CFAI Mock AM Question 5
Why policy 2 “Any client accounts that include staff as beneficiaries must trade after all other client accounts” is not correct? According to the curriculum “Members or candidates may undertake transactions in accounts for which they are a beneficial owner only after their clients and employers have had adequate opportunity to act on a recommendation”.
The policy that was mentioned in the item set was: Any client accounts that include staff as beneficiaries must trade after all other client accounts.
The distinction between the policy and what you cited from the curriculum is that the policy mentions staff as beneficiary, as in, I am the beneficiary on my wife’s account. If my wife was a client, it would be a violation to treat her account differently from the rest of the clients. What you cited says beneficial interest and is under the heading of “Personal Trading Secondary to Clients” on page 157.
The main difference is one relates to being a beneficiary (which is often designated without the beneficiary knowing) and the other one relates to personal securities you decided to trade.
Oh, I see. Beneficiary and beneficial interest are different things. My English sucks. Thank you.