11. Praful Chandarana, CFA, is starting a new business to offer investment-consulting services to
pension fund trustees in response to a new regulation that requires all pension fund Investment
Policy Statements (IPS) to be reviewed and approved by an independent CFA Charterholder.
Prior to starting the new business, he meets with the pension fund regulator to clarify if the CFA
Charterholder undertaking the IPS review should be a licensed financial advisor. A separate
regulatory body grants the license to those giving investment advice to clients. The regulator
states they do not require the CFA Charterholder to hold a financial advisor’s license, despite
financial-related advice being given to the pension funds during any IPS review. Chandarana
therefore, starts his new business to undertake IPS reviews without obtaining a financial
advisors license. Subsequently when clients of his former employer contact him he informs
them of his new company and the services he offers. Does Chandarana most likely violate the
CFA Code and Standards?
A. No.
B. Yes, with regard to Professionalism.
C. Yes, with regard to Duties to Employer.
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