Performance misrepresentation, is it under I © , professionlism r III (D), Duties to Clients…I don’t see the differences in their talking about performance presentation.
Can you accept a trip overseas as a gift from an existing client? 1) No, it is a violation. 2) Yes, but you need to disclose to the employer. 3) No, you must get permission from employer after your discloser.
Can research comp only be a flat fee? Can it ever tied to performance or other things? Isn’t that what is being doing on ws? The more I read the s*hit the more I am confused…should it be something like the comp can tie to something else as long as the independence and objectivity not comprised?
Always do a report for a flat fee, never have your pay tied to the end result of the report. I read the thing about private placements too, its basically the same as an IPO.
Salary tied to investment banking is a little tricky. I got that question wrong on the free sample. Apparently its ok if you disclose to what extent your salary relies on IB.
Niblita, you can’t have a bonus tied to banking directly, but you can have a bonus tied to the performance of the firm if you disclose what percentage of the firm’s revenues are derived from banking. At least that’s how I understand it.
The answer to my question about the overseas trip and answer is 2). You don’t need persmission from employer, who only needs to ‘monitor’ this kinda gift. Does this cause obvious conflicts to many other principles in this CFA ethics?! Sounds like gift like this does not compromise one’s independence…
Over05, don’t get confused as to where the gift is coming from. A gift from a client that you manage money for is acceptable if you don’t favor the client over another (hence mgm’t needs to be aware so they can monitor the situation). A gift from a firm you are covering is a no-no (if over USD 100) since it has the look of impropriety.
Regardless you have to disclose the gift to your employer right?
Yes but you don’t need written permission from your employer. Hence, take the trip first and then tell them after you get back. They just need to be aware so they can monitor your bias in dealings between your clients.
yup, regardless of client/firm, you have to disclose it.
“Hence, take the trip first and then tell them after you get back.” I don’t know about that. May not need permission, but you should disclose it before accepting it. a little tricky there.
Sure. I was confused about this at first but it was heavily tested in Level I. The fine point is that your boss needs to be aware that you don’t allocate better securities, hot ipos, a disporptionate amount of time, etc… to the client that gave you the gift vesus other clients (Fair Dealing). A bonus from a client is fine but they can’t expect you to be their personal “slave” nor can you favor them in order to obtain the “bonus.” All is fair when you are aready being paid for their service and you are not harming your other duties/employer. I think the example used in the handbook is a week at a beach house or something similar. Remember, you must tell you boss timely - can’t wait for year end b/c they need to monitor the situation.
Thanks for clarification. I missed the point regarding what kinda relationship with clients…