Code of Ethics and Professional Conduct in the Financial Sector

CODE OF ETHICAL AND
PROFESSIONAL
CONDUCT FOR THE
FINANCIAL SECTOR

Approved by
Board Resolution
Central Bank of the
Republic of Azerbaijan
Date: July 7, 2026
Protocol No. 30/4
.

CODE OF ETHICAL AND
PROFESSIONAL CONDUCT
FOR THE FINANCIAL
SECTOR

Contents
I. GENERAL PROVISIONS...............................................................................................................3

Purpose.......................................................................................................................................................3
Scope..........................................................................................................................................................3
Key Concepts.............................................................................................................................................3
Ethical Principles .......................................................................................................................................4
II. RULES OF PROFESSIONAL CONDUCT.................................................................................... 6
Professionalism .........................................................................................................................................6
5.1. Competence and Continuing Professional Development............................................................6
5.2. Compliance with Laws and Ethical Standards ..............................................................................6
Integrity in Financial Markets...................................................................................................................6
6.1. Handling Internal and Sensitive Information..................................................................................7
6.2. Transparent Disclosures...................................................................................................................7
6.3. Preventing Abuse in Financial Markets ..........................................................................................7
Conflicts of Interest ...................................................................................................................................7
7.1. Preventing Conflicts of Interest........................................................................................................7
7.2. Prioritizing Operations.......................................................................................................................8
7.3. Gifts and Referral Fees.....................................................................................................................8
Customer Relations ..................................................................................................................................8
8.1. Providing Products that Meet Customers' Interests .....................................................................8
8.2. Communication with Customers......................................................................................................9
8.3. Behavior Towards Customers..........................................................................................................9
8.4. Customer Data Protection ................................................................................................................9
Obligations Towards the Employer ........................................................................................................9
9.1. Whistleblowing..................................................................................................................................10
9.2. Abuse of Position.............................................................................................................................10
9.3. Reputation and Public Disclosures ...............................................................................................10
9.4. Ethical Business Conduct and Professional Communication ...................................................10
9.5. Responsibility of Management.......................................................................................................11
Social Responsibility and Contribution to Society ...........................................................................11
10.1. Social and Environmental Responsibility ...................................................................................11
10.2. Contribution to Society and Financial Literacy..........................................................................11
III. ENFORCING THE RULES OF ETHICAL CONDUCT ................................................................ 12
Aligning Institutional Codes of Ethics.................................................................................................12
Creating Support and Conditions for Professionals.........................................................................12
Monitoring and Enforcement Mechanisms for Ethical and Professional Conduct......................12

I. General Provisions

Purpose
This Code of Ethics and Professional Conduct (hereinafter "the Code") establishes recommendations for uniform standards of conduct for professionals in the financial sector. The Code's primary purpose is to foster an environment of high professionalism, transparency, accountability, and trust, thereby bolstering public confidence in the financial sector. The Code also aims to promote compliance among supervised entities with legislative requirements, including the fight against corruption, the legalization of funds or other property obtained through crime and the financing of terrorism, consumer rights protection, and other established requirements, by applying ethical principles and professional conduct rules.
Scope
This Code applies to all supervised entities of the Central Bank of the Republic of Azerbaijan, including their employees, management body members, and committee members, and is of a recommendatory nature for application to both daily activities and strategic decision-making processes.
Key Concepts
3.1. For the purposes of this Code, the terms used have the following meanings:
3.1.1. Continuous Professional Development – Professionals need to regularly update
their knowledge, skills and competencies, keep up with new trends and continue learning to adapt to a changing environment.
3.1.2. Ethical Behavior – carrying out professional activities in accordance with the
principles of honesty, objectivity, responsibility, transparency, confidentiality, justice, equality, competence, and protection of public confidence.
3.1.3. Ethical Principles – The principles defining professional conduct set out in Part
4 of this Code.
3.1.4. Public Trust – The trust and confidence shown by society in the financial sector
and the professionals working there.
3.1.5. Financial Product - Products and services offered by supervised entities to
individuals and legal entities.
Chapter I

3.1.6. Financial Literacy – The level of awareness, knowledge, skills, and behaviors
necessary to understand financial products and services, assess financial risks and opportunities, and make well-informed decisions.
3.1.7. Conflicts of Interest – A situation in which a professional's personal or
commercial interests prevent them from performing their duties in an objective and fair manner.
3.1.8. Supervized Entities – Banks, non-bank credit institutions, professional
participants in the insurance market, investment companies and other licensed persons in the securities market, investment funds, investment fund managers, payment institutions, electronic money institutions, payment system operators, credit bureaus and other persons defined as entities supervised by the Central Bank under the laws regulating financial markets.
3.1.9. Professionals – Individuals who are subject to supervision in accordance with
the laws regulating financial markets, individuals working under an employment or civil law contract in a supervised entity, as well as members of management bodies and their committees.
3.1.10. Referral Fees – any compensation, fee or benefit received from or paid to third
parties by professionals in exchange for recommending financial products or services to customers.
4. Ethical Principles
4.1. The following principles shall guide the activities of professionals:
4.1.1. Integrity – Professionals demonstrate integrity in their activities and refrain
from achieving goals through deception, manipulation, or unethical means.
4.1.2. Objectivity – Professionals ensure that their decisions are made impartially,
without being influenced by emotions or personal interests.
4.1.3. Accountability – Professionals are responsible for their actions and decisions
and are willing to accept the consequences;
4.1.4. Transparency – Professionals clearly, accurately, and promptly disclose
information and decisions, thereby ensuring a transparent operating environment.
4.1.5. Confidentiality – Professionals maintain the confidentiality of information
related to clients and the subject of supervision, including banking secrets, insurance secrets, commercial secrets, and other confidential information protected by law and disclose this information to other persons only in cases provided for by law.

4.1.6. Justice and Equality: Professionals treat all stakeholders fairly and do not
tolerate discrimination or biased behavior.
4.1.7. Competence: Professionals consistently demonstrate a high level of expertise
in their field and strive to improve their skills.
4.1.8. Protecting Public Trust - Professionals exhibit behaviors that enhance public
trust in the financial sector and avoid actions that could damage it.

