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A. Diligence and Reasonable Basis.
#analyst-notes #and-actions #code-of-ethics-and-standards-of-professional-conduct #recommendations #v.-investment-analysis

You must:

  • Exercise diligence, independence, and thoroughness in analyzing investments, making investment recommendations, and taking investment actions.
  • Have a reasonable and adequate basis, supported by appropriate research and investigation, for any investment analysis, recommendation, or action.

You must perform the investigations necessary to make an investment recommendation or action. Three factors determine the nature of the diligence, thoroughness of the research, and level of investigation required by the standard:

  • Investment philosophy followed.
  • The role of the member or candidate in the investment decision-making process.
  • The support and resources provided by the employer.

Members must establish a reasonable basis for all investment recommendations and actions. Diligence must be exercised to avoid any material misrepresentation. In other words, members cannot be quick or negligent in making investment recommendations.

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