Robe Advisory Services operates an office in San Francisco, where it manages portfolios for its clients based in the United States. The firm also maintains an office in Tokyo, where it employs Sam Lee, CFA, who researches Japanese stocks. Lee is required to maintain knowledge of and comply with all applicable laws, rules, and regulations in: A) both the U.S. and Japan, but not the CFA Institute Standards of Professional Conduct. B) the U.S., but not Japan, and the CFA Institute Standards of Professional Conduct. C) Japan, but not the U.S., and the CFA Institute Standards of Professional Conduct. D) both the U.S. and Japan and the CFA Institute Standards of Professional Conduct.
C. It doesn’t say anything about him being involved with US clients’ portfolios or US stocks.
D.
I agree with Whodey. It doen’t say anything about servcing US clients C.
I am inclined towards C as well but want to know tophr’s reasoning for D.
A lot of ethics questions for me are off of gut instinct. It just doesn’t make sense to me for a research analyst employed by a US firm to only have knowledge of Japanese laws and the Code & Standards. Sam Lee should know all three. The problem never says he researches Japanese stocks for investment in Japan. What if he researches Japanese stocks and then tells those recommendations to his US employer who then buys shares for its US accounts. He should know US laws as well so as to better make recommendations of those stocks. There are other cases where he would be better off knowing both sets of laws so as not to make any illegal transactions for his US firm in the foreign market. Also, CFAI is pretty strict on ethics. It requires the utmost loyalty to high ethical professional standards. Knowing all three sets of laws is best practice. (of course in real life, most analysts will know very little about either set of laws and will probably rely on the compliance department for legal guidance.)
I would say D. In San Francisco it has an office where it manages portfolios for clients based in US (know and be compliant with US laws), in Japan has to know Japan laws, and must apply CFA standard whenever laws of Japan and/or US are less restrictive than the Standards.
Thanks guys. D is the official answer. S
D
topher Wrote: ------------------------------------------------------- > A lot of ethics questions for me are off of gut > instinct. > This is a really bad plan. It sends you running to the moral high ground all the time and is not necessarily the right answer.
topher Wrote: ------------------------------------------------------- > It just doesn’t make sense to me for a research > analyst employed by a US firm to only have > knowledge of Japanese laws and the Code & > Standards. Sam Lee should know all three. The question does not say that it is a US firm, it only says they operate an office in San Francisco. How do we know they’re not based in London?
It seems that the best strategy is not to game the question. D is the gut answer from my careful reading. C is the over-thinking answer for me.
I also went with C for this one. I agree with Whodey. I don’t like how many of these questions require certain assumptions.
whodey good point. but nevertheless, i still stick with D. He should be knowledgeable with all laws.
saurya_s Wrote: ------------------------------------------------------- > Robe Advisory Services operates an office in San > Francisco,… saurya_s where did you get this question? is it CFAI or Stalla/Schweser?
This is from Qbank. I answered the question before doing a mock exam. The thing is, I didn’t really ponder the answers too much when I first saw it. I just chose D.