II. RULES OF PROFESSIONAL CONDUCT
5. Professionalism
Professionalism forms the basis of professional conduct and encompasses the knowledge, skills, responsibilities, and behavioral qualities of financial sector professionals. This principle reflects not only the technical competence of professionals, but also their commitment to the law and values, motivation for continuous improvement, and responsibility to maintain public trust in the financial sector.
5.1. Competence and Continuing Professional Development
Professionals demonstrate a high level of competence and knowledge in their activities. They possess the necessary knowledge, skills, and experience to fulfill their professional obligations. They understand that they serve both the protection of the reputation of the supervised entity and the public welfare with their knowledge and skills. At the same time, they ensure their continuous professional development by regularly updating their skills and striving to contribute to the development of other professionals' skills.
5.2. Compliance with Laws and Ethical Standards
Professionals should be thoroughly familiar with the relevant legislation, normative acts, and regulatory requirements and strive to comply with them. They should avoid any action aimed at evading legal obligations or abusing legal loopholes. They should also refrain from behavior and decisions that violate or manipulate legal requirements. They should prioritize ethical principles and legal compliance, refrain from actions that attempt to circumvent the legal framework, and avoid behavior that undermines public confidence in the financial sector.
6. Integrity in Financial Markets
Integrity in financial markets is crucial for the financial sector's reliability and market participants' confidence. Professionals avoid abusing information asymmetry and adhere to the principles of transparency and objectivity to prevent manipulation and illegal activity in the market. These principles protect investor and public trust in the financial sector and ensure fair operations.
Chapter II

6.1. Handling Internal and Sensitive Information
Professionals do not act on, nor encourage others to act on, confidential or undisclosed information that could influence decisions in the financial services or operations field. They safeguard internal and material information and refrain from using it for personal gain.
6.2. Transparent Disclosures
All material information that may influence decision-making is provided to the relevant parties in a timely and accurate manner. Disclosure of this information is not prevented by its not being in line with the personal interests of the organization or its professionals. The intentional concealment or distortion of information is not permitted.
6.3. Preventing Abuse in Financial Markets
Professionals must not take any action intended to artificially alter market prices, distort trading volumes or misrepresent the value of assets. They shall not engage in, encourage or condone any conduct that undermines the efficiency, transparency or fairness of the market, or induces other participants to make deceptive decisions. They shall recognise that such activities can seriously damage the integrity of the market, the trust of stakeholders, and the reputation of the supervised entity, and they shall be aware that they and the supervised entity are both responsible for preventing such situations.
7. Conflicts of Interest
Objectivity and transparency are integral to professional activity in the financial sector. When a conflict of interest arises, personal or organisational interests may take precedence over client or public interests. Therefore, professionals must identify potential conflicts of interest in advance and inform their direct supervisor in writing or electronically about the circumstances that give rise to them. They must also register these cases in accordance with the supervised entity's internal procedures. If a conflict of interest arises, the professional must not participate in the decision-making or discussion processes relating to the issue in question and must take the necessary measures to ensure objectivity and impartiality.
7.1. Preventing Conflicts of Interest
Professionals should avoid situations that could impair their independence or objectivity, interfere with their obligations to clients or employers, or otherwise affect their ability to perform their duties. They should also provide clients or employers with full and open

information about such situations, as appropriate. These disclosures shall be written in clear, plain language; presented in a prominent manner; and convey relevant information effectively. Professionals shall not prioritize their personal interests over those of the client and shall base their activities on this principle. They shall also ensure that their interests do not interfere with the client’s ability to make informed and independent choices, nor with the transparent and fair provision of financial services.
7.2. Prioritizing Operations
Professionals treat all clients equally and act fairly to avoid discrimination or favoritism. Professionals do not prioritize their own interests over those of the client or the entity under review, nor do they alter their priorities for personal gain. Accounts belonging to family members or personal acquaintances of professionals are managed the same as other individuals' accounts without special privileges
7.3. Gifts and Referral Fees
In accordance with applicable law, professionals shall disclose to the relevant parties—clients or the supervised entity—any commission or other benefit received or provided for recommending a financial product or service. At the same time, professionals shall not accept or request any gift, benefit, or other form of compensation that may call into question or affect their independence or objectivity, nor shall they accept anything that exceeds the limits set by the supervised entity.
8. Customer Relations
Mutual trust, transparency, and tailored service form the basis of customer relationships. Professionals protect customers' interests, provide honest and transparent information, and ensure that personal relationships do not affect professional ones. These principles ensure customer satisfaction and long-term cooperation.
8.1. Providing Products that Meet Customers' Interests
Professionals consider the client's financial experience, risk and return expectations, and financial limitations before entering into any business relationship. They only recommend financial products and services based on this information if they are deemed appropriate for the client.

Professionals use reasonable judgment to determine analyses, recommendations, and actions related to financial products and services. They also mention these factors in their communications with clients.
8.2. Communication with Customers
Professionals inform clients about the nature, features, and costs of the financial products and services they offer. They also distinguish between facts and opinions when analyzing and presenting recommendations for financial products and services. Professionals understand that establishing personal or financial relationships with clients may call into question their professional qualities and harm their reputation, so they avoid doing so. They avoid relationships such as borrowing and lending money, acting as guarantors, and so on, within the framework of personal relationships with clients.
8.3. Behavior Towards Customers
Professionals treat all clients fairly and objectively. They do not discriminate against clients based on race, ethnicity, religion, language, gender, health status, origin, property status, employment status, beliefs, or membership in political parties, trade unions, or other public associations.
8.4. Customer Data Protection
Professionals keep confidential information, such as banking secrets, insurance secrets, and commercial secrets, as well as other information protected by law, confidential. They disclose this information only when required by law and in accordance with specified regulations. Professionals take all necessary technical and legal measures to ensure the security of operations and data in any service environment. They inform their clients of the important steps they must take to protect their data.
9. Obligations Towards the Employer
Professional activity is based on two main pillars: ethical behavior in the workplace and responsible behavior towards the organization. Professionals protect the reputation of their employer, use resources properly, and report ethical violations to the appropriate authorities. At the same time, leaders set an example by promoting these values and developing team members.

