Professional Conduct and Ethics
This domain tests judgement under pressure: conflicts, confidential information, personal dealing and the standards expected when no rule directly answers the question.
Core rules
Act with integrity and in the client's best interest; avoid or disclose conflicts; keep client and firm information confidential; do not deal ahead of clients or on inside information; do not tip others. Personal account dealing requires pre-clearance and is restricted around client orders and non-public information. Gifts and entertainment must be proportionate, disclosed and approved. Market manipulation such as wash trades, marking the close and spoofing is prohibited regardless of whether it produced a profit.
Worked example
While waiting for a meeting, you see a draft memo naming an unannounced takeover target. You must not trade the target's shares, and you must not pass the information to colleagues, family or a chat group. Report the inadvertent exposure to compliance and follow the firm's restricted-list process. The fact that you did not seek the information is irrelevant; the duty arises once you hold it.
Traps that cost marks
Rationalising conduct because competitors do it; discussing a client's positions with a friend; accepting lavish hospitality from a counterparty whose mandate you influence; assuming a personal trade is safe because it is small.