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CFA Institute - Global Policy Summit 2013

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The Global Policy Summit is an annual event organized by the Standards and Financial Market Integrity (SFMI) division of the CFA Institute. It takes place in Washington DC and it brings together about eighty CFA Institute staffers as well as volunteers.

Similar to prior years, this year’s summit included members of the five global policy councils that are part of SFMI: Asset Manager Code (AMC), Capital Markets (CMPC), Global Investment Performance Standards (GIPS), Standards of Practice (SPC) and Corporate Disclosure. In addition to the five councils, the attendees also included delegates from the Advocacy Committees of regional and local CFA Societies with the largest number of members.

The schedule and format of the conference includes a “plenary session” and “breakout sessions”. In the plenary session all attendees gather together to listen to presentations from each of the five council’s leaders. At the end of each presentation, participants have an opportunity to ask questions and comment on the topics presented.

Breakout sessions included CMPC, GIPS, AMC, SPC and the Society Leaders Workshop. On the first full day, I attended the CMPC morning session. On the second day, I attended the Society Leaders Workshop.

This report presents the most important discussion topics that I was able to attend and the presentation of different society leaders. The latter, in particular, is relevant to the advocacy work at NYSSA for the ideas and initiatives that NYSSA can adopt. This document also includes a concise, high-level overview of the CFA Institute mission, activities and organization for NYSSA members who may not have kept pace with the latest developments. Lastly, at the end, there is a list of quick references and links for easy access to relevant information and documents on the CFA Institute website.

Major Themes

The Summit this year included several prominent themes and topics that were covered in one or more sessions. Here are some of the most important ones.

Enhanced Mission

A recent change in the mission statement captures the wider perspective adopted by the CFA Institute in its concern, approach and strategy. The new mission statement reads as follows:

“To lead the investment profession globally by promoting the highest standards of ethics, education, and professional excellence for the ultimate benefit of society.”

Adding the words “for the ultimate benefit of society” has profound implications. It starts with the recognition that a primarily self-serving financial industry is ultimately self-destructive.

Finance represents the bloodstream of the global economy. Its role is to allocate capital efficiently in ways that support economic progress and the welfare of a majority of people. Fraud, unethical behavior and a casino mentality in finance and investments contribute to the creation of vast and inequitable wealth disparities which threaten the fabric of civilized societies. History is replete with examples of political turmoil and social upheavals following periods of financial excess.

Even absent any extremism and social violence, large wealth concentrations that are either idle or used for financial speculation, have serious negative consequences. They create liquidity traps for central banks which seriously limits the effects of monetary policy and holds economic output well below potential.

Low and decreasing velocity of money causes increasing financial wealth on one side to be based on proportionally higher levels of debt on the other side. As the total debt relative to GDP rises above certain levels, the risks of a financial meltdown become more elevated. Central bank monetary tools are massive yet blunt. Their use since the Dot-Com crash have fueled financial speculation with the simultaneous increase in financial wealth as well as total debt. Their continued use exacerbates systemic risk yet they are the only tools available. Policymakers in the US are not only deadlocked but also have limited tools and scarce ideas. They can make marginal changes only when forced by the need to avoid an impending calamity brought on by each new crisis.

In this environment it is the duty as well as the unique opportunity for the financial system (commercial banks, investment banks, investment advisers, etc.) to do a better job allocating capital to productive uses and concern for the greater good. Success hinges not only on skill but also on strong ethics and social responsibility. By adding the words “for the ultimate benefit of society” in the mission statement, CFA Institute becomes a leading force for positive change not only in the field of finance but also for economic progress and social stability.

Important: above section is my own editorial and deductive interpretation of the CFA Institute position. It may not reflect accurately the views and analysis of CFA Institute.

Future of Finance

The Future of Finance project is a long-term global effort to shape a trustworthy, forward-thinking financial industry that better serves society. It ties directly with the new mission statement of the CFA Institute by using the subtitle: “Help change finance for the greater good”.

The project is guided by the Future of Finance Advisory Council led by John Kay, a distinguished economist, businessman and academic. Some of the other fifteen-member council include professor Robert Shiller of Yale University who was recently awarded the Nobel Prize in Economics, the former chair of the SEC, Mary Shapiro, Robert Pozen, a senior fellow at the Brookings Institution and Tom Keene, CFA, editor at large at Bloomberg News.

