Ethics & Professional Standards for the CMT Exam

Ethics on the CMT Exam

Ethics carries 15% weight on CMT Level 1 and appears on all three levels. Many candidates underestimate this section — yet it offers some of the most straightforward points on the exam.

For the complete curriculum overview, see the CMT exam guide 2026.

CMT Association Code of Ethics

All CMT candidates and charterholders must adhere to the Code of Ethics, which covers:

Integrity of Capital Markets

• Material nonpublic information: Never trade on or share inside information
• Market manipulation: Avoid actions designed to mislead market participants

Duties to Clients

• Loyalty, prudence, and care: Act in clients' best interests
• Fair dealing: Treat all clients fairly — no preferential treatment
• Suitability: Recommendations must match client objectives and risk tolerance
• Disclosure: Reveal all material conflicts of interest

Duties to Employers

• Loyalty: Act for the benefit of your employer
• Additional compensation: Disclose any outside compensation arrangements

Investment Analysis

• Diligence and reasonable basis: Analysis must be thorough and well-supported
• Communication: Distinguish between fact and opinion
• Record retention: Maintain adequate records

Conflicts of Interest

• Disclosure of conflicts: All potential conflicts must be disclosed
• Priority of transactions: Client trades before personal trades

Study Strategy for Ethics

1. Read the full Code of Ethics document (available from CMT Association)
2. Focus on scenario-based application — the exam tests judgment, not just recall
3. When unsure, choose the answer that puts clients first
4. Ethics concepts also appear in Level 3 essays

Practice ethics questions in our question bank and return to the full guide.