“Members and Candidates must use reasonable care and judgment to achieve and maintain independence and objectivity in their professional activities. Members and Candidates must not offer, solicit, or accept any gift, benefit, compensation, or consideration that reasonably could be expected to compromise their own or another’s independence and objectivity.” “Do not let the investment process be influenced by any external sources. Modest gifts are permitted. Allocation of shares in oversubscribed IPOs to personal accounts is NOT permitted. Distinguish between gifts from clients and gifts from entities seeking influence to the detriment of the client. Gifts must be disclosed to the member’s employer in any case.” Do modest gifts have to be disclosed to the employer/client?
no such a rule as modest gift anymore…old rule, now everything has to be disclosed…I think anyway…
My understanding is that gifts have to be disclosed but not accepted in writing. Anything that could be a conflict of interest, ie a client offering to pay you extra if you beat the benchmark, has to be accepted in writing by your employer.
I think you have to refuse gifts if not from a client but from an entity trying to influence your decision at the expense of the client
N.Van - Schweser is routinely referring to “token” gifts but there is no brightline defining them. I think a token gift is defined as something that could be perceived to violate independence and objectivity. Is there a different handling of token gifts from clients vs. token gifts from a firm an analyst covers?
Business related entertainment is OK. Also, you can accept flights, accomodation etc if that is the only option to get to the firm and the only real option to stay. Lavish, extravagant stuff (loosely defined) from the firm is not acceptable.
nicolargol Wrote: ------------------------------------------------------- > I think you have to refuse gifts if not from a > client but from an entity trying to influence your > decision at the expense of the client Schweser has a question about a PM accepting an inexpensive bottle of wine from a broker who he places trades with. Schweser is saying that he can accept the bottle since it is a token gift.
Dwight Wrote: ------------------------------------------------------- > Business related entertainment is OK. Also, you > can accept flights, accomodation etc if that is > the only option to get to the firm and the only > real option to stay. Lavish, extravagant stuff > (loosely defined) from the firm is not acceptable. So what about disclosure? Do items not intended to influence the independence and objectivity of an analyst have to be disclosed?
ChadD Wrote: ------------------------------------------------------- > Dwight Wrote: > -------------------------------------------------- > ----- > > Business related entertainment is OK. Also, > you > > can accept flights, accomodation etc if that is > > the only option to get to the firm and the only > > real option to stay. Lavish, extravagant stuff > > (loosely defined) from the firm is not > acceptable. > > > So what about disclosure? Do items not intended to > influence the independence and objectivity of an > analyst have to be disclosed? I don’t believe so. Only “matter that could reasonably be expected to impair the independence and objectivity or interfere with respective duties to clients, prospect clients, and employers.”
A client can give you a gift as a reward after the fact, i.e. if you had an amazing year they can send you all manner of gifts as a thank you, with anything considered material to be disclosed to your employer (around $100). Prior to performance, you can not accept any gifts from clients, large or small. If a client approaches you and says “I’ll give you a box of cigars if you beat this benchmark,” that could be construed as a conflict of interest in regards to your other clients. Any gift from outside solicitors (brokerage houses, companies that want you to invest, etc) should not be accepted. These create a clear breach of your objectivity as an analyst. Be sure to distinguish between a gift (a set of golf clubs, a bottle of wine), and travel/entertainment expenses (airfare to a remote location, dinner). Also note the fine line in entertainment, for example a nice dinner vs. a Broadway show.
ChicagoPMA Wrote: ------------------------------------------------------- > > Prior to performance, you can not accept any gifts > from clients, large or small. If a client > approaches you and says “I’ll give you a box of > cigars if you beat this benchmark,” that could be > construed as a conflict of interest in regards to > your other clients. > Prior to performance, you could accept the gift from a client if you have written consent from your employer. After performance, you could accept the gift from the client and just disclose it to your employer. However, you cannot accept a gift from another company that provides services to your company (eg. brokerage) even if you have approval from your employer…
^^^ this is the info I have in my notes… can someone confirm the acceptance of gifts provided you have written consent, prior to performance?
I get the questions right when I answer “written consent from employer.” I do forget if you just need written consent from your employer, or all parties. Any elaborate?