Ethics Q

A money management firm has the following policy concerning new recommendations: When a new recommendation is made, each portfolio manager estimates the likely transaction size for each of their clients. Clients are notified of the new recommendation in the order of their estimated transaction size—largest first. All clients have signed a form where they acknowledge and consent to this allocation procedure. With respect to Standard III(B), Fair Dealing, this is: A) not a violation because the clients are aware of the policy. B) not a violation because the clients have signed the consent form. C) a violation of the standard. D) not a violation because this policy qualifies as a pro rata procedure for disseminating information.


I think C. Even when clients consent to to the procedure.


C. Resorts to fair dealings.

Good job guys - The correct answer was C) a violation of the standard. Such a policy is a violation of the Standard and client acknowledgement and/or consent does not change that fact.

C) It’s a fair Dealing Issue…

wtf, if the client signed a consent that says they will be put on a list of priorities, its not violation right? If they dont like it they can go to another firm…

ancient, Signing pre-consenting document does not waive PM’s violation. The share allocation has to be fairly and equally conducted.

ha ha ha… I like your style ancientmtk.

I wonder how many people would actually blow the whistle on this.

my style is not acceptable by the standard?