Ethics CFA practice question - best execution, trade allocation

As head of operations, Zane wishes to simplify trading and implements a new trade policy: first place trades for the Sastre account through the local financial advisor and then submit the commingled fund’s trades through national brokerage houses and electronic networks. The local financial advisor is pleased with this arrangement, as he is able to buy securities before other clients; he informs Zane that he’ll recommend SZR to additional clients.

Q. Does Zane’s revision of SZR’s trading process violate the CFA Institute Asset Manager Code of Professional Conduct?

  1. No.
  2. Yes, only with respect to best execution.
  3. Yes, with respect to best execution and fair, equitable trade allocation.

C is correct. Zane should have pursued best execution for all clients in the fund (which is not accomplished by placing trades with the local financial advisor first versus with national brokers or electronic networks), and fairly traded for all clients. While Sastre is welcome to direct trades, Zane’s change in procedures harms other clients.

Why did he violate the fair, equitable trade allocation standard? One of the clients wanted specific broker and for the rest he used best execution. I have problem understanding the answer.

Thank you.