Last Ethics question (#4)

KRochelli · May 30, 2009, 4:35am

I am CIO of a pooled group of mutual funds. The pooled fund has a board of directors, which has several independent members to protect the integrity of the fund and bring relevant outside experience to the table. I brought to the next board meeting a series of asset valuation policies, so that i can further cooperate with the AMC. who should evaluate and approve the policy? 1. board of directors 2. independent directors 3. outside independent third party

heer · May 30, 2009, 4:36am

All of them can

jeks · May 30, 2009, 4:37am

the independent directors

florinpop · May 30, 2009, 4:37am

valuation needs to be reviewed by independent third party companies

heer · May 30, 2009, 4:37am

ahh I think 2 and 3 can and 1 cannot.

Big_Babbu · May 30, 2009, 4:39am

1

cfasf1 · May 30, 2009, 4:40am

3?

KRochelli · May 30, 2009, 4:43am

and the answer is 2, independent directors. for NON-POOLED funds, answer would be 3. don’t ask me why. this is a tough one. (and likely to be on the exam therefore)

florinpop · May 30, 2009, 4:44am

good questions Krock

cfasf1 · May 30, 2009, 4:46am

can someone explain the difference between pooled and non-pooled mutual funds please?

KRochelli · May 30, 2009, 5:08am

perhaps McLeod can chime in…my guess is Fidelity is a pooled group of funds. whereas the hedge fund i work for is a non-pooled (singular) fund.