CAIA Ethics Updates 2026: How Changes Affect Level 1 and Level 2 Exam Content
- Dimitri Dangeros, CFA, CAIA
- 5 days ago
- 4 min read
CAIA Ethics Updates 2026 are not cosmetic. Ethics has been rebuilt around the CAIA Ethical Principles and repositioned across both levels with new topics, new weights, and a different style of questioning. If you are sitting March or September 2026, your old “Professional Standards & Ethics” playbook is obsolete.
1. Core of the CAIA Ethics Updates 2026
Three structural changes define CAIA Ethics Updates 2026:
New core framework – Ethics is now built around the eight CAIA Ethical Principles, grouped into “doing the right things” and “doing things right,” and explicitly integrated into both Level 1 and Level 2 exam content.
New topics at both levels – “CAIA Ethical Principles” is a standalone topic at Level 1 and Level 2, with its own readings on Ethics plus Professionalism and Fiduciary Responsibilities.
New weights and formats – Ethics weight at Level 1 is now a fixed 10% of the exam. At Level 2, ethics has 0% weight in multiple-choice but 10% of the constructed-response section, forcing candidates to demonstrate applied judgment in writing.
That is the ethical architecture you are preparing for in 2026.
2. Level 1 – What Changed in Ethics for 2026
In 2025, Level 1 ethics was “Professional Standards and Ethics,” heavily based on the CFA Institute Standards of Professional Conduct and weighted 15–25% of the exam. That section is gone for 2026.
For 2026 Level 1, ethics is restructured as:
Topic: CAIA Ethical Principles
Sub-areas:
Ethics
Professionalism and Fiduciary Responsibilities
Weight: 10% of the Level 1 exam.
The underlying learning outcomes now focus on:
The relationship between professionalism, fiduciary duty, and ethics.
Understanding the eight CAIA Ethical Principles and how they split into “doing the right things” vs “doing things right.”
Foundations such as value creation, assurance of quality, conflicts of interest, prudence and care, loyalty, impartiality, and trust.
Case-based analysis of historical ethical breaches in the finance industry and mapping them to the principles.
Practical implications for Level 1:
Any notes or question banks built around “Standard I–VI” are no longer aligned with the current syllabus.
You must be able to name, explain, and apply each of the eight CAIA Ethical Principles, not just recognise narrow rule violations.
Although ethics weighting is now “only” 10%, it is pure CAIA-specific content; if you treat it as recycled CFA ethics, you will mis-prepare.
3. Level 2 – Ethics Added and Concentrated in Constructed Response
Pre-2026, Level 2 did not have a dedicated ethics topic with explicit weight; ethics was effectively absent as a separate focus.
CAIA Ethics Updates 2026 change that. For 2026 Level 2:
Topic: CAIA Ethical Principles
Readings:
Professionalism and Fiduciary Responsibility
Ethics
Multiple-choice weights:
Professional Standards and Ethics: 0% (no dedicated MC questions).
Constructed-response weights:
Professional Standards and Ethics: 10% of the CR section.
In practice, that means:
At least one constructed-response question will focus directly on CAIA Ethical Principles, professionalism, and fiduciary responsibilities.
You will be judged on your ability to interpret complex scenarios, identify principle conflicts, and recommend actions, not just choose an option from A/B/C.
Ethics answers must be structured, explicit about which principles are engaged, and linked to real-world institutional contexts (asset owners, managers, mandates, risk, due diligence).
You cannot “hide” from ethics at Level 2. A weak ethics CR answer can drag down your overall score disproportionately, because this portion is pure judgment and writing, not guessable MC.
4. How CAIA Ethics Updates 2026 Change Your Study Strategy
For Level 1 candidates
You need a different approach than 2025:
Rebuild your ethics base. Dump any plan based on “Professional Standards and Ethics = CFA Standards.” Start with the CAIA Ethical Principles readings and map out all eight principles with their key components and examples.
Focus on application, not slogans. Questions will lean on “Which principle is being violated or upheld?” and “What is the professional, fiduciary response?” rather than “Which Standard letter applies?”
Integrate ethics with the rest of the curriculum. The principles explicitly touch value creation, risk, stewardship, and client-centric behaviour. Use ethics scenarios as a lens on real assets, private equity, hedge funds, and digital assets rather than treating ethics as a silo.
Exploit the 10% weight smartly. 10% of the exam is still a significant chunk of marks that can be secured with concept-heavy, formula-light preparation. Ethics is one of the fastest-return topics if you study it properly.
For Level 2 candidates
The shift is more brutal at Level 2, because ethics is now written, not multiple-choice:
Train for written answers. You need to practice short, disciplined responses that:
Identify the relevant CAIA Ethical Principles.
Diagnose exactly where behaviour or policy conflicts with those principles.
Recommend concrete actions that real institutions could implement.
Use principles as a decision framework. For Level 2, ethics questions will often intersect with Institutional Asset Owners, Asset Allocation, Risk, Due Diligence, and Volatility/Complex Strategies. You are expected to show how a fiduciary acting under the CAIA Ethical Principles would set policies and make trade-offs.
Treat the 10% CR weight as non-negotiable. Unlike MC sections where a few guesses might land, ethics CR exposes you. A vague or generic answer tells the marker you do not actually understand CAIA Ethical Principles. That is how you fail despite knowing the math.
5. Summary of CAIA Ethics Updates 2026
Condensed:
New backbone: ethics across both levels is now built entirely on the eight CAIA Ethical Principles.
Level 1: old “Professional Standards and Ethics” (CFA-based, 15–25%) replaced by CAIA Ethical Principles at a fixed 10% weight, with heavy emphasis on principles, fiduciary duty, and case studies.
Level 2: ethics newly added as Topic 1, with 0% MC weight but 10% of constructed response, forcing applied, written use of the principles.
If you are sitting in 2026 and still studying from a 2025 ethics syllabus, you are preparing for the wrong exam. Align your plan explicitly to CAIA Ethics Updates 2026 or accept an unnecessary risk of failure.
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