CODE OF ETHICS AND STANDARDS OF PROFESSIONAL CONDUCT
The Code of ethics and standards of professional conduct are fundamental to the values of the NLB Tutunska broker AD Skopje and essential to setting and achieving high standards of education, integrity, and professional excellence. High ethical standards are critical to maintaining the public's trust in financial markets and in the investment profession. The CFA Code of ethics and standards of professional conduct is the basis for development of the NLB Tutunska broker`s Code of ethics and standards of professional conduct. The Code of ethics and standards of professional conduct are in force since August 1st, 2007.
NLB Tutunska broker employees (employees) must:
Act with integrity, competence, diligence, respect, and in an ethical manner with the public, clients, prospective clients, employers, employees, colleagues in the investment profession, and other participants in the global capital markets- Place the integrity of the investment profession and the interests of clients above their own personal interests.
- Use reasonable care and exercise independent professional judgment when conducting investment analysis, making investment recommendations, taking investment actions, and engaging in other professional activities.
- Practice and encourage others to practice in a professional and ethical manner that will reflect credit on themselves and the profession.
- Promote the integrity of, and uphold the rules governing, capital markets.
- Maintain and improve their professional competence and strive to maintain and improve the competence of other investment professionals.
STANDARDS OF PROFESSIONAL CONDUCT
The Standards of Professional Conduct are organized into six standards:
I. Professionalism
II. Integrity of Capital Markets
III. Duties to Clients
IV. Duties to Employers
V. Investment Analysis, Recommendations, and Actions
VI. Conflicts of Interest
Each standard contains multiple provisions for which the employees are responsible.
I. PROFESSIONALISM
A. Knowledge of the Law. Employees must understand and comply with all applicable
laws, rules, and regulations (including the Code of Ethics and Standards of Professional
Conduct) of any government, regulatory organization, licensing agency, or professional
association governing their professional activities. In the event of conflict, employees must
comply with the more strict law, rule, or regulation. Employees must not knowingly participate
or assist in and must dissociate from any violation of such laws, rules, or regulations.
B. Independence and Objectivity. Employees must use reasonable care and judgment
to achieve and maintain independence and objectivity in their professional activities.
Employees must not offer, solicit, or accept any gift, benefit, compensation, or consideration
that reasonably could be expected to compromise their own or another's independence and
objectivity.
C. Misrepresentation. Employees must not knowingly make any misrepresentations
relating to investment analysis, recommendations, actions, or other professional activities.
D. Misconduct. Employees must not engage in any professional conduct involving
dishonesty, fraud, or deceit or commit any act that reflects adversely on their professional
reputation, integrity, or competence.
II. INTEGRITY OF CAPITAL MARKETS
A. Material Nonpublic Information. Employees who possess material nonpublic
information that could affect the value of an investment must not act or cause others to act on
the information.
B. Market Manipulation. Employees must not engage in practices that distort prices or
artificially inflate trading volume with the intent to mislead market participants.
III. DUTIES TO CLIENTS
A. Loyalty, Prudence, and Care. Employees have a duty of loyalty to their clients and
must act with reasonable care and exercise prudent judgment. Employees must act for the
benefit of their clients and place their clients' interests before their employer's or their
own interests. In relationships with clients, employees must determine applicable fiduciary
duty and must comply with such duty to persons and interests to whom it is owed.
B. Fair Dealing. Employees must deal fairly and objectively
with all clients when providing investment analysis, making investment recommendations,
taking investment action, or engaging in other professional activities.
C. Suitability.
1. When employees are in an advisory relationship with a client, they must:
a. Make a reasonable inquiry into a client or prospective client's
investment experience, risk and return objectives, and financial constraints prior to making
any investment recommendation or taking investment action and must reassess and update
this information regularly.
b. Determine that an investment is suitable to the client's financial situation and
consistent with the client's written objectives, man dates, and constraints before making an
investment recommendation or taking investment action.
c. Judge the suitability of investments in the context of the client's total portfolio.
2. When employees are responsible for managing a portfolio to a specific mandate,
strategy, or style, they must only make investment recommendations or take investment
actions that are consistent with the stated objectives and constraints of the portfolio.
D. Performance Presentation. When communicating investment performance
information, members or candidates must make reasonable efforts to ensure that it is fair,
accurate, and complete.
E. Preservation of Confidentiality. Employees must keep information about current,
former, and prospective clients confidential unless:
1. The information concerns illegal activities on the part of the client or prospective client,
2. Disclosure is required by law, or
3. The client or prospective client permits disclosure of the information.
IV. DUTIES TO EMPLOYERS
A. Loyalty. In matters rel ated to their employment, employees must act for the benefit
of their employer and not deprive their employer of the advantage of their skills and abilities,
divulge confidential information, or otherwise cause harm to their employer.
B. Additional Compensation Arrangements. Employees must not accept gifts,
benefits, compensation, or consideration that competes with, or might reasonably be
expected to create a conflict of interest with, their employer's interest unless they obtain
written consent from all parties involved.
C. Responsibilities of Supervisors. Employees must make reasonable efforts to
detect and prevent violations of applicable laws, rules, regulations, and the Code and
Standards by anyone subject to their super vision or authority.
V. INVESTMENT ANALYSIS, RECOMMENDATIONS, AND ACTIONS
A. Diligence and Reasonable Basis. Employees must:
1. Exercise diligence, independence, and thoroughness in analyzing investments, making
investment recommendations, and taking investment actions.
2. Have a reasonable and adequate basis, supported by appropriate research and
investigation, for any investment analysis, recommendation, or action.
B. Communication with Clients and Prospective Clients. Employees must:
1. Disclose to clients and prospective clients the basic format and general principles of the
investment processes used to analyze investments, select securities, and construct portfolios
and must promptly disclose any changes that might materially affect those processes.
2. Use reasonable judgment in identifying which factors are important to their investment
analyses, recommendations, or actions and include those factors in communications with
clients and prospective clients.
3. Distinguish between fact and opinion in the presentation of investment analysis and
recommendations.
C. Record Retention. Employees must develop and maintain appropriate records to
support their investment analysis, recommendations, actions, and other investment-related
communications with clients and prospective clients.
VI. CONFLICTS OF INTEREST
A. Disclosure of Conflicts. Employees must make full and fair
disclosure of all matters that could reasonably be expected to impair their independence and
objectivity or interfere with respective duties to their clients, prospective clients, and employer.
Employees must ensure that such disclosures are prominent, are delivered in plain language,
and communicate the relevant information effectively.
B. Priority of Transactions. Investment transactions for clients and employers must
have priority over investment transactions in which a member or candidate is the beneficial
owner.
C. Referral Fees. Employees must disclose to their employer,
clients, and prospective clients, as appropriate, any compensation, consideration, or benefit
