Uniform Code of Ethics for Three Leading Investment Credentials

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MTA adopts CFA Institute code of ethics into the CMT Program curriculum

“We respect the significance of this work and the impact our findings will have on the MTA’s diverse membership and its clients, colleagues, employers and even the general public." - Sam Levine, CFA, CMT, Ethics Committee Chair

The Market Technicians Association, the global organization for investment professionals advancing the discipline of technical analysis and the governing body for the Chartered Market Technician (CMT) Program, joins the CFA Institute under a uniform code of ethics for members, candidates and charterholders around the world. The CAIA Association adopted the CFA standards of practice previously and has integrated this into the ethics portion of their curriculum. In the wake of the financial crisis and numerous recent investigations of Wall Street firms, opinions of the general public and regulators’ for the financial services industry are at an all-time low. Alignment of non-profit professional associations under a single ethical standard bolsters the integrity and ethical capacity of practitioners in various roles throughout the industry.

In an internal statement to the global membership of the MTA, Sam Levine, CFA, CMT, chair of the ethics committee said: “We respect the significance of this work and the impact our findings will have on the MTA’s diverse membership and its clients, colleagues, employers and even the general public. A code of ethics can either prohibit unacceptable behavior or it can inspire, reassure and motivate current and prospective members to be model citizens of the global financial community.”

The MTA ethics committee engaged in a comprehensive review of the current code of ethics for well over a year. Several themes emerged from their investigation:

  • Ethical behavior is imperative
  • There are relatively few cases of misconduct in the MTA history. The CFA Institute’s code of ethics provides additional guidelines and case studies of potential violations allowing for more robust curriculum materials and exam questions to be written for the CMT Program
  • The differences between the MTA code of ethics and other credentialing organizations are sometimes subtle. This requires additional study and can be an area of confusion for dual charterholder candidates
  • The CFA institute’s code of ethics provides specific guidelines surrounding their standards to help users understand how they are interpreted
  • Adopting a more comprehensive standard could enhance the growth of the MTA, employment prospects for CMT charterholders, and credibility among the investment community

One of the strategic imperatives of the MTA has been to strengthen partnership activity across other professional associations committed to the education of financial industry professionals. The MTA has valuable ambassadors within the CFA Institute who have proven that they are interested in advancing the investment profession as a whole; not any one discipline or analytical framework.

The CAIA Association adopted the CFA Institute Standards of Professional Conduct, I-VI upon inception providing a precedent for the MTA licensing agreement. "When CAIA adopted the CFA code of ethics into our core curriculum, we did so with the knowledge that the alternative investment industry was already largely made up of ethical, client-focused professionals," said William J. Kelly, Chief Executive Officer of CAIA, the global leader in alternative investment education. "Codifying that commitment to ethics has allowed us to present a single, unified vision for our global membership which hails from more than 80 different countries."

The MTA will integrate the standards of practice handbook into the CMT curriculum for the October 2015 exam administration. The partnership between CFA and MTA will go deeper to also adopt the Code of Ethics. Craig Johnson, CMT, CFA Chief Technical Strategist for Piper Jaffray and President of the MTA Board of Directors said: “This partnership represents what Ralph Acampora has been teaching for years: Fusion Analysis. Every analyst looks at the P/E ratio, but some of us simply start with Price rather than Earnings. Our disciplines are complementary and new our ethics are universal.”

The CFA Institute, primarily through Bob Dannhauser, CFA and more recently Jon Stokes, CFA Head of Standards and Outreach, has been an incredible collaborator on this project. The willingness to share content and present best practice to the MTA ethics committee and Board of Directors goes far beyond professional courtesy. "Our diverse membership of professional investors informs our perspectives on global capital markets issues, transcending narrow commercial interests to focus on market integrity." Said Kurt Schacht, CFA, Managing Director, CFA Institute. The CFA Institute is actively involved in shaping public policy that strengthens investor confidence and market integrity. By licensing the standards of practice to the MTA and CAIA associations, the CFA further ratifies their approach to ethical standards and ensures all investment professionals understand the issues and improve their ethical practice.

The CMT Program is globally recognized as the most rigorous, professional credential for technical analysis. On average, only 57% of candidates pass the level III exam each administration. A three level exam ensures competency and ethical practice in the application of quantitative tools to active asset management across the world’s financial markets. Technical analysis provides the tools to successfully navigate the gap between intrinsic value and market price across all asset classes through a disciplined, systematic approach to market behavior and the law of supply and demand. Statistical concepts and intermarket relationships are a critical piece of the analytical framework for asset managers, research analysts and securities traders. The CMT Program is one of only two investment certifications recognized in the USA by FINRA and the SEC for exemption on the Series 86 exam; the second being the Chartered Financial Analyst (CFA) designation.

For the Level II exam, 63% of candidates passed, whereas 69% of those who took the Level I exam were successful. "The breadth of the curriculum and rigor of our assessment practices attest to the descending success rates. It is critical to the MTA mission and vision that all CMT Charterholders possess the requisite risk management tools and are skilled in quantitative methods necessary to manage money, advise clients or publish research in today’s often volatile financial markets ," said Tyler Wood, MBA Managing Director of Global Business Development at the MTA.

About the Market Technicians Association (MTA)
The Market Technicians Association’s objective is to educate members and the investment community in technical analysis. The MTA is responsible for the creation, administration and regulation of the Chartered Market Technician® (CMT) designation. The CMT® designation is the only technical analysis designation recognized by the Financial Industry Regulatory Authority (FINRA) qualifying candidates for a Series 86 exemption upon passing Levels I & II of the CMT exam.

Each of the three levels of the CMT exam are administered twice a year in May and October. The MTA offers the exams worldwide through Prometric testing centers. Candidates can sit for one exam each administration and therefore a successful candidate could complete the entire CMT Program in 12 months. For complete information, please visit http://www.mta.org.

Media Contact:
Maya Ganguly
Communications Manager
Market Technicians Association
(646) 652-3300


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