If a recommendation to buy/sell is made early in the morning to the general public, can you place a trade to act on that recommendation towards the end of the day? what’s considered appropriate length of time for public dissemination Another example, the buy/sell recommendation was posted on the company’s website, when can you act on it?
I believe you should be able to but only after your clients trades were actually executed .
I believe the min recommended length of time is 24 hrs, so my guess is that you can’t trade end of the same day. This gives adequate time for clients to react, esp if they are in a different time zone. I guess same timing applies to website. - BN
1st - Yes 2nd - not immediately and only if clients/investors know that they are published on your website…
Is this for a manager? first one: depends on the firm. most firms have a policy (e.g., 48 hour restriction), while others do not. you can trade several hours after the recommendation is made, providing that it does not disadvantage clients. this seems like a grey area to me, so i try to stick with the 48-72 hour rule, which, i believe is dictated by best practices. correct me if i am wrong…
is it 24 hours??? I dont ever recall readin that.
bigwilly Wrote: ------------------------------------------------------- > is it 24 hours??? I dont ever recall readin that. Same here. I don’t recall ever seeing that. I thought that once it the info was disseminated to the public, it was fair game to trade on the info for your clients.
there is no specific time required but 8 hours is insufficient time for investors/clients to hear about the buy/sell recommendation. I would think that a minimum of 24-48 hours would be required so in the first case, you would not be allowed to make the trade. As far as the 2nd example, I do recall a sample exam question last year on that very topic. If all they do is publish their buy/sell recommendation on the web, is that sufficient public dissemination? What about investors who do not have access to the internet?
common sense dictates that it is not sufficient. investors are not glued to the firm’s website 24 / 7. your buying / selling will effect price action and could adversely effect the client. there may or may not be a specific number of hours, but i think the intent of the rule is pretty clear. if the question says something like “she published her recommendation, giving clients sufficient time to react, and then she sold her shares” then you know what to do. otherwise, be conservative.
> As far as the 2nd example, I do recall a sample > exam question last year on that very topic. If > all they do is publish their buy/sell > recommendation on the web, is that sufficient > public dissemination? What about investors who do > not have access to the internet? Sample exam??? How about the real exam. I remember this internet question on the December 06 Level 1 exam. I still remember my reaction after seeing this question. I was like WTF with about 4 minutes left in the exam!!!
I remember reading somewhere the number 48 hours. Don’t recall if it was Schweser or OM. And I can’t imagine posting something to a website counts as dissemination to clients. Maybe if you are a small cap blogger who writes for a non-paying audience, but in that case, who cares?