The project aims to provide the tools to motivate and empower the world of finance to commit to fairness, improved understanding, and personal integrity. Six themes were identified that best capture the scope of the endeavor:

  • Financial Knowledge
  • Putting Investors First
  • Regulation & Enforcement
  • Retirement Security
  • Safeguarding the System
  • Transparency & Fairness

At the joint group dinner, Ashvin Vibhakar, CFA and Bob Dannhouser, CFA, formed a panel discussing the goals, process and the operation of the Future of Finance project. Ashvin is spearheading the effort which include a 15-person team of CFA Institute staffers allocating a portion of their time.

During plenary session, the work done on Retirement Security was presented and discussed. The topic is one of great importance for old and young people alike, all around the world. Some of the more important challenges identified are:

  • Aging populations and lack of sufficient young people to support them
  • Longevity risk creating additional burdens on already stretched social programs
  • Sustainable human capital - keeping populations healthy and well educated
  • Lack of pension coverage for large parts of the world population
  • Unsustainable entitlement programs
  • Tough choices: raise taxes, cut pensions, cut healthcare, cut education or some of each
  • Low-interest rate environment / Financial Repression
  • Threat of Inflation which can decimate cash and low-yielding assets.
  • Risk of rising interest rates which acts as deterrent to investment as higher rates reduce asset prices
  • Long-term unemployment and wage stagnation

Because the defined benefit programs are being increasingly replaced by defined contribution programs, the risk is transferred to the individual. Financial knowledge is lacking but even with sufficient education, behavioral biases are an impediment for individuals to implement proper retirement planning. Individuals are not capable of properly quantifying their retirement liability. General lack of investment expertise is an impediment even for those who save enough.

In a low-interest rate environment, high-fees eat-up a large portion of the returns. Many don’t know or understand the level of total fees they pay. Contributing to that is the fact that many of the fees could hidden or very hard to find and comprehend.

In the case of defined contribution plans, employers fear that by providing advice they would assume fiduciary liabilities and therefore many of these plans are left without professional investment advice. Those without sufficient assets cannot afford to engage the expertise of an adviser. Even those that have sufficient assets, don’t have the expertise to evaluate the quality of the adviser.

In the US, at the State and Local Government level, there are many overpromised pension benefits due to lack of understanding, poor accounting and corruption. As the public finance problems come to a head in places like Detroit and San Bernadino the rights of pensioners are challenged against the contractual obligations toward bondholder, with uncertain outcomes.

Internationally, each country is different due to their own socio-economic issues. For example, Japan has an important demographic problem that make it unique.

CFA Institute is analyzing the target audiences with whom it can contribute to the dialogue. Existing audience includes Money Managers, Investment Advisors Corporate Investors/Analysts and Individuals. Some of the potential audiences are Government Officials, Public Policymakers, Employers and Municipal Bond Investors. Reaching the audience can take various forms such as blogs, press, press releases and meetings with policymakers.

Future of Finance Advocacy

Proposed advocacy efforts include: Advocating to government and policymakers

  • Adopt mandatory savings
  • Reform entitlements for sustainability
  • Increase transparency at state and local government level
  • Augment tax-advantaged retirement savings
  • More savings vehicles for those without employer coverage

Advocating to employers

  • Help educate employees
  • Require enrollment in retirement savings plans

Advocating to intermediaries

  • Lower fees
  • Improve investor education on products

CFA Institute has defined a three-part message to be presented in a series of three whitepapers:

  1. Retirement Design – build awareness to retirement plan design alternatives and advocate for improvements. Consider mandatory savings. (Feb 2014)
  2. Retirement Strategies – educate and advocate for effective investment strategies for retirement. (May 2014)
  3. Fees – build awareness of fees and advocate for lowering fees. (Aug 2014)

At this time the CFA Institute is considering the input that it may soliciting from societies, from members and from employers. The institute is also pondering on the involvement of societies in crafting, tailoring and delivering the messages

Global Survey 2013

The CFA Institute Global Market Sentiment Survey was created to seek input from CFA Institute members and gather feedback on market sentiment, performance, and market integrity issues in 2013, and to further our mission of promoting ethical and trustworthy investment markets. This year’s survey results headlines are:

  • Advanced economies are especially optimistic on global economic expansion in 2013, despite the continued worldwide impact of the European sovereign debt crisis.
  • The Future Looks Brighter for Local Economic Growth, Unless You're in Europe
  • United States, China, and Brazil to Provide the Best Investment Opportunity
  • To Restore Integrity to the Global Capital Markets, Change Must Come From Within
  • And That Change Must Come from the Top

Proactive Contribution to Legislative and Regulatory Agenda

This is one of the significant topics discussed by the Capital Markets Policy Council (CMPC). Repeatedly, the idea was presented of being involved in influencing legislation being considered by policymakers during the initial stages rather than simply responding and trying to shape around the margin of laws already passed.

