Investment managers have a duty to disclose, to clients, the services of products obtained using soft dollar arrangements. True or False? If false, why?
i say false
Hm, I think they only have a duty to disclose the _availability_ of information regarding the soft dollar arrangements. So I guess that’s why it’s false. Nitpicking.
I’ll say true. Investment managers need to be very transparent with the use of soft dollars since it is the property of the client. When in doubt, disclose!
my false answer is based on this, I have never heard someone say to me: “your commissions will help pay for our bloomberg terminals for research”
I would say true.
I think it’s true, from the notes CFA Institute’s Soft Dollar Standards are intended to ensure: “Complete disclosure of the investment manager’s use of soft dollars and client brokerage.”
true they must disclose policies, type of reaserch received, statements of comformity to soft dollar standard shd be sent to clients at least annually
one of the recommendations of CFA soft dollar standards is “full and fair disclosure of an investment manager’s use of a client’s brokerage” i guess the standards are voluntary so it’s not required unless you choose to claim compliance.
FALSE Clients and potential clients
^ that doesn’t make the statement about the clients wrong now, does it?
^ You are correct. BUT, I had this quesiton on a sample. The answer was as I stated. It’s not 100% accurate, so FALSE accoring to whichever test it was. When I see these type of Q/A, I write “STUPID” in my notes.
I hear ya.
i think dan’s right. thats prob why they awkwalrd put the “to clients”, in between commas. however i think i remember a qbank question where answer said that you only have to tell client what % of soft dollars are used for clients but you dont have to tell them where all of your money is going to. dont remember exactly what the wording was, i can check when i get home.
I would say false. I recall from the reading that it is only required that clients be made aware that the information is available should they request it.
Chi, that’s exactly what I had written down in my notes. “The Show”, can we have the answer?
An investment Manager must disclose (i) the types of Research received through Proprietary or Third-Party Research Arrangements; (ii) the extent of use; and (iii) whether any affiliated Broker is involved.
^ Ali To whom?
This one is ‘to Clients’
TheAliMan Wrote: ------------------------------------------------------- > This one is ‘to Clients’ Clients. The business kicking the soft dollars back is not in this loop.