This stuff is always so nuanced, but i remember reading that the key is that it is up to the firm’s written policies on what is deemed material and what is not. The $100 rule no longer applies. I would not use Schweser for ethics, stick to CFAI there.
I would think these would fall under standard I.B since they are gifts not additional compensation.
I think of additional compensation as an agreement BEFORE performance, and gifts as non contractual. Since there was no contract stating that the manager would receive flowers or food if a good job was done, then these are gifts.
Under standard I.B the manager would not be able to accept any gifts that could reasonably be expected to influence their objectivity. Modest gifts are ok, and I would consider both of these as modest. I would expect both of these to be ok to accept without the need for disclosure.
Thank you FinNinja; I’ve always been confused by the compensation vs. gift distinction, and I felt like this was a case where disclosure wasn’t necessary for some reason, which you clearly explained.
There is a section somewhere ( i don’t have the books on me ) that says the firm has to have written policies to determine what would reasonably impair judgment. On the disclosure, I am not 100% sure but I think that also is up to the policies, in general I would disclose a bag of popcorn just to be safe unless i see something that says the firm deems it unncessary. It would be helpful if someone could find this specific text… i will look when im at home.
I just want to type this out so I remember it. Outside activities need to be acknowledged in writing by employeer. Additional compensation, all parties have to provide written consent. How about second jobs and referral fees?
Only if the second job is competitive with the practices of the main job! I was always confused by this because the CFAI text says “independent practice” which makes you think the second job could be completely different from the main job and still require disclosure. In truth, when CFAI says “independent practice”, they actually mean independent in the sense that it’s a completely separate flow of income/unrelated to the employer, but still in the same competitive field.