Code Of Ethics L3

### Section: Code of Ethics and Standards of Professional Conduct — Level 3 Application Estimated study time: 45 minutes Content: Exam weight (2026 curriculum): Ethical and Professional Standards — 10–15% of the CFA Level III exam (common core). Source: CFA Institute Level III Exam page, fetched 2026-06-29. Level III consists of two 132-minute sessions totaling 4 hours 24 minutes: 11 item sets and 11 essay (constructed-response) sets; 20 sets scored and 2 trialed. Ethics appears in both essay and item-set formats — the essay format requires candidates to cite the specific Standard, state the violation, and prescribe corrective action with precision. Ethics is part of the common core (approximately 65–70% of the exam) and is tested regardless of which pathway (Portfolio Management, Private Markets, or Private Wealth) the candidate selects. At Level 3, the CFA Institute Code of Ethics and Standards of Professional Conduct is tested differently than at Levels 1 and 2. Rather than simple rule identification, candidates must apply ethical standards to complex portfolio management scenarios and write reasoned justifications. The exam rewards nuanced analysis — recognizing when a situation involves multiple competing standards and articulating the correct hierarchy of duties. The Code of Ethics establishes six core principles: acting with integrity, competence, diligence, and respect; placing clients' interests above personal interests; practicing independently and objectively; maintaining and improving professional competence; promoting the integrity of capital markets; and maintaining confidentiality. At Level 3, these principles surface in portfolio-level decisions — trading for multiple client accounts simultaneously, managing conflicts in discretionary mandates, and navigating soft-dollar arrangements across an institutional…