This one is from Schweser: Jason Blackwell, CFA, works as an investment manager for Mega Capital, a large multinational brokerage firm. He resides in a country whose applicable law is stricter than the Code and Standards but does business with clients in a country whose applicable law is less strict than the Code and Standards. Blackwell decides to follow the Code and Standards for clients in the less strict country. While Blackwell is still employed at Mega, Lego Associates verbally asks Blackwell to review client portfolios during evenings and weekends for a fee. Blackwell gets consent from his immediate supervisor at Mega to undertake this independent activity for a one-month trial basis. Which of the following statements about Blackwell’s actions involving Standard I, Professionalism, and Standard IV(A), Loyalty is most accurate? Blackwell: A) did not violate either Standard I or Standard IV(A). B) violated Standard I but did not violate Standard IV(A). C) violated both Standard I and Standard IV(A). D) did not violate Standard I but violated Standard IV(A).
A I am alittle shocked they dont tell you what standard I or IV (A) is though…
Is the answer to this C ?? Part-1 He stays and does business in C1 (strictest laws) Client A stays in Country C2 with laws less strict than COESOP So C1 > COESOP > C2 So C1 is to be followed… and he has violated the law, by not doing so… Part-2 Job is Part-time, one-month , during evenings and weekends, he is paid for getting the job done, Also taken permission from ‘Mega Capital’. But I still feel going down the line, the 2 jobs will cause a conflict of interest for the clients. So he violated the law. - Dinesh S
- if you read the question – just above it, they have said what Standard I (A) and Standard IV (A) are. Which of the following statements about Blackwell’s actions involving Standard I, Professionalism, and Standard IV(A), Loyalty is most accurate? Blackwell: Answer choice is B. He should have followed the Stricter country law. So I(A) is violated. He has consent from his supervisor to undertake the consultancy work – so he has not violated IV (A). CP
“Your answer: A was incorrect. The correct answer was B) violated Standard I but did not violate Standard IV(A). Blackwell violated Standard I, Professionalism. Because the applicable laws were stricter than the Code and Standards, he must adhere to the more strict applicable law.” CP was right; but I’m confused. Should he not follow the stricter of the law of the country he is doing business in or the Code and Standards? Which in this case would be the Code and Standards? Why does the law of the country he resides matter ? Am I not reading this correctly?
If country he resides in has code which is stricter than the Code & Standards, he MUST follow that, whether he does business in a country with no code, or a less strict code. This is given in a big table with about 10-12 scenarios, where this is discussed in great detail in the Standards of Practice Handbook… CP
and Dinesh – to clarify about the Part 2 – he needs written consent from his supervisor. So long as he has informed his supervisor and obtained consent, he can do the part time work. Onus is on the Supervisor now to decide if there is a conflict of interest with his job or not, and then to give the permission. Additionally - the type of work, the time period for which he will be doing the part time work all need to be provided to the supervisor, in order for him to make the decision. CP
cpk123 Wrote: ------------------------------------------------------- > If country he resides in has code which is > stricter than the Code & Standards, he MUST follow > that, whether he does business in a country with > no code, or a less strict code. > > This is given in a big table with about 10-12 > scenarios, where this is discussed in great detail > in the Standards of Practice Handbook… > > CP Ah, yes. Exhibit 2-1. Looking at it now. Thanks CP.
cpk123 Wrote: ------------------------------------------------------- > and Dinesh – to clarify about the Part 2 – he > needs written consent from his supervisor. So long > as he has informed his supervisor and obtained > consent, he can do the part time work. Onus is on > the Supervisor now to decide if there is a > conflict of interest with his job or not, and then > to give the permission. > > Additionally - the type of work, the time period > for which he will be doing the part time work all > need to be provided to the supervisor, in order > for him to make the decision. > > CP Thanks cpk, for clearing me up!! Hope I don’t repeat this at the exam. - Dinesh S