Confidentiality
Keeping client information confidential unless the information concerns illegal activities, disclosure is required by law, or the client permits.
Exam items hand you a third party asking for client data — a regulator, a prospective employer, or a member’s own outside counsel — and make you choose disclose vs. stay silent. The tell is whether disclosure is required by law or merely requested: a subpoena or statutory mandate is the legal-compulsion exception, so a casual request “to assist an investigation” with no legal force is a trap — you must still refuse. One key exception runs the other way: cooperating with a CFA Institute Professional Conduct investigation is itself a permitted disclosure, not a breach. The highest-scoring move when unsure is to consult compliance or counsel before disclosing.
Do not confuse III(E) with loyalty (IV(A) — now titled simply “Loyalty,” though many banks still say “Loyalty to Employer”), which guards your employer’s confidential lists and models, not the client’s secrets — a departing analyst can breach loyalty without touching confidentiality. Leaking material nonpublic information implicates integrity of capital markets (II(A)), not III(E). Memory hook: three keys — Law, Lawbreaking, License (legal compulsion, the client’s own illegal acts, and the client’s permission).
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