I think statement 4 is wrong. Employees need written perssion for receiving gift in stead of simply disclose to the employer.
Any comments, please? Thanks.
For your convinience, I type the statement here:
On the matter of gifts that might impair employees’ objectivity, Mshsud Financials’s written compliance policy should also include the following component:“Employees must disclose to Mahsud Financial all client gifts regardless of value”
Question: Is the statement sufficient to meet the requriements of related CFA Institute Standards?
It depends on where the gift is coming from: client, third party, related firm, etc…you only need to disclose gifts from clients, but non-client gifts that compete directly with your ability to make independent objective decisions must be approved in writing from all related parties.
Also, you do not need to disclose the gift from the client before you accept it, but you must make a reasonable effort to do so. If a client tosses you two tickets to the Yankees game you don’t say “Hang on let me clear it with my firm first”. No, you take the tickets and disclose later.
From the Handbook (There are some great examples in the Handbook):
“Receiving a gift, benefit, or consideration from a client can be distinguished from gifts given by entities seeking to influence a member or candidate to the detriment of other clients. In a client relationship, the client has already entered some type of compensation arrangement with the member, candidate, or his or her firm. A gift from a client could be considered supplementary compensation. The potential for obtaining influence to the detriment of other clients, although present, is not as great as in situations where no compensation arrangement exists. When possible, prior to accepting “bonuses” or gifts from clients, members and candidates should disclose to their employers such benefits offered by clients. If notification is not possible prior to acceptance, members and candidate must disclose to their employers benefits previously accepted from clients. Disclosure allows the employer of a member or candidate to make an independent determination about the extent to which the gift may affect the member’s or candidate’s independence and objectivity.”