Current situation

Many candidates are asking us about the threat of the coronavirus to the June 2020 CFA Program exams.

First of all, we have no information regarding the CFA exam other than what has been stated publicly, which, at this stage, is not that much. CFA Institute is, of course, monitoring the situation closely and will provide updates as and when they deem appropriate. The exam is also nearly three months away, enough time for global health to improve, or deteriorate, drastically. CFA Institute will provide as much warning to candidates as they can, though we feel a final decision is unlikely until much nearer the exam – unless coronavirus spreads faster than expected in the coming weeks.

The examination process is vastly complex, with venues booked years in advance, in particular in the larger centres such as London, New York, Toronto and Beijing. Postponing an exam is no simple task. Running the exam on different dates in different locations also poses potentially insurmountable challenges.

Possible scenarios

We consider the following scenarios to be possible, starting broadly with the more optimistic ones.

Scenario 1: Proceed with caution. If the spread of coronavirus slows then the CFA exam will run globally. Exceptions will be made where large gatherings are prohibited, such as currently the case in parts of China and Italy. Candidates in those locations, we believe, will be offered (1) to relocate, subject to travel restrictions, (2) to defer at zero cost, or (3) to cancel and get a full refund.

Scenario 2: Alternative date. If enough venues are in locations in which the exam cannot run, then June candidates in those locations may be offered a later date for Levels II and III. Given the nature of coronavirus it seems unlikely that an alternative date for the Level I sitting will be offered before December. This scenario, in our opinion, will only happen if it is a relatively small number of locations, as there is a clear benefit in the alternative date being the same (or very close) in all affected locations. The logistics of booking suitable venues make this scenario difficult, though I am confident that CFA Institute has lists of venues in all exam centres. The complexities are mitigated significantly by only offering Levels II and III on such dates. In this scenario candidates in affected regions will again most likely be offered relocation, deferral (e.g. to June 2021) or cancellation.

Scenario 3: Global deferral. This scenario involves a new date later in the year at all locations. The June exams are postponed at every centre to the new date. Although this situation provides an even playing field to all candidates it seems unlikely that venues offering sufficient provision could be booked. This scenario becomes more feasible if Level I is cancelled altogether (candidates shifting to December) and venues only need to host Levels II and III. Larger exam centres could be split into multiple small locations to enable all candidates to take their exam should they wish.

Scenario 4: Global cancellation. This is the worst case. If, nearer to June, it seems that every major economic hub has gone into lockdown, with no respite visible until at least the spring of 2021, then full cancellation of the CFA exams may be the only solution. The implications are pretty dire for candidates who are delayed by up to a year, not to mention that they would then need to study from the 2021 curriculum. CFA Institute would take a hefty financial hit too, though this would not prevent them from taking the right action.

Impossible scenarios

There are other scenarios that one could envisage – two of these are running different exam dates by location, and home-based exams.

The first of these seems extremely unlikely, other than as in Scenario 2. Having each centre hosting the CFA exam on potentially a different date in each venue requires either for CFA Institute to have dozens of alternative exams, or for some candidates (those prepared to violate the CFA Code and Standards) to have an unfair advantage over more ethical one.

The second of these will not happen either. It has taken CFA Institute enormous resources to move to computer-based testing for Level I in 2021 in such a way that the security and integrity of the exam are not compromised. Home-based testing is a vast step further and, quite frankly, is out of the question.

Conclusion

One thing is abundantly clear: CFA Institute will not compromise on the integrity of the CFA exam (and hence the reputation of the CFA charter), nor will they go against any local health advice. For this reason, CFA candidates need to be prepared for postponement or even cancellation.

We will continue to monitor the situation for our own candidates and will publish further analysis as appropriate.

Important note: opinions in this blog entry are those of Quartic and not those of CFA Institute. The scenarios are hypothetical and we have no knowledge of what plans CFA Institute is currently making.

Follow Nicholas Blain on Twitter @njblain
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