This approach is being rolled-out globally: US, Europe, Asia and elsewhere. In Europe CFA Institute established a permanent presence in Brussels, the principal locations of the European Commission and the European Parliament. In Oct 2013 CFA Institute appointed Josina Kamerling and Mirzha de Manuel Aramendia to its Brussels Office.

Other Plenary Session discussions and information

Shadow Banking

Feedback loops between the money market funds, which are part of this alternative funding source known as “shadow banking”, and regular banking system became evident during the 2007-8 financial crisis. The Financial Stability Board created a dedicated task force to strengthen oversight and regulation of the system. CFA Institute took the position and advocated for migration to a floating NAV system for money market funds.


The role of Global Investment Performance Standards (GIPS) and recent developments were discussed. An issue was raised regarding the creation of a registration facility for managers who claim GIPS compliance. Also, the certification of GIPS auditors is being considered.

Ethical Decision-Making Webinar

The Ethical Decision-Making Webinar is a free, highly interactive, case-based webinar led by CFA Institute staff that will provide participants with the framework to analyze situations from an ethics perspective.

Code of Ethics and Standards of Professional Conduct

A revised version is in the final stages and will be officially published after the June 2014 CFA exam.

CFA Institute & Edelman Investor Trust Study

The CFA Institute & Edelman Investor Trust Study examines trust by investors in investment managers, and explores what dimensions influence that level of trust. This study builds on the Edelman Trust Barometer which explores the levels of trust informed members of the public have in a variety of business, NGO, and government institutions globally. The Investor Trust Study surveyed over 2,100 retail and institutional investors in the United States, United Kingdom, Hong Kong, Australia, and Canada, and finds that while a slim majority of respondents trust investment managers, the level of trust is fragile. The study finds that beyond the usual financial issues of performance and fees, investors place value on alignment of interests in their consideration of which managers to hire.

THE VALUE OF TRUST: Strong performance alone is no longer enough for investment management professionals to earn investors’ trust. Behavior – and the ability to demonstrate aligned interest – is also of foremost importance.

Claritas Program

The Claritas Investment Certificate is a new global self-study education program and exam designed to give anyone working in financial services a clear understanding of the investment industry and their professional responsibilities within it. Focused on the essentials of finance, ethics, and investment roles, the program requires approximately 100 hours of study and generally can be completed within six months.

Society Leaders Workshop - Highlights


Number of members: 122,664, Countries with members: 142, Number of societies: 140, Countries with societies: 62, Number of Charterholders: 114,636

The work with societies is coordinated by the Advocacy Engagement Group. The global head of the group is Tony Tan. The head for Americas is Bob Luck.

Advocacy (definition): Promote Financial Market Integrity FMI

  • Ethics
  • Standards
  • Policy work – research and recommendations to policymakers and regulators

As a non-commercial organization, unlike most lobbying firms, CFA Institute is in a unique position to gain the trust of policymakers.

Each delegate from the represented societies presented an overview of the work conducted within the advocacy committee of their organization and some of the issues they face. The following are some highlights.

Brazil CFASB


  • Engaging members using surveys. Lesson learned: it is important to use the title “1-Minute Survey” which tends to receive a large percentage of responses. Simply using the title “Survey” is guaranteed to be shunned.
  • Hired a consultant with specialized skills and contacts to create documents and interact with the Securities Commission (CVM).
  • Ana Novaes, a director of CVM is a CFA Charterholder
  • A memorandum of understanding was finalized between CFA-I and CVM to offer 4 annual scholarships to CVA.
  • CVM invited CFA Society of Brazil (CFASB) to participate in it 10-year planning process
  • CFASB approached and discussed agendas with major capital market entities: ANBIMA (mutual funds), AMEC (asset managers), APIMEC (analysts association), IBGC (corporate planners), IBCPF (financial planners)


Web: cfafrance.org  | Tweeter: #CFAFrance

Advocacy goals: speaking up about ethics, professional standards, fairness, transparency and protecting investors

Actions: contributing to members’ education, building relations with regulatory agencies, commenting on regulatory initiatives, collaborating with other professional organizations and participating in the Future of Finance initiative

Society members like the information and the website. Website increases visibility to the members.

Committee members are involved on the long term. In the first year they work on a choice from 3 topics. On the second year, they work on certain themes (ex: fair and transparent disclosures)

Lesson learned: it is important to advertise events that have as main topic a subject related to investment management rather than ethics or advocacy. Market integrity and Ethics are then included in the context of the principal theme. 


