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Mark Of Trust: HDFC AMC Adopts CFA Institute Asset Manager Code

The CFA Institute Asset Manager Code is a trusted global standard for asset management companies

Mark Of Trust: HDFC AMC Adopts CFA Institute Asset Manager Code

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HDFC Asset Management Company Limited (HDFC AMC), one of India's leading mutual fund managers, has adopted the globally recognized CFA Institute Asset Manager Code. By adopting the Code, HDFC AMC has joined an elite group of more than 1000 firms across 30 countries that adhere to the principles of conduct and provisions of the CFA Institute’s Asset Manager Code.

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In Picture: Navneet Munot, CFA, managing director, and CEO at HDFC AMC and Margaret Franklin, CFA, CEO and president at CFA Institute

Speaking on the landmark event, Navneet Munot, CFA, managing director, and CEO at HDFC AMC said, “High ethical standards, and serving clients with professional excellence reflect the HDFC group’s fundamental business values and ethos. To emphasise our continued commitment to ethics, professionalism, and putting clients’ interests first, HDFC AMC has adopted the CFA Institute’s Asset Manager Code of Professional Conduct”.

“CFA Institute has the important mandate of advancing ethics, market integrity, and professional standards of practice, which collectively contributes value to society. We are very proud to include HDFC Asset Management Company in this extensive list of companies around the world that are applying ethical thinking and prioritising transparency, to protect clients’ best interests and make our industry more accountable, especially as we navigate through these complex times,” CFA Institute CEO and president Margaret Franklin, CFA, said.

Decoding the Code

The CFA Institute Asset Manager Code is a voluntary code of conduct for investment managers and has the interest of investors at its core. It sets out the highest standards of ethics, professionalism, and education in the investment industry. It outlines the ethical and professional standards for organisations that manage client assets, including mutual funds, collective investment schemes, and funds of fund organisations. The Code is applicable globally to asset management firms of all sizes and structures.

While asset managers must adhere to the Code’s principles and provisions, it also offers them the flexibility to outline custom policies and procedures to best implement the said provisions in their work environment.

The principles and provisions of the CFA Institute Asset Manager Code addresses six broad categories:

1. Loyalty to clients: Asset Managers must prioritise client interest over their own, preserve confidentiality of information, and maintain client objectivity and loyalty.

2. Investment process and actions: Managers must adhere to standards when managing client assets, must be prudent, not engage in unfair practices, and take actions as per client investment objective.

3. Trading: Managers must engage in best trading practices that enhance value for clients, prioritise investments made on clients’ behalf, and ensure equitable trade allocation.  

4. Risk management, compliance, and support: Managers must establish risk management processes, ensure compliance to the Code and legal and regulatory requirements, and install resources for work support. 

5. Performance reporting and valuation: Managers must present performance information that is fair, accurate, relevant, timely, and complete. Managers must not misrepresent the performance of individual portfolios or of their firm.

6. Disclosures: Managers must provide complete, accurate, timely, and truthful disclosures and share material facts, conflicts of interests, or any other information deemed vital for the client.

Adopting the Code not only enhances the image and reputation of asset managers, but it also reinforces trust. For smaller and newer firms that don’t have formal policies and procedures, it can serve as a code of conduct aligned to global best practices. Even for larger firms with established procedures, alignment with the Asset Manager Code can help fill gaps and ensure conformity with the most respected standard in the space.

More than 1000 firms worldwide claim compliance with the Asset Manager Code. To find out if your mutual fund is on the list, click here.