Standard IV-B: Additional Compensation Arrangements Members and Candidates must not accept gifts, benefits, compensation or consideration that competes with, or might reasonably be expected to create a conflict of interest with, their employer’s interest unless they obtain written consent from all parties involved. COMPETES or REASONABLY EXPECTED TO COMPETE sitting on a board of a company when you are in the business of selecting securities? thats something that could reasonably compete with your employers (and clients interest. waiting tables does not compete
smileygladhands Wrote: ------------------------------------------------------- > Standard IV-B: Additional Compensation > Arrangements > Members and Candidates must not accept gifts, > benefits, compensation or consideration that > competes with, or might reasonably be expected to > create a conflict of interest with, their > employer’s interest unless they obtain written > consent from all parties involved. > > COMPETES or REASONABLY EXPECTED TO COMPETE > > sitting on a board of a company when you are in > the business of selecting securities? thats > something that could reasonably compete with your > employers (and clients interest. > > waiting tables does not compete Read this sentence: “Members and candidates should make an immediate written report to their employer specifying ANY compensation they propose to receive for services in addition to the compensation or benefits received from their employer.”
I will also refer you to page 1-32 of the Stalla guide if you have access to it.
^Ya that makes sense. But you don’t need permission for compensation that doesn’t compete or deprive your employer of your skills.
so if in a big snowstorm i shovel everyone in my blocks sidewalk at $10 a pop, making a total of $50, i need to get written consent from my employer to do that? makes no sense. i say no way. I see the sentence you’ve highlighted, and it does seem to say “any”, which would imply everything, however the standarf itself clearly has the exemption for “competes” and thats what i’m going with…
smileygladhands Wrote: ------------------------------------------------------- > so if in a big snowstorm i shovel everyone in my > blocks sidewalk at $10 a pop, making a total of > $50, i need to get written consent from my > employer to do that? makes no sense. > > i say no way. I see the sentence you’ve > highlighted, and it does seem to say “any”, which > would imply everything, however the standarf > itself clearly has the exemption for “competes” > and thats what i’m going with… You don’t need consent, but you do need to disclose. There’s a difference between the two. Stalla users - see YMCA example.
Arghhh I’m at work so I can double check the bartender example until I get home.
boss , I just want to let you know that on Saturday nights I mow my neighbor’s lawn for 20 bucks.
whats the basis for disclosure vs consent, then?
You do not need to disclose your bartending job… Duty IV, B - Additional Comp Arrange only addresses things that interfere…and for those you need consent. There is no “lesser kind of arrangement” that only requires disclosure. The only reason you ever have the situation where you disclose a client gift but do not need consent is because of a separate standard…VI A Disclosure of conflicts where you are required to disclose anything that may be interpreted as a conflict…such as gifts for investment performance or sitting on the board of a company. There is no standard that says “you must disclose anything that you get money for.” If there was I’d need to start telling my employer about how many rewards card cash back $$'s I’m making too…
guys, you’re getting all confused. Additional compensation arrangements - this relates to competition with my employers, or incentives for future performance from my clients whose accounts I manage - for these, i must receive written consent from all parties involved for gifts from clients (that are more like 1 time bonuses or recognition for PAST services) - these are governed by standard I(B) - independence and objectivitiy. These require DISCLOSURE ONLY Stanard VIa, conflicts of interests - these pertain largely to referal fees - these must be disclosed…
FROM I(B) - this governs disclosure… Receiving a gift, benefit, or consideration from a client can be distinguished from gifts given by entities seeking to influence a member or candidate to the detriment of other clients. In a client relationship, the client has already entered some type of compensation arrangement with the member, candidate, or his or her firm. A gift from a client could be considered supplementary compensation. The potential for obtaining influence to the detriment of other clients, although present, is not as great as in situations where no compensation arrangement exists. Therefore, members and candidates may accept “bonuses” or gifts from clients but must disclose to their employers such benefits from clients. Disclosure allows the employer of a member or candidate to make an independent determination about the extent to which the gift may affect the member or candidate’s independence and objectivity.
CFAI Pg 74: example 9: Alfonso is a research analyst with Tyson investments. He works part time as a mayor for his hometown, a position for which he receives compensation. Must he seek permission from tyson. ans: If his duties are so extensive & time consuming that they might distract him from fulfilling his responsibilities at tyson, he should discuss it with his employer. standard IV (a) so if you are mowing a lawn on weekends, you need not disclose but if you are working as a part time accountant you MAY have to…
In terms of additional compensation. I know if a client offers to give you a reward for future benefits you need to get permission. Do you need to notify your employer of the offer if you don’t accept it? Similarly, If a company tries to gain influence by giving you some large gift, this is obviously not permissible, but do you need to notify your employer of the offer? I always struggle with these, not even sure if there real scenarios.
I’m sticking with this… if it is a gift/monetary benefit from a part-time job that does not compete with your investment related job… need not disclose as there is no way it could create a conflict of interest. I recall the gym membership example and in that case the guy sat on the board. Sitting on a board could take up a considerable amount of ones time and affect your ability to perform for your primary employer. Second, if the company for which you are a board member is publicly traded, a potential conflict could arise in the future.
i’m with you, dhwit - if we fail, at least we fail together! 