This index will derive its value over time by showing how sentiment varies with market conditions and events. It would have been most interesting to have had this index over the last decade. But we start now, and in three years' time we may be able to make some interesting time-series comparisons. Because of current limitations, we are releasing the index only to our members and on occasion to interested parties.

Developed by the CFA Institute Centre for Financial Market Integrity—primarily Matt Orsagh, CFA, and Kurt Schacht, CFA—this annual index ranks the overall ethical behavior of market participants on a scale of 1 (poor) to 5 (excellent). For the United States, where we have begun, the initial reading of financial service professionals is 3.52. Because we have no history or context, we must be careful how we interpret these numbers; however, this ranking suggests we have work to do.

We also surveyed our members' attitudes on segments within the capital markets. Hedge funds, corporate boards, and CEOs did not rank as well as the market overall. I am not sure how to interpret the data other than to say that our members have questions about these market segments. To be fair, if boards and CEOs surveyed themselves about the integrity of analysts, portfolio managers, investment bankers and the like, it would be interesting to see how we'd fair. The more important point is that over time I believe we'd like to see all of these numbers rise.

The index also tracks confidence in various "market foundations" such as regulatory protections, legal protections, corporate governance standards, and financial transparency. Among these market foundations, the index indicates most confidence in U.S. legal protections (average rating of 3.45) and the least amount of confidence in corporate governance (average rating of 3.04).

The new index tracks the responses of CFA Institute members situated both inside and outside the U.S. market. Interestingly, those outside the U.S. market consistently rated the ethical conduct of financial professionals and market foundations higher than did those who live and work within the United States. For example, U.S. respondents rated the ethical behavior of corporate executives in the United States at 2.66, while those outside the market gave the ethical behavior of U.S. corporate executives a rating of 2.95.