9.1. Whistleblowing
Professionals familiarize themselves with the whistleblowing policies of the supervised entity they work for and encourage the supervised entity to implement industry best practices in this area. Professionals promptly inform the relevant authorities in writing or via designated channels about any known or reasonably suspected facts related to violations of internal laws, fraud, violations of the code of ethics and professional conduct, and internal rules and policies. This information is confidentially registered in accordance with the supervised entity's internal procedures. The supervised entity provides secure and accessible mechanisms for receiving information and protects the anonymity and confidentiality of reporting persons. The entity also prevents reporting persons who provide information in good faith from being subjected to pressure, harassment, or negative influence, and takes appropriate protective measures against such actions. At the same time, professionals adhere to the principles of objectivity and impartiality in their decisions and activities and do not deliberately conceal violations.
9.2. Abuse of Position
Unless otherwise specified by the employer, professionals shall use the supervised entity's resources only for service purposes and in a manner that is efficient and consistent with their intended purpose. At the same time, professionals shall not exploit their official authority for personal gain or abuse their own or their clients' capabilities.
9.3. Reputation and Public Disclosures
Professionals make public statements, speeches, or declarations regarding their supervised entity, its activities, or related matters only when expressly authorized by the entity's management. Professionals must refrain from any conduct that could harm the entity's reputation, both during and outside of working hours. When professionals individually disseminate information, statements or comments related to the financial sector through various social media channels or communication tools, they protect the reputation of the supervised entity and do not harm it.
9.4. Ethical Business Conduct and Professional Communication
Professionals communicate courteously and thoughtfully when performing their duties and collaborate with other professionals to achieve common goals. They treat their

colleagues with courtesy and respect, creating an inclusive environment free from discrimination. Professionals who believe a decision or approach is not in the organization's or its stakeholders' best interest express their views in a constructive manner within a framework of mutual respect, focusing the discussion on the organization's goals and values.
9.5. Responsibility of Management
Leaders determine if their departments need additional procedures to ensure compliance with the Code. They create development opportunities for their team members, providing ongoing guidance, mentoring, and training. They also provide the necessary support and resources to help professionals improve their skills and reach their full potential within the organization. They support, facilitate, and monitor team members’ adherence to professional conduct in accordance with this Code. Additionally, leaders promote a culture of continuous learning, encourage team members to take advantage of development opportunities, and provide constructive feedback that contributes to their growth in their roles.
10. Social Responsibility and Contribution to Society
Professional activity carries responsibility not only within an organization, but also to society. In line with the principles of social responsibility, professionals contribute to environmental protection, social justice, and financial inclusion. This approach is important for fulfilling ethical principles and ensuring long-term public welfare.
10.1. Social and Environmental Responsibility
Professionals support and promote environmentally friendly, sustainable financial practices. They refrain from engaging in financial activities that exploit vulnerable client groups or increase economic inequality.
10.2. Contribution to Society and Financial Literacy
Professionals support improving financial literacy in society by contributing to the accessible and transparent sharing of information and resources. They feel responsible for their important role in achieving financial market stability and societal well-being, and encourage others to do the same.

III. ENFORCING THE RULES OF ETHICAL CONDUCT
11. Aligning Institutional Codes of Ethics
Supervised entities shall align their internal codes of ethics and professional conduct with this Code. The codes shall be made available to all professionals and updates shall be communicated.
12. Creating Support and Conditions for Professionals
Supervised entities provide professionals with the necessary training, legal and technical support, resources, and a conducive work environment to ensure compliance with ethical principles. Creating conditions for ethical and professional conduct is part of the corporate culture, and the supervised entities regularly involve professionals in training and development to this end.
13. Monitoring and Enforcement Mechanisms for Ethical and Professional Conduct
Fair, transparent, and documented control mechanisms are in place to monitor ethical and professional conduct and detect violations. Indicators related to compliance with ethical and professional conduct are included in the main risk indicators of the supervised entity. The person who supervises the activities of structural units related to the risk management function oversees the control mechanisms. The indicators of compliance with ethical and professional conduct within the supervised entity are considered when rewarding its management. Supervised entities take appropriate disciplinary measures against ethical violations in accordance with labor legislation and carry out procedures for violations within an ethical and legal framework.
Chapter III

APPENDIX 1
to the Code of Ethical and Professional Conduct for the Financial Sector Examples of Professional Conduct

Professionalism
1.1. Competence and Continuing Professional Development
Example 1:
As the head of compliance, Seljan is aware of the new customer compliance measures and AML/CFT requirements that will soon take effect at her place of work. She understands that these changes will directly impact the entity’s internal procedures, risk assessment methodology, and accountability mechanisms. Proactively approaching the situation, Seljan develops a personal development plan. She enrolls in internationally accredited online training, analyzes new regulatory requirements, and prepares proposals reflecting changes in internal rules. She also leads a brief session for department professionals, explaining the new AML/CFT indicators, risk levels, and control procedures. Explanation:
Seljan stayed up to date on changes in his field, updated her knowledge, and incorporated new requirements into her work and that of her team. She also contributed to a culture of learning and sharing within the organization. This approach made her work more effective and her decisions more informed. Her initiative positively impacted both the protection of the supervised entity’s reputation and the establishment of an ethical model at the sector level. Example 2:
Although Sabuhi is aware of the changes made to the internal regulations since he was hired as a junior specialist in the sales department at the bank, he does not sufficiently appreciate the importance of implementing these innovations. He does not allocate the necessary time to learn them. Consequently, he fails to properly implement the new requirements established in the work process, which results in operations not being carried out in accordance with standards. This increases the workload of his colleagues, resulting in delays in the work process and decision-making. At the same time, he fails to properly convey

