The Standard relating to Priority of Transactions states that the financial analyst shall conduct himself in such a way that transactions for his customers, clients and employer have priority over his own personal transactions. “Personal transactions” may include transactions for: a. Immediate family members only. b. Immediate family members and all business associates. c. Immediate family members and all personal friends.
wow C - but personal friends can be his clients too. A?
I’d say C… personal friends dont have to be included in personal transactions (in the case where a personal friend is also a customer) but it may be included in instances where a personal friend is not ie: write a research report… send to clients… personal friend gets a copy of it… both place an order - client has priorty
is there an option D that combines options B and C? if this is a schweser question then fcuk it. their qbank is useless for ethics because its so subjective and you want to go with CFAI interpretations. qbank rocks for other stuff!
I mean can’t you argue that business associates are always potential clients (as opposed to non client personal friends) and any order is almost a test run for best execution… therefore maintain priority?
> ie: write a research report… send to clients… personal friend gets a copy of it… both place an order - client has priorty No, clients should not be advantaged over personal friends or even family members.
wouldnt that be front running
You sent to your clients, so your friends are not front running. You should treat them fairly.
if you receive a large order from a mutual fund client and a small order from a personal friend at the same time…
Dreary Wrote: ------------------------------------------------------- > No, clients should not be advantaged over personal > friends or even family members. This is only true if those personal friends/family are also clients. The rule is, you must give last priority to any accounts from which you might benefit. Its vague. That’s for sure, but I’d go with C because it has the word PERSONAL in it, just like the question. Lame reason to tip the scales, I know.
what’s the answer?
What’s the answer? I would say A
> This is only true if those personal friends/family are also clients. If the information has gone out to everyone, you have an obligation to treat everyone fairly, friends, clients, brothers, sisters, are all equal. In fact, you will be in severe violation if you put your brother or sister at a disadvantage!
According to Stalla, answer is A.
my choice is B assuming that he is associated through equity stake in the businesses
Hopefullly my wild guesses would work in exam too
@Dreary But this question doesn’t say anything about information going out. Its purely priority of transactions. If your brother is a client of your employer, then you’re right, he gets treated like everyone else. If, on the other hand, you happen to have his fidelity.com password, and front-run clients/employer, that’s a violation.
just ran the question by my Dad and he said the legal answer is A but he would be tempted to pick C… lol said that it is only immediate family because by definition anyone who is giving you an order is a client… and once they are a client there is no separation of personal friend or not on priority of transactions
That was in response to JasonU who said: > ie: write a research report… send to clients… personal friend gets a copy of it… both place an order - client has priorty
JasonU Wrote: ------------------------------------------------------- > just ran the question by my Dad and he said the > legal answer is A but he would be tempted to pick > C… lol > > said that it is only immediate family because by > definition anyone who is giving you an order is a > client… and once they are a client there is no > separation of personal friend or not on priority > of transactions What is your dad? CFAI’s president?