This is from CFA Ethics page 144, lower left. The book is kinda vague here. They say Principal trades must benefit the client if the Investment Company act of 1940 applies. If the rules dont apply, it is possible to use principal brokerage to benefit client accounts other than the account generating brokerage if this is disclosed before hand and obtains prior consent from the client. The second part seems pretty straight forward but they don’t explain when the 1940 rule applies to accounts, only what you can do if the rules don’t apply. Is it simply all US based clients and managers must follow the rule, because its a US rule? Anyone have any insights? Are we simply told when this would apply?
bump
Bump again. C’mon somebody? What happened to all the ethics experts?
Bump one last time before i give up. This has very high change of being tested in ethics.
Sadly, I have several FINRA licenses and cannot tell you one way or the other.
The CFA text left a really poor definition. I didn’t feel like reading the actual law for the whole night. Not sure what i’ll do if this comes up