Soft dollar question

============== As part of Ironclad’s PM activities on behalf of its clients, Harrison and Myers maintain relationship with 3rd-party soft dollar providers and commission recapture brokers. Better Trading Brokerage (BTB), one of the Ironclad’s top ten brokers and soft dollar providers, has offered Harrison two round-trip airline tickets anywhere in the US in appreciation of its 2-year relationship with Ironclad. One of Harrison’s pension clients, Worldwind Travel Inc (WTI), participates in commsion recapture and has offered Harrison two round-trip airline tickets anywhere in the US or Europe in appreciation for its 2-year relationship with Ironclad. In order to maintain compliance with CFAI Standards of Professional Conduct, is it appropriate for Harrison to accept, or is he required to reject, the offers of appreciation from BTB and WTI assuming Ironclad consents to both? BTB WTI A. accept reject B, accept accept C. reject reject D. reject accept ============== What is the answer and why?

He has to reject the tickets from BTB because those tickets have nothing to do in helping the investment process for the client. The second one to me seems a bit ambiguous. I am leaning towards he can accept it because is a gift. I would think he still has to get permission to accept it though. Either way: Reject Accept.

Reject for BTB for sure and Accept/Reject (recapture commission) is an ambigous term for me.

B-- client one is definitely an accept. I’m inclined to believe that the first one should be accept too, since the company is fine with it.

D) Reject the 1st as thats a clear conflict of interest. Accept the 2nd as its the client.

i’d go D here.

The answer is D. I think I understand now. dancingqueen’s explanation is right.