There is one practice question, number 26 reading 2 that deals with this. It seems like from prior years I remember some gotcha related to this - The question: Is there a case, assuming clients have had opportunities to trade, and that your position is disclosed to the employer, yada yada, where it is not ok to trade personal securitues in personal accounts counter to the employers recommendation? If I want to buy for myself and the firm has issued a sell rec, is that ok? If I want to sell personal holdings for personal reasons against a firm buy recommendation is that ok as well?
if they are on a restricted list I would say no, you cannot trade them at all (buy or sell) some firms have trading policies for all securities, like you cannot sell a stock for at least 30 or 60 days after the purchase
But barring some form or rule or blacklist, lets just assume there are no firm rules, in general, are there CFAI ethics rules or guidelines against selling or buying counter the firm rating? I tried to locate some, but couldn’t find and explicit statement either way except that one problem…
its a grey area if you contribute somehow to the rating …a research analyst who says long telecommunication stocks but is privately going short Att is in violation since he is trading against his own rec
as long as you’re not front running or trading on material non-public info I don’t see why it would be a violation
mcap11 Wrote: ------------------------------------------------------- > as long as you’re not front running or trading on > material non-public info I don’t see why it would > be a violation if you are mostly responsible for the rating then yes its a violation to tell clients one thing and trade privately against it…ask yourself why would someone do that unless one is either deceiving or front running clients…again like i said its a grey area
IF you/ur firm issued buy rating but u r in dire necessity of money, it is ok to sell your position and u wouldnt be in violation… Again I dont recall whr i studied this but it was at L2
Ok practice you must obviously disclose your position in the securities if you are dealing with the report.
acer Wrote: ------------------------------------------------------- > IF you/ur firm issued buy rating but u r in dire > necessity of money, it is ok to sell your position > and u wouldnt be in violation… Again I dont > recall whr i studied this but it was at L2 Yeah, that’s what i was talking about, I thought i recalled something to that effect. But given that question I referenced, I guess that isn’t the case…