information about the product and risks to loan applicants, which leads to delays in loan processing. Explanation:
Sabuhi's failure to regularly update his knowledge and professional skills hindered his ability to properly perform his professional obligations. Due to a lack of continuous development, errors and delays occurred in transactions with customers, resulting in decreased customer satisfaction and increased reputational risk for the bank.
1.2. Compliance with Laws and Ethical Standards
Example 1:
Farid works as a bank operations specialist. When opening a joint bank account in the names of more than two individuals, one of the clients provides the bank with their information and offers to check its compatibility. The client claims to live far away and asks Farid for assistance. Farid determines that this proposal does not comply with the legislation and refuses to open the account. Explanation:
Farid knows that customer due diligence measures are applied to each account holder separately when opening a joint account. Therefore, he refuses the customer's request and clearly informs them of the rule. In doing so, he demonstrates professional behavior and protects the supervised entity from reputational risk. Example 2:
A person named Zumrud applies to the bank to obtain information about the transactions carried out on the bank account of a customer named Vafa and some personal information. She presents Vali, a bank employee, with a power of attorney stating that she is the customer's legal representative. When Vali realizes that the power of attorney has expired, Zumrud insists that she is an adult and asks Vali to overlook the situation this one time. Despite Zumrud's expired power of attorney, Vali provides the requested information. Explanation:
Vali violated banking law by sharing confidential information via an expired power of attorney. Once he realized the power of attorney had expired, he should have informed the applicant and refused to share the information, demonstrating professional behavior.

Integrity in Financial Markets
2.1. Handling Internal and Sensitive Information
Example 1:
Rauf is a data analytics specialist at the bank. The bank conducts surveys of its users to improve the design of new products and identify cybersecurity gaps. The results of the survey are confidential and should only be used for analytical and strategic purposes within the bank. While working on the survey, Rauf shared interesting information about the gaps with his friend, who is a journalist. Later, this information was published on social media, creating a reputation and information security risk for the bank. Explanation:
Rauf's transfer of internal, undisclosed information to a third party resulted in a breach of confidentiality and data protection requirements. Consequently, the bank's operational security and public reputation were damaged. Had he used the information only for internal purposes and adhered to principles such as professional responsibility and confidentiality, his conduct would have been in accordance with the Code. Example 2:
Aytaj, an employee of a payment service provider, learns of undisclosed internal information regarding new tariff and commission negotiations with the supervised entity’s processing provider. Since tariff changes can affect the transaction costs of large corporate clients, this information must be kept confidential. Knowing this, Aytaj communicates information about the expected tariff changes during an informal conversation with professionals at one of the partner companies. Explanation:
Aytaj violated the professional standard of protecting internal and sensitive information when she shared undisclosed information with a third party. This put the organization's commercial interests, operational stability, and reputation at risk. A few days later, this information sparked rumors in the market, leading to unfounded expectations about the organization's pricing policy.

2.2. Transparent Disclosures
Example 1:
While preparing a report reflecting the monthly transaction indicators, Nargiz, who works on transactions at a payment service provider, discovers an increase in the number of failed transactions and discrepancies related to technical errors. Although this information must be presented to management completely and accurately, Nargiz omits some of the failed transactions from the report, believing that management will view these figures negatively. During a subsequent audit, a discrepancy between the report and the actual transaction indicators was identified. Explanation:
Nargiz failed to adhere to transparency in disclosing information, distorted the report, and negatively affected the accuracy of the decision-making process and internal control mechanisms. This behavior created additional risks for the supervised entity. Had she presented the situation to management and supported the taking of appropriate measures to eliminate the inconsistencies, Nargiz would have been in compliance with the Code instead of hiding information. Example 2:
Elvin, a risk analyst at the bank, identified discrepancies in the month-end reporting process due to increased delays in loan payments from several large clients and incorrect risk assessments from the previous period. These assessments were prepared by another team member, Javid. Despite informal pressure not to highlight the information in the report and to present the situation in a more positive light, he does not allow the data to be distorted, fully reflects all the identified discrepancies in the report, and presents the necessary measures to reduce the risks to management. Explanation:
Javid should have ensured the proper application of methods during the risk assessment and taken measures to improve them when necessary. Any pressure from team members based on personal interests is unprofessional and undermines the objectivity of professional activity. On the other hand, Elvin complied with transparency requirements in disclosing information because he knew that distorting information would negatively affect the bank's risk management process and the objectivity of the decision-making mechanism.

2.3. Preventing Abuse in Financial Markets
Example 1:
Ahmad, who works as a trader at an investment company, receives a large order from a client to buy securities. Before submitting the order to the market, he makes small purchases of the same securities through his personal account. This creates an artificial increase in the market price. He then executes the client's order at the increased price. After the transaction, he makes a personal profit by selling the securities in his portfolio. These operations are detected during the control procedures, and the investment company is subject to control measures and sanctions. Explanation:
Ahmad engaged in behavior that was driven by personal gain rather than protecting the client's interests, artificially manipulated market prices, and violated public trust. This behavior led to reputational risks for the investment firm, diminished client confidence, and regulatory investigations. Example 2:
Zarifa is an analyst at an investment firm. She has offered many of her clients strategies to drive down the price of ABC Company’s stock. A few days before the company’s quarterly report is due, she tells her teammate, Ulkar, that she can influence the price by publishing articles and reports highlighting the company's negative aspects based on rumors. Since the company will have limited opportunities to respond during the reporting period, her clients could take advantage of the situation and purchase shares at a low price. Ulkar disagrees, saying that this is price manipulation. Explanation:
Zarifa acted unprofessionally by manipulating the market with false information in an attempt to drive down prices and benefit her clients. She could have damaged public trust in the regulated entity and the financial sector. Ulkar intervened in a timely manner to prevent market manipulation and acted in accordance with professional standards.