Web: italiancfasociety.it

Adopted the clear 3-step approach with the guidance of CFA Institute:

  • Internal advocacy
  • External advocacy
  • Government advocacy


  • Society board is increasingly aware of the importance of advocacy
  • Members are more engaged
  • Created separate advocacy section on the website of CFA Society Italy 
  • Advocacy activities are highlighted society’s periodic newsletter
  • External publication of the Statement of Investor Rights and the Market Outlook Survey results helped raise the profile of the CFA brand
  • Leveraged CFA Institute position papers with regulators


Contribution for MiFID II Draft. MiFID - Markets in Financial Instruments Directive - is a European Union law that provides harmonized regulation for investment services across the 31 member states. Its objectives are to increase competition and consumer protection in investment services.

Article 25 stipulates: “Member states shall require investment firms to ensure and demonstrate that natural persons giving investment advice or information about investment products, investment services or ancilliary services to clients on behalf of the investment firm possess the necessary knowledge and competence to fulfill their obligations under Article 24 and this article and shall publish the criteria used to assess knowledge and competence.” 

Hong Kong HKSFA


  • Create a series of publications on selected topic
  • Create focus groups
  • Increase participation in policymaking process
  • Make recommendations to government organizations

Current projects:

  • Industry consultation on Enhanced Competency Framework for Private Wealth Management Practitioners
  • Consultation paper on proposed amendments to the Professional Investor Regime and the Client Agreement requirements
  • FSDC HC Committee survey on Wealth and Asset Management

India IAIP

Vision: be the most respected organization for governance, financial market integrity and ethics


  • Regulator relationship – capital markets, insurance and banking
  • Relationship with other industry bodies and academic institutions
  • Generate awareness inside and outside the industry
  • Co-hosting events with regulator, industry and stock exchange: roundtables, forums
  • Actively engaged with SFMI
  • Share CFA Institute publications and research
  • Member engagement:
    • IAIP newsletter includes advocacy efforts
    • CFA Institute Advocacy news disseminated to members
    • Members encouraged to represent on global committees
    • Members approached for feedback and comment on papers


  • To be recognized as a thought leader by regulators and investment community
  • Create strong advocacy organization with specific roles and responsibility for members
  • Have an active pool of subject-matter experts who are passionate
  • Setup subgroups to discuss and respond to specific issues 

Canada CAC

Web: cfaadvocacy.ca

The Canadian Advocacy Council (CAC) is an independent organization comprising of approximately 15 member societies from across Canada. Funding for the CAC is provided by the 12 member societies of CFA Canada and CFA Institute.

CAC uses a Litmus Test in order to efficiently allocate its resources to those initiatives that will produce the greatest benefits to Canada's CFA Institute member societies, CFA Institute members, the capital markets, and the investment community in general.

Mission: The Canadian Advocacy Council for Canadian CFA Institute Societies (“CAC”) is the Pan Canadian body representing the interests of Canadian CFA Institute societies with regards to advocating CFA Institute’s Code of Ethics and Standards of Practice to Canada’s securities regulators, standard setters, self-regulatory organizations, industry groups and legislators.

CAC advocates through:

  • Publication of comment letters on proposed rules from legislators and securities regulators.
  • Publishes white papers on issues of national importance
  • Participates in a number of User Advisory groups.
  • Comments and issues considered are put through the litmus test and debated by members.

CAC members are expected to serve a minimum of 3 years and the maximum is 9 years. Chair and Vice-chair are elected annually with a two year term limit. CAC convenes monthly via conference call and in person at least twice per year. Members cannot miss more than 3 consecutive meetings.

During 2012-13 fiscal year CAC wrote 18 letters. YTD for 2013-14 CAC wrote 6 letter.

Boston BSAS

BSAS conducts advocacy by:

  • Promoting Ethics – lunch presentation and presentation at Boston University
  • Promoting AMC in the Boston investment community
  • Developing relationships with legislators and regulators – Barney Frank, Elizabeth Warren
  • Promoting relationships between practitioners and academia – dinner, on-campus presentation, lecture program, access to papers through BSAS website
  • Community Outreach – meeting with state financial education officials; explore providing investment advice to Boston residents
  • Promoting Claritas – 500 participants in pilot program; BSAS reps visiting Boston investment firms
  • Organized ESG conference in partnership with Bloomberg and MSCI to educate BSAS members on sustainable investing

New York NYSSA

The committee focuses on the following areas:

  • Advocacy - Building relationships and identifying, researching, and addressing issues with policy makers
  • Communication - Coordinating efforts and communicating between CFA Institute and NYSSA on the topics of Advocacy Initiatives, Issue Positions and Policy Research Papers
  • Standards - Promoting the adoption of CFA Institute Standards (including working with our Corporate Reporting committee on those Standards)
  • Ethics - Outreach to employers, investors, media and industry groups to promote ethical industry practices and recognition of CFA Charterholder

Current Activities: Media Directory Program

The goal is to create a list of subject matter experts on different topics and make it available to members of the press and the media. Some of the benefits include

  • Raising awareness of NYSSA, CFA Institute and the CFA charter among the press and the public
  • Helping NYSSA experts gain visibility


  • Reached out to all who have been NYSSA members for at least five years
  • Received responses from 105 members
  • Created a database with the information from the respondents
  • Currently working on vetting the respondents and creating the final list
  • Once the list is completed, it will be published to the press and media organizations

Proposed Initiative for US: Raising Consumer Protection for Investors and Consumers of Financial Services through enhanced competency requirements for practitioners. - submitted by Robert Andriano. Similar proposals are currently considered in the European Union and Hong Kong (see highlighted sections above in blue)

About CFA Institute


To lead the investment profession globally by promoting the highest standards of ethics, education and professional excellence for the ultimate benefit of society.


This is how we believe financial markets and services should operate:

  • Investment professionals contribute to the ultimate benefit of society through the sustainable value generated by efficient financial markets and by effective investment institutions.
  • Good stewardship and high ethical standards are necessary for trust and confidence to be secured and for society to be served.
  • Financial markets should afford every investor the opportunity to earn a fair return.
  • Financial markets are more effective when participants are knowledgeable.
  • High ethical principles and professional standards are essential to positive outcomes; rules and regulations, while necessary, are not sufficient by themselves.

Strategic Premises

Our strategy builds on the following beliefs:

  • Investment services will thrive only if principals and assets owners have trust in the system and obtain fair and sustainable results from the services and actions of agents.
  • Significant systemic risks arise from the complexity and inter‐connectedness of markets and instruments, to which effective industry structure and excellent practice are critical.
  • Economic and political power is broadening out across a wider range of countries and regions, requiring significant strategic re-balancing.
  • Imbalances in the macroeconomic and geopolitical environment present significant opportunities, challenges, and risks.
  • Transformational changes in demography, the environment, and the limits to natural resources present significant challenges and opportunities.

Based on the above, CFA Institute will emphasize strategic initiatives with respect to:

Broader Mission

Extend our promotion of ethical and trustworthy investment markets and services, and education for investment professionals and other market participants.

Bolder Voice

Provide the voice globally for an effective investment industry that reflects our values.

Bigger Community

Broaden and re-balance our global reach with those working in or using the financial markets.


CFA Institute is a global organization composed of employed staffers and volunteers. According to an unofficial account, there are now about 650 paid staffers. Committees tend to have a greater number of volunteers than staffers. The role of the committees is to advise the staff on policy matters. 

CFA Program

  • Council of Examiners
  • Education Advisory Committee

CIPM Program

  • CIPM Association Advisory Council

Claritas Investment Certificate

  • Claritas Investment Certificate Advisory Committee

Educational Events and Programs

  • Annual Conference Advisory Group
  • European Investment Conference Advisory Group
  • FAS Board of Regents
  • Middle East Investment Conference Advisory Group

Ethics and Standards

  • Advisory Council
  • Standards and Financial Market Integrity division (SFMI)
    • Asset Manager Code Advisory Committee (AMC)
    • Capital Markets Policy Council (CMPC)
    • GIPS Executive Committee
    • Standards of Practice Council
    • Corporate Disclosure Policy Council 
  • U.S. Investment Performance Committee

Professional Conduct

  • Disciplinary Review Committee
  • PCP Liaison
  • CFA Digest Editorial Board
  • Financial Analysts Journal Advisory Council
  • Financial Analysts Journal Editorial Board 
  • Presidents Council



Quick References and Links 

SFMI Main page


Policy Positions and Research document list


Surveys and Results


Global Market Sentiment Survey 2013


Ethical Decision-making webinar






The best and latest in investment management research


Standards and Financial Markets Integrity (SFMI) Semi-annual Report May 2013


Societies page


Americas Market Integrity Team


Market Integrity Content Specialists


Social Media



Disclaimer: this document is for information purposes only and does not represent the official positions or views of CFA Institute. Errors, discrepancies or omissions, if any, are introduced inadvertently in the process of recording, reproducing and interpreting the original information. 

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