IBBC CAPITAL ACADEMY / 2027
Protect market integrity without banning legitimate research
Independent IBBC Capital draft content for self-study. Not affiliated with or endorsed by CFA Institute. New lessons await subject-matter review. No CFA designation or official PSM credit is awarded.
Learning goals
- Diagnose the conduct from the facts and relevant professional duties.
- Recommend a documented preventive and corrective response.
Draft · approximately 60 minutes, excluding further revision.
Decision case · fictional facts
A fictional analyst receives an unreleased acquisition approval directly from the issuer’s finance director, clearly confidential and price-sensitive. Separately, a research colleague combines public shipping data with immaterial supplier observations. A trader proposes fictitious matched orders to create apparent demand.
Duties and competing interests
Information is material when a reasonable investor would consider it important or it is likely to affect price; nonpublic status concerns dissemination and access. Do not trade or induce others to trade on material nonpublic information. Source reliability, specificity and context matter; an NDA does not authorize trading.
Legitimate mosaic research can combine public information with nonmaterial nonpublic observations; it does not cleanse genuinely material confidential facts. Manipulation includes deceptive information or transactions intended to distort price or volume. Genuine hedging, liquidity provision or arbitrage requires analysis of facts and intent rather than suspicion based solely on activity.
Decision, controls and remaining uncertainty
Stop use of the acquisition information, notify compliance and follow restricted-list/information-barrier controls. Do not tip another fund. Preserve the communication and determine whether appropriate public disclosure can occur through authorized issuer channels.
Reject fictitious orders and escalate the proposal; retain legitimate research sources and the reasoning separating nonmaterial observations from confidential price-sensitive facts.
Formula and assumptions
Identify facts → duties → affected parties → feasible action → evidence and follow-up
Compare with the model response after drafting
- Stop use of the acquisition information, notify compliance and follow restricted-list/information-barrier controls. Do not tip another fund. Preserve the communication and determine whether appropriate public disclosure can occur through authorized issuer channels.
- Reject fictitious orders and escalate the proposal; retain legitimate research sources and the reasoning separating nonmaterial observations from confidential price-sensitive facts.
Errors to catch
- Treating disclosure, client consent or a supervisor’s instruction as permission for prohibited conduct.
- Inventing missing facts or treating a potential concern as a proven legal violation.
Write, compare, then self-assess
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Original knowledge check
Answer every question before checking. Review explanations after submitting; retry starts a new attempt.
Sources and coverage status
These original lessons are drafts. Public outlines are used to check scope; the official learning-outcome text and proprietary question banks are not reproduced here. Follow the source for exam-year requirements and updates.