Conflicts of Interest
3.1. Preventing Conflicts of Interest and Fair Treatment
Example 1:
Rovshan is an investment advisor at an investment company. While assessing a client's investment, he knew that the company offering the security belonged to his brother but did not disclose this information to the client. During the advisory process, Rovshan failed to present all risk indicators and did not provide information about alternative investment opportunities. After the client made an investment decision based on Rovshan's recommendation, the security did not provide the expected profitability, resulting in financial losses for the client. Subsequent investigation revealed that Rovshan had concealed his family relationship and that the recommendation process was not objective. Explanation:
By withholding information, Rovshan limited the client's ability to make decisions, harmed the client's interests, and increased the reputational risk of the supervised entity. Professionals in such cases openly declare family and other close relationships, ensure an objective recommendation process, provide information about alternative products, and inform clients of situations that may cause a conflict of interest. Example 2:
Leyla, a lead HR specialist at a payment service provider, is involved in evaluating candidates for a new position. One of the candidates is her close friend and she believes this situation could affect the objectivity of the decision-making process and create a potential conflict of interest. Leyla does not hide this fact and officially informs her department head. Management decides to exclude her from the interview and assessment stages for the candidate in question. HR specialists carry out the selection process based solely on professional criteria and eligibility requirements. All decisions are documented and presented to management. Explanation:
By disclosing potential conflicts of interest in a timely manner, Leyla ensured the impartiality of the decision-making process and the preservation of institutional trust. Her advance disclosure enabled the hiring process to be conducted based solely on objective criteria. This approach reduces the organization's reputational risk and supports adherence to the principles of transparency and fairness.

3.2. Prioritizing Operations
Example 1:
Aysel works as a card operations specialist at a bank. During the day, she must process incoming customer requests for card unblocking, limit changes and complaint investigations in the order they enter the system. In the middle of the day, a close relative of Aysel's requests that her card be unblocked urgently. Despite knowing the standard processing order, Aysel immediately processes the request, putting it ahead of others in the queue. During an inspection conducted by the internal control group, a discrepancy in the processing sequence of requests is identified, and dissatisfaction regarding the delay to other customers' requests is recorded. Explanation:
Aysel's unscheduled execution of the request caused a conflict of interest, changing the priority of transactions in her own interest. This behaviour negatively impacted the rights of other customers, the quality of the bank's service, and posed reputational risks. According to the Code, all requests for card transactions by professionals are processed in the order they are received, without any preferential treatment, thereby protecting the priority of the transactions. Example 2:
Aydin, a customer service manager at an insurance company, processes several insurance claims received on the same day. Among these is a claim related to one of his relatives. Although his relative makes an informal request for the claim to be evaluated before others, Aydin does not accept it, as this could affect the sequence of operations and the objectivity of the decision-making process. He states that claims are prioritised based solely on the date of receipt and the claim's urgency, and enters his relative's claim into the system in the specified order. All stages of the settlement process are documented in accordance with the rules and carried out according to established procedures. Explanation:
Aydin has maintained his professional conduct by prioritising transactions and not being influenced by personal relationships. This approach ensures that transactions are conducted in a non-discriminatory and compliant manner, eliminating the risk of differential treatment between clients. This approach has helped to preserve the insurance company's reputation and the reliability of its processes, thereby fostering public trust.

3.3. Gifts and Referral Fees
Example 1:
Teymur, a business development specialist at a payment service provider, is involved in integrating a large online trading platform into the payment infrastructure of a supervised entity. One of the potential partners offers Teymur valuable gifts to gain his support. Although he accepts these gifts, Teymur does not inform management about them and prioritises selecting the partner. Once the integration is complete, a comparative analysis shows that the partner is offering unfavourable commercial terms. During an internal audit, it is revealed that Teymur accepted the gifts without disclosing them. Explanation:
Teymur’s acceptance of high-value gifts without disclosing them, coupled with giving preference to that partner in decision-making, constitutes a breach of professional and ethical conduct. Such behaviour undermines the independence of the decision-making process and creates reputational risks for the auditee. According to the Code, Teymur should have informed management about the gifts and hospitality before accepting them, and should not have compromised his objectivity on the basis of personal interests. Example 2:
Aysel, a mortgage client advisor at a bank, discovers that she is being offered a referral fee and certain benefits for each client referred by a local real estate agency. Recognising that these offers could influence the decision-making process and the impartial presentation of mortgage products, Aysel immediately reports the situation to management and refuses the personal benefits. She instructs the agency to adhere only to the formal corporate cooperation framework established by the bank. The terms and conditions of mortgage products presented to clients are explained in a comparative manner using objective criteria. Explanation:
By disclosing a potential conflict of interest in a timely manner, Aysel did not prioritise her personal interests. Consequently, the customer made a decision based on their own preferences. However, Aysel's behaviour ensured a fair and equitable presentation of mortgage products and protected customer interests and the public trust in the bank, including her own professional reputation.

Customer Relations
4.1. Providing Products that Meet Customers' Interests
Example 1:
Gunel is an investment company consultant. A new client named Rashad plans to invest some of his savings, but he has no experience of the capital markets. During the initial meeting, Gunel systematically assesses Rashad's attitude to risk, income expectations and current financial obligations. The assessment reveals that, as Rashad plans to acquire real estate in the near future, high-risk investment products are not suitable for his goals. Gunel therefore provides him with detailed and clear information about low-risk, high-liquidity investment instruments. Explanation:
By asking questions, Günel thoroughly investigated the client's risk profile and financial goals, and provided detailed information about suitable products. She distinguished between facts and opinions, and explained costs, risks and limitations transparently to the client. As a result, the client's interests were protected, trust was strengthened, and a solid foundation was established for long-term cooperation between the supervised entity and the client. Example 2:
Ahmad, a customer manager at the bank, receives a consumer loan application. Orkhan states that he has limited financial knowledge and only wants to borrow the amount required for repairs. Ahmad arranges the loan without properly assessing Orkhan's borrowing capacity, and provides him with a credit card without explaining the terms of the product. As the customer is not sufficiently informed about how the card works or what his obligations are, he accrues more debt than expected and complains to the bank about his dissatisfaction. Explanation Ahmad's failure to accurately assess the client's financial capabilities and level of awareness, and his subsequent provision of an inappropriate product, resulted in a breach of professional conduct. This limited the client's ability to make informed decisions, increased their debt burden and created reputational risks for the bank.

