What must members and candidates not do with material nonpublic information?

The correct answer highlights the critical ethical obligation of professionals in the finance industry regarding material nonpublic information. Acting on material nonpublic information, or causing others to act on it, constitutes insider trading, which is illegal and unethical. This action undermines the integrity of markets and can lead to severe legal consequences for both the individual and the firm involved.

For individuals in investment management, such as chartered analysts and other finance professionals, maintaining confidentiality of nonpublic information is essential for preserving trust and ensuring a level playing field for all investors. By preventing any action based on undisclosed material information, the rule establishes a foundational principle of fairness in trading practices.

While options that reference utilizing material nonpublic information for personal gain, sharing it with colleagues, or making it public also highlight serious ethical concerns, the primary violation focuses on the act of either executing trades based on that information or encouraging others to do so. Thus, the emphasis is on protecting market integrity through non-action with respect to such sensitive information.