the vignette method, including the 2024 updates to the Standards themselves; the Standards are cited below by number and never re-taught. ES1.02 owns GIPS, verification, the SEC and FCA architecture and the SEBI registration categories as categories; what follows takes the operative conduct obligations that sit inside those categories and leaves the architecture alone. AA1.03 owns performance measurement, attribution and the composite arithmetic; Section 7 states only what the Asset Manager Code demands of a firm's performance and valuation, and hands the arithmetic back. M0.02 owns market structure and the referees. M8.04 owns mosaic theory as an analytical craft, and Section 12 attaches statute names to a boundary that module already draws correctly. PW1.01 owns the private-client policy statement and its constraints. Cross-links below point at those owners rather than duplicating them.