4.2. Communication with Customers
Example 1:
Aylin is a bank manager who works with corporate clients. She learns that one of her long-term clients is facing financial difficulties. This client then asks Aylin for a personal loan and to act as guarantor when applying for a business loan. Aylin recognises that these requests could compromise her professional objectivity and the impartiality of the service process. She formally informs management about the situation. To ensure objectivity, management delegates customer service to other professionals and provides all services to the client in accordance with the bank's internal regulations. Explanation:
The client’s request for personal financial support and a guarantee from Aylin created a potential conflict of interest. Informing management promptly and referring the client to other professionals ensured impartiality in the decision-making process and prevented reputational risk to the bank. This approach reinforced compliance with professional conduct standards, ensuring that services to the client remained within institutional requirements. Example 2:
A long-term client of Arif's, who is a manager working with large corporate clients at a bank, offers to open a joint account with him and invest the amount accumulated there each month. Arif accepts, fearing that the relationship will be damaged if he refuses, and thinking that it is a good opportunity to earn additional income. Some time later, the same client applies to the bank for a large loan. Although Arif participates in the credit committee's discussion, he does not mention the client's current financial difficulties or personal financial situation. After the loan is approved, the client is unable to fulfil his obligations, resulting in financial losses for the bank. An investigation reveals that Arif had concealed the relationship, causing the bank to suffer losses and reputational damage. Explanation:
Arif's financial relationship with the client created a conflict of interest. This behaviour posed a serious risk to the bank's financial security and reputation, and undermined the impartiality of the decision-making process. According to relevant ethical principles, Arif should have refused the client's offer, reported the situation to management promptly, and ensured his removal from the decision-making process.

4.3. Behavior Towards Customers
Example 1:
Reyhan, a sales manager at an insurance company, received two applications from two clients on the same day. One client is a foreign citizen and the other is a local resident. Although the risk profiles and product eligibility criteria for both applications are similar, Reyhan refuses to provide services to the foreign citizen based on personal bias. She continues to provide services only to the local client. She justifies this decision informally, stating, "Our citizens are more reliable customers." The foreign citizen considers this lack of service to be discriminatory and files a complaint with the supervisory authority, which sparks a public debate. Explanation:
Reyhan failed to assess the situation objectively and fairly as a professional. She discriminated against clients applying for services from the supervised entity where she works based on ethnicity, race, or language. This was not an act in accordance with professional conduct. Her behavior increased the supervised entity's reputational risks, decreased customer trust, and violated the principle of protecting public trust. Consequently, public trust in the supervised entity and the sector as a whole was negatively impacted. Example 2:
Two users contacted the customer service center of a payment service provider. One user communicated fluently in the local language, while the other could only receive service in English. Some professionals are reluctant to provide service to English-speaking users due to the language barrier when communicating with them. The center's customer service manager, Sevinj, intervenes and tries to provide service to the English-speaking user by supporting the translation of information through software applications, taking into account the situation. Explanation:
Some customer service professionals did not make sufficient efforts to treat customers equally. Sevinj, on the other hand, demonstrated professionalism and ethics by intervening in the situation promptly, thereby improving the reputation of the payment services provider.
4.4. Customer Data Protection
Example 1:
Aygun, a lawyer at the bank, is dealing with a journalist's inquiry as part of an ongoing legal process involving a high-profile client. Based on existing legislation and internal ethical

conduct requirements, Aygun does not disclose any information, stating that it can only be provided in accordance with the established legal procedure or by court order. She also informs management of the situation and notes the need for additional technical measures to strengthen the security of the client's personal data. Explanation:
Aygun effectively implemented professional conduct by rejecting illegal offers to transfer customer data to third parties and strengthening ethical standards within the institution. By complying with the requirements of the legislation and the Code, she ensured the protection of customer data, reduced the bank's reputational risks, and strengthened customer trust. Example 2:
Ramil, an incident management specialist at an insurance company, talks to his friends about his daily duties at a cafe after work. During the conversation, he inadvertently mentions a customer's name and reveals that the person applied for insurance payment in connection with a recent traffic accident, disclosing the amount of the insurance. Other people in the café overhear this information, which quickly spreads informally. A few days later, the customer realizes that his personal information has been disclosed to unauthorized third parties when he receives questions about it from acquaintances, so he files an official complaint with the insurance company. Explanation:
Ramil failed to comply with the professional standard of protecting client data when he shared confidential information about a client's accident with third parties without authorization. His actions contradicted professional standards for safeguarding client personal data, increased the reputational risks of the supervised entity, and damaged public trust.
5. Obligations Towards the Employer
5.1. Whistleblowing
Example 1:
Farid, a risk manager at an investment company, noticed unusual cash flows from several transactions while preparing monthly reports. The investigation revealed that the head of the sales department had kept some customer transactions off the official register and had artificially inflated revenue figures in order to achieve the annual plan. Considering

that this situation poses serious legal and reputational risks for the company, Farid reports the matter in writing to the relevant structural unit through the organization's internal reporting mechanism. Explanation:
Farid supports identifying gaps in control mechanisms by reporting violations in accordance with official procedures. His actions help prevent legal and reputational risks for the supervised entity, improve the internal control system, and preserve the organization's credibility. Example 2:
Sabina, a credit risk manager at the bank, discovered irregularities in the process of granting several large loans during an internal audit. The investigation revealed that one of the branch managers had approved unsecured loans for companies owned by his close acquaintances. Although Sabina disclosed this information, she did not report the violation, fearing it would damage her career prospects. Eventually, those loans became problem assets, causing significant financial losses for the bank. When the matter became public, it was revealed that Sabina had been aware of the violation beforehand. Explanation:
By disclosing information, Sabina violated professional conduct, increased the bank's financial and reputational risks, and undermined public trust. According to professional standards, Sabina should have reported the violation to the appropriate structural unit in a timely manner, documented the matter formally, and contributed to the early elimination of risks through the internal disclosure mechanism.
5.2. Abuse of Position
Example 1:
Lala is a division head at a payment service provider and is provided with a company car and driver. The car's main purpose is to transport her to and from official meetings and work assignments. For personal reasons, Lala is considering using the company car to drive her children to kindergarten. However, she is concerned that this could lead to the personal use of company resources, depreciation, and an increased risk of accidents, so she is reluctant to do so. Explanation:

