CFA 2015 MOCK Q1 Ethics

I just don’t understand how independence/objectivity was not compromised. Ashoka is paying for expenses with the understanding that transactions will be executed through Ashoka… Am I missing something?

soft dollars are no longer in the curriculum, so exchanging brokerage for travel is OK.

(that would be my interpretation).

maybe because it is basically a plain transaction of Ashoka pays for expenses and in turn we will give them commission. It is agreed to before hand. If it were phrased as Ashoka is paying for expenses in hopes that they will execute trades through Ashoka, then it may be more of an issue?

I believe it’s that Independence and Objectivity only apply when considering whether an actual investment recommendation/decision will be compromised, where as this case dealt with a decision of brokerage to actually execute the trade once the investment decision had been made.

So say stock X is a buy and stock Y is a sell when looking with independence and objectivity, as long as those actual buy/sell decisions aren’t changed to sell/buy due to “bribery” and promises of expensive trips etc then the Independence and Objectivity standard hasn’t been breached.

It’s his decision of which brokerage to execute through which is being influenced, not his actual investment recommendation/decision.