We had discussed one question on this forum in which it was said that when a manager starts an independent service in competition with the employer, he has to take written consent from “all the relevant parties”. This explicitly included prospective clients. Does any of you remember that question? Now I came across this question which says otherwise… check out choice D! Which of the following statements is most correct concerning a members obligation to his or her employer under the Code and Standards? A) Members are prohibited from making arrangements or preparations to go into competitive business before terminating their relationship with their employer. B) Members are prohibited from undertaking independent practice in competition with their employer. C) Consent from the employer is necessary to permit independent practice that could result in compensation or other benefits in competition with the member’s employer. D) Consent from the prospective clients is necessary to permit independent practice that could result in compensation or other benefits in competition with the member’s employer. Your answer: C was correct! There is no blanket prohibition against independent practice in competition with a members employer. The member must obtain permission from the employer. Members may make preparations to go into a competitive business, but may not solicit clients of the employer as long as members are still employed by the employer.
This is what is mentioned in the SoPH. I don’t know where in the earlier posts someone came up with a requirement to get pernission from both employers.
Choice D says that manager only have to take written permission from the ‘prospective client’, which is not completely true. It necessary to take permission from employer otherwise it will lead to conflict of interest. Best course of action would be to take permission from all parties involved. That’s what Standard 4(B) has to say. The question that you are talking about had a choice in which manager had to take permission from only the employer and in other choice permission was required from all parties involved. Here is the link to that question. http://www.analystforum.com/phorums/read.php?11,702701,702946#msg-702946
It is C. Good one, though. Recall that it is okay to prepare your new venture even as you are employed at the currnet company.