Lala did not abuse her position. She did not consider using a service car for personal purposes to be appropriate. This decision prevented the misuse of resources and the perception of privilege among professionals, thus contributing to the maintenance of ethical standards within the organization. Example 2:
Nihad works as a senior specialist in the sales department of an insurance company. He has been provided with a laptop, a corporate phone line, and presentation equipment for official use. Outside of work hours, Nihad uses the laptop and phone line for personal business activities and lends the projector to friends for their events. He also gives advertising materials intended for customers to his personal acquaintances. During an internal audit, it was discovered that Nihad was using company resources for personal use. The matter was presented to management, who applied disciplinary measures against Nihad. Explanation:
Nihad abused his position by using official resources for personal purposes. His behavior undermined the efficient management of resources and equal treatment among professionals. As a result, he increased the risk to the reputation and internal control mechanisms of the supervised entity.
5.3. Reputation and Public Disclosures
Example 1:
Ulkar is a sales manager at an insurance company. Outside of work, she posts on her personal social media account about a new product from the company he works for that has not yet been officially announced. In the post, she presents the product in an overly positive manner and mentions unconfirmed details. The premature publicizing of this information quickly creates confusion among customers, and the company receives premature applications. Company management declares the disclosure to be unofficial, saying it damages the reputation of the supervised entity.

Explanation:
Ulkar damaged her professional reputation, the reputation of the supervised entity, and trust in the financial sector by making a public statement without management's permission and without accurate facts. In this case, Ulkar should not have shared information that had not been officially announced. She should have only shared information that management had approved for public disclosure. Example 2:
Samir, a product development specialist at a payment service provider, is scheduled to give an interview to journalists immediately following a team meeting. Since the meeting is taking too long and there is still unconfirmed information on the table, Samir apologizes to the journalists and asks for a short break to prepare the room. He ensures that the data carriers are wiped clean before beginning the interview. This prevents undisclosed information from reaching third parties and creating reputational risk. Explanation:
Samir mitigated the organization's reputation and information security risks by safeguarding undisclosed information. His actions positively impacted compliance with internal procedures and maintained public trust.
5.4. Ethical Conduct and Professional Communication
Example 1:
Gulnar is a risk assessment specialist at an insurance company. During a meeting to discuss the pricing mechanism for a new insurance product, the finance department proposes a plan based on certain calculations. Gulnar determined that the proposed methodology would increase the company's risk profile in the long term. She presented her position on this matter to the other party in a respectful, constructive, and reasoned manner. She also presents alternative approaches to risk scenarios, actuarial calculations, and risk mitigation mechanisms. As a result of the discussions, her arguments are taken into account, and the product's pricing structure is reformulated.

Explanation:
Gulnar expressed her professional judgment in a factual manner, free from emotional influence. Her constructive approach strengthened team cooperation and led to a more accurate assessment of the audited entity's risks. Consequently, the product's stability increased, ensuring the audited entity's reputation and financial stability. Example 2:
Aynur is a senior sales specialist at a payment service provider. During a meeting where a new strategy is being presented, she is about to voice her disagreement with the current approach when her colleague Ahmed interrupts her to present his own ideas. The interruption disrupts the meeting's flow and causes Aynur to have an emotional reaction. Instead of offering constructive feedback, she expresses her ideas in a harsh and personal manner. Explanation:
Ahmad's interruption of his colleague did not align with professional communication norms and undermined team cooperation. Similarly, Aynur did not adhere to professional communication norms when she expressed her critical opinion in an emotional and disrespectful manner. These situations weakened the atmosphere of open discussion within the team, causing professionals to be reluctant to express their opinions and reducing overall work efficiency.
5.5. Responsibility of Management
Example 1:
Javid is a loan operations specialist at a bank. During an internal audit, he discovers that a client's loan documents have been intentionally altered, which violates the bank's loan policy. He officially reports this violation to the relevant department of the bank's whistleblowing policy. An investigation is underway, and appropriate measures are being taken. Javid is pressured by the professional who incorrectly entered the information. Ilaha, the head of loan operations, protects Javid and intervenes in the matter. Explanation:
Ilaha acted in accordance with professional conduct regarding the responsibility of management by protecting Javid from pressure. Her intervention supported the implementation of professional conduct, the protection of professionals who reported

irregularities from pressure, the provision of a productive work environment, and the protection of the bank from reputational risks. Example 2:
Khadija is a salesperson at an investment company. She prepares dynamic visual reports on market data for management. Since she relies on outdated visualization methods, she must turn to the analyst, Rasha, for data processing, which increases the team's workload. After assessing the situation, the manager, Elchin, instructs Rasha to organize a short training session for the team. Explanation:
As a leader, Elchin accurately identified the source of the problem and resolved it through development and collaboration rather than criticism or punishment. Rashad's mentoring skills increased the team's overall knowledge and enabled them to use resources more efficiently. Consequently, the team's performance improved, and the organization's culture of continuous learning and initiative strengthened.
6. Social Responsibility and Contribution to Society
6.1. Social and Environmental Responsibility
Example 1:
Shafaq, a product development specialist at an insurance company, is working on an agricultural insurance program. The program requires new tariffs for small farmers living in high-risk areas. While the initial model takes risks into account, excessively high premiums could limit these farmers' access to insurance and exacerbate social inequality. Recognizing that this approach would further complicate the financial situation of vulnerable groups, Shafaq formally reported the issue to her department head. She presents alternative solutions for reevaluating tariffs and distributing risk. Explanation:
By adhering to social and environmental responsibility and professional behavior, Shafaq has avoided decisions that could lead to the exploitation of vulnerable groups and the increase of economic inequality. Its proposals are accepted, and the new product is being developed in a balanced way, considering both risk management and social inclusion. As a result, the product was developed in a more inclusive way, customer trust was maintained, and the social role of the insurance institution was upheld.

