Canadian pension fund Caisse de dépôt et placement du Québec has signed on to the CFA Institute’s Asset Manager Code , which establishes ethical and professional responsibilities of companies managing assets for clients. [Source]
The C$391.6 billion ($287.3 billion) CDPQ said it is the first pension fund in Canada to adopt the code, which is based on the ethical principles of the CFA Institute and the CFA program. The code outlines the responsibilities for asset managers committed to ethical behavior and protecting investors’ interests.
By adopting the code, fund managers are committing to the CFA’s general principles of conduct, which include:
- Acting in a professional and ethical manner at all times;
- Acting for the benefit of clients;
- Acting independently and objectively;
- Acting with skill, competence and diligence;
- Communicating with clients in a timely and accurate manner; and
- Upholding the applicable rules governing capital markets.
“Integrity and responsibility are at the heart of our activities to create value for our depositors and for our communities,” Maarika Paul, CDPQ’s executive vice president and chief financial and operations officer, said in a statement. “The adoption of the CFA Institute standards is another step that demonstrates the CDPQ’s leadership in terms of best practices.”
Under the code’s guidelines, managers of portfolios or pooled funds must take into account only investment actions that are consistent with the stated objectives and constraints of the portfolio or fund. They are also expected to provide adequate disclosures and information so investors can consider if any proposed changes in the investment style or strategy suit their investment needs.
When managing separate accounts, managers are required to evaluate and understand the client’s investment objectives, tolerance for risk, time horizon, liquidity needs, financial constraints, unique circumstances—such as tax, legal, or regulatory considerations—and any other relevant information before providing investment advice or taking investment action for a client.
The CFA Institute says more than 1,000 organizations have adopted its code of ethics so far, including BlackRock, Janus Henderson Investors and JP Morgan Asset Management. The code includes sections covering client loyalty; investment process and actions; trading; risk management, compliance and support; performance and evaluation; and disclosures.