CFA Institute Standard V(A): Diligence and Reasonable Basis requires CFA Institute members to exercise diligence, independence, and thoroughness as well as have a reasonable and adequate basis supported by appropriate research and investigation for making investment recommendations or taking investment action. Yoon’s well-established routine and procedures for conducting analysis of the global travel and lodging industry are disrupted by the global pandemic. Steps she normally takes to thoroughly analyze her investment recommendations are now prohibited. Although she could refrain from undertaking any analysis until her high standards of investigation can be resumed (A), that is likely not practical given the uncertainty of when the restrictions will be lifted and the demands of her employer.
Standard V(B): Communication with Clients and Prospective Clients requires members to disclose the basic format and general principles of the investment processes they use to analyze investments and select securities. Although Yoon does not have to provide the minute detail of her research process that would give away confidential or proprietary information, she must disclose the basic process for conducting her research. Therefore, the course of conduct in Choice C would not be an option. If she continues to provide research and recommendations without any mention about the change in process for conducting that research and that her in-person capabilities have diminished (D), that would violate Standard V(B), which requires CFA Institute members to disclose any changes that may materially affect the investment process they use to analyze investments and disclose any limitations and risks associated with the process. Given the facts, Yoon’s best course of action is Choice B, which is to conduct her research as best she can given the restrictions and disclose any issues in her report.