Example 2:
Nur is an intern at an investment company and often makes typos because she just started working. Konul, an experienced professional, takes a nonconstructive approach to the situation, mocking Nur's work and causing her to lose motivation. Another team member, Rufat, sees the situation differently. To prevent waste and support new professionals, he initiates a separate paper collection in the office. Nur then suggests creating a collection box for used batteries. The management supports these initiatives, and Konul has an enlightening conversation. Explanation:
Rufat took a constructive approach, maintaining the new employee's motivation and promoting sustainable behavior in the office. Nur's battery collection initiative also helped sustain environmental protection measures. Management's timely intervention in Konul's unethical communication promoted a healthy work environment and strengthened teamwork.
6.2. Cobtribution to Society and Financial Literacy
Example 1:
While working as a bank branch manager, Nurtan observed a trend of improper credit card use and increasing debt among young people in the region. To address this issue, she organized outreach seminars on financial literacy at local universities and youth centers. These seminars present information on budget planning, managing credit obligations effectively, and forming savings habits in a simple, accessible way. The bank's management supported the initiative, and the project received positive evaluations from the public. Explanation:
By adhering to professional codes of conduct for social contribution and financial education, Nurtan has promoted the long-term well-being of the bank and its young client group. As a result, young people have improved their financial knowledge and behavior, reduced their debt, and strengthened the reputation of the bank and the financial sector. Trusting relationships with the public have also been strengthened. Example 2:
Hasan, a leading risk management specialist at an insurance company, was assigned by management to participate in an educational session on insurance and risk management for schoolchildren as part of Children's Day. The event aims to raise awareness of the

importance of insurance among children from an early age. Despite his experience and extensive knowledge of the subject, Hasan declined the assignment, citing time constraints. He also avoids answering questions posed by the professionals preparing for the event. Explanation:
Hasan failed to adhere to the principles of professional conduct, community contribution, and financial education by failing to provide support through his knowledge and expertise. His actions negatively impacted the public reputation of the auditee and the sector’s educational initiatives.
7. Aligning Organizational Codes of Ethics
Example 1:
The internal code of ethics of one of the insurance companies had not been updated for a long time. After the launch of the new unified Code for the financial sector, the management of the supervised entity, taking into account the urgency of this issue, began the process of updating it. The relevant structural unit establishes a working group to align the existing internal code with the provisions of the new Code. The updated document is placed in the supervised entity's internal information system, and electronic notifications are sent to all professionals simultaneously. Additionally, an online training session is organized to explain the new requirements and main principles. Explanation:
In this example, the regulator ensured the updated code of ethics was made available to all professionals simultaneously, guaranteeing equal and timely information sharing. As a result, employees had a clearer framework for professional conduct, and the regulator's and the sector's reputations were protected. Example 2:
The supervised entity's internal code of ethics has not been updated in five years, nor has it been aligned with the new "Code" requirements. Although management raised the issue, the update process was not carried out promptly. As a result, professionals remained unaware of the current requirements, ethical principles were violated, and uncertainty arose regarding the rules of conduct. During the investigation, it became clear that the code had not been updated or presented to professionals in an official, accessible manner.

Explanation:
The subject of supervision was required to update the internal professional and ethical code in a timely manner and communicate it to all professionals simultaneously. As a result, regulatory confusion arose among professionals, and the organization faced reputational risks with regulatory authorities.
8. Creating Support and Conditions for Professionals
Example 1:
An investment company begins implementing the requirements of a single code, but management observes that professionals are having difficulty fully understanding some of the provisions. Therefore, management does more than share the code; they also create additional support mechanisms. They organize a training program, launch a hotline for legal and technical questions, and open an anonymous advice line for ethical issues. Explanation:
The supervised entity has created an appropriate support environment for professionals by providing the conditions necessary for ethical behavior. As a result, professionals have received timely support, risks have been reduced, the organization's reputation has been protected, and a healthy work environment has been established. Example 2:
After the new unified Code for the financial sector took effect, management at one of the supervised entities sent the document via email to professionals only and did not establish any additional mechanisms to explain it. They did not provide training sessions, legal and technical support, or any channel for addressing questions on ethical issues. For this reason, professionals cannot find answers to questions that arise from applying the Code. This results in delays and disagreements in decision-making processes. Explanation:
The supervised entity failed to provide the necessary conditions for ethical professional conduct, such as support and resources, for its professionals. Although the code was formally shared, no support was provided to employees for its correct application. As a result, uncertainty arose among professionals, which increased the risk of losing trust in the supervised entity and the financial sector.

Monitoring and Enforcement Mechanisms for Ethical and Professional Conduct
Example 1:
The bank’s compliance department received an anonymous tip indicating that loan manager Ahmad was charging some customers an unofficial “extra service fee.” Compliance specialist Zulfiya investigated the matter by analyzing internal records and complaints. Risk manager Ilgar notes that if the issue is not documented, it could lead to more serious consequences in the future. Zulfiya documented the investigation thoroughly and presented it to management. Management decides to take disciplinary action against Ahmad, return the funds received unjustly, and strengthen control and training mechanisms to prevent such cases in the future. The process is documented transparently. Explanation:
Ahmad's behavior was unprofessional and unethical. Zulfiya responsibly investigated the issue without hiding it. Ilgar emphasized the importance of documentation and reminded everyone of the principles of objectivity and protection of public trust. Thanks to the management's measures, the bank's reputation was protected, customer rights were restored, and a culture of ethical and professional behavior was fostered. Example 2:
One of the banks has implemented a control mechanism to monitor ethical and professional behavior and promptly detect violations. In accordance with the code's requirements, professionals are informed of the importance and principles of this mechanism, with an emphasis on its role in protecting the positive image of the supervised entity and the sector as a whole within society. Explanation:
In this example, the supervised entity supports oversight and enforcement mechanisms for ethical and professional conduct. It does so by establishing monitoring and violation detection mechanisms to ensure compliance with the Code. As a result, professionals operate in a safe work environment, potential violations are prevented promptly, and the supervised entity's reputation is protected.