Bring them on…
Trading blackout dates: required or recommended?
30 days before and 5 days after is only a specific recommendation related to the requirement of no front running. the requirement is not to front run clients or get pre IPO stocks of a subject company or industry
I serve on the board McRonald’s and get free meals. Is disclosure and/or written permission required?
disclosure at the very least. if McRonald is just a burger chain, disclosure is enough if McRonald is in competing business e.g. investment manager focusing on the fast food industry then written permission required and the free quarter pounders can be construed as additional compensation
I am downgrading Company A. I send an e-mail to all my clients notifying them of the downgrade and call my largest clients afterward in order to discuss the downgrade in more detail. What standard, if any, am I violating?
No violation. at least on the surface. if the follow up call is an additional service you provide for an extra fee and is available to all willing clients no violation took place.
Good job mate, you’re spot on when it comes to Ethics.
A client has a stock that’s at a huge gain. It does not yet violate the terms of his IPS and you have discretion over your account. Your firm has a buy rating on the stock. Are you allowed to take gains on the position either partially or entirely? Would the answer change if it put him out of compliance with his target asset allocation?
I work as a portfolio manager and have been recently asked to sit on the board of a company unrelated to investment management. I receive no compensation, but must spend a considerable amount of time reviewing financials and corporate governance procedures. Since I receive no compensation, no disclosure is necessary. What standard, if any, am I violating?
If there’s no need to take gains, the sensible thing to do is not take any. But are you allowed to? Yes, if you can come up with some other reason that is justified for the client’s interest. Like your tactical allocation is out of wack, but remember that it can be out of line at an acceptable range. Also if it’s a huge gain, better check the tax consequences to your client b/c s/he calls you very upset. ------------ Violating Duty to Employers from depriving them of your talent, skill & energy if you’re performance at work is suffering from your second “job”
Duties to employers, disclosure is neccessary if it can be reasonablity expected to interfere with your current job potentially depriving your employer of your skills/abilities…
What’s with the notion that you are suppose to try your best to disseminate material nonpublic information??? What the heck? “Unless you are bound by duty or loyalty to preserve confidentiality…” Thought you’re suppose to NOT spread it around? Q 44. p.125 CFAI Ethics
Lets see if you get this one… In selecting a broker for client trades where soft dollars are involved, CFA Institute members are A) required to consider trade execution capabilities well as an evaluation of the broker’s financial responsibility and the range of services provided. B) prohibited from using soft dollars from client brokerage to purchase goods and services that do not benefit the client. C) required to disclose soft dollar arrangements to the client prior to entering into any such arrangements.
What does B have to do with selecting a broker? I’m going with A.
A: process in selecting broker b is to comply with the standard but is not the question
Good one…was that a real q you saw somewhere?
B is the correct answer. RTFQ. You are just a member who may or may not be claiming compliance with soft dollars rules. You’ve got to comply with B regardless but A and C are mandatory only if you claim compliance with SD.
B is the correct answer. RTFQ. You are just a member who may or may not be claiming compliance with soft dollars rules. You’ve got to comply with B regardless but A and C are mandatory only if you claim compliance with SD. This was on the first Schweser live mock in the am.