The CFA Institute Asset Manager Code (Code), which is a voluntary code of conduct to help asset managers practice ethical principles that put client interests first, has recently gained a lot of traction in the Asia-Pacific region (APAC), as three big events in June show. First, SEC Thailand signed a Memorandum of Understanding (MoU), which is nonbinding agreement between two or more parties outlining the terms and details of an understanding, including each parties’ requirements and responsibilities, with CFA Society Thailand to promote the Code in Thailand. Second, the Mongolian Association of Securities Dealers (MASD) signed an MoU with CFA Institute to promote the Code in Mongolia. And, third, AMII (Indonesia Association of Investment Managers) decided to adopt the Code as the Association’s Code of Ethics in Indonesia.

MoU between SEC Thailand and CFA Society Thailand

Mr. Rapee Sucharitakul, Secretary-General of SEC Thailand, and Mr. Andrew Stotz, President of CFA Society Thailand, signed an MoU to promote the Code locally at the Thailand Investment Conference 2017 in Bangkok on 22 June. The conference was organized by the SEC Thailand and CFA Society Thailand to promote investor protection and general financial literacy in Thailand. The theme of the conference was putting investors first, which is in line with the Code. More than 200 industry practitioners attended the conference, which significantly increased awareness of the Code in Thailand.

Established in 2003, CFA Society Thailand shares the mission of CFA Institute to lead the investment profession globally by promoting the highest standards of ethics, education, and professional excellence for the ultimate benefit of investors in Thailand. Both SEC Thailand and CFA Society Thailand will work closely to promote adoption of the Asset Manager Code as well as the Global Investment Performance Standards (GIPS®) over the next two years to encourage healthy growth in the Thai capital markets. CFA Institute will provide training on and interpretation of the Code and the GIPS standards to both parties, as needed. A Thai translation of the Asset Manager Code is available on the CFA Institute website. We anticipate that this collaboration will stimulate asset managers’ interest in learning about the Code and the GIPS standards and have a significant impact on compliance with both.

Back row from left to right: Chatchai Thisadoldilok, CFA, Secretary, CFA Society Thailand (Director of Research, SEC Thailand); Win Phromphaet, CFA, Vice President, CFA Society Thailand (Chief Investment Officer, CIMB Principal Asset Management); Nick Pollard, Managing Director, CFA Institute Asia-Pacific Region; Tipsuda Thavaramara, Deputy Secretary-General, SEC Thailand; Prakid Punyashthiti, Deputy Secretary-General, SEC Thailand; Duangmon Chuengsatiansup, Assistant Secretary-General, SEC Thailand. Front row from left to right: Andrew Stotz, CFA, and Rapee Sucharitakul.

MoU Signing between CFA Institute, MASD, and MSFA

On 27 June in Ulaanbaatar, Mr. Nick Pollard, Managing Director, CFA Institute Asia-Pacific Region, Mrs. B. Ulziibayar, Chairperson of the Board of Directors of the Mongolian Association of Securities Dealers (MASD), and Mr. Bayarsaikhan Davaadorj, Chairman of the Mongolian Society of Financial Analysts (MSFA), all signed an MoU to signal a joint effort to promote the Asset Manager Code in Mongolia over the next two years. The ceremony was witnessed by more than 100 local industry practitioners, including local media.

From left to right: Bayarsaikhan Davaadorj, B. Ulziibayar, and Nick Pollard.

MASD has been recognized in 2015 by the Mongolian Financial Regulatory Commission (FRC) as the first self-regulatory organization of its kind. Members include 47 brokerage houses and an asset management company, which are all licensed by the FRC to operate in Mongolia’s capital markets. Mr. Khuyag Tsedendamba, Secretary General of MASD said “MASD’s mission is to act on behalf of its members, to protect the interests of investors, and to sustain continuous development of (Mongolia’s) capital markets.”

MSFA is a not-for-profit organization based in Mongolia and it shares the CFA Institute mission to lead the investment profession globally by promoting the highest standards of ethics, education, and professional excellence for the ultimate benefit of investors in Mongolia.

This agreement is an excellent model of collaborative efforts among three different types of organizations — local self-regulatory organization, local society of financial analysts, and CFA Institute — to help promote professionalism, ethical conduct, and industry best practice that support the healthy, long-term financial market development in Mongolia. A Mongolian translation of the Asset Manager Code is available on the CFA website. In this collaboration, MASD and MSFA will be actively promoting the Code locally and CFA Institute will support their promotional efforts by conducting webinar training sessions on the Code, as needed.

AMII Adopts the Asset Manager Code

In June, AMII officially adopted the Code as its Code of Ethics, with some adjustments to conform with local rules. As required by the Otoritas Jasa Keuangan or OJK (Financial Services Authority of Indonesia) in its recent directives, all members of the Association are required to abide by the Association’s Code of Ethics.  Mr. Edward Lubis, Chairman of AMII, said “AMII plans to include the Code of Ethics training into the mandatory bi-yearly CPD (continuing professional development) program for individuals holding an investment management license from OJK. AMII will encourage its members to formally claim compliance with the Code, and the members will report on an annual basis by completing a self-assessment questionnaire to AMII Committee of Ethics if they formally claim compliance with the Code.”  CFA Institute welcomes the Association’s initiative and will support the Association’s efforts by providing webinar training sessions on the Code to its members, as needed.

The call for ethical professional conduct is loud and clear in Thailand, Mongolia, and Indonesia. The Asset Manager Code provides firms with a robust ethical and compliance framework to establish a culture of integrity within their firms. It also creates a win–win situation for all stakeholders, such as regulators, investors, and asset managers, to build trust among market participants, practice ethical principles embedded in the Code, and run a sustainable business.  We look forward to seeing the extent of the positive impact their collaborative efforts will have on their countries!

If you liked this post, consider subscribing to Market Integrity Insights.

Photos provided by